tag:blogger.com,1999:blog-30506238463717134672024-02-08T10:16:31.478-08:00CS TALENTUnknownnoreply@blogger.comBlogger252125tag:blogger.com,1999:blog-3050623846371713467.post-53505236309031673912014-05-01T01:30:00.002-07:002014-05-01T01:30:36.811-07:00Business standard updates<div dir="ltr" style="text-align: left;" trbidi="on">
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<b><span style="color: steelblue; font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;">Sebi may act on PwC’s MCX audit</span></b><span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;"></span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;"><br />JAYSHREE PYASI</span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;">Mumbai, 30 April</span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;">The Securities and Exchange Board of India ( Sebi) will soon direct the BSE to independently check for violations of listing agreement norms at Multi Commodity Exchange ( MCX), following PricewaterhouseCoopers’ adverse findings, said sources.</span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;">The capital market watchdog is also likely to approach the Union ministry of corporate affairs to probe allegations of breach of various clauses in the Companies Act, they said.</span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;">Separately, the commodity markets regulator, the Forward Markets Commission, <span class="aBn" data-term="goog_1607198455" style="border-bottom-color: rgb(204, 204, 204); border-bottom-style: dashed; border-bottom-width: 1px; position: relative; top: -2px; z-index: 0;" tabindex="0"><span class="aQJ" style="position: relative; top: 2px; z-index: -1;">on Wednesday</span></span>sent the PwC audit report to MCA and the Enforcement Directorate ( ED). The ED is going to examine allegation of money laundering at MCX, sources said.</span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;">The special audit report by PwC, a summary of which was made public <span class="aBn" data-term="goog_1607198456" style="border-bottom-color: rgb(204, 204, 204); border-bottom-style: dashed; border-bottom-width: 1px; position: relative; top: -2px; z-index: 0;" tabindex="0"><span class="aQJ" style="position: relative; top: 2px; z-index: -1;">on Tuesday</span></span>, has highlighted serious corporate governance lapses and non- compliance with regulations. For instance, the audit revealed MCX had only disclosed names of 235 related party entities, while PwC’s background checks revealed at least 670 more known or related parties.</span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;">Also, the PwC audit summary noted payouts to trading members or related parities worth millions “ without adequate substantiation”.</span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;">BSE will have to verify whether any of the PwC findings breach any listing agreement clauses. The latter agreement is a contract between a stock exchange and a listed company. It comprises a little more than 50 clauses — on corporate governance and information- based disclosures such as filing of results, shareholding data and related party deals — which listed companies have to follow.</span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;">Failure to disclose related party business dealings is a violation of Clause 32 of the listing agreement.</span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;">MCX is the country’s only listed commodity bourse. It is listed solely on the BSE; it also trades on the National Stock Exchange, under the permitted to trade category.</span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;">At present, ensuring compliance with the listing agreement has to be done by the exchanges. Typically, they order suspension of trading in companies for repeated violations of the agreement.</span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;">Violators also face a penalty of up to </span><span style="font-family: 'Times New Roman', serif; font-size: 14pt;">₹</span><span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;"> 25 crore under the Securities Contracts Regulation Act. “ Sebi will not like to undermine the authority of BSE and will want the exchange to verify facts before taking any action on the alleged violations,” said a person in the know.</span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;">Corporate governance experts said the role of independent directors and the audit committee at MCX can be questioned, given the adverse findings in the PwC audit. Shares of MCX <span class="aBn" data-term="goog_1607198457" style="border-bottom-color: rgb(204, 204, 204); border-bottom-style: dashed; border-bottom-width: 1px; position: relative; top: -2px; z-index: 0;" tabindex="0"><span class="aQJ" style="position: relative; top: 2px; z-index: -1;">on Wednesday</span></span> ended at </span><span style="font-family: 'Times New Roman', serif; font-size: 14pt;">₹</span><span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;"> 533.55, down </span><span style="font-family: 'Times New Roman', serif; font-size: 14pt;">₹</span><span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;"> 40.55, or 7.1 per cent.</span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;">|Sebi might ask BSE to probe violation of listing norms at MCX |Regulator might also approach MCA to check for breaches in the Companies Act |PwC report has noted payouts to related parties |Failure to disclose related party business dealings is a violation of Clause 32 of the listing agreement |Listed entity violating listing agreement norms faces suspension in trading, penalty</span></div>
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<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 14pt;">Regulator likely to write to BSE, corporate affairs ministry on alleged violations of listing norms</span></div>
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Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-3050623846371713467.post-75629283226616226112014-02-13T18:43:00.002-08:002014-02-13T18:43:12.718-08:00SEBI updates<div dir="ltr" style="text-align: left;" trbidi="on">
<div align="right">
PR No. 12/2014</div>
<br /><div align="center">
<h2 style="color: #27376a; font-size: 16px;">
SEBI Board Meeting</h2>
</div>
<br /><div>
<strong>The SEBI Board met in New Delhi today
and inter-alia took the following important decisions:</strong></div>
<div>
<strong>I. Review of Corporate Governance norms in India for listed companies</strong></div>
<div>
The
Board has approved the proposals to amend the Listing Agreement with
respect to corporate governance norms for listed companies. The
amendments, inter-alia, propose to align the provisions of Listing
Agreement with the provisions of the newly enacted Companies Act, 2013
and also provide additional requirements to strengthen the corporate
governance framework for listed companies in India. The amendments shall
be made applicable to all listed companies with effect from <span class="aBn" data-term="goog_1226682062" tabindex="0"><span class="aQJ">October 01, 2014</span></span>.</div>
<div>
The Board approved the following proposals:</div>
<div>
(i) Exclusion of nominee Director from the definition of Independent Director</div>
<div>
(ii) Compulsory whistle blower
mechanism</div>
<div>
(iii) Expanded role of Audit Committee</div>
<div>
(iv) Prohibition of stock options to Independent Directors</div>
<div>
(v) Separate meeting of Independent Directors</div>
<div>
(vi) Constitution of Stakeholders Relationship Committee</div>
<div>
(vii) Enhanced disclosure of remuneration policies</div>
<div>
(viii) Performance evaluation of Independent Directors and the Board of Directors</div>
<div>
(ix) Prior approval of Audit Committee for all material Related Party Transactions (RPTs)</div>
<div>
(x) Approval of all material RPTs by shareholders through special resolution with related parties abstaining from
voting</div>
<div>
(xi) Mandatory constitution of Nomination and
Remuneration Committee. Chairman of the said committees shall be
independent.</div>
<div>
(xii) At least one woman director on the Board of the company</div>
<div>
(xiii)
It has been decided that the maximum number of Boards an independent
director can serve on listed companies be restricted to 7 and 3 in case
the person is serving as a whole time director in a listed company</div>
<div>
(xiv)
To restrict the total tenure of an Independent Director to 2 terms of 5
years. However, if a person who has already served as an Independent
Director for 5 years or more in a listed company as on the date on which
the amendment to Listing Agreement becomes effective, he shall be
eligible for appointment for one more term of 5 years
only.</div>
<div>
(xv) The scope of the definition of RPT has been widened to include elements of Companies Act and Accounting Standards.</div>
<div>
<br /></div>
<div style="background-color: transparent; color: #2c2c2c; font-family: Arial; font-size: 15.555556297302246px; font-style: normal;">
In
addition to the above, the Board also approved the proposal to put in
place principles of Corporate Governance, policy on dealing with RPTs,
divestment of material subsidiaries, disclosure of letter of appointment
of Independent Directors and the letter of resignation of all
directors, risk management, providing training to Independent Directors,
E-voting facility by top 500 companies by market capitalization for all
shareholder resolutions and Boards of companies to satisfy themselves
that plans are in place for orderly succession for appointments to the
Board and senior management.</div>
<div>
<br /></div>
<div style="background-color: transparent; color: #2c2c2c; font-family: Arial; font-size: 15.555556297302246px; font-style: normal;">
<strong>II. </strong><strong>Long Term Policy for Mutual Funds in India</strong></div>
<div>
SEBI
Board has approved a Long Term Policy for Mutual Funds in India. The
long term policy includes all aspects - including enhancing the reach
and promoting financial inclusion, tax treatment, obligation of various
stakeholders, etc. to deal with the public policy objectives of
achieving sustainable growth of the mutual fund industry and
mobilisation of household savings for the growth of the economy. The
recommendations of long term policy has been bifurcated in two buckets,
tax incentive related proposals and non-tax related proposals.</div>
<div>
<strong><br /></strong></div>
<div style="background-color: transparent; color: #2c2c2c; font-family: Arial; font-size: 15.555556297302246px; font-style: normal; font-weight: bold;">
<strong> </strong><strong>(a) Tax related proposals:</strong></div>
<div>
The
objective of giving tax benefits is to incentivize and channelize
savings into long term investment products. Schemes offering tax
benefits are a powerful approach world over that helps channelize
household savings into long term investment products. The tax incentives
for Mutual Fund schemes are recommended as under:</div>
<div>
(i)
A long term product such as Mutual Fund Linked Retirement Plan (MFLRP)
with additional tax incentive of Rs.50,000/- under 80C of Income Tax Act
may be introduced.</div>
<div>
(ii) Alternatively, the limit of
section 80C of the Income Tax Act, 1961, may be enhanced from INR 1 lakh
to INR 2 lakh to make mutual funds products (ELSS, MFLRP etc.) as
priority for investors among the different investment avenues. RGESS may
also be brought under
this enhanced limit.</div>
<div>
(iii) Similar to
merger/consolidation of companies, the merger/consolidation of equity
mutual funds schemes also may not be treated as transfer and therefore,
may be exempted from capital gain taxation. </div>
<div>
<strong>(b) Non-Tax incentive proposals:</strong></div>
<div>
In
the long run, the objective is to ensure that Mutual Funds achieve a
reasonable size and play an important role in achieving the objective of
financial inclusion while further enhancing the transparency so that
investors can take informed decision. Towards this objective the
following has been decided:</div>
<div>
(i) Capital Adequacy i.e. minimum networth of the Asset Management Companies (AMC) be increased to INR50
crore.</div>
<div>
(ii) The concept of seed capital to be
introduced i.e. 1% of the amount raised (subject to a maximum of Rs.50
lacs) to be invested by AMCs in all the open ended schemes during its
life time.</div>
<div>
(iii) EPFOs be allowed to invest upto 15%
of their corpus in Equities and Mutual Funds. Further, the members of
EPFOs who are earning more than INR6500 per month be offered an option
for a part of their corpus to be invested in a Mutual Fund product of
their choice.</div>
<div>
(iv) Presently, Navratna and Miniratna
Central Public Sector Enterprises (CPSEs) are permitted to invest in
Public Sector Mutual Funds regulated by SEBI. It has been recommended
that all CPSEs be allowed to choose from any of the SEBI registered
Mutual Funds for investing their surplus
funds.</div>
<div>
(v) In order to enhance transparency and
improve the quality of the disclosures, it has been decided that AUM
from different categories of schemes such as equity schemes, debt
schemes, etc., AUM from B-15 cities, contribution of sponsor and its
associates in AUM of schemes of their mutual fund, AUM garnered through
sponsor group/ non-sponsor group distributors etc. are to be disclosed
on monthly basis on respective website of AMCs and on consolidated basis
on website of AMFI. </div>
<div>
(vi) In order to improve
transparency as well as encourage Mutual Funds to diligently participate
in corporate governance of the investee companies and exercise their
voting rights in the best interest of the unit holders, voting data
along with rationale supporting their decision (for, against or abstain)
be disclosed on quarterly basis on their
website. This is to be certified by Auditor annually and reviewed by
board of AMC and Trustees.</div>
<div>
(vii) Towards achieving the
goal of financial inclusion, a gradual approach to be taken such that
initially the banked population of the country may be targeted with
respect to Mutual Funds investing. SEBI will work towards achieving the
goal that the basics of capital markets and financial planning may be
introduced as core curriculum in schools and colleges. Printed
literature on Mutual Funds in regional languages be mandatorily made
available by Mutual Funds. Investor awareness campaign in print and
electronic media on Mutual Funds in regional languages to be introduced.</div>
<div>
(viii)
In order to develop and enhance the distribution network PSU banks may
be encouraged to distribute schemes of all Mutual Funds. Online
investment facility need to be enhanced to tap the
internet savvy users to invest in Mutual Funds. Also, the burgeoning
mobile-only internet users need to be tapped for direct distribution of
Mutual Funds products.</div>
<div>
The proposals relating to tax
incentives, allowing EPFO to invest in equities/mutual funds and
allowing all CPSEs to invest their surplus fund in mutual funds will be
sent to the Government for its decision.</div>
<div>
<strong><br /></strong></div>
<div style="background-color: transparent; color: #2c2c2c; font-family: Arial; font-size: 15.555556297302246px; font-style: normal; font-weight: bold;">
<strong>III. Amendment to SEBI {KYC (Know Your Client) Registration Agency} Regulations, 2011</strong></div>
<div>
SEBI
(KYC Registration Agency) system ('KRA system') has evolved and
stabilized over a period of two years and with inter-operability in
place, there is easy exchange of KYC data among five SEBI registered
KRAs. The client who has already done the KYC with any SEBI
registered intermediary need not undergo the same process again when he
approaches another intermediary. The system has benefited the investors
as well as the intermediaries.</div>
<div>
However, as per existing KRA
Regulations, there is an option available to the intermediary that he
may access the centralised KRA system in case of a client who is already
KYC compliant or carry our fresh KYC process. As the KRA system has
been working well, it is felt that there may not be a need to provide
this option in the Regulations.<br /><br />Board has now approved the
amendment to KRA Regulations and the option of taking fresh KYC has been
done away with. However, as provided in the Regulations, the
intermediary can undertake enhanced KYC measures commensurate with the
risk profile of its clients.</div>
<div>
This would further facilitate the KYC process for the investors.</div>
</div>
Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-3050623846371713467.post-47331278314808141922014-01-24T08:15:00.001-08:002014-01-24T08:15:50.281-08:00New CBDT press release for change of PAN allotment process w. e. f. 03.02.2014<div dir="ltr" style="text-align: left;" trbidi="on">
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<div style="text-align: justify;">
<span style="color: #660000; font-size: large;"><strong>New CBDT press release for change of PAN allotment process w. e. f.<span class="aBn" data-term="goog_1119959554" style="border-bottom-color: rgb(204, 204, 204); border-bottom-style: dashed; border-bottom-width: 1px; position: relative; top: -2px; z-index: 0;" tabindex="0"><span class="aQJ" style="position: relative; top: 2px; z-index: -1;">03.02.2014</span></span></strong></span></div>
<div style="text-align: justify;">
<span style="color: blue;"><br /></span></div>
<div style="text-align: justify;">
<span style="color: blue;"><br /></span></div>
<b><span style="font-family: Times-Bold; font-size: medium;"><span style="font-family: Times-Bold; font-size: medium;"></span></span></b><br />
<div style="text-align: center;">
<b><span style="font-family: Times-Bold; font-size: medium;"><span style="font-family: Times-Bold; font-size: medium;"><span style="color: blue;">Government of India</span></span></span></b></div>
<b><span style="font-family: Times-Bold; font-size: medium;"><span style="font-family: Times-Bold; font-size: medium;"><div style="text-align: center;">
<span style="color: blue;">Ministry of Finance</span></div>
<div style="text-align: center;">
<span style="color: blue;">Department of Revenue</span></div>
<div style="text-align: center;">
<span style="color: blue;">Central Board of Direct Taxes</span></div>
</span></span><div style="text-align: right;">
<span style="color: blue;"><span style="font-family: Times-Bold; font-size: medium;"><span style="font-family: Times-Bold; font-size: medium;">Dated 24</span></span><span style="font-family: Times-Bold; font-size: xx-small;"><span style="font-family: Times-Bold; font-size: xx-small;">th </span></span><span style="font-family: Times-Bold; font-size: medium;"><span style="font-family: Times-Bold; font-size: medium;">January, 2013</span></span></span></div>
<span style="font-family: Times-Bold; font-size: medium;"><span style="font-family: Times-Bold; font-size: medium;"><div style="text-align: right;">
<span style="color: blue;"> Press Release</span></div>
<div style="text-align: right;">
</div>
<div style="text-align: justify;">
</div>
</span></span></b><span style="font-family: Times-Roman; font-size: medium;"><span style="font-family: Times-Roman; font-size: medium;"><div style="text-align: justify;">
<span style="color: blue;">The procedure for PAN allotment process will undergo a change w.e.f. </span><span style="color: blue;"><span class="aBn" data-term="goog_1119959555" style="border-bottom-color: rgb(204, 204, 204); border-bottom-style: dashed; border-bottom-width: 1px; position: relative; top: -2px; z-index: 0;" tabindex="0"><span class="aQJ" style="position: relative; top: 2px; z-index: -1;">03.02.2014</span></span>. From this date onwards, <strong><u>every PAN applicant has to submit selfattested </u></strong></span><strong><u><span style="color: blue;">copies of Proof of Identity (POI), Proof of Address (POA) and Date of </span><span style="color: blue;">Birth (DOB) documents and also produce original documents of such </span><span style="color: blue;">POI/POA/DOB documents, for verification at the counter of PAN Facilitation </span></u></strong><span style="color: blue;"><strong><u>Centres.</u></strong> The copies of Proof of Identity (POI), Proof of Address (POA) and Date </span><span style="color: blue;">of Birth (DOB) documents attached with PAN application form, will be verified </span><span style="color: blue;">vis a vis their original documents at the time of submission of PAN application at </span><span style="color: blue;">PAN Facilitation Centre. Original documents shall not be retained by the PAN</span><span style="color: blue;">Facilitation Centres and will be returned back to the applicant after verification.</span></div>
<div style="text-align: justify;">
</div>
</span></span><b><span style="font-family: Times-Bold; font-size: medium;"><span style="font-family: Times-Bold; font-size: medium;"><div style="text-align: justify;">
<span style="color: blue;">(Rekha Shukla)</span></div>
<div style="text-align: justify;">
<span style="color: blue;">Commissioner of Income Tax (M&TP)</span></div>
<div style="text-align: justify;">
<span style="color: blue;">Official Spokesperson, CBDT</span></div>
</span></span></b><br />
<br clear="all" /><br />--<br /></div>
<div dir="ltr" style="background-color: white; color: #222222; font-family: arial, sans-serif; font-size: 13px;">
<div>
<span style="color: blue;"> </span></div>
<div>
<span style="color: blue;"> </span></div>
<div>
<span style="color: blue;"> </span></div>
<div>
<span style="color: blue;"> </span></div>
<div>
<span style="color: blue;"> See all updates on my blogger: </span></div>
<div>
<span style="color: blue;"><br /></span></div>
<div>
<span style="color: blue;"> 1. <a href="http://incometaxindia1.blogspot.in/" style="color: #1155cc;" target="_blank">http://incometaxindia1.<wbr></wbr>blogspot.in/</a></span></div>
<div>
<span style="color: blue;"> 2. <a href="http://femanfcra.blogspot.in/" style="color: #1155cc;" target="_blank">http://femanfcra.blogspot.<wbr></wbr>in/</a></span></div>
<div>
<span style="color: blue;"> 3. <a href="http://corporatelawsupdate.blogspot.in/" style="color: #1155cc;" target="_blank">http://<wbr></wbr>corporatelawsupdate.blogspot.<wbr></wbr>in/</a> </span></div>
<div>
<span style="color: blue;"><br /></span></div>
<div>
<span style="color: blue;"><br /></span></div>
<div>
<span style="color: blue;"> </span></div>
<div>
<span style="color: blue; font-family: verdana, sans-serif;">With regards,<br />Bipul Kumar<br />FEMA & Tax Advisory Services<br />Wisdom Management Consultancy Private Limited<br />------------------------------<wbr></wbr>--------------------<br />Reg. Office: B-116, Joshi Colony, I.P. Extension, New Delhi-110092 </span><br />
<span style="color: blue;"><span style="font-family: verdana, sans-serif;">+91-9560084833 [Cell]</span></span></div>
</div>
</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-3050623846371713467.post-64386579866994515242013-12-21T16:45:00.002-08:002013-12-21T16:45:21.104-08:00source Business standard and business line updates 22-12-2013<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">Source
Business Standard<o:p></o:p></span></div>
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<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Govts can’t tell India Inc how to spend on CSR, says Pilot</span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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PRESS TRUST OF INDIA<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">New
Delhi, 21 December<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">With
the new law requiring certain class of companies to spend on CSR efforts,
Union Minister Sachin Pilot on Saturday said neither the central nor state
governments can tell corporates on how to spend money towards social welfare
activities.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
new Companies Act, 2013, requires certain class of profitable entities to
shell out at least three per cent of their three- year annual average net
profit towards corporate social responsibility ( CSR) activities.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Pilot,
who is at the helm of Corporate Affairs Ministry, which is implementing the
legislation, said the ultimate decision on how to spend money towards CSR
activities would be with the board of the company.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“I
am very clear that it cannot be the ministry or the secretary or the state
government that will tell you on how to spend the ( CSR) money,” Pilot said
at an event here.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“We
don’t want to be the judge and jury on how to spend the CSR money,” he said.
The government is in the process of finalising the new Companies Act. “ We
have made sure that environment, ecology, wildlife... all of these have been
put as part of areas where companies can spend the money if they wish,” the
minister said.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Under
the Companies Act, 2013, that replaces the nearly six- decade old legislation
governing the way corporates function and are regulated in India, profitable
companies with a sizeable business would have to spend every year at least
two per cent of three- year average profit on CSR works. This would apply to
the companies with a turnover of </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 1,000 crore and
more, or net worth of </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 500 crore and more, or net profit of
</span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 5 crore and more.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
new rules, which would be applicable from 2014- 15 financial year, also
require the companies to set up a CSR committee of their board members,
including at least one independent director.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Emphasising
that the priority is to protect the interest of investors, Pilot said all
options are available before the government to deal with the NSEL crisis and
its fall out. The Corporate Affairs Minister said the ministry is expected to
receive the final report on the issue in the “ next few days”.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“All
options are available in front of us... Like in company law there are many
provisions that can be invoked depending on what the ( final) report says,”
Pilot said.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">National
Spot Exchange Ltd ( NSEL) promoted by Jignesh Shah- led Financial
Technologies is grappling with </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 5,600- crore
payment crisis. The Exchange, Financial Technologies, Shah as well as some
other group companies are already under the scanner of various authorities.
On the NSEL crisis, Pilot said his ministry is also looking at “ fit and
proper aspects” of certain entities, adding the government has already taken
" enough steps" in this regard.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Corporate
Affairs Minister Sachin Pilot speaks at 86th Annual General Meeting of Ficci in
New<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Delhi
on Saturday. PHOTO: PTI<o:p></o:p></span></div>
</td>
</tr>
</tbody></table>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
<table border="0" cellpadding="0" class="MsoNormalTable">
<tbody>
<tr>
<td style="padding: .75pt .75pt .75pt .75pt;">
<table border="0" cellpadding="0" class="MsoNormalTable">
<tbody>
<tr>
<td style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Withhold TDS when purchasing property from builder</span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
</td>
</tr>
<tr>
<td style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
PRAMOD ACHUTHAN<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">When
I met my friend Ameya Joshi last weekend over coffee, he excitedly informed
me that he had recently booked a fourbedroom apartment in an upcoming
scheme of a reputed builder. He went on to explain how good a deal he had
bagged, both from the builder and the bank financing his loan, and how he
had no need to worry at all since the bank had taken full responsibility to
disburse the loan instalments to the builder as and when the project was
completed over the next couple of years.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">My
tax brain immediately spun into action and I asked him whether he had made
any provision to withholding income tax on the payments to be made to the
builder. Upon finding that he was completely unaware about this
requirement, I went on to explain. Effective June 1, 2013, the income tax
rules require the purchaser of any immovable property ( except of
agricultural land) of value exceeding </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 50 lakh to
withhold income tax at the rate of 1 per cent and deposit it with the
government at the time of credit or payment of such sum (whichever was
earlier) to a seller who was a tax resident of India. This provision was
introduced by the government to improve reporting in the real estate sector
and to collect income tax at the earliest.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Hearing
this, Joshi mentioned that since his bank would make direct payment to the
builder, he need not worry about this statutory requirement even though the
value of his apartment crossed </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 50 lakh. Iduly
warned him, nevertheless, that the law casts the responsibility on the ‘
transferee’, that is, the buyer, to withhold income tax at source. And that
the bank might not always withhold the tax since it was only acting as his
disbursing agent. Since, non- deduction of tax at source might attract
penalties, it was Joshis duty to ensure that the tax was paid.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Seeing
that Joshi was turning worried about the number of compliances he would
need to undertake, I assured him that the government had already considered
this, and that he would not be required to obtain a tax- deduction account
number ( TAN) nor to file a quarterly tax withholding statement. Instead,
he would simply be required to fill up the requisite challan in Form 26QB
and deposit the appropriate tax within seven days from the end of the month
in which the amount was deducted.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Ifurther
explained that in Form 26QB, one needed to indicate relevant particulars
such as name, address and PAN of the buyer and seller; particulars of
transaction such as date of agreement, value of property, date and amount
of tax deducted.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
good thing is that the tax so withheld could also be paid electronically by
logging onto this website https:// onlineservices.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">tin.
egovnsdl. com/ et axnew/ tdsnontds. jsp, selecting Form 26QB and following
the instructions.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Ialso
asked Joshi to check with his bank whether it would agree to deposit an
amount equal to the withholding tax to the Government Treasury on his
behalf and release the net instalment due to the seller. Joshi then shot
the following questions at me:<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Is
this new provision ( i. e., Section 194- IA of the Act) applicable to
agreements entered into prior to June 1, 2013?<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
new provision applies to agreements entered prior to June 1, 2013 ( where
the value of the immovable property is more than </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
50 lakh) only for payments made on or after June 1, 2013. The provision is
applicable even if the payments to be made on or after June 1, 2013 are
less than </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 50 lakh, when
the overall consideration is more than </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 50 lakh.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Is
the tax needed to be deducted on the entire amount at one time or on
payment of instalments? The tax is required to be deducted on earlier
payment or credit of such sum to the account of the seller. Thus, in
payment by instalment, tax needed to be deducted at the time of every
instalment.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Is
the tax needed to be deducted on the amount paid towards indirect taxes (
such as service tax, VAT, etc)?<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Conservatively,
tax is required to be deducted on the full sale consideration including the
indirect tax component.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Is
there any other provision which needs to be complied with in addition to
payment of income tax in Form 26QB?<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Yes,
the purchaser ( of the property) is required to issue to the seller a “
certificate of tax deducted at source” in Form 16B, which can be downloaded
from https:// www. tdscpc. gov. in/ after allowing the system about a week
from payment in order to process the matter. Of course, one needs, however,
to first register on this website.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Does
this provisions apply to a non- resident Indian purchaser?<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Yes.
It applies to all persons purchasing such property from aresident seller.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">By
the time we had been thoroughly caffeinated, Joshi had come to the
conclusion that the procedure would not be too difficult to implement.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
author is Tax Partner, Ernst& Young. The views expressed are personal<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Your
financier might not always withhold income tax at source. Ensure you do so TDS
RULES<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><!--[if !supportFootnotes]--><span style="font-size: 12pt; line-height: 115%;">[1]</span><!--[endif]-->Tax-
at- source has to be deducted when you make payments to the seller for
property worth over </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 50 lakh <!--[if !supportFootnotes]--><span style="font-size: 12pt; line-height: 115%;">[1]</span><!--[endif]-->Non-
deduction of tax at source when making payments to builders might attract
penalties <!--[if !supportFootnotes]--><span style="font-size: 12pt; line-height: 115%;">[1]</span><!--[endif]-->Buyers
have to withhold tax at source even when the payment is made through
housing finance companies <!--[if !supportFootnotes]--><span style="font-size: 12pt; line-height: 115%;">[1]</span><!--[endif]-->One
does not require to have a tax- deduction account number to file taxes, but
just has to fill the requisite challan<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Source Business line<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; margin-bottom: 0.25in;">
<b><span style="color: #1f57a5; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 18.0pt;">Know
your gratuity benefits<o:p></o:p></span></b></div>
<div class="MsoNormal">
<span style="color: #7f7f7f; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; text-transform: uppercase;">ANAND KALYANARAMAN</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 12.0pt; margin-bottom: 15.0pt;">
<span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Job-hopping can increase your pay, but good old loyalty also
has its perks. Stay on with your employer for five years or more, and you
are entitled to gratuity when you resign, retire or are retrenched. This
monetary reward to be paid by your employer in recognition of your years of
service is mandated by the Payment of Gratuity Act. Most establishments
employing 10 or more workers fall under the Act.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 12.0pt; margin-bottom: 15.0pt;">
<span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The amount you get as gratuity depends on the number of
years you have served and the last drawn monthly salary. Roughly, you get
half a month’s Basic and DA for every completed year of service. Here’s the
formula to calculate gratuity: (Number of years of service) * (Last drawn
monthly Basic and DA) *15/26. So, if you have served 30 years and draw
monthly Basic and DA of Rs 20,000 when you leave the job, you get gratuity
of Rs 3,46,154 calculated as (30 * 20,000 *15/26). Your employer can choose
to pay you more but the maximum amount of gratuity according to the Act
cannot exceed Rs 10 lakh. Amount paid above this will be in the nature of
ex-gratia — something voluntary and not mandated according to law.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 12.0pt; margin-bottom: 15.0pt;">
<span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">If you serve more than six months in the last year of
employment, it is considered as a full year of service. For instance, if
your tenure is 30 years and 7 months, the years of service for gratuity
calculation will be rounded off to 31. But if you serve 30 years and 5 or 6
months, then the number of years of service will be considered as 30.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 12.0pt; margin-bottom: 15.0pt;">
<b><span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Waiving the rule</span></b><span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
<br />
Going by the book, gratuity is payable only if you have been with the
employer for five years or more. But this rule is waived if an employee
dies or is disabled. In such cases, gratuity is paid to the nominees or to
the employee, even if the tenure is less than 5 years.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 12.0pt; margin-bottom: 15.0pt;">
<span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Even employees not covered under the Payment of Gratuity Act
are entitled to gratuity. But in such cases, the formula for gratuity
calculation differs. It is computed as the (number of years of service) *
(average monthly salary in the last 10 months of employment) * (15/30).
This computation makes the gratuity amount lesser than that under the Act.
For instance, in the above example, an employee not covered by the Act will
be entitled to Rs 3,00,000 as gratuity, calculated as (30 * 20,000 *
15/30). This is Rs 46,154 lower than employees covered under the Act are
entitled to. Another difference is that only fully completed years of
service are considered in the calculations, and partial service in the last
year, even if it in excess of six months, is ignored. For instance, service
of 30 years and 7 months, will be considered as 30 years and not 31 years.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 12.0pt; margin-bottom: 15.0pt;">
<span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Another positive is the favourable tax treatment that
gratuity receipt enjoys. <b>Tax treatment</b><o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 12.0pt; margin-bottom: 15.0pt;">
<span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">If you are a government employee, then the entire amount you
get is exempt from tax. If you are not a government employee but are
covered under the Act, you get tax deduction for an amount which is the
lower of the following:<o:p></o:p></span></div>
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<span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">a) Actual gratuity received<o:p></o:p></span></div>
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<span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">b) 15 days Basic and DA for each completed year of service
(according to calculations in the example above)<o:p></o:p></span></div>
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<span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">c) Rs 10 lakh<o:p></o:p></span></div>
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<span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Say, in the instance above, your employer paid you gratuity
of Rs 5,00,000, which is more than the Rs 3,46,154 actually payable under
the law. You will enjoy tax deduction on Rs 3,46,154 and the surplus Rs
1,53,846 will be subject to tax. Note that the total tax deduction on
gratuity amounts received, including those from previous employers in
earlier years, cannot exceed Rs 10 lakh.<o:p></o:p></span></div>
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<span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Employees not covered under the Payment of Gratuity Act are
also entitled to tax deduction on the amount they receive. The deduction
rules are similar to those applicable for employees covered by the Act.<o:p></o:p></span></div>
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<span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><a href="mailto:anand.k@thehindu.co.in"><i><span style="color: #1f57a5; text-decoration: none; text-underline: none;">anand.k@thehindu.co.in</span></i></a><o:p></o:p></span></div>
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<span style="color: #333333; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">(This article was
published on December 21, 2013)<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 12.0pt; margin-bottom: 15.0pt;">
<span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Keywords: <a href="http://www.thehindubusinessline.com/features/investment-world/know-your-gratuity-benefits/article5487047.ece?homepage=true"><span style="color: #1f57a5; text-decoration: none; text-underline: none;">gratuity
benefits</span></a>, <a href="http://www.thehindubusinessline.com/features/investment-world/know-your-gratuity-benefits/article5487047.ece?homepage=true"><span style="color: #1f57a5; text-decoration: none; text-underline: none;">job-hopping</span></a>, <a href="http://www.thehindubusinessline.com/features/investment-world/know-your-gratuity-benefits/article5487047.ece?homepage=true"><span style="color: #1f57a5; text-decoration: none; text-underline: none;">stay with
your employer</span></a>, <a href="http://www.thehindubusinessline.com/features/investment-world/know-your-gratuity-benefits/article5487047.ece?homepage=true"><span style="color: #1f57a5; text-decoration: none; text-underline: none;">entitled to
gratuity</span></a>, <a href="http://www.thehindubusinessline.com/features/investment-world/know-your-gratuity-benefits/article5487047.ece?homepage=true"><span style="color: #1f57a5; text-decoration: none; text-underline: none;">resign</span></a>, <a href="http://www.thehindubusinessline.com/features/investment-world/know-your-gratuity-benefits/article5487047.ece?homepage=true"><span style="color: #1f57a5; text-decoration: none; text-underline: none;">retire</span></a>, <a href="http://www.thehindubusinessline.com/features/investment-world/know-your-gratuity-benefits/article5487047.ece?homepage=true"><span style="color: #1f57a5; text-decoration: none; text-underline: none;">retrenched</span></a><o:p></o:p></span></div>
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<div class="MsoNormal" style="background-color: white; background-position: initial initial; background-repeat: initial initial; margin-bottom: 0.25in;">
<b><span style="color: #1f57a5; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 18.0pt;">Consumer inflation linked bonds finally
here<o:p></o:p></span></b></div>
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<span style="background: white; color: #7f7f7f; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; text-transform: uppercase;">ANAND KALYANARAMAN<o:p></o:p></span></div>
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<span style="background: white; color: #7f7f7f; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; text-transform: uppercase;">BL RESEARCH BUREAU<o:p></o:p></span></div>
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<b><span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">December 21, 2013: <o:p></o:p></span></b></div>
<div class="MsoNormal" style="background: white; line-height: 12.0pt; margin-bottom: 15.0pt;">
<span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The much-anticipated inflation indexed bonds, linked to consumer
prices, will be available for sale for a week beginning Monday. Inflation
Indexed National Savings Securities - Cumulative, as these bonds are called,
seek to protect your savings from price rise, by offering returns over and
above inflation at the retail level. Drawbacks on taxation and liquidity fronts
dilute the hedge, but the bonds could still merit a place in your portfolio.<o:p></o:p></span></div>
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<b><span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The deal: </span></b><span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Only retail investors can
buy these bonds. The minimum investment size is Rs 5,000. The interest rate is
the sum of the prevailing inflation based on the combined consumer price index
(CPI) and a fixed rate of 1.5 per cent annually. The inflation rate will be
reckoned with a lag of three months, with the September CPI used in December,
and so on. Interest on the bonds will not be paid out but compounded on a
half-yearly basis. To illustrate, if CPI inflation is 6.67 per cent for six
months, add 0.75 per cent to arrive at the interest rate (7.42 per cent). So, an
investment of Rs 5,000 in December will earn interest of Rs 371 and stand at Rs
5,371 in June. This in turn will earn interest for the next six months based on
the inflation during that period. This continues for 10 years (the bond tenure)
when the principal and the compounded interest is get paid back.<o:p></o:p></span></div>
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<b><span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Pros & cons: </span></b><span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The bond’s unique selling
point – that it tracks retail inflation – can come in quite handy, if retail
level inflation remains high. In November, CPI-based inflation was 11.24 per
cent. At this level, the pre-tax return on the bond works out to nearly 12.75
per cent, far more than rates on long-term bank deposits (9.25 per cent). But
if inflation falls, the pre-tax return on the bond could be lower than that on
bank fixed deposits.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 12.0pt; margin-bottom: 15.0pt;">
<span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Note that the tax on interest will also reduce your returns.
After taxes, the 12.75 per cent pre-tax return on the bond will fall to 11.4
per cent in the 10 per cent slab, 10.1 per cent in the 20 per cent slab, and
8.8 per cent in the 30 per cent slab. That said, other safe investment options
today such as tax-free bonds and bank fixed deposits also do not provide
positive real returns (post-tax returns minus inflation). The bonds, however,
carry no TDS and tax experts say retail investors can offer their interest income
to tax either annually or at the time of maturity.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 12.0pt; margin-bottom: 15.0pt;">
<span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Liquidity on the bonds is not great either. Premature redemption
is allowed after one year for investors above 65 years, and after three years
for other investors. But if you redeem early, you will lose half the last
payable coupon.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 12.0pt; margin-bottom: 15.0pt;">
<span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">It is critical for your portfolio to beat inflation over the
long-term and these bonds provide a partial hedge. The returns are better at
lower tax slabs. But the bonds are not useful for regular income seekers. The
issue is open till December 31. To invest, approach SBI and its associates,
nationalised banks, HDFC Bank, ICICI Bank, Axis Bank and Stock Holding
Corporation.<o:p></o:p></span></div>
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<span style="color: #333333; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">(This article was published on December 21, 2013)<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 12.0pt; margin-bottom: 15.0pt;">
<span style="color: #3b3a39; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Keywords: <a href="http://www.thehindubusinessline.com/industry-and-economy/banking/consumer-inflation-linked-bonds-finally-here/article5487374.ece"><span style="color: #1f57a5; text-decoration: none; text-underline: none;">inflation
indexed bonds</span></a>, <a href="http://www.thehindubusinessline.com/industry-and-economy/banking/consumer-inflation-linked-bonds-finally-here/article5487374.ece"><span style="color: #1f57a5; text-decoration: none; text-underline: none;">bonds linked to
consumer prices</span></a>, <a href="http://www.thehindubusinessline.com/industry-and-economy/banking/consumer-inflation-linked-bonds-finally-here/article5487374.ece"><span style="color: #1f57a5; text-decoration: none; text-underline: none;">Inflation
Indexed National Savings Securities</span></a>, <a href="http://www.thehindubusinessline.com/industry-and-economy/banking/consumer-inflation-linked-bonds-finally-here/article5487374.ece"><span style="color: #1f57a5; text-decoration: none; text-underline: none;">price rise</span></a>, <a href="http://www.thehindubusinessline.com/industry-and-economy/banking/consumer-inflation-linked-bonds-finally-here/article5487374.ece"><span style="color: #1f57a5; text-decoration: none; text-underline: none;">inflation</span></a>, <a href="http://www.thehindubusinessline.com/industry-and-economy/banking/consumer-inflation-linked-bonds-finally-here/article5487374.ece"><span style="color: #1f57a5; text-decoration: none; text-underline: none;">Investment Focus</span></a><o:p></o:p></span></div>
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Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-3050623846371713467.post-50585890192944060012013-10-14T18:17:00.002-07:002013-10-14T18:17:57.442-07:00Business standard news update 15-10-2013<div dir="ltr" style="text-align: left;" trbidi="on">
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<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Now, book online for your railway food</span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
ANUSHA SONI<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">New
Delhi, 14 October<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Each
time Ajita Singh, aspiring to become a chartered accountant, travels from
Delhi to her home town, Lucknow, she prefers to munch chips and biscuits
rather than buy food on the train, being sceptical about the quality.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">This
time, though, she tried something different — placed an order online and the
food was delivered to her, at her berth, for less than </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
150.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
</span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 4,000- crore railway catering
sector, a subject of debate on the quality of food served, is witnessing a
change. Responding to the need are a couple of websites that have come up
with a ‘ market place model for railway catering’.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Travelkhana.
com and Merafoodchoice. com are among the leading players in this space.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Both
have a tie- up with over 200 restaurants spread across 100 cities, where they
can serve meals for individuals or groups. The cost could vary starting at
around </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 130. All one has to do is provide
the PNR number on the ticket or the originating and destination station,
along with the date of travel. The websites will let you choose from multiple
cuisines and prices. The delivery boy will have to buy a platform ticket to
give you the food. Both these companies started with an investment of under </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
1 crore and expect venture capitalist funding in the coming months. “We are
in a very advanced level of talks with the Railway Board for making us a
recognised partner in rail catering,” says Pushpinder Singh who started
travelkhana. com in August 2012. He plans to soon start a mobile application.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“We
serve about 500 meals in a day and reach 158 cities. People want quality food
and affordable prices”, says Piyush Kasliwal, a software professional who
started merafoodchoice.com in November 2012. The websites usually get a cut
of 15- 30 per cent in the profits of the restaurant.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Pushpinder
expects large fast- food chains to tie- up with him soon.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Currently,
under the standard prices decided by the Railway Board, the caterers must
serve a vegetarian meal at amaximum of </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 50 and a
nonvegetarian at 55. But, usually, charges go up to </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
85 and above, according to railway officials. “Most of them overcharge as
they say that in the current inflation, it’s very difficult to provide food
at the rates decided by the railways,” says an official. In 2010, the
catering of Indian Railways was taken away from Indian Railway Catering and
Tourism Corporation. Currently, a little over 30,000 catering units take care
of food in the trains and at stations.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Dinesh
Trivedi, who was railway minister in early 2012, had announced he’d start
asimilar ‘ book a meal policy’, where people could book a meal of their
choice before boarding.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">There
have been success stories earlier, too. For instance, Comesum, a vendor for
IRCTC, has about 20 outlets at railway stations and serves 70- 80 trains but
its reach is limited. It’s here that the online model can perhaps fill the
gaps.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
railway catering sector has been a subject of debate on the quality of food
served<o:p></o:p></span></div>
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<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Mumbai Police wing seeks powers to attach properties of
Shah, others</span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
</td>
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<tr>
<td style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
SANJAY JOG<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Mumbai,
14 October<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
Economic Offences Wing (EOW) of the city police has sought recommendations of
the Mumbai and Mumbai Suburban district collectors for invocation of the
provisions under the Maharashtra Protection of Interest of Depositors Act,
1999, ( in financial establishment).<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
invocation, if it happens, will give EOW the powers to attach the properties
of NSEL promoter Jignesh Shah, besides former directors, in connection with
the </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 5,600crore payment fraud at the
bourse.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Balsing
Rajput, deputy commissioner of police in the EOW, told Business Standard: “
We expect the two district collectors’ recommendations within a day or two.
We have sought invocation of the Maharashtra Act, which mainly covers the
functioning of financial establishments.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
invocation of its provisions will enable EOW to attach properties of Shah and
others who could have gained out of the crime.” On conviction for fraudulent
default, according to the Act, imprisonment for up to six years and a fine of
up to </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 1 lakh can be imposed on promoters,
partners, directors or employees of a financial establishment.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
Act gives the state the powers to attach properties of firms that fail to
return deposits after maturity or on demand from depositors. Properties can
also be attached if a financial establishment does not pay interest or other
assured benefits, fails to provide the service promised against such deposit,
or where the government has reasons to believe it is acting in a calculated
manner against the interest of depositors with an intention to defraud them.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Pending
order from the designated court, the government can conduct the attachment
through appointment of a competent authority.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">EOW’s
action has come within days of the arrests of former NSEL vice- presidents
Jai Bahukhandi and Amit Mukherjee over alleged fraud and bribery. These
arrests were made on the basis of an FIR lodged against them, NSEL promoters,
the board and other key employees.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Meanwhile,
EOW on Monday recorded the statements of former NSEL director B D Pawar and a
director of Delhi- registered Namdhari Food International and Harayanabased
Namdhari Rice and General Mills were also recorded.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Asks
for invocation of the Maharashtra Protection of Interest of Depositors Act,
1999<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">NSEL
PAYMENT FRAUD<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">FINANCE
7 ><o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">>Returns
thatweren’t cost NSEl ~ 1,700 cr<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">THE
SMART INVESTOR 14 ><o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">>Compass:
Petchem saves the day for RIL GK Pillai nominated on MCX- SX board<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">MCX-
SX, part of Financial Technologies group, on Monday said former home
secretary, Gopal Krishna Pillai, had been nominated public interest director
on its board. No question of govt taking over NSEL: FM<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Finance
Minister P Chidambaram has said NSEL’s parent group, Financial Technologies,
and related entity, MCX- SX, are underwatch and people responsible for the
alleged irregularities will have to pay the price. “ There’s no question of
the government taking over NSEL,” he said.<o:p></o:p></span></div>
</td>
</tr>
</tbody></table>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
<table border="0" cellpadding="0" class="MsoNormalTable">
<tbody>
<tr>
<td style="padding: .75pt .75pt .75pt .75pt;"></td>
</tr>
<tr>
<td style="padding: .75pt .75pt .75pt .75pt;">
<table border="0" cellpadding="0" class="MsoNormalTable">
<tbody>
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<td style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">To unlock FDI, govt to ease lock- in period for realty</span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
</td>
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<td style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
NAYANIMA BASU<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">New
Delhi, 14 October<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Much
to the cheer of foreign real estate developers, those investing in India’s
construction sector might be allowed to exit before the mandatory three
years stipulated at present.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">However,
for that, they would have to complete the project and procure completion
occupancy certificates from local authorities.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Currently,
they can exit before three years of putting in money only with permission
from the Foreign Promotion and Investment Board ( FIPB).<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">That’s
not all. According to a Cabinet note, being prepared by the Department of
Industrial Policy and Promotion ( DIPP), foreign developers will be allowed
to take back the entire invested amount before three years, after obtaining
the government’s approval.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">A
senior official involved in the process confirmed<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">this
to Business Standard.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">According
to the current FDI policy, the lock- in period of three years applies to
every tranche of investment brought in by aforeign player from the date of
receipt of investment or from the date of ‘ completion’ of minimum
capitalisation, whichever is later. Developers had long been complaining
that restrictions, such as the lockin norms, deterred them from investing
in the Indian market. At present, at least $ 10 million of paid- up capital
is required in whollyowned subsidiaries and $ 5 million in joint ventures.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“There
will be general easing of conditions in the lock- in norms. If they (
foreign developers) want to exit, they should not be scared to come to us
for an approval,” the official said.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">DIPP,
which has received approvals from most departments, is now in the process
of firming up its proposal. It is expected to shortly finalise the final
Cabinet note.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">With
investors proposed to be allowed to exit earlier on receipt of completion
occupancy certificate, there would be an incentive for players to complete
the projects.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">India
allows 100 per cent FDI through the automatic route in townships, housing,
built- up infrastructure and construction- development projects, subject to
certain conditions.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Between
2000 and 2013, the construction development sector has received about $ 22
billion of FDI — about 11 per cent of the country’s total FDI inflow during
the period.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">However,
since 2012, FDI in the sector has slowed down significantly. In 201213, it
was down to $ 1.33 billion, against $ 3.14 billion the previous year. In
the first four months of the current financial year, only $ 0.36 billion
foreign direct investment has flowed into this sector.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">But
completion occupancy certificates to be mandatory BUILDING BRIDGES<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">FDI
inflows in the construction sector<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">2011-
12<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">$3.14
bn<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">2012-
13<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">$1.33
bn<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">2013-
14*<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">$0.36
bn<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">*April-
July Source: Department of Industrial Policy &Promotion<o:p></o:p></span></div>
</td>
</tr>
</tbody></table>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
<table border="0" cellpadding="0" class="MsoNormalTable">
<tbody>
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<td style="padding: .75pt .75pt .75pt .75pt;">
<table border="0" cellpadding="0" class="MsoNormalTable">
<tbody>
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<td style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Returns thatweren’t cost NSEL </span></b><b><span style="color: steelblue; font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span></b><b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
1,700 cr</span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
</td>
</tr>
<tr>
<td style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
NSUNDARESHA SUBRAMANIAN<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">New
Delhi, 14 October<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Aforensic
audit commissioned by the Forward Markets Commission (FMC) has found
National Spot Exchange Ltd ( NSEL) gave away </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 1,700 crore as returns during
its life span. According to regulatory officials, this sum, around 30 per
cent of the </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
5,600 crore the exchange owes to 13,000 investors, was paid using the
money brought in by new investors, as trades on the platform did not
generate actual returns.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“An
unpermitted financing scheme was being run on the NSEL platform, wherein
NSEL was allowing the defaulting buyers to get more money and fresh money
was being brought in to ensure the earlier members were not exposed,”
said a senior regulatory official.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">While
some borrowers are prepared to pay the original amount they borrowed,
they are not prepared to pay the extra amount the exchange has added to
their dues as “ rollover costs”, leading to disputes.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">In
negotiations with the aggrieved investors over the past few weeks, the
exchange’s promoters, led by Jignesh Shah, have asked them to take ahair-
cut. But investors have not agreed to this which has caused a deadlock.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Now,
the settlement of investors’ dues could not be completed, unless there
was a decision on who would foot this </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
1,700- crore bill, the officials said.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Asked
by Business<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Standard
if NSEL had taken any decision on how to generate this sum, a
spokesperson of the exchange indicated NSEL was not responsible for the
repayment. “ This is not correct. When an old investor exited, he exited
with returns. His returns were funded by new investors, instead of
defaulters. This way, the old investor got the returns; it’s not NSEL
that got the money. In a way, old investors enjoyed the financing
platform. Now, it is part of the defaulting members’ dues,” the
spokesperson said in an emailed response.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
sum grew over the years as NSEL went on filling in payout defaults by one
party by using cash generated by others. The liability of members who had
already defaulted also went on increasing. In his affidavit confessing
his role in the scam, Anjani Sinha, former MD & CEO of NSEL,
estimates “ rolling over costs” to be </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
1,200 crore. He also gives a member- wise break up of these costs.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">According
to Sinha, “ It is a fact that these buyers have used part of these funds
towards repayment of their interest component and other exchange charges.
Besides, members have also used this fund for giving it back to the
exchange as cash- margin deposit. Considering all these factors, the cost
of funds comes to 21- 22 per cent a year. So, the total amount payable by
the members as on date includes the principal amount utilised by them,
plus the cost of funds paid by them through rolling over of their
liability by way of compounding.” He goes on to add: “ The situation was
such that if we did not allow rollovers, buyers would have defaulted on
huge amounts. On the other hand, if we continue to allow a member to roll
over his position position, his exposure keeps on increasing every year
by 2025 per cent due to the impact of rollover cost and exchange fees.”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Exchange
used new investors’ money to pay returns to old ones, finds FMC’s
forensic audit<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">How
it unfolded<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">|Exchange
paid regular returns to investors |Returns were paid despite defaults by
borrowers |The payments were made using money brought in by new investors
|The return payments added as rolling- over costs to borrowers’ dues
|These rolling- over costs run into hundreds of crores of rupees<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">NKProteins
</span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
388 crore<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">PD
Agro Processors<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
215 crore<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">ARKImports<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
165 crore<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">LOILgroup
( 3 firms)<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
117 crore<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Mohan
India/ Tavishi<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
70 crore<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Yathuri<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
55 crore<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Top
rolling- over cost of funds<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Source:
Anjani Sinha’s affidavit<o:p></o:p></span></div>
</td>
</tr>
<tr>
<td colspan="3" style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Madras HC bars ARCIL from taking possession of SPIC land</span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
</td>
</tr>
<tr>
<td colspan="3" style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 12pt;"><br />
BS REPORTER</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 12pt;">Chennai, 14 October<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 12pt;">The Madras high court has set aside earlier orders allowing
Asset Reconstruction Company ( India) Ltd ( ARCIL) to take possession and
sell the 168.35 acres in Tamil Nadu it had acquired as part of the
restructuring of SPIC Petrochemicals Ltd, a subsidiary of Southern
Petrochemical Industries Corporation ( SPIC).<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 12pt;">The order was related to a petition by Chennai Petroleum
Corporation Ltd ( CPCL), which had formed a joint venture with SPIC to
float a project on 1,655.92 acres, including the disputed land. Judge V
Ramasubramanian said the issue involved public interest, as despite the
acquisition of more than 1,655 acres by the government, invoking the
emergency clause, the industry for which the acquisition was made hadn’t
come up. Allowing CPCL’s application, the court recalled the earlier
order passed in December 20, 2010, which allowed ARCIL to take possession
of the 168.35 acres.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 12pt;">In January 1985, CPCL had signed a memorandum of
understanding with SPIC for a joint venture to float a public limited
company— National Aromatics and Petrochemicals Corporation— after the
former received an industrial licence to manufacture o- xylene, benzene
and purified teraphthalic acid. The project was named Arochem.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 12pt;">In September 1989, the Tamil Nadu government accorded
administration sanction for the acquisition of 1,655.92 acres of patta
and poramboke lands in various villages.<o:p></o:p></span></div>
</td>
</tr>
<tr>
<td colspan="5" style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">NSEL probe gets wider</span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
</td>
</tr>
<tr>
<td colspan="5" style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
RAJESH BHAYANI<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Mumbai,
14 October<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
probe in the National Spot Exchange Ltd ( NSEL) payment crisis is being
widened, with more agencies joining the investigations. Also, the Forward
Markets Commission ( FMC) is considering aspecial audit of the Multi
Commodity Exchange (MCX), NSEL’s sister concern.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
Department of Company Affairs has already begun an inspection of NSEL
under Section 209- A of the Companies Act, 1956. The probe would include
inspection of the exchange’s books, with a specific reference to “ all
sums of money received and expended by the company and the matters in
respect of which the receipt and expenditure take place”. The Enforcement
Directorate is probing the exchange’s operations under the Prevention of
Money Laundering Act ( PMLA), after securing information in this regard
from the economic offences wing of the Mumbai Police.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">When
contacted, an NSEL spokesperson said, “ Since investigations are on, we
cannot comment on this.” After issuing a show- cause notice to the
promoters and directors of the crisis- ridden exchange, the FMC is now
focusing on MCX, India’s leading commodity futures exchange. It is
considering a special audit of MCX operations since the inception of the
exchange in 2003, focusing on related party transactions and on probing
whether any special treatments were given to these, in terms of margins.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">In
response to a query, an MCX spokesperson said, “ MCX has not yet received
any communication from FMC with regard to a special audit. MCX is open to
any scrutiny from FMC or any other authority.” MCX has already admitted
the Indian Bullion Merchants’ Association ( IBMA) was found to be trading
on MCX, despite the fact that it was a subsidiary of NSEL and, therefore,
a related party. Trading by related parties isn’t allowed by regulations
governing commodity futures.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
MCX spokesperson clarified, “MCX has an automated trading system, with
virtually no human interference. Calls for margin money are automated,
with adequate provisions for informing members about their margin
requirements and settlement dues. Moreover, the system does not waive or
lower margin money for members’ leveraged trades. Members are not allowed
to take new positions without the requisite margin requirements, and the
system automatically squares off all such outstanding positions.” Sources
privy to the development said a special audit would cover issues related
to trading by IBMA — whether any related party traded on it or not,
whether favourable margins were given to related parties and whether
proper procedures were followed in case of NSEL defaults.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">In
its show- cause notice to NSEL promoters, FMC had said there were 2,000
defaults.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">A
source said FMC would soon finalise who would conduct the special audit.
The audit is aimed at ascertaining whether corporate governance norms
were adhered to. “ If nothing serious comes out, that will inspire
confidence among other stakeholders and if some discrepancies are found,
prompt action will be taken to restore the confidence,” said a government
official.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Inspection
under Companies Act launched; ED starts money- laundering probe; FMC
mulls special audit of MCX<o:p></o:p></span></div>
</td>
</tr>
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<div class="MsoNormal">
<br /></div>
</div>
Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-3050623846371713467.post-16295874117316773112013-10-10T17:13:00.000-07:002013-10-10T17:13:00.960-07:00business standard news updates <div dir="ltr" style="text-align: left;" trbidi="on">
<table border="0" cellpadding="0" class="MsoNormalTable">
<tbody>
<tr>
<td style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Walmart keeps the door open for India retail play</span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
</td>
</tr>
<tr>
<td style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
NAYANIMA BASU<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">New
Delhi, 10 October<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">American
retail major Walmart has snapped ties with Indian partner Bharti but its
plans to enter the country’s multi- brand retail space appears intact. The
company has urged the Department of Industrial Policy and Promotion (DIPP) to
allow entry of private label suppliers as part of 30 per cent mandatory
sourcing norms.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">It
has asked DIPP to amend the mandatory sourcing clause to introduce the
concept of private- labelling.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">This,
if allowed, would help the US retail behemoth bring in some of its
international private labels that are keen to enter the fast- paced Indian
retail market.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Walmart,
which announced its break- up with Bharti on Wednesday, has sent to DIPP a
detailed plan on the way it wants its private label suppliers to operate in
India.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“They
( Walmart) have suggested private labelling to be inducted in the sourcing
clause. We are examining it and trying to understand the concept,” asenior
DIPP official told<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Business
Standard.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">He
said DIPP was trying to comprehend whether sourcing would be done from
foreign markets or from India before taking a call on the issue.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Through
its partnership with Bharti Retail, Walmart had brought in seven private
labels — Great Value, Equate, Hometrends, George, Astitva, Mainstays and
Simply Basic — offering adiverse mix of products in India at Easyday
supermarket chain.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Private
labels, popularly known as store brands, are owned by the retailers and sold
at lower prices within their own outlets. Big retailers are able to sell
these at lower prices, unaffected by margin worries, as the cost of marketing
and advertising of these private labels is nominal.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Indian
retail biggies, such as Future Group and Reliance Retail, also rely on
private labels to push their sales.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Even
as the government has relaxed entry norms for foreign multibrand retailers,
Walmart has expressed its discontent over some of the conditions the policy
lays out. Under pressure from international players, the government further
eased the norms on some of the riders, especially the one related to the
mandatory sourcing clause.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“They
still have problems with the sourcing norm. We are trying to analyse what
they are seeking,” the official said.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">According
to the extant policy, foreign retailers can open outlets in the country on
the condition that 30 per cent of their sourced sales would come from small
to medium- sized domestic producers in India. However, the definition of
small sector has been expanded to include units with total investments of up
to $2 million in plant and machinery (instead of $ 1 million earlier).<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Walmart
now wants to get this norm amended to fit in its private label suppliers.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Seeks
entry of private- label suppliers as part of 30% sourcing norms STICKING
POINT<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
mandatory MSME sourcing norm<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">>Up
to 51% FDI allowed<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">in
multi- brand retail on the condition that at least 30% of requirements will
be sourced from Indian micro, small and medium enterprises >To attract
FDI, the norm was eased by redefining the MSME sector to include units with
total investments of up to $ 2 million in plant and machinery ( instead of $
1 million earlier)<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">>Still
wary of the sourcing<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">norm,
Walmart has been seeking further relaxation<o:p></o:p></span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-3050623846371713467.post-68260005095853414412013-10-09T18:03:00.003-07:002013-10-09T18:03:54.079-07:00Business standard news updates 10-10-2013<div dir="ltr" style="text-align: left;" trbidi="on">
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<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">NSEL admitted members without KYC documents</span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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NSUNDARESHA SUBRAMANIAN<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Mumbai,
9 October<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">National
Spot Exchange Ltd (NSEL), in the middle of a </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 5,600- crore
payment crisis, admitted several of its 24 borrowing members without proper
compliance with know your customer ( KYC) norms and failed in due diligence,
a forensic auditor has found.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
refusal by these 24 members to pay their dues triggered the payment crisis in
August.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">During
a forensic audit commissioned by the Forward Markets Commission ( FMC), it
emerged “ 25 buyers were introduced on the NSEL platform over the last four
years.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">No
due diligence of these buyers was done and buyers with very poor credentials
had been introduced into the NSEL system.” NSEL admitted several of its
borrowing members such as N K Proteins, Mohan India, Sankhya Investments,
Yathuri, Namdhari Food International, Tavishi Enterprises, Shree Radhey
Trading, Metkore Alloys & Industries and Topworth Steel and Powers, when
one or more of their KYC documents such as identity proof, address proof,
details of promoter group, etc, were not available.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">These
members account for about </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 2,700 crore or
nearly half of the total dues. Some of these such as Tavishi and Yathuri have
gone hostile. Tavishi has even initiated legal proceedings, saying it never
received the goods against </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 346 crore dues
shown by the exchange.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">In
some cases, even the security deposit was not fully received. In the case of
Chandigarh- based LOIL group entities and Andhra- based Sankhya Investments,
the security deposit was only partially received.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Further,
the audit also found LOIL group firms LOIL Overseas, LOIL continental foods
and LOIL Health Foods had a common director in Balbir Singh. This was in
contravention of Rule 33 of the NSEL rules. Yet, exceptional approval was
given for them to trade by the then managing director & chief executive officer,
Anjani Sinha, and his juniors, but the grounds of this exceptional approval
were not documented, the auditor found.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
report also found no evaluation was conducted on the annual compliance
documents collected from members.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">In
the absence of effective monitoring, no penal actions have been initiated. No
member was ever barred or deactivated on such grounds.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">FMC
has issued a showcause notice based on the findings of the forensic auditor.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">An
NSEL spokesperson said he could not offer any comments, since the report was
confidential.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Forensic
audit finds some members did not put in enough security deposit NOT
ENOUGH KNOWN<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Members
with incomplete KYC documentation ( Amount due in </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
cr)<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">NK
Proteins 929 Mohan India 605 Yathuri Associates 460 Tavishi Enterprises 346
Topworth Steels 182 Metkore Alloys 114 Namdhari Food Intl 53 Shree Radhey
Trading 36 Sankhya Investments 7<o:p></o:p></span></div>
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<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">MCX’s board to get govt flavour </span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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NSEL PAYMENT CRISIS FALLOUT NSUNDARESHA SUBRAMANIAN<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Mumbai,
9 October<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Nudged
by the Forward Markets Commission (FMC), Multi Commodity Exchange ( MCX) has
written to five institutional shareholders to nominate their representatives
on the exchange’s board.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Requests
have been sent to IFCI, Bank of India, Union Bank of India, Corporation Bank
and HDFC Bank. Once the proposal is implemented, Financial Technologies,
which has been controlling the exchange, is likely to have just one board
seat.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Officials
in the know said the move was independent of the regulator’s show- cause
notice to the three Financial Technologies Group directors—Jignesh Shah,
Joseph Massey and Shrikant Javaglekar.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“Once
these directors are appointed, MCX would have six institutional nominees, as
one director representing Nabard is already there. Eventually, Financial
Technologies will have only a single director in the board,” said a senior
regulatory official familiar with the development.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
exchange’s board would have 14 directors, seven of whom would be independent
ones. FMC wants institutional representatives be nominated for non-
independent executive roles. Executive directors would be involved in the
day- to- day running of the exchange.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
restructuring is likely to give the Centre indirect control over the
exchange’s affairs, with five of the six institutional investors--- Nabard,
IFCI, Bank of India, Union Bank of India and Corporation Bank —under the
administrative control of the finance ministry.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Also,
three of the seven independent directors would be nominated by FMC.
Traditionally under the control of the consumer affairs ministry, FMC affairs
have recently been brought under the finance ministry’s ambit.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">In
response to an email seeking comment, an MCX spokesperson said, “ FMC has
given revised guidelines to reconstitute commex boards. In order to meet its
guidelines, we are in the process of reconstituting the MCX board and have
asked institutional shareholders to nominate board representatives.” The
regulator’s move is aimed at insulating the regulated MCX from the troubles
of National Spot Exchange Ltd (NSEL), which has run into a </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
5,600- crore payment crisis. “The restructured board is likely to bring in a
new management and take corrective steps wherever there are issues,” said the
official quoted earlier.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">According
to the latest shareholding pattern, Financial Technologies, the promoter of
NSEL, holds 26 per cent in MCX. A few industry officials said this holding
would give Financial Technologies a quarter of the non- independent board
seats — two directors out of seven. But Financial Technologies would still be
a minority on the board. With 26 per cent stake, however, the group would be
able to block special resolutions, as company law provisions require a
threefourths majority for a special resolution to be passed.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">IFCI
holds 4.79 per cent stake in MCX. With 3.06 per cent stake, Nabard is the
second largest shareholder among state- owned institutions. While Corporation
Bank owns 2.95 per cent, Bank of India, Union Bank and HDFC Bank hold about
one per cent each.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Bourse
has asked IFCI, three public sector banks to nominate directors; HDFC Bank to
get a board seat IN THE WORKS<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">|After
the restructuring, Financial Technologies is likely to have just one board
seat |Once these directors are appointed, MCX would have six institutional
nominees |FMC wants institutional representatives be nominated for
nonindependent executive roles |The restructuring is likely to give the
Centre indirect control over the exchange’s affairs<o:p></o:p></span></div>
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<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Sebi allows SME listing sans IPOs</span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
BS REPORTER<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Mumbai,
9 October<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
Securities and Exchange Board of India ( Sebi) has allowed listing of small
and medium enterprises ( SMEs) without raising any money from the public, a
move expected to help provide an exit avenue to existing investors.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
companies would be listed on a platform which is open only to institutional
investors and which would have a minimum trading lot of </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
10 lakh, according to a regulatory notification dated October 8.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Pavan
Kumar Vijay, managing director at financial consultancy firm Corporate
Professionals, said the move would aid price discovery and liquidity for the
shares of such companies.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“Listing
will afford companies better valuations and also help make it easier for
investors to sell their stake,” he said.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Sebi
has said promoters need to have at least 20 per cent stake in the company.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“Not
less than 20 per cent of the post listing capital shall be held by the
promoters at the time of listing of specified securities of the small and
medium enterprises, which shall be lockedin for a period of three years from
the date of listing,” the notification said.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Sebit
has also put in place conditions to keep away wilful defaulters and those who
have had a run- in with regulators, according to the notification released on
Wednesday. It bars listing by companies whose name appears in the wilful
defaulters list of the Reserve Bank of India. Sebi is also looking to keep
out companies whose promoter, group company or directors appear in the list.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Also,
there should be no winding up petition against the company or regulatory
action against it for five years, said the notification.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Other
criteria include not completing more than 10 years after incorporation and
revenues, which have not exceeded </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 100 crore.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
companies that list on the platform would also require to have received
funding or investment from at least one from a list of eligible entities,
which include angel investors, alternative investment funds, scheduled banks
or specialised international multilateral agencies.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
list also extends to merchant bankers and qualified institutional investors
whose stake in the company would be locked in for at least three years from
the time of listing.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
exit from such an institutional trading platform will be subject to a nod
from a majority of non- promoter shareholders and the stock exchange where it
is listed.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
exit would also happen if the company has been listed for 10 years or fulfils
criteria such as revenues of more than </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 300 crore or
market capitalisation, which is greater than </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 500 crore.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
exchange can de- list the company if it fails to file periodic filings or
comply with corporate governance norms for more than a year.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
promoters and nonindependent directors of a company, which is de- listed for
non- compliance, will not be allowed to list another company on the platform
for five years.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Companies
cannot come out with an IPO while listed on the platform but can raise
capital through private placement or rights issue.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">SMALL
GOES BIG<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Features
of the new SME platform<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">|SME
allowed to list without raising of funds |Institutional platform to help price
discovery, liquidity |Minimum trading lot of </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 10 lakh |Promoter
lock- in for three years |Sebi bars entities that are apart of wilful
defaulters’ list or have faced regulatory scrutiny<o:p></o:p></span></div>
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<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Sebi mulls trade cancellation to prevent ‘ freakouts’</span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
BS REPORTER<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Mumbai,
9 October<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Market
regulator Securities and Exchange Board of India (Sebi) on Wednesday
proposed aframework for cancellation or annulment of trades to deal with
the growing instances of freak trades. A freak or erroneous trade is a
transaction executed either by a punching error by amarket dealer or
through malfunction of a trading system.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Currently,
exchanges are empowered to annul trades and have their own bye- laws in the
absence of a regulatory framework.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">To
have uniformity and transparency, the market regulator, in a discussion
paper, proposed a regulatory framework for the annulment of trades.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Sebi
has said that trades that are executed shall not be annulled under normal
circumstances.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“Trade
annulment should only be considered under exceptional circumstances (
fraud, market manipulation, regulatory action or error that impacts the
sanctity of price discovery, etc). In such cases, the exchange may also suo
moto undertake examination of trades for cancellation,” Sebi has said in a
discussion paper.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
regulator has said as the decision to cancel trades impacts a large set of
market users, it should only be invoked in the interest of the market at
large.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“Such
traders/ investors may find themselves at the losing end for no fault of
theirs in the event such ‘ erroneous’ trades are cancelled or modified,”
the paper added.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
exchanges will have to be clearly define circumstances under which a trade
annulment request shall be accepted. The regulator has said annulment shall
be accepted if all the parties involved are in agreement to do so.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Under
the proposed regulatory framework for trade annulment, Sebi has proposed to
apply deterrent penalties in the form of fines or suspension of trading rights
of the stock broker. It has also prescribed a time limit for accepting a
request for annulment.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Typically,
trades executed on exchanges are considered final. However, in some
exceptional cases, including the volume surge during Muhurat day trading on
BSE triggered by faulty algorithm, exchanges have annulled trades.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Refusal
of trade annulment also can be a contentious issue between an exchange and
a broker as seen in case of the infamous Emkay flash crash.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">RAGE
AGAINST THE MACHINE<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Recent
freak trade incidents observed in the Indian securities market<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Exchange
Date Incident<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">BSE
Oct 26, ‘ 11 A trading algorithm malfunctioned resulting in a large
movement in the Sensex futures in less than three minutes NSE Apr 20,’ 12
An error by a trading algorithm resulted in a fall in the prices of Infosys
futures by 19% NSE Oct 05, ‘ 12 On account of erroneous orders of a stock
broker resulting in multiple trades for an aggregate value of over </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
650 crore, the Nifty circuit breakers got triggered and trading in the
NSE’s cash market segmentwas halted NSE Feb 01, ‘ 13 Malfunction of a
trading software of a stock broker resulted in erroneous orders in the
scrips of Tata Motors and UltraTech Cement<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Source:
Sebi discussion paper<o:p></o:p></span></div>
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Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-3050623846371713467.post-64343745562750013142013-09-04T18:24:00.002-07:002013-09-04T18:24:25.136-07:00Business standard news updates 5-9-2013<div dir="ltr" style="text-align: left;" trbidi="on">
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<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Bill to give pension sector regulator statutory powers gets
House okay</span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
BS REPORTER<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">New
Delhi, 4 September<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
Lok Sabha on Wednesday passed the Pension Fund Regulatory & Development
Authority ( PFRDA) Bill, which seeks to give statutory powers to the interim
regulator constituted by an executive order in 2003. The pension reforms Bill
has fixed the ceiling on foreign direct investment ( FDI) in the sector at 26
per cent — to move in sync with that for the insurance sector.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
Bill passed by the lower house on Wednesday carried some amendments to the
one tabled in 2011. The earlier version had kept the option of FDI cap
outside the purview of the legislation, as it was believed the FDI cap could
be raised through an executive order. However, the revised Bill included it
as part of the legislation, following objection from Parliament’s standing
committee on finance.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Other
amendments include providing subscribers the option of investing in the
schemes that provide minimum assured returns.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">On
this, during the debate in the Lok Sabha, Bhratruhari Mahtab of the Biju
Janata Dal sought amendments to provide that the government give minimum
assured returns equivalent to at least the interest rate offered by the
Employees’ Provident Fund Organisation ( EPFO).<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Finance
Minister P Chidambaram said it was not possible to give an undertaking that
assured returns would be higher (or lower) than the EPFO rates but added the
money could be invested in government securities.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
proposed pension fund in some cases. These cases and the number of
withdrawals will be decided by PFRDA.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
proposed law will give statutory powers to PFRDA, which has been regulating
the New Pension Scheme ( NPS) since January 1, 2004, and had 5.28 million
subscribers and a corpus of </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 34,965 crore as on
August 14, 2013. NPS is different from the earlier pension system in that it
has defined contributions, while the earlier one had defined benefits.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">All
central government employees, except armed forces, who joined the services
since January 1, 2004, are part of NPS.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Turn
to Page 22 ><o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“The
New Pension System (regulated by PFRDA) is the only genuine plan. Pension
products of insurance companies are already there. Going forward, NPS will be
the only pure pension programme”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">YOGESH
AGARWAL<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Chairman,
PFRDA<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">>The
FDI cap for the pension sector, which has been fixed at 26%, will move in
sync with that for the insurance sector<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">>The
insurance Bill,<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">which
seeks to raise FDI cap from 26% to 49%, will be taken up in Parliament’s
winter session, says FM<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">>Pension
fund<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">subscribers
will get the option to invest their money in schemes with minimum assured
returns >At least one of the managers for the proposed pension fund will
have to mandatorily be from the public sector<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">>At
least 40 per cent<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">of
subscribers’ money under the proposed pension fund will have to be
mandatorily annuitised SPECIAL<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Coverage
ECONOMY P4 ><o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">>10
things you wanted to know >What the passage of the Bill means
>Enactment brings optimism<o:p></o:p></span></div>
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<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">RBI validates e- KYC through Aadhaar</span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
SURABHI AGARWAL<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">New
Delhi, 4 September<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
Reserve Bank of India has accepted an electronic KYC, based on the Aadhaar
or Unique Identification ( UID) number, as a valid way to open abank
account.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">This
could reduce the risk of identity fraud and document forgery, paving the
way for a paperless way of fulfilling the know- your- customer (KYC) norms.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">In
a notification on Monday, the central bank said an e- KYC was acceptable
under the Prevention of Money Laundering ( Maintenance of Records) Rules,
2005. Banks may open a new account by taking aperson’s Aadhaar number and
biometrics. Once matched, the demographic data, including identity and
address proof stored with the UID’s central registry, can be accessed by
the bank concerned to complete the verification.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">A
bank will need to take “explicit consent” of the person concerned to “
release her or his identity/ address through biometric authentication to
the bank branches/ business correspondents,” RBI said.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">A
P Singh, deputy director general of the Unique Identification Authority of
India ( UIDAI) said the move would help the banking and telecom sectors the
most.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">These
would save on the huge cost of storing and verifying the documents in
question, along with the obvious advantages of establishing an audit trail
and reducing document fraud. The department of telecom would also have to,
first, notify an e- KYC as a valid verification process for new telecom
connections.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“Since
RBI has approved it, we’re hoping other regulators such as the Securities
and Exchange Board of India (Sebi) also allow e- KYC for other financial
transactions,” said Singh.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Business
Standard had reported in July on a division regarding whether e- KYC was
allowed under current law. The matter was referred to the law ministry.
Last month, the ministry had approved, as it felt the Information
Technology Act considered electronic documents at par with physical ones.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
finance ministry had then written to RBI and to other regulators such as
Sebi to issue directives for financial companies to start accepting e- KYC.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">According
to the RBI notification, banks will have to sign an agreement with UIDAI to
access the e- KYC service, deploy hardware and software, develop a software
application and define a procedure for obtaining customer authorisation fot
UIDAI to share the data with the bank.<o:p></o:p></span></div>
</td>
</tr>
<tr>
<td colspan="3" style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">PEs lobby for directors’ parity in Cos Bill</span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
</td>
</tr>
<tr>
<td colspan="3" style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 12pt;"><br />
REGHU BALAKRISHNAN</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 12pt;">MUMBAI, 4 September<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 12pt;">Private equity ( PE) investors in India are coming out against
certain clauses in the new Companies Bill that create a disparity between
PE nominee directors and other directors on company boards.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 12pt;">According to PE experts, the nominee directors of banks and
other financial institutions enjoy certain immunity for the wrongdoing of
promoters, while nominee directors of PE firms are held responsible for
these.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 12pt;">The Indian Private Equity and Venture Capital Association (
IVCA), the premier body of PE and venture capital firms in India, plans to
approach the corporate affairs ministry to demand removal of the
contentious clauses in the Bill and treat PE directors on par with
directors of banks and financial institutions.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 12pt;">Mahendra Swarup, president of IVCA, said: “ This discriminates
against the nominee directors of PE, as they are held responsible and
considered just like any other director, including the promoter directors.
Whereas both nominee directors of the banks or financial Institutions and
PE should have same treatment as both are investors or lenders and not
involved in the day- to- day operations of the company.” The board members
of a limited or a private limited company are liable for prosecution under
various statutes for any default by the company management, including
independent directors and nominees of PE Funds.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 12pt;">“The investors or limited partners ( LPs) such as global
Insurance companies or large pension funds insist on a very high level of governance
and transparency, which the Indian promoters and their boards are not
familiar with.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 12pt;">This creates a lot of reputational risk for both fund
managers, LPs and personal risk for the nominee directors of the PE funds,”
said a fund manager on condition of anonymity.<o:p></o:p></span></div>
</td>
</tr>
<tr>
<td colspan="5" style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">BS
REPORTER<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Mumbai,
4 September<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">It
was easily the most substantive speech by a Reserve Bank of India (RBI)
governor on his first day in office.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Just
two hours after the formal signing- in ceremony and a warm hug from his
predecessor, Raghuram Rajan got down to business in a manner that surprised
all.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">In
his first media conference as governor, Rajan unveiled a slew of reforms,
many of those focused on “ protecting the value of money”. His opening
remarks set the tone for the new order at the central bank: “ To the
existing traditions of RBI, we will emphasise two others: Transparency and
predictability. That is not to say we will never surprise markets with
actions.” The new governor removed uncertainties over the new bank licence
process by setting a timeframe. An expert panel under former RBI governor
Bimal Jalan will scrutinise the applications and licences will be issued
before or soon after Deputy Governor Anand Sinha leaves office in January.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Rajan
postponed the midquarter review of its monetary policy by a couple of days
to September 20. The US Federal Open Market Committee ( FOMC) meeting,
scheduled on September 1718, is expected to indicate when the US Fed might
start tapering its stimulus programme — an event crucial for the fate of
currencies of emerging markets, including India.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Rajan
also announced four committees —one under RBI Deputy Governor Urjit Patel
to revisit the structure of monetary policy; two on bad and restructured
loans and their recovery; and one on financial inclusion to be headed by
Nachiket Mor, a former board member of ICICI Bank who is now on the RBI
board.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Earlier
in the day, the rupee recovered 0.94 per cent from its previous close to
67.09 a dollar. Stock markets also gained, with the BSE Sensex rising 1.83
per cent, or 333 points, to close at 18,567.55.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Freeing
up branch licensing is another key reform Rajan announced on Wednesday.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">At
present, banks need to take prior approval of RBI for opening branches in
Tier- I centres ( with population of more than 100,000, except in the
Northeast and Sikkim). For Tier- II to Tier- VI towns, banks can open
branches, subject to reporting. However, banks are required to ensure they open
25 per cent of their branches in unbanked rural areas ( Tier- V and - VI).<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">In
a move to ensure flow of credit to productive sectors and curb ‘ lazy
banking’, Rajan proposed reduction of banks’ requirement to invest in
government securities.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">As
of now, banks need to hold at least 23 per cent of their net demand and
time liabilities in government securities.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">|BIMAL
JALAN TO HEAD PANEL ON NEW BANK LICENCES |BRANCH LICENSING FOR DOMESTIC
BANKS FREED |INFLATION- SAVINGS CERTIFICATES BASED ON CONSUMER PRICE INDEX
|RBI TO GRADUALLYREDUCE BANKS’ G- SEC INVESTMENT REQUIREMENT MARKETS
GREET RAJAN<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">New
RBI Governor Raghuram Rajan ( left) greeted by his predecessor DSubbarao,
at the RBI headquarters in Mumbai on Wednesday<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“Governorship
of central bank is not to win votes or Facebook likes but to do what is
right”<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">RAGHURAM
RAJAN<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">RUPEE
GAINS<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">0.94%<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Close:
67.09/$ Close: 18,567.55<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">SENSEX
RISES<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">1.83% SETTING
THE STAGE<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">>Committees
set up<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">|BIMAL
JALAN to head external committee to vet bank licences to be announced
around January 2014 |URJIT PATEL, deputy RBI governor, to head committee on
improving monetary policy framework |NACHIKET MOR to head committee to take
financial inclusion forward |K C CHAKRABARTY, deputy RBI governor, to take
a look at banks’ rising NPAs and the restructuring/ recovery process |ANAND
SINHA, deputy RBI governor, to examine issues related to debt recovery
tribunals and asset reconstruction companies |TECHNICAL COMMITTEE to study
feasibility of using encrypted SMS- based fund transfers<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">>Several
steps announced<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">|Mid-
quarter monetary policy review postponed to September 20 *Banks won’t need
RBI approval for opening new branches (subject to certain conditions)
|Banks’ minimum G- sec investment requirement to be reduced gradually
|Limit for exporters to rebook cancelled forward contracts raised to 50% (
from 25%) |Importers allowed to rebook up to 25% cancelled forward
contracts |Introduction of interest rate futures of 10- year tenure
|Interest rate futures on overnight interest rates under study |Special
concessional window for swapping FCNR ( B) deposits |Banks’ overseas
borrowing limit raised to 100% of unimpaired Tier- I capital ( from 50%)
|Inflation- savings certificates based on Consumer Price Index SPECIAL Coverage<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">>~
to gain as Rajan comforts sentiment >Capital outflow curbs partially
eased >Action aplenty at RBI head office<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">RAJAN
TAKES CHARGE P7 > D- Stmay cheer today<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">With
Raghuram Rajan’s maiden speech as RBI governor raising hopes of more
aggressive steps to support the rupee and clean up the banking system mess,
the stock market, led by banking stocks, is likely to open higher on
Thursday.<o:p></o:p></span></div>
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<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Bakshi to take up McDonald’s row with CLB</span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
</td>
</tr>
<tr>
<td style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
SURAJEET DAS GUPTA<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">New
Delhi, 4 September<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Vikram
Bakshi, the estranged partner of fast- food chain McDonald’s, will seek
reinstatement as managing director of the 50: 50 joint venture Connaught
Plaza Restaurants, with a plea to the Company Law Board seeking the “
deadlock” in the August 6 board meeting be resolved.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Connaught
Plaza Restaurants controls the franchise to run McDonald’s stores in north
and east India.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">At
the August 6 meeting, two members of the board ( Vikram and wife Madhurima)
had supported his continuation as managing director, while two (McDonald’s
officials) had opposed it. Bakshi’s term as managing director had lapsed on
July 17.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Earlier,
the process of nominating the managing director was virtually automatic,
with Bakshi being re- elected in the normal course.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Bakshi
would appeal in the Company Law Board against a notice by McDonald’s
publicly stating he wasn’t the managing director, as, according to him, the
issue hadn’t been resolved yet. He would also challenge the “ differential
treatment” by McDonald’s towards its two partners in the country and
putting undue restrictions on Bakshi.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">McDonald’s
also has a tie- up with B L Jatia Group’s Hardcastle Restaurants ( a
subsidiary of Westlife Development), which has the franchise to run stores in
west and south India. In 2011, the Jatias bought McDonald’s stake in the
company and secured a development licence to run the chain.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">According
to sources, the estrangement started in 2008 when McDonald’s offered Bakshi
$10 million for his stake in the joint venture, based on valuations by
agencies. However, after an independent valuation by Grant Thornton, Bakshi
didn’t agree to the price.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
second bone of contention was the cap on the debt Bakshi could take.
Between 2008 and 2012, he couldn’t increase his debt beyond </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
134 crore; only after prolonged was he allowed to increase this limit to </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
161 crore. When the debt limit was raised, Bakshi’s business grew, but his
profits fell.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Third,
while the royalty Bakshi continued to pay was five per cent, McDonald’s
reduced the royalty payment of Hardcastle Restaurants to two per cent.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">When
contacted, Bakshi declined to comment on the issue. The joint venture
between Bakshi and McDonald’s runs about 150 outlets under nonexclusive
licences from McDonald’s India.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">In
a circular to its suppliers in India, the head of McDonald’s global supply
chain said the daytoday operations would be run by the board “ till a new
managing director is appointed”. It added “ it is business as usual” for
the company and it had plans it was committed to follow.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Bakshi
clarified he wouldn’t sell his stake to the US partner or to the second
Indian franchisee, Hardcastle Restaurants.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“We
are not negotiating with anyone to sell our 50 per cent equity in the joint
venture,” he said.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">A
McDonald’s Corporation spokesperson said the matter was internal.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“We
are not negotiating with anyone to sell our 50 per cent equity in the joint
venture”<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">VIKRAM
BAKSHI<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Former
managing director, Connaught Plaza Restaurants ( the joint venture that has
the franchise for McDonald’s in north and east India)<o:p></o:p></span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-3050623846371713467.post-85356333819238270392013-09-04T09:47:00.000-07:002013-09-04T09:47:08.369-07:00Business standard news updates 18-7-2013<div dir="ltr" style="text-align: left;" trbidi="on">
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<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">RBI opens windowfor MFs </span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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JOYDEEP GHOSH & SAMIE MODAK <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Mumbai,
17 July <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Mutual
funds faced </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 50,000- crore redemption orders from
banks and companies on Tuesday, prompting the Reserve Bank of India ( RBI) to
provide them a threeday repo borrowing window at a 10.25 per cent interest
rate. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
central bank had previously provided such access to special funding in 2008
when fund houses had faced redemption pressure of </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
80,000 crore to </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 1,00,000 crore over three- four days
— about 20 per cent of the sector’s total assets of around </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
5 lakh crore at that time. That was in the wake of a global financial crisis.
Tuesday’s redemption, on the other hand, was a little over six per cent of
fund houses’ total assets of </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 8.11 lakh crore (
as of June 2013). <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
special window had a sobering effect on Wednesday, though fund houses
remained edgy. The actual figures of redemption were not available but fund
houses said there were some inflows, too, unlike Tuesday, when only heavy
selling was seen. Sentiments improved after short- term interest rates cooled
a little on Wednesday after surging the previous day. The rates of one- month
certificates of deposit, which had jumped 150 basis points on Tuesday, came
down to 10.4 per cent. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Tuesday’s
surge in redemptions follows RBI’s liquidity- tightening measures, as banks
and corporate entities usually park their shortterm money with fund houses
for better returns. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Industry
sources said the Securities and Exchange Board of India (Sebi) and the
Association of Mutual funds in India ( Amfi), held a meeting on Tuesday and
RBI was approached for opening the special window. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Reliance
Mutual Fund CEO Sundeep Sikka said RBI’s special window was a welcome step,
though the industry had been able to manage the redemptions so far. “ We may
or may not require this window,” he said. Some industry players, however,
admitted fund managers were on back- to- back conference calls during the day
to convince clients not to withdraw. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">RBI
calmed nerves further by allowing banks availing of the additional liquidity
support through the repo window to seek waiver of penal interest for
shortfall in maintenance of statutory liquidity ratio ( up to 0.5 per cent of
their net demand and time liability). Also, the waiver would be available to
banks in addition to the two per cent waiver allowed under marginal standing
facility. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Turn
to Page 20 > <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Special
</span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 25,000- crore three- day repo
facility after </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 50,000- crore redemption on Tuesday <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">THE
SMART INVESTOR P15 > <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">>YOUR
MONEY: Debt investors don’t need to panic TACKLING THE LIQUIDITY CRUNCH
FALLING YIELD <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Category
Avg return (%)* <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">>Gilt
( medium & long- term) - 2.59 >Income - 2.03 >Short- term - 1.39
>FMPs - 0.92 >Others - 0.77 >Gilt ( short- term) - 0.71 >Ultra
short term - 0.47 >Liquid - 0.18 >Overall - 1.02 <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">*Loss
of schemes on July 16, compared with July 15 Source: Value Research <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Monday
| RBI issues guidelines to cap LAFat</span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 75,000 cr from
July17 Tuesday | MFs face </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 50,000- crore
redemption pressure |Sebi and Amfi meet, request RBI to open special window
|Amfi issues circular directing fund houses to MTM debt securities below60
days Wednesday | RBI opens special repo windowof</span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
25,000 crore for three days at10.25% <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Redemptions
were in ultra, ultra- short- term, short- term, and liquid funds, as they
faced mark- to- market losses <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">India’s
MF universe <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Assets
in </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> ’ 000 cr; in June 2013 <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">1.6
Other ETFs 8.5 Gilt funds 9.6Gold ETFs 16 Balanced funds 1.9 Fund of funds <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">(investing
overseas) 22.5 ELSS ( equity) <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">441
Income funds 148 Equity funds <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Total
811.1 <o:p></o:p></span></div>
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Liquid/ money market funds<o:p></o:p></span></div>
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here to read more...</span></b><a href=""><b><span style="color: blue; font-family: 'Trebuchet MS', sans-serif; font-size: 12pt;">Turn to Page 20 ></span></b></a><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> <o:p></o:p></span></div>
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<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">RBI opens window... </span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
Market players said there were redemptions in ultra- short- term, ultra,
shortterm and liquid funds, as they faced mark- to- market losses — a rare
event. Over 70 per cent of the money of mutual funds is in debt schemes. As
of Juneend, liquid and money market funds held as much as Rs 1.62 lakh
crore and income funds had assets of Rs 4.41 lakh crore. The total assets
of the industry in June were Rs 8.11 lakh crore. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“After
RBI decided to squeeze liquidity in the system by capping the liquidity
adjustment facility at Rs 75,000 crore from Wednesday, companies feared
they would be stuck for their liquidity requirement and rushed to withdraw
from debt funds,” said an industry player. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">According
to industry experts, Rs 1- 1.5 lakh crore are at stake from both corporate
and banks in these schemes. And, if such withdrawals happen, these schemes
will end up in losses, leading to more redemption pressure. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Net
asset value ( NAV) of most debt schemes declined more than two per cent —
translating into an annualised negative return of over 500 per cent. “ It
was a rude shock for a lot of investors who thought liquid schemes never
made losses,” said a fund manager. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">However,
a lot of mutual funds didn’t sell securities in the market and borrowed
from the overnight market to meet the mismatch. Also, Amfi issued a late-
evening circular, asking all fund houses to value their debt securities —
even those below 60 days — at market prices. At present, only the debt
securities with maturity above 60 days have to be valued at market price.
Those below 60 days follow the amortisation method. Sources said Amfi asked
fund houses to align the prices of their debt securities below 60 days to
the CRISIL Bond Matrix, which is a gauge for weighted average prices. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">On
Tuesday, prices of the ten- year government securities had crashed by up to
Rs 3.50 and yields on the 10- year benchmark had surged 54 basis points —
the highest since January 2009. On Wednesday, the 10- year bond price rose
0.11 per cent and the yield fell 1.60 basis points. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“The
situation is not as bad as in 2008, as investors have become more mature.
But there have been a lot of queries,” said R Sivakumar, head of fixed
income, Axis Mutual fund, admitting that he was on calls since 8.30 am on
Tuesday morning. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">According
to him, the situation is different now, because Sebi has brought in tough
guidelines. “ In 2008, fund managers were allowed to invest in one- year
papers in their short- term schemes. Now, they can invest only in papers of
up to 91 days. Also, amortisation is allowed up to 60 days. So, the freedom
with fund managers is much less,” he added. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">>FROM
PAGE 1<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Ordinance
to empower Sebi cleared<o:p></o:p></span></div>
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Regulator to keep an eye on certain unregistered NBFCs, can directly go for
search & seizure, ask for call records of those being probed BS REPORTER <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">New
Delhi, 17 July <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
government will promulgate an ordinance to empower the Securities and
Exchange Board of India ( Sebi), the capital markets regulator, to directly
go for search and seizure operations on errant listed companies. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">It
will also get the task of regulating those non- banking financial companies (
NBFCs) collecting at least </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 200 crore, which
hitherto do not fall under any watchdog, a senior finance ministry official
explained. The ordinance will also empower Sebi to seek information such as
records of telephone calls from any entities or persons in respect to any
share transaction being investigated by it. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">An
ordinance to this effect was cleared by the Cabinet on Wednesday. The move is
aimed at tightening the checks on chit fund companies floated under other
garb to get around the rules, in the aftermath of the scandal concerning the
Bengal- based Saradha Group which left scores of investors high and dry. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Currently,
the Prize Chits and Money Circulation Schemes ( Banning) Act, 1978, is
acentral one, enforced by states. Since it bans prize chit fund companies,
the question of regulating these do not arise. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Many
chit fund schemes are being launched under other garb, officials said. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">NBFCs
have to get a licence from the Reserve Bank of India to start operations, but
there are many fraudulent schemes being operated under various names to avoid
regulatory control. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Sebi
already regulates collective investment <o:p></o:p></span></div>
</td>
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<td style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Multi- brand retail FDI policy riders might be eased </span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
NAYANIMA BASU <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">New
Delhi, 17 July <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Under
pressure from international retailers, the government might soon amend the
foreign direct investment ( FDI) policy on multi- brand retail trading (MBRT)
by easing some conditions which had drawn sharp criticism from global
investors. However, there is no proposal to hike the FDI limit in the sector
from 51 per cent. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
department of industrial policy and promotion (DIPP), nodal agency for FDI
policy under the ministry of commerce and industry, seems to have prepared a
note for the Cabinet Committee of Economic Affairs ( CCEA) to consider. It
would mean changes in the FDI policy approved in September. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
government will seek to change three main conditions that have invited the
most criticism by retail conglomerates such as Walmart, Tesco and Carrefour.
This pertains to the riders concerning back- end infrastructure, mandatory
sourcing and establishment of retail stores only in cities having more than
amillion population. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
move comes at a time when the economic scenario is gloomy, with the rupee at
an all- time low and investment sentiment depressed. It was only last month
that DIPP had issued a set of clarifications on these issues but this failed
to soothe retailers’ nerves. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">On
back- end infrastructure, the government is planning to highlight the
condition of creating “ additional” infrastructure. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">A
senior official, told Business Standard, the main reason why government
opened the sector to FDI was “only” to create additional and state- of- art
back- end infrastructure such as cold chains and storage facilities. For, the
“present back- end facilities are not enough and the existing players will
get an easy exit route if foreign retailers buy them out, leading to a real
estate business of sorts.” According to extant policy, “At least 50 per cent
of total FDI brought in shall be invested in back- end infrastructure within
three years of the first tranche of FDI.” It does not specify whether such an
investment will be in existing infrastructure or new ones. The clarifications
issued later said even front- end investment must go in creating new
facilities. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">It
seems the policy on 30 per cent mandatory procurement from MSMEs is also set
to change. It says this much procurement of processed products should be from
domestic small industries with investment of not more than $ 1 million in
plant and machinery (P& M). The government might relax this to say once
the 30 per cent threshold is met, the retailer can source from the same
supplier, even if the investment in P& M exceeds $ 1 mn, keeping in mind
quality consistency. The government is also set to change the rider that
retailers can set up their outlets in only cities with more than one million
population. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">For
full reports, visit www. business- standard. com <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Note
by DIPP in final stages; likely to recommend easing of all three main
conditions specified in September last year <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">|FDI
policy in multibrand retail likely to change |No change in FDI limit on
cards; cap to remain 51 per cent |DIPP to soon move CCEA on this; note being
finalised |Government to ease the stiff conditions |For back- end infra, the
new policy might now clearly specify that investments have to be made in
creating new facilities, as existing infra is not sufficient, leading to
wastage |New policy might also relax sourcing conditions |Retailers might be
allowed to open stores in cities with a population of less than one million
population<o:p></o:p></span></div>
</td>
</tr>
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<br /></div>
<table border="0" cellpadding="0" class="MsoNormalTable">
<tbody>
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<td style="padding: .75pt .75pt .75pt .75pt;">
<table border="0" cellpadding="0" class="MsoNormalTable">
<tbody>
<tr>
<td style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Pollution costs India $80 bn a year: World Bank </span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
</td>
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<td style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
BS REPORTER <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">New
Delhi, 17 July <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Environmental
degradation costs India about </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 8 crore,
equivalent to 5.7 per cent of the country’s gross domestic product ( GDP),
on an annual basis according to a World Bank report released on Wednesday. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
report, Diagnostic Assessment of Select Environmental Challenges in India,
focuses on particle pollution from the burning of fossil fuels, which has
serious health consequences amounting to about three per cent of India’s
GDP, along with losses due to lack of access to clean water supply,
sanitation and hygiene and natural resources depletion. Of this, the
impacts of outdoor air pollution account for the highest share at 1.7 per
cent, followed by cost of indoor air pollution at 1.3 per cent. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
higher costs for outdoor/ indoor air pollution are primarily driven by an
elevated exposure of the young and productive urban population to
particulate matter pollution that results in a substantial cardiopulmonary
and chronic obstructive pulmonary disease mortality load among adults. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">According
to the World Bank report, India can make green growth a reality, by putting
in place strategies to reduce environmental degradation at the minimal cost
of 0.02 per cent to 0.04 per cent of average annual GDP growth rate. <o:p></o:p></span></div>
</td>
</tr>
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<td colspan="3" style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">New banks might queer the pitch for state - owned ones </span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
</td>
</tr>
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<td colspan="3" style="padding: .75pt .75pt .75pt .75pt;">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
VRISHTI BENIWAL <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">New
Delhi, 17 July <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">As
the Reserve Bank of India (RBI) prepares to dole out licences to corporate
houses and others for launching new banks, India’s 26 public sector banks (
PSBs) are watching the situation carefully. For it could prove a shot in
the arm for Finance Minister PChidambaram, who wants some of them to merge
with their bigger peers. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">With
new private banks in the play, the going could become more difficult for
the old- school state- run banks, already losing business and market
position, forcing them to think hard towards consolidating and forming
larger entities to garner big- ticket deals. An executive with a small
state- run bank said, “ PSBs are already staring at shrinking margins and
rising bad loans due to economic downturn and they fear worse when a new
breed of private sector banks mushrooms. Small state- run lenders are worried
that new bank licences may make their survival difficult, forcing them to
fulfil the government’s wish of consolidating with bigger banks.” On July
1, RBI had received 26 applications for new bank licences. While the
government is saying no cap has been prescribed, RBI has made it clear all
eligible applicants may not get a licence, the first of which might be
given by March 2014. Since the eligibility criteria are stringent, not more
than half a dozen might be able to meet them. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">This
might be a breather for the PSBs, as just a couple of new banks might not
be able to deal amajor blow to the state- run banks, which have 70 per cent
of market share. The entry of YES Bank and Kotak Mahindra Bank about a
decade ago did not have much impact on PSBs. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">However,
this could be temporary relief because the expansion of new banks would
come at the cost of PSBs. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“New
banks will take good clients of PSBs, as existing private sector lenders
would not let them poach their clients. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">New
banks will be superior in terms of quality of official, who did While old
private sector banks fear consolidation the most, small and include Punjab
and Sind Bank, Dena Bank, United Bank of India, Bank of Maharashtra, Andhra
Bank, Vijaya Bank, Corporation Bank, UCO Bank, Oriental Bank of Commerce
and Syndicate Bank. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
official, however, added consolidation would still not be a cakewalk for
the government unless it agrees to reach out to bank employee unions, which
are resisting the move. When it takes State Bank of India at least two years
to complete amalgamation of a subsidiary, other banks would take even
longer, due to the differences in their culture and geography, he added. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">According
to RBI guidelines, it is mandatory for new banks to open 25 per cent of
branches in rural areas but in metros, most of their growth is likely to
come from unsatisfied customers switching over from PSBs. Some loyal
customers might, however, prefer to stick to public sector banks. These
customers consider their money safe with a government institution. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“The
aim for new bank licences is financial inclusion. But how would that be
met? When PSBs are not ready to go to remote areas because viability is not
there, why would a private bank invest there? So, new banks might not be
viable in the initial years of their operation. However, government
spending on programmes like food security will generate demand in rural
areas and that may provide an opportunity to these banks,” said a former
executive of a large government bank. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Current
account and savings account deposits of PSBs are coming under pressure and
many are expected to report a dip in their business income at the end of
the quarter ended June, compared with the one ended March. Consolidation
can help PSBs achieve economies of scale. The banking system saw about a
dozen mergers between 1990 and 2000, and 15 amalgamations in the last
decade. While mergers of banks with weak financials dominated the first
decade, the second saw mergers between healthy banks, driven by commercial
reasons. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">In
December 2009, the finance ministry had called chiefs of five leading
public sector banks — Punjab National Bank, Canara Bank, Union Bank of
India, Bank of Baroda and Bank of India — to take their views on
consolidation. Owing to stiff opposition from employee unions, the idea was
dropped. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">This
is the first of a three- part series on how new bank licences would impact
public sector lenders TRANSACTION BOOK <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Merger
targets <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Last
year, the finance ministry divided banks into seven pools. The large bank
in each group handholds small banks to improve their functioning. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Any
amalgamation might happen within these groups <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Punjab
National Bank: <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Dena
Bank, Vijaya Bank BankofBaroda: IDBI Bank, UCO Bank Bankof India: Oriental
Bankof Commerce, Andhra Bank Union Bankof India: United Bankof India,
Punjab & Sind Bank <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Central
Bankof <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">India:
Indian Bank, Allahabad Bank, BankofMaharashtra Canara Bank: Indian Overseas
Bank, Syndicate Bank, Corporation Bank State Bankof India: State
BankofHyderabad, State Bankof Mysore, State BankofBikaner & Jaipur,
State BankofPatiala, State Bankof Travancore <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Key
numbers of public sector banks ( 2012- 13) <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Deposits
57,45,697 Investments 17,59,106 Advances 44,72,773 Total assets 69,61,966
Net NPA* ratio 2.01% Capital adequacy ratio 13.13% <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">*Non-
performing assets; figures in </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> crore Source:
IBA<o:p></o:p></span></div>
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<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Sebi offers hand of friendship to PEs </span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
NSUNDARESHA SUBRAMANIAN <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">New
Delhi, 17 July <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
Securities and Exchange Board of India ( Sebi) has offered to address the
concerns of the private equity ( PE) and venture capital sector working
closely to remove several tax and regulatory anomalies that arise from
the new Alternative Investment Fund ( AIF) regulations. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
industry, hitherto unregulated, came within the fold of Sebi with the
notification of these regulations in May last year. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Sebi
Chairman U K Sinha assured that the regulator will reconsider the cap on
investments that can be made by the employees of an alternative
investment fund ( AIF) in it. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">According
to the Sebi AIF regulations, </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
25 lakh is the investment threshold for employees or directors of the
AIF. “ We have received representations asking why there is aceiling of </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 25 lakh for employees. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">We
are open to reconsidering this provision,” Sinha told the fund managers. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">According
to the regulations, an AIF should have a minimum corpus of </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 20 crore and should not have
more than 1,000 investors. <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">In
the first formal public interaction with the regulator at a conference of
the Indian Private Equity and Venture Capital Association — IVCA Conclave
2013 — on Tuesday, the PE industry sought more encouragement for raising
rupee funds, extension of tax pass through status for category Iand
category II funds and flexibility in capital structure for fund managers.
<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">At
present, domestic institutions such as insurance companies, pensions and
banks are not allowed to invest in AIFs. Also, although the government
this year allowed the tax passthrough status for entities registered
under the Sebi venture capital funds ( VCF) regulations, this move fell
in a grey area as the VCF regulations got replaced by the AIF
regulations. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Sinha
added that he was in favour of pass- through tax status for all
categories of alternative funds. He offered to recommend the same to the
government. “ There is scope for all of us to approach the government,”
he said. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Another
problem faced by the fund managers was the apparent lack of co-
ordination among the multiplicity of financial sector regulators. Both
the finance minister and the Sebi chairman assured that the Financial
Stability and Development Council, headed by the finance minister, would
address such issues and meet once in three months. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">PEs
were told they could bring to the minister’s notice if there were any
conflicting positions made by the regulators, which could, then, be taken
up for discussion in the council. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Sinha
also readily agreed to aproposal to bring out a joint study sponsored by
the IVCA and the regulator to put forth the various aspects of the PE
segment, which could help mitigate the great degree of pessimism in the
government and regulatory circles. Sebi also assured the segment it would
not push for safety net in initial public offers and was open for
suggestions to changes in the de- listing guidelines. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“We
need to interact and understand each other’s concerns. We need to talk
and move forward,” said Sinha. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Says
it wants the sector to develop, assures changes in the framework <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">UK
Sinha, Chairman, Sebi ALTERNATIVES NEEDED <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">|Tax
pass through status not available for majority of funds |Restrictions on
investments in AIFs by insurance firms, banks, MFs etc |Lock- in
provisions in initial public offerings |Stringent provisions in delisting
regulations |Cap on investment by employees and directors at </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> 2.5 million<o:p></o:p></span></div>
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<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">‘Neyveli share- sale plan defies public holding
intent’ </span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
SAMIE MODAK <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Mumbai, 17 July <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The Securities and Exchange
Board of India ( Sebi)’ s decision to allow the Tamil Nadu government
to buy the Centre’s stake in Neyveli Lignite Corporation ( NLC) to meet
minimum public shareholding norms has faced criticism from advocates of
sound corporate governance practices. Though the move would help cut
the Centre’s stake in NLC below 90 per cent in letter, the sale of
shares from the Centre to a state defeated the objective of diverse
ownership and better free- float, said a former Sebi official, as well
as officials at corporate governance advisory firms. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Currently, government holding
in NLC stands at 93.56 per cent. To meet Sebi’s minimum public
shareholding norms, it has to be cut to less than 90 per cent before
August 9. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The government’s decision to
divest shares in NLC had met stiff opposition from Tamil Nadu- based
political parties; about 30,000 workers of the company had gone on
strike. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">After discussions, Sebi allowed
four Tamil Naduowned entities that would qualify as qualified
institutional bidders to acquire stake from the government. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“The spirit ( of minimum public
shareholding, or MPS) is to ensure wider holdings and increase the
depth of trading of securities. By allowing state PSUs ( public sector
undertakings), whose business isn’t securities trading, Sebi hasn’t
applied this first principle and the logic of MPS gets flawed,” said
Shriram Subramanian, founder and managing director, InGovern Research
Services. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">In 2010, the government had
amended the Securities Contract ( Regulation) Rules, making it
mandatory for private companies to have at least 25 per cent public
holding ( 10 per cent for PSUs). The objective behind the move was to
ensure disperse ownership to curb manipulation by having more
liquidity. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Amit Tandon, managing director,
IIAS, believes the manner in which a company complies with the norms is
critical. “ If it is achieved through a process that gives any investor
a chance to participate at a market clearing price, the minimum public
shareholding criterion should be considered being fulfilled,” <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">he said. Turn to TSI, Page 15
> EGoM clears 3.56% stake sale in Neyveli via IPP <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">A panel of ministers, headed by
Finance Minister P Chidambaram, on Wednesday cleared disinvestment of
3.56 per cent stake in Neyveli Lignite through an institutional
placement programme ( IPP). The Department of Disinvestment has
originally planned to divest five per cent of its stake in the Tamil
Nadubased mining company. The Cabinet had last month approved the same.
Since the IPP mode is allowed only to meet the pubic holding norm
minimum 10 per cent, the department would now sell only 3.56 per cent
or over 55.8 million shares. “ The DoD has written to Sebi, seeking
preference to Tamil Nadu state PSUs,” Disinvestment Secretary Ravi
Mathur told reporters after ameeting of the empowered group of ministers,
adding the department would now file the offer document with Sebi and
after that, the issue would hit the market. Sources, however, said the
issue was likely only in the first week of August. PTI<o:p></o:p></span></div>
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<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">SC orders transfer of all Sahara appeals in OFCD case </span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br />
BS REPORTER <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">New Delhi, 17 July <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The Supreme Court on Wednesday
directed the transfer to itself of matters pending before the
Securities and Appellate Tribunal ( SAT) and the Allahabad High Court
arising out of the applications filed by the Sahara group. The court
expressed displeasure over interference by other forums in a matter
decided by the apex court. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">“We are annoyed by the SAT
order. How can they interfere?” judge K S Radhakrishnan said. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The directors of Sahara India
Real Estate and Sahara Housing Invest had moved SAT, while Sahara India
Parivar, the partnership firm that offered infrastructure facilities to
the two companies collecting money, had moved the Lucknow bench of the
Allahabad High Court, following an order by the Securities and Exchange
Board of India ( Sebi) to attach the properties of the group in
February. The attachment order came during the course of the execution
of a Supreme Court order on August 31, 2012, which directed the two
companies to refund </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
24,029 crore collected from about three million investors, along with
interest of 15 per cent. Sahara had raised this sum by issuing
optionally fully convertible debentures ( OFCDs). <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Sebi had ordered the attachment
after the companies failed to deposit the full amount, according to a
Supreme Court- directed timeline. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">So far, the companies have
deposited </span><span style="font-family: "Times New Roman","serif"; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">₹</span><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
5,120 crore, less than a quarter of the original sum. They claim the
rest has been refunded to the OFCD holders directly. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Before adjourning the matters
of contempt proceedings to July 24, the bench of judges Radhakrishnan
and J S Khehar wondered why the companies didn’t comply with the
court’s clear orders for the past several months. At one point, they
said they would hear any further defence by Sahara in the matter only
after the group deposited the amount. “ If you don’t comply, we would
order personal appearance,” Radhakrishnan said. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Sebi counsel Arvind Datar
pressed for the appearance of Sahara group chief Subrata Roy, saying he
was the promoter of the two errant companies and controlled the
entities. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">He added according to a
petition filed before the Lucknow bench of the Allahabad High Court,
Roy was named the person in charge of Sahara India Parivar, holding 67
per cent stake, according to the firm’s partnership deed. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Roy’s counsel Aryama Sundaram
argued Roy wasn’t party to the Supreme Court order and didn’t have
direct interest in the two companies. “Any decision on the contempt
proceedings should not be made without hearing me,” Sundaram said. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">As time ran out, the court
decided to defer the matter to next week. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Earlier, Sebi had submitted its
seventh status report in the matter. It said of the 1,000 responses
from Sahara OFCD holders, only 12 were genuine. It noted several
discrepancies. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Datar said, “ In 146 cases, the
names and details of the bond holders could not be found in the DVDs (
submitted by the group).” In another 130 cases, while bondholders asked
for refunds, the DVDs showed they had already been <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">refunded. Turn to TSI, Page 15
> <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">SC adjourns matter to next week
after hinting at “ personal appearance” by group officials<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%;">Source Times of India<o:p></o:p></span></div>
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<b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-font-kerning: 18.0pt;">Companies
can get tax breaks on employee stock option plans<o:p></o:p></span></b></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
author has posted comments on this article</span><a href="http://timesofindia.indiatimes.com/toireporter/author-LUBNA-KABLY.cms"><span style="color: blue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">LUBNA
KABLY</span></a><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">,
TNN | Jul 18, 2013, 01.04AM IST <o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">MUMBAI:
A special bench set up by the Bangalore Income-tax appellate tribunal (ITAT)
has ruled that discounts under the </span><a href="http://timesofindia.indiatimes.com/topic/employee-stock-option-plans"><span style="color: blue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">employee stock
option plans</span></a><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
(ESOP) are an employee cost and should be allowed as a deduction, over the
vesting period, in the hands of the issuing company.<br />
<br />
The special bench held that when a company undertakes to issue ESOPs at a
discounted price, the primary objective is not to raise share capital but to
retain its key employees. It brushed off the contention of the tax authorities
that such discount was a capital expenditure or that it was a contingent
liability.<br />
<br />
The special bench of the </span><a href="http://timesofindia.indiatimes.com/topic/ITAT"><span style="color: blue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">ITAT</span></a><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> was set up to
determine the deductibility of ESOP discount, as a clutch of companies
including </span><a href="http://economictimes.indiatimes.com/biocon-ltd/stocks/companyid-2082.cms" target="_blank"><span style="color: blue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Biocon</span></a><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">
had filed appeals on this issue. The ITAT also had to determine when and how
much should be allowed as a deduction.<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white;">
<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; line-height: 115%; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The special bench
held that when a company undertakes to issue ESOPs at a discounted price, the
primary objective is not to raise share capital but to retain its key
employees. "The objective is securing the consistent and concentrated
efforts of its dedicated employees during the vesting period. The discount is
construed, both by the employees and the company, as a part of the remuneration
package. Such discounted premium on shares is a substitute to giving direct
incentive in cash for availing of the services of the employees," stated
the special bench in its order. It brushed off the contention of the tax
authorities that such discount was a capital expenditure or that it was a
contingent liability.<br />
<br />
Punit Shah, co-head (tax), KPMG, says, "This decision offers substantial
clarity. Going forward, more companies will be inclined to claim a deduction
for the ESOP discount." Industry players feel it will result in a
substantial decline in litigation.<br />
<br />
The special bench of the ITAT was set up to determine the deductibility of ESOP
discount, as a clutch of companies, including Biocon, had filed appeals on this
issue. The ITAT also had to determine when and how much should be allowed as a
deduction.<br />
<br />
In a 50-page order relating to Biocon's case, the special bench looked into
various stages of an ESOP scheme such as granting, vesting and exercise. At the
grant stage, the company merely offers to make available shares at a discount
price.<br />
<br />
The second stage is vesting and the vesting period varies from company to
company. During this period, the company incurs the obligation to issue
discounted shares. The shares are allotted at the end of the vesting period,
post which the employee can exercise his right to purchase the shares under the
ESOP scheme at the discounted price.<br />
<br />
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-3050623846371713467.post-2546543078537826792013-09-03T18:01:00.002-07:002013-09-03T18:01:47.288-07:00GST Reforms source Business standard<div dir="ltr" style="text-align: left;" trbidi="on">
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<b><span style="color: steelblue; font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">GST to reforms, Centre accepts panel recommendations</span></b><span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></div>
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VRISHTI BENIWAL<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">New
Delhi, 3 September<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">After
failing to push through some key reforms despite an economic crisis and
putting the Direct Taxes Code on the backburner, the government is pinning
hopes on a muchawaited tax reform — the Goods & Services Tax ( GST).<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
finance ministry has accepted almost all the recommendations of the standing
committee on Finance on the Constitution Amendment Bill for GST and is likely
to seal a deal with the states later this month.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
empowered committee (EC) of state finance ministers, which also comprises
representatives from the finance ministry, would meet on September 19 to
discuss the Constitution Amendment Bill that paves the way for the
introduction of the GST.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
EC’s recent visit to South Africa to study the GST model of the African
country might also be discussed in the meeting.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">In
line with the recommendations of the standing committee, the finance ministry
has made changes to the Bill, which has been vetted by the law ministry. It,
however, does not support some recommendations of the committee, such as the
automatic compensation mechanism wherein a fund might be created under the
GST Council and GST design. But as these are not part of the Constitution
Amendment Bill, a consensus with states can be built up later.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The
ministry is also not in favour of giving an option to the states to stay out
of GST and has already made its decision clear to the states. The standing
committee had suggested that like the ValueAdded Tax, the states might also
be given flexibility in joining GST.<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">A
finance ministry official, who did not wish to be identified, told<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Business<o:p></o:p></span></div>
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<span style="font-family: "Trebuchet MS","sans-serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Standard:
“ The Standing Commi<o:p></o:p></span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-3050623846371713467.post-69088972214339907612013-07-05T17:58:00.000-07:002013-07-05T17:58:03.132-07:00Deposits<div dir="ltr" style="text-align: left;" trbidi="on">
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;">ACCPETANCE OF DEPOSITS<span style="mso-spacerun: yes;"> </span>BY COMPANIES<span style="mso-spacerun: yes;"> </span>-<span style="mso-spacerun: yes;"> </span>COMPANIES BILL 2012<span style="mso-spacerun: yes;"> </span>-<span style="mso-spacerun: yes;"> </span>CS A RENGARAJAN <o:p></o:p></span></b></div>
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<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;">Introduction: <o:p></o:p></span></u></b></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">One of the major areas in which Companies Bill 2012 changes <span style="mso-spacerun: yes;"> </span>made<span style="mso-spacerun: yes;"> </span>are <span style="mso-spacerun: yes;"> </span>on Deposits. Before going into the provisions in the Bill, let us look into the law applicable on Deposits as per Companies Act 1956.<o:p></o:p></span></div>
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<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;">Provisions pertaining to Deposits as on date<o:p></o:p></span></u></b></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">Acceptance of Deposits was dealt by Sec. 58A, 58 AA, 58 B read with Companies (Acceptance of Deposits) Rules 1975. <o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">As per these provisions, a Company can accept deposits only on the following conditions.<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">i) Only a Public Limited Company can accept deposits. <o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">ii) Company need to publish an advertisement in the prescribed form and manner as laid in Rule 4 of Companies (Acceptance of Deposits) Rules 1975. Prior to publishing such advertisement, Company needs to file it with ROC signed by majority of Directors.<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">iii) Only Companies with a minimum Net owned Funds of 1 crore can accept deposits. (Net owned funds are explained in a detailed manner); To put it briefly Net owned funds is the aggregate of paid up capital and free reserves less certain items like accumulated loss, intangible assets, investment in subsidiary, etc.<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">Further a limit upto which a Company can accept deposits has also been prescribed:<o:p></o:p></span></div>
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<li class="MsoNormal" style="margin: 0in 0in 10pt; mso-list: l0 level1 lfo2; tab-stops: list .5in;"><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">A Company can accept deposits upto 10 % of its paid up capital & free reserves from its shareholders (other than shareholders in Private Limited Company).<o:p></o:p></span></li>
<li class="MsoNormal" style="margin: 0in 0in 10pt; mso-list: l0 level1 lfo2; tab-stops: list .5in;"><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">Upto 25 % of its paid up capital & free reserves from General public.<o:p></o:p></span></li>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">As regards the repayment, it is mandatory for the Company to repay the deposits as and when they are due, unless it is renewed. If not, stringent punishment<span style="mso-spacerun: yes;"> </span>are prescribed.<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">****<span style="mso-tab-count: 1;"> </span><o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">Now let us look at the provisions in the Companies Bill 2012.<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">Deposits have been dealt in a separate chapter (Chapter V )<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">under Clauses 73 to 76 explain provisions pertaining to Deposits. <o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">Clause 73<span style="mso-spacerun: yes;"> </span>of Companies bill 2012<span style="mso-spacerun: yes;"> </span>provides for prohibition for acceptance of deposits <span style="mso-spacerun: yes;"> </span>from public<span style="mso-spacerun: yes;"> </span>(marginal notes) <span style="mso-spacerun: yes;"> </span>corresponding section 58A of the Companies Act, 1956. <o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">Clause 76<span style="mso-spacerun: yes;"> </span>of Companies bill 2012 provisions have been given for acceptance of deposits from public by certain companies<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">As per the Companies Bill, the following entities are not coming under the purview of provisions relating to Deposits & they can continue to accept Deposits: <o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">i) Banking company<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">ii) Non Banking Financial company<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; mso-bidi-font-weight: bold;">Apart from the above, Notified Companies and </span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; mso-bidi-language: TA; mso-fareast-font-family: 'Times New Roman';">Public company having such net worth or turnover as may be prescribed</span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; mso-bidi-font-weight: bold;"> can accept deposits subject to the following conditions:<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-bidi-font-weight: bold; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">a)<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">They can accept deposits<span style="mso-spacerun: yes;"> </span><u>only from its members</u> <span style="mso-spacerun: yes;"> </span>prohibits<span style="mso-spacerun: yes;"> </span>from public<span style="mso-spacerun: yes;"> </span>(marginal notes)<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-bidi-font-weight: bold; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">b)<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">They need to create a Deposit repayment reserve account to the extent of 15%<span style="mso-spacerun: yes;"> </span>amount of deposits maturing<span style="mso-spacerun: yes;"> </span>during the current financial year and<span style="mso-spacerun: yes;"> </span>the immediately following financial year<span style="mso-tab-count: 1;"> </span>.<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-bidi-font-weight: bold; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">c)<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">Company has to issue a circular containing details such as financial position of the company, details of credit rating obtained, total number of depositors, the amount due towards in respect of any previous deposits accepted<span style="mso-spacerun: yes;"> </span>by the company , etc.<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-bidi-font-weight: bold; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">d)<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">Company has to file a copy of the circular with Registrar of Companies, 30 days prior to issue of the circular.<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-bidi-font-weight: bold; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">e)<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">Company needs to take deposit insurance <span style="mso-spacerun: yes;"> </span>as <span style="mso-spacerun: yes;"> </span>to be prescribed by the Government<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-bidi-font-weight: bold; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">f)<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">Company needs to give a Certificate that it has not defaulted either principal or interest before or after<span style="mso-spacerun: yes;"> </span>commencement of the Act<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; mso-bidi-font-weight: bold;">g<span style="mso-spacerun: yes;"> </span>All existing deposits should be refunded </span><span style="color: #231f20; font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; mso-bidi-font-family: Times-Roman;">within one year from such commencement or from the date on which<span style="mso-spacerun: yes;"> </span>payments are due, whichever is earlier<span style="mso-spacerun: yes;"> </span>( clause 74)<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">Further it has been mentioned that the deposit repayment reserve shall not be used for <span style="mso-spacerun: yes;"> </span>any other purpose except for repayment of deposits.<o:p></o:p></span></div>
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<b style="mso-bidi-font-weight: normal;"><u><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;">Certain issues <span style="mso-spacerun: yes;"> </span>are worth pondering:<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></u></b></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;"><span style="mso-spacerun: yes;"> </span>The bill has prescribed that Notified Companies and Companies with a certain Net worth or Turnover can accept deposits only from shareholders. This gives rise to some interesting questions:<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-bidi-font-weight: bold; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">1)<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">After the Act comes into force, a Deposit holder may be a shareholder initially at the time of becoming a Deposit holder. Later he can sell his shares without the knowledge of the company and continue to remain as Deposit holder, then he becomes a non member – public How this could be monitored? <o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-bidi-font-weight: bold; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">2<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;"><span style="mso-spacerun: yes;"> </span>Taking Deposit insurance, mandatory credit rating and advertisement and other administrative expenditure will cost the Companies and this will indirectly affect the cost. <o:p></o:p></span></div>
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<li class="MsoNormal" style="margin: 0in 0in 10pt; mso-list: l0 level1 lfo2; tab-stops: list .5in;"><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">The penalty leviable in case of non payment of deposits is extremely high; hence Accepting Deposits is not going to be an attractive option for many Companies. However this will certainly help avoid the unscrupulous elements making money from the public. <o:p></o:p></span></li>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-bidi-font-weight: bold; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">4.<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;">As per provisions of the bill, the company should create securities and even if partial security lead to the deposits will become unsecured one.<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-weight: bold;"><span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-3050623846371713467.post-76422836654646880762013-06-27T08:28:00.000-07:002013-06-27T08:28:02.307-07:00SEBI updates<div dir="ltr" style="text-align: left;" trbidi="on">
The SEBI in its Board Meeting held on 25th June 2013 approved the following important matters among other things;<br />
Amendment in SEBI (Buy Back of Securities) Regulations, 1998 The SEBI has approved Chandrasekhar Committee's recommendations on SEBI (Buy Back of Securities) Regulations, 1998. These amendments are in recognition of the fact that the buyback regulations for the stock exchange mechanism (i.e open market purchase) have been grossly misused over the years. Initially, there was no mandate on the amount of buyback that was required and therefore, companies would announce very high buyback price, not buy single share for the whole year and give wrong signal to the investors. Then the SEBI came up with the regulation mandating minimum buy back of 25% of the amount earmarked for buy back couple of years ago.Further, if you go through capital market data of the last 15 months or so, it is found that every third issue mobilised less than one third of its intended buyback amount. So 14 out of 43 companies bought back less than 30 percent of the intended buyback, this included some of the largest buyback announcements like Reliance industries and Reliance Infrastructure that ended up with 25-30 percent. The SEBI has made the following amendments in SEBI Buy Back Regulations to arrest misuse of open market buy back mechanism;1. The mandatory minimum buy-back has been increased to 50% of the amount earmarked for the buy-back from 25%, failing which amount in the escrow account would be forfeited subject to a maximum of 2.5% of the total amount earmarked.2. The maximum buy-back period has been reduced to 6 months from 12 months.3. The companies shall create an escrow account towards security for performance with an amount equivalent to at least 25% of the amount earmarked for buy-back.4. The company shall not raise further capital for a period of one year from the closure of the buy-back except in discharge of subsisting obligations as against the existing 6 months.5. The company shall not make another buy-back offer within a period of one year from the date of closure of the preceding offer.6. Rationalization of disclosure requirement.7. The companies can buy-back 15% or more of capital (paid-up capital and free reserves) only by way of tender offer.8. The companies are permitted to extinguish shares bought back during the month, within fifteen days of the succeeding month subject to the last extinguishment within seven days of the completion of the offer.9. The promoters of the company shall not execute any transaction, either on-market or off-market, during the buy-back period.Enabling Listing of Start-Ups and SMEs on Institutional Trading Platform (ITP) without having to make an IPO Lack of exit opportunities for the existing investors and restricted access to new investors is one of the problems faced by Start-Ups and SMEs. With a view to provide easier exit options for informed investors like Angel Investors, VCFs, PE, etc. to provide better visibility, wider investor base and greater fund raising capabilities to such companies, the Board approved the proposal to amend the SEBI (ICDR) Regulations to permit listing of Start-ups and SMEs in Institutional Trading platform (ITP) without having to make an IPO.<br />
The companies eligible to be listed on this ‘Institutional Trading Platform’ can access investment only from the informed investors. Therefore the minimum amount for trading or investment on the ITP will be Rs 10 lakh. These companies shall be exempted from the requirements of rule 19(2)(b) of SC(R)R 1957 under which companies have to offer upto 25% of its shareholding to public through an offer document in order to get listed. Therefore the listing can be done without an IPO and the expenses associated with it. While such companies are listed on the ITP they will not be permitted to raise capital though they can continue to make private placements.<br />
Listing on ITP by Start-Ups and SMEs is expected to offer their existing investors better chances to find alternate buyers than if they search using their own network in the investment community. Standardized norms of entry for companies, eligibility criteria, continuous disclosure requirements, simplified exit rules and corporate governance norms will be prescribed.<br />
Amendments to SEBI ICDR - preferential issue With a view to enhance transparency, ensure adequate audit trail and apply lock-in for the shares allotted in preferential issues, the Board approved the following;1. Preferential issue shall be subscribed only through the allottee’s own bank account. Further, the issuing company shall disclose the ultimate beneficial owner of allotted shares.2. Allotments in preferential issues shall only be made in dematerialized form.3. Shares allotted in the preferential issue shall not be transferred till trading approval is granted for such shares by the stock exchanges. Further, the lock-in period shall commence on the date of such trading approvalRationalization of Investment Routes and Monitoring of Foreign Portfolio InvestmentsSEBI in its Board meeting discussed the report of the “Committee on Rationalization of Investment Routes and Monitoring of Foreign Portfolio Investments”, under the Chairmanship of Shri K. M. Chandrasekhar, former Cabinet Secretary, Government of India (GoI).The Board accepted the recommendations of the Committee which, inter alia, include: 1. Simplified and uniform entry norms for foreign investors by merging existing FIIs, Sub Accounts and Qualified Foreign Investors (QFIs) into a new investor class to be termed as “Foreign Portfolio Investors” (FPIs). 2. In order to make the procedure much simpler, prior direct registration of FIIs and Sub Accounts with SEBI be done away with. Instead, DDPs authorized by SEBI would register FPIs on behalf of SEBI subject to compliance with KYC requirements.3. Risk Based Approach towards Know Your Client (KYC) – From the point of KYC, the Committee recommended for categorization of FPIs into three categories. Category I - which would include Government and Government related entities such as Foreign Central Banks, Sovereign Wealth Funds, Multilateral Organizations etc, Category II - which would include regulated entities such as Banks, Asset Management Companies, Broad Based Funds such as Mutual Funds, Investment Trusts, Insurance and Reinsurance Companies, University Funds, Pension Funds and University related Endowments already registered with SEBI and Category III – All other FPIs not eligible to be included in the above two Categories.4. The approach to KYC will be risk based. The documents needed for registration and on boarding would be the simplest for Category I and most stringent for Category III.5. The requirement of submitting personal identification documents such as copy of passport, photograph etc. of the designated officials of FPIs belonging to Category I and Category II shall be done away with.6. Portfolio investments to be defined as investment by any single investor or investor group, which shall not exceed 10% of the equity of an Indian company. Any investment beyond the threshold of 10% shall be considered as Foreign Direct Investment (FDI). Trust this write up will be useful to you.Thanks & RegardsCS M Alagar,B.Com.,ACS,LLBDirectorGenicon Business Solutions Pvt.LtdUdhayam Royal TerraceNo.13/1, BasementTanjore Road (Near Krishna Ghana Sabha)T. NagarChennai – 600 017 Tel:044 4208 8484 M :91-9003199947Emaiil: <a href="mailto:alagar@geniconsolutions.comwww.geniconsolutions.com">alagar@geniconsolutions.comwww.geniconsolutions.com</a> <br />
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-3050623846371713467.post-5247054824152671622013-06-27T08:25:00.001-07:002013-06-27T08:25:59.109-07:00Fema query<div dir="ltr" style="text-align: left;" trbidi="on">
Please help me to resolve this:<br />
<br />1) Does <br />Latest circular of RBI circular has made any change to the previous provisions of FDI with respect to transfer of shares from Resident to NRI.<br />
<br />2) i also need to know i have not found advance reporting requirement (as required at the time of FDI for new shares) in the master circular. Please let me know should we need to report the same as in case of allotment of share to NRI within 30 days?<br />
<br />3) Master circular put the onus of submission of the Form FC-TRS within the given timeframe on the transferor / transferee, resident in India WHEREAS in form FCTRS it clearly says it has to be signed by non resident buyer/non resident seller as the case may be. Please let me know the acceptable practice.<br />
<br />manoj<br />
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Thanks & Regards<br />
For G.R Gupta & Associates<br />
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Dear Professional Colleagues ,<br /><br />RBI has issued circular as regards to Foreign Direct Investment – Reporting of issue / transfer of Shares to/by a FVCI .<br /><br />For more details , please visit to:<br />
<a href="http://rvseckarfema.blogspot.in/2013/06/foreign-direct-investment-reporting-of.html">http://rvseckarfema.blogspot.in/2013/06/foreign-direct-investment-reporting-of.html</a><br />
<br />
Still need to have clarity on following two things:<br />
<br />1) i think the time of 30 days will start from the day when money is remitted in Indian entity bank account irrespective of date of cheques?<br />
Yes. From the date of receipt of money as reported in the FIRC by the authorised dealer .<br />
2) Advance reporting will be done through the same Advance Reporting & KYC Form given in RBI-Forms-FEMA (attached with this mail)<br />
Yes</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-3050623846371713467.post-40397200427812773512013-06-07T15:48:00.000-07:002013-06-07T15:48:14.149-07:00Expert opinon<div dir="ltr" style="text-align: left;" trbidi="on">
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<b><u><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">TDS DEDUCTION ON FOREIGN PAYMENT</span></u></b><b><u><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></u></b></div>
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<b><u><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">QUERY </span></u></b><b><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">:</span></b><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> my client make payment for purchase of bandwidth from abroad. bandwidth is in the nature of technical fees. party receiving payment having no PE or place of business in India. whether deduction of TDS is mandatory if yes please inform me procedure/deposition of TDS/challan no /filing of TDS return/ in case of deductee having no pan. </span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> 1. if DTAA exists II) if no DTAA.</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> Please enlighten on this above subjects.</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> warm regards,</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Tapan Kumar Saha</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">3, Sastitala Road, Narkeldanga</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Kolkata : 700011</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">M. No. 9433354924</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">REPLY: Query of Mr T.K.Saha on remittanace of technical fees. </span></div>
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<span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">The querist himself states that the payment for import of Bandwith is in the nature of technical fees . Payment for technical fees is covered u/s 9(1)(vii) of the Act and particularly after amendment in section 9 of the Act by the Finance Act 2010 ( insertion of Explanation at the end of section) your case undoubtedly attracts withholding tax and TDS has to be deducted irrespective of whether DTAA is there or not . Regarding procedure see form no 15CB . Rate will depend upon </span></div>
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<span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">DTAA with the country concerned . If no PAN then check section 206AA of the Act ( 20%) . </span></div>
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<b><span style="color: #c00000; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Regards,</span></b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><span style="color: #c00000; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">CA P.K.Sanghai</span></b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><span style="color: #c00000; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">+91 9830031711</span></b><span style="color: #c00000; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">QUERY</span></b><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">- Query in relation to Capital Gain:-</span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">I purchased a Construction linked flat in 2008-09 and till now i have not received the possession of the flat. Now i selling the flat in 2013-14.</span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Whether amount received is treated as long term capital gain or the amount paid for previous 3 years is treated as long term capital gain or all the money received is treated as short term capital gain.</span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Also provide the any case law in this regard. For any further details, please revert back. </span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">With Regards</span><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Prashant Jain</span></div>
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<b><u><span style="color: #0070c0; font-family: Verdana, sans-serif; font-size: 10pt;">Reply1:</span></u></b><span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> </span><span style="color: #0070c0; font-family: Verdana, sans-serif; font-size: 10pt;">First the agreement much ensure that this booking is a capital asset. Ref - CBDT cir for DDA flats. Then it may be LTCG is more than 3 yrs has lapsed. However in this case since no conveyance has been done and handing over not done, the ITO might treat this as IFOS. A keen study of purchase agreement and stage of construction wld sort this out.</span><span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><span style="color: #0070c0; font-family: Verdana, sans-serif; font-size: 10pt;">Ajoy Mohta</span></b><span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><u><span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt; line-height: 115%;">Reply2: </span></u></b><span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt; line-height: 115%;">As the possession has not been received the transaction is that of booking of a flat and right to obtain conveyance. If the period of three years from the date of booking of the flat has passed then the transaction shall be long term and not short term. As per the definition of capital assets under section 2(14) of the Act, any kind of property held by an assessee would come within the definition of 'capital asset'.</span></div>
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<span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Please refer Right to obtain conveyance of property is a ‘property’ - A contract for sale of land is capable of specific performance. It is also assignable. A right to obtain conveyance of immovable ‘property’ is clearly ‘property’ as contemplated by section 2(14) - CIT v.Tata Services Ltd. [1980] 122 ITR 594 (Bom.).</span></div>
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<b><span style="background: white; color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Thanks & Regards<br />Miraj D Shah</span></b><span style="background: white; color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">D J Shah and Co<br />Kalyan Bhavan<br />2 Elgin Road<br />Kolkata 700020<br />Phone: 033-22870767 / 22871487<br />email:</span><span><span style="background: white; color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> </span></span><a href="mailto:mirajshah@djshahandco.com" target="_blank"><span style="background: white; color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">mirajshah@djshahandco.<wbr></wbr>com</span></a><span style="background: white; color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"><br />url:</span><span><span style="background: white; color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> </span></span><a href="http://www.djshahandco.com/" target="_blank"><span style="background: white; color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">www.djshahandco.com</span></a><b><span style="background: white; color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></b></div>
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<b><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">QUERY</span></b><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">- Is there any Circular/Notification from the Dept. that a Director or Manager or Secretary of a Company should file his / her Income Tax Return in that Ward/Circle where the Company is assessed.</span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">If so, then if a person is a Director in more than one company where to file the Return.Under Companies Act 1956 a person can be a MD in two companies with remuneration.</span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Dipjyoti Majumdar</span></div>
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<b><u><span style="color: #002060; font-family: Verdana, sans-serif; font-size: 10pt;">REPLY:</span></u></b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> The salary circles have been formed for convenience in faster processing of returns, refunds etc. Primarily one is governed by territorial jurisdiction which the jurisdictional AO mentioned in PAN details on NSDL /<span> </span></span><a href="http://incometaxindia.gov.in/" target="_blank"><span style="color: #1155cc; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">incometaxindia.gov.in</span></a><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">. The Departmental practice and functioning covers by territorial jurisdictional except in respect of Salary, Company, Trust and TDS cases. This pattern is followed except where minor deviations are there. There may be case where one person is Director of several companies or an employee shifts job from one company to another every 6 months and in such cases the territorial jurisdiction will apply. In cases of such circumstances, the Information Branch of the Department will transfer the relevant data, if required, to the particular Range(s)/Circle(s). From the user end, one has to file his/her return as per the territorial jurisdiction.</span><b><span style="color: #002060; font-family: Verdana, sans-serif; font-size: 10pt;"></span></b></div>
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<span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> Further, as provided in section 139(1A) employees have option to file their returns through employer i.e. bulk filing system. The main purpose of forming the Salary Circle is to have the relevant information relating to company and its employees at one place. However, with advent of filing of TDS returns, Annual Salary Statements, E-filing of IT Returns etc. the Departmental system will be able to have all the details electronically. Reference may be made to CBDT Administrative Manual as under:</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<a href="http://www.incometaxindia.gov.in/archive/mop_volume_i.pdf" target="_blank"><span style="color: #1155cc; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">http://www.incometaxindia.gov.<wbr></wbr>in/archive/mop_volume_i.pdf</span></a><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<a href="http://www.incometaxindia.gov.in/archive/mop_volume_ii.pdf" target="_blank"><span style="color: #1155cc; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">http://www.incometaxindia.gov.<wbr></wbr>in/archive/mop_volume_ii.pdf</span></a><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #1f497d; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> </span><b><span style="color: #002060; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Deepak Jain</span></b></div>
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<b><span style="color: #002060; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Advocate, Calcutta High Court</span></b></div>
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<b><span style="color: #002060; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">0-98302-02630</span></b><b><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></b></div>
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<b><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">QUERY</span></b><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">- It can be understood from a PAN whether it belongs to an Individual or Firm or AOP or Trust or Body of Individuals or a Company without accessing the income tax or any other website like NSDL/TRACES etc.Can we gather similar information by simply seeing a TAN without opening any website.</span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">I do look forward to your valued opinion.</span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Warm Regards,</span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Dipjyoti Majumdar</span></div>
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<b><u><span style="color: #002060; font-family: Verdana, sans-serif; font-size: 10pt;">REPLY: </span></u></b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">In the TAN registration details the requisite information is stated and which is with the applicant.</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><span style="color: #002060; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Deepak Jain</span></b></div>
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<b><span style="color: #002060; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Advocate, Calcutta High Court</span></b></div>
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<b><span style="color: #002060; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">0-98302-02630<u><span></span></u></span></b></div>
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<b><span style="background: white; color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">QUERY: </span></b></div>
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<span style="background: white; color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">There is case, in which father sent his son for study to foreign & taken part cash loan from son for payment of education fees and refunded latter on for purchase of dollar & travelling ticket. However, ITO is imposing penalty for this. Further, they are looking for some favourable case law for avoiding such penalty.</span><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">So, kindly advice us & give the list of case law in favour of assessee.</span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Thanking You,</span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">With Best Regards,</span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">CA Raman Kumar Jha</span></div>
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<b><span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Reply – </span></b></div>
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<span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">The ITAT has held that the loans from relatives are in the nature of financial support within the family and this is a reasonable cause falling u/s. 273B of the Act and hence no penalty can be imposed. Three such decisions are attached to this email. </span></div>
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<b><span style="background: white; color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Thanks & Regards<br />Miraj D Shah</span></b><span style="background: white; color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">D J Shah and Co<br />Kalyan Bhavan<br />2 Elgin Road<br />Kolkata 700020<br />Phone: 033-22870767 / 22871487<br />email:</span><span><span style="background: white; color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> </span></span><a href="mailto:mirajshah@djshahandco.com" target="_blank"><span style="background: white; color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">mirajshah@djshahandco.<wbr></wbr>com</span></a><span style="background: white; color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"><br />url:</span><span><span style="background: white; color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> </span></span><a href="http://www.djshahandco.com/" target="_blank"><span style="background: white; color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">www.djshahandco.com</span></a><b><span style="background: white; color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></b></div>
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<span style="background: white; color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">QUERRY - Assessee has been denied the benefit of HRA as shown in the Form-16 issued to him at the time of scrutiny. The fact also has been admitted by the assessee as per the calculation of A O. A O has added the amount while making assessment u.s. 143(3) and also intend to initiate penalty u.s.271(1)(c) treating as concealment of income. Assessee is on the view that mere disallowance of claim is not concealment but a calculation error. Please comment.</span><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"><br /><br /><span style="background: white;">PKPradhan</span></span><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">It is true that no penalty u/s 271(1)(c) can be imposed on mere disallowance of claim or calculation error or any other bonafide error . In this regard, following case-laws may be referred to-</span></div>
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<b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">(i) CIT vs. International Audio Visual Company</span></b><span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> </span></span><b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">288 ITR 570 (Del)</span></b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">(ii) CIT vs. Nath Brothers Exim International Limited</span></b><span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> </span></span><b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">288 ITR 670 (Del)</span></b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">(iii) Btx Chemical P. Limited. vs</span></b><span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> </span></span><b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">CIT </span></b><span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> </span></span><b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">288 ITR 196 ( Guj)</span></b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">(iv)</span></b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> <span> </span><b>ACIT vs. M/s. Cube Communication Ltd. ( I.T.A. Nos. 672/K/09; ‘A’ Bench, ITAT, Kolkata, Order dated 03.07.09)</b></span></div>
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<b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Following-</span></b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">(a) Chandrapal Bagga vs. ITO 261 ITR 67 (Raj.)</span></b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">(b) Motilal Padampat Sugar Mills Co. Ltd. vs. State of U.P. 118 ITR 326 (SC)</span></b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">(c) CIT vs. SPK Steels Pvt. Ltd. 270 ITR 156 (MP)</span></b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">(v) K.C. Builder vs. ACIT 265 ITR 562</span></b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Recently, in the case of<span> </span><b>Price Waterhouse Coopers (P.) Ltd.</b><span> </span><b>vs.</b><span> </span><b>CIT 348 ITR 308,</b><span> </span>it was held that it is possible that the assessee can make a 'silly' mistake and no penalty is imposable for such errors.</span></div>
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<span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">However, pursuant to the show-cause notice issued u/s 271(1)©, the assessee is required to give a bonafide explanation. The assessee can also adduce fresh evidence in the course of penalty proceedings to prove his case inspite of the fact that the addition is already made in the scrutiny assessment framed u/s 143(3) and the assessee has accepted the addition. If the evidence or the explanation is not found to be false, the A.O. cannot impose the penalty as per Explanation 1 to section 271(1)(c).</span></div>
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<span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">It was held in the case of<span> </span><b>National Textiles vs. CIT 249 ITR 125 (Guj.)</b><span> </span>-</span></div>
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<b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">No penalty can be imposed if the facts and circumstances are equally consistent with the hypothesis that the amount does not represent concealed income as with the hypothesis that it does.</span></b><span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> </span></span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">If an assessee gives an explanation which is unproved but not disproved i.e., it is not accepted but circumstances do not lead to the reasonable and positive inference that the assessee's case is false, the Explanation cannot help the Department because there will be no material to show that the amount in question was the income of the assessee.</span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">QUERY : my client make payment for purchase of bandwidth from abroad. bandwidth is in the nature of technical fees. party receiving payment having no PE or place of business in India. whether deduction of TDS is mandatory if yes please inform me procedure/deposition of TDS/challan no /filing of TDS return/ in case of deductee having no pan. </span><span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">1. if DTAA exists II) if no DTAA.</span><span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Please enlighten on this above subjects.</span><span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">warm regards,</span><span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Tapan Kumar Saha</span><span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Prop. T.K.SAHA & ASSOCIATES</span><span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Chartered Accountants</span><span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><u><span style="color: blue; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">REPLY: </span></u></b><span style="color: blue; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">I think the basis that payment for bandwidth is FTS may be flawed. In</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><span style="color: blue; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">[2011] 45 SOT 157 (Bang.)</span></b><span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: blue; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> </span><b><span style="color: blue; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Infosys Technologies Ltd. v. Deputy Commissioner of Income-tax, Circle-11(4), Bangalore</span></b><span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><span style="color: blue; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">it was held that payment for bandwidth is not FTS and non deduction of TDS was not considered violative of section 195!!</span></b><span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #000099; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Thanks & Regards!<br />Ajoy Kumar Mohta, Partner<br />ARSK & Associates, Chartered Accountants<br />22 R. N. Mukherjee Road, 3rd Floor, Above ICICI Bank<br />Kolkata – 700 001</span><span style="color: #888888; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<u><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt; font-weight: normal;">QUERY:</span></u><span><u><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt; font-weight: normal;"> Tax Deduction from payment of Overseas Commission: </span></u></span><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt; font-weight: normal;">Our clients make payment of commission to non-resident persons for either procuring the goods or sale of goods on behalf of them. Before making the remittance through bank a certificate in Form 15CB is required to be issued by the C.A. and thereafter Form 15CA is required to be uploaded. Whether tax is required to be deducted on such payment of commission to non-resident person for the services rendered outside India. Previously there was a circular from the I.T. Department based on which no tax was required to be deducted. But of late the same has been withdrawn. Moreover there had been conflicting judicial pronouncements on the above matter. According to some view such payments do not come within the purview of Sec. 9 also.</span><u><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt; font-weight: normal;"></span></u></h1>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Please enlighten on the above matter. </span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Thanks & Regards<br /><b><span style="background: yellow;">B Kumar & Co.</span></b><br /><b><span style="background: #fdeee0;">Chartered Accountants</span></b><br /><span style="background: #ffffbf;">6A, Clive Row, 2nd floor.</span><br /><span style="background: #ffffbf;">Kolkata - 700001.</span><br /><span style="background: #ffffbf;">Ph : 22300289 / 22310161</span></span></div>
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<b><u><span style="color: #002060; font-family: Verdana, sans-serif; font-size: 10pt;">REPLY 1:</span></u></b><span style="color: #002060; font-family: Verdana, sans-serif; font-size: 10pt;"> At the outset try to<span> </span>find<span> </span>if any DTAA subsists between the country of the payee and India and<span> </span>then try to follow it. If the commission is<span> </span>a business receipt in the hands<span> </span>of the payee<span> </span>and it does not have<span> </span>PE in<span> </span>India, no TDS may be reqd to be deducted u/s 195.<br /><br />If there is no DTAA then TDS will have to be deducted at the rates prescribed u/s 195 (stated in the ready reckoner at the begining).</span></div>
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<span style="color: #002060; font-family: Verdana, sans-serif; font-size: 10pt;">Ajoy Kumar Mohta, Partner</span><span style="color: #002060; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"><br /><span>ARSK & Associates, Chartered Accountants</span><br /><span>22 R. N. Mukherjee Road, 3rd Floor, Above ICICI Bank</span><br /><span>Kolkata – 700 001</span><br /><span>PHONE: 033 - 40063380</span></span></div>
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<b><u><span style="color: #0070c0; font-family: Verdana, sans-serif; font-size: 10pt;">REPLY 2:</span></u></b><span style="color: #0070c0; font-family: Verdana, sans-serif; font-size: 10pt;"> </span><span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">In my view, Circular No. 23 and Circular No. 786 had clarified that where the non-resident agent operates outside the country (i.e. India), no part of his income arises in India. Further, since the payment is usually remitted directly abroad it cannot be held to have been received by or on behalf of the agent in India. Such payments were therefore held to be not taxable in India. The relevant sections, namely section 5(2) and section 9 of the Income-tax Act, 1961 not having undergone any change in this regard, the clarification in Circular No. 23 still prevails. No tax is therefore deductible under section 195 and consequently, the expenditure on export commission and other related charges payable to a non-resident for services rendered outside India becomes allowable expenditure. The circular is based on the principles of income deemed to accrue or arise in India.<u> Mere withdrawal of the circular does not negate the principles of income deemed to accrue or arise in India or outside India</u>.</span></div>
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<span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Moreover, the Hon’ble Supreme Court observed in <b><u>CIT -vs.- Toshoku Limited (125 ITR 525)</u></b> held that the non-resident assessees did not carry on any business operations in the taxable territories (i.e. India). They acted as selling agents outside India. The receipt in India of the sale proceeds of tobacco remitted or caused to be remitted by the purchasers from abroad does not amount to an operation carried out by the assessees in India as contemplated by cl. (a) of the Explanation to s. 9(1)(i) of the Act. The commission amounts which were earned by the non-resident assessees for services rendered outside India cannot, therefore, be deemed to be incomes which have either accrued or arisen in India. <b>The said decision of Supreme Court was not based on the provisions of the circular but based on the principles of income deemed to accrue or arise in India and outside India.</b></span></div>
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<span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Hope the above answers your query.</span></div>
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<span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Thanks and regards,<br />Akash Bansal<br />Proprietor<br /><b>BANSAL AKASH & CO<br />Chartered Accountants</b>+91 98308 76647</span></div>
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<u><span style="color: #0070c0; font-family: Verdana, sans-serif; font-size: 10pt;">REPLY 3:</span></u><span style="color: #0070c0; font-family: Verdana, sans-serif; font-size: 10pt;"> </span><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt; font-weight: normal;">Dear Mr More ,</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></h1>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt; font-weight: normal;">Please refer to a Qyery raised on TDS on commssion to overseas agent recd on 5th of May 2013 : given below with some of the answers :.</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></h1>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt; font-weight: normal;">The answers to the query in general was no TDS is required to be dedcuted . But the things as on date are not so simple. Before issue of certificate in 15 CB</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></h1>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt; font-weight: normal;">or upload form 15CA certain parameters have to be ensured . 1) Examine the agreement with foreign agent - whether the clause in the agreement also suggets that the agent is also responsible for product or quality requirement or market survey etc. - if yes the nature of payment ( commission) may turn out to be a fees and then withholding tax applies. 2) examine the DTAA and see whether the foreign agent have any PE in India if yes the proposition will change. 3) Obtain TRC of payee concerned now </span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></h1>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt; font-weight: normal;">However after ensuring the above if it is the case of remitting commission simply on sale outside India to NR no withholding tax is required . Withdrawing of circular no 23 and 786 does not alter the interpretation of the language used in section 9 of the Act and the same is not deemed to accrue or arise in India . I do not agree with the idea one has suggested in the answer that withholding tax applies where DTAA does not exist with a country . Once the matter is outside the scope of section 9 , section 195 has no application . </span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></h1>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt; font-weight: normal;">Thanks & Regards</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></h1>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt; font-weight: normal;">P.K. Sanghai </span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></h1>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt; font-weight: normal;">cell: 9830031711 </span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></h1>
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<b><u><span style="color: #0070c0; font-family: Verdana, sans-serif; font-size: 10pt;">REPLY 4:</span></u></b><span style="color: #0070c0; font-family: Verdana, sans-serif; font-size: 10pt;"> </span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Dear All,</span></div>
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<span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> In my view this forum is for exchange of thoughts and experience. If any expert is raising objection on a particular view of another, it is his point of view. Tax laws being so dynamic, it is not so simple to answer a particular query. One has to analyze in details the complete facts of a particular case. <strong>My view was totally based on the fact that the payment to a non-resident is in the nature of export commission</strong> and do not represent any thing else, i.e. FTS or Royalty. As soon as the characteristic of a particular payment changes, its taxability also changes.</span></div>
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<span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> Saying this, I stick to my earlier reply that export commission to non-resident agent do not attract any tax implication in India. Moreover, I would like to draw attention to a very enlightening article on the subject issue published in the May 2013 journal of ICAI “The Chartered Accountant”. The following is the web link to access the article:</span></div>
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<span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> </span><a href="http://220.227.161.86/29761cajournal_may2013-20.pdf" target="_blank"><span style="color: #1155cc; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">http://220.227.161.86/<wbr></wbr>29761cajournal_may2013-20.pdf</span></a><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> Hope the above explanation would be considered as a view from my side and not as a law of land. One is open to take a view contrary to my view.</span></div>
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<span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> Should you require any clarification/information, please do not hesitate to contact me.</span></div>
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<span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> </span><span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Thanks and regards,<br />Akash Bansal<br />Proprietor<br /><strong>BANSAL AKASH & CO</strong><b><br /><strong>Chartered Accountants</strong></b>+91 98308 76647</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><u><span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">QUERY : ON REMEDY FOR NON-DISPOSAL OF RECTIFICATION PETITION U/S ON SEC 154: REPLY BY OUR EXPERT PANEL MEMBER</span></u></b></div>
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<b><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">QUERY:</span></b><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> The AO did not give TDS credit in the 143(3) Order as per the claim made in the ITR and/or the same reflected in the 26AS. During the course of scrutiny proceedings the AO did not call for TDS certificates also. The AO granted a short credit of TDS to the tune of around Rs 140,000/-.The assessee does not want to opt for appeal but intends to file a rectification petition under section 154.Under section 154(8) the AO is supposed to dispose off the same within 6 months. But what will be the remedy to the assessee if the AO does not comply with the time limit.The tax payer has experienced in past that AO has not acted on the 154 petition on some other matter within 6 months and it is still pending though around 3 years have passed by.<br /><br />Regards,<br />Dipjyoti Majumdar<br />ACA<br /></span><b><u><span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Reply 1 :</span></u></b><span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> Unfortunately, no remedy has been provided in the Income-tax Act, where the A.O. fails to dispose of the petition filed u/s. 154 within the statutory period of six months as provided u/s. 154(8). It may, however, be noted that the department cannot take any coercive measure or recover any outstanding dues occasioned due to the denial of the legitimate TDS credit in respect of which a petition u/s. 154 has been filed with the A.O. without first disposing of the assessee’s petition.In this regard, reference may be made to a judgement in the case of Sultan Leather Finishers (P) Ltd. vs. ACIT 191 ITR 179 (All.)</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">If inspite of reminders and persuasion, the A.O. is still not disposing of the rectification petition, the only legal option available to the assessee is to file a writ petition before the jurisdictional High Court. Our framers of constitution has visualized this situation and equipped the High Courts with powers to issue a writ of “Mandamus” for securing judicial enforcement of public duties, performance of which has been wrongfully refused.</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">In a similar situation as that of the querist, where the A.O. was not disposing of the rectification petition u/s. 154, the Hon’ble High Court in the case of Smt. Rajamma vs. ITO 152 ITR 657(Ker) held that an application for relief cannot be kept in cold storage and directed the A.O. to dispose of sec. 154 application within one month from the date of receipt of the order.</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">However, to avoid the cost, one option available to the assessee is to approach Income-tax Ombudsman by filing a complaint with him for non-disposal of sec. 154 petition by the A.O. However, before proceeding, one should refer to the Income Tax Ombudsman Guidelines, 2006 so that the proper procedure is followed.</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Regards,</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Subash Agarwal, Advocate</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Address: 1, Gibson Lane,</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Siddha Gibson, 2<sup>nd</sup> Floor,</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Suite No. – 213, Kolkata – 700069.</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #0070c0; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Mobile No. - 9830052141<span> </span></span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><u><span style="color: #8064a2; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Reply 2:</span></u></b><span style="color: #8064a2; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> </span><span style="color: #8064a2; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">I endorse the view given in the Reply. A writ may be moved and will be ideal in instant case and particularly where there has been inordinate delay by the Department in making rectifications and issuance of refunds thereafter and in cases of CPC adjustments. Before moving the writ it will always be better if couple of letters have been submitted by the aggrieved to the concerned authorities in relation to the rectification and refunds. Due to unilateral and wrongful CPC adjustments of earlier demands, there are more than thousands of rectifications pending as also refunds pending to be issued. For the past 6-9 months the issuance of refunds even where rectification has been duly made has not been issued since Department did not have the requisite funds (as they say). But now position seems to be improving and things are moving.</span></div>
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<span style="color: #8064a2; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Regards</span></div>
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<span style="color: #8064a2; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Deepak Jain, Advocate</span></div>
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<span style="color: #8064a2; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">0-98302-02630</span></div>
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<b><u><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">QUERY:</span></u></b><span><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> </span></span><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">MY QUERY IS A HUSBAND TRANSFERS 50% OF HIS FLAT TO HIS WIFE THROUGH A GIFT DEED.HUSBAND GOT THAT FLAT FROM HIS ELDER BROTHER THROUGH GIFT DEED.NOW IN WHOSE BALANCE SHEET FLAT WILL BE SHOWN.</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">1)HUSBAND`S BALANCE SHEET<br />2)HUSBAND AND WIFE`S BALANCE SHEET AT 50% </span><a href="http://value.in/" target="_blank"><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">VALUE.IN</span></a><span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> THAT CASE WHAT WILL HAPPEN AT THE TIME OF SELLING THE FLAT.</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">THANKS,</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">REGARDS.<br />CA RAVIKANT GOEL<br />9874974424</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><u><span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">REPLY :</span></u></b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">1. The property can be show 50/50 in Husband and Wife balance sheet.</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">2. At the time of selling the provisions of Section 64 (1)(iv) will be attracted and the Capital Gains arising on sale of the property on account of wife’s portion of the flat shall be clubbed with the husband as per the provisions of Section 64 (1)(iv).</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<b><span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">(iv) subject to the provisions of clause (i) of </span></b><a href="http://law.incometaxindia.gov.in/DIT/HtmlFileProcess.aspx?FooterPath=D:%5CWebSites%5CDITTaxmann%5CAct2010%5CDirectTaxLaws%5CITACT%5CHTMLFiles%5C2012&DFile=section27.htm&tar=top" target="_blank"><b><span style="color: #1155cc; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">section 27</span></b></a><b><span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">, </span></b><a href="http://law.incometaxindia.gov.in/DIT/HtmlFileProcess.aspx?FooterPath=D:%5CWebSites%5CDITTaxmann%5CAct2010%5CDirectTaxLaws%5CITACT%5CHTMLFiles%5C2012&DFile=ftn44section64.htm&tar=middle" target="_blank"><b><sup><span style="color: #1155cc; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">44</span></sup></b></a><b><span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">[* * *] to the spouse</span></b><a href="http://law.incometaxindia.gov.in/DIT/HtmlFileProcess.aspx?FooterPath=D:%5CWebSites%5CDITTaxmann%5CAct2010%5CDirectTaxLaws%5CITACT%5CHTMLFiles%5C2012&DFile=ftn45section64.htm&tar=middle" target="_blank"><b><sup><span style="color: #1155cc; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">45</span></sup></b></a><b><span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> of such individual from assets transferred<sup>45</sup> directly or indirectly to the spouse by such individual otherwise than for adequate consideration</span></b><a href="http://law.incometaxindia.gov.in/DIT/HtmlFileProcess.aspx?FooterPath=D:%5CWebSites%5CDITTaxmann%5CAct2010%5CDirectTaxLaws%5CITACT%5CHTMLFiles%5C2012&DFile=ftn45section64.htm&tar=middle" target="_blank"><b><sup><span style="color: #1155cc; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">45</span></sup></b></a><b><span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> or in connection with an agreement to live apart ;</span></b><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #500050; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> </span><span style="color: #888888; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"><br /></span><b><span style="color: #33cc00; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">Thanks & Regards<br />Miraj D Shah<br />D J Shah and Co<br />Kalyan Bhavan<br />2 Elgin Road<br />Kolkata 700020<br />Phone: 033-22870767 / 22871487<br />email: </span></b><a href="mailto:mirajshah@djshahandco.com" target="_blank"><b><span style="color: #1155cc; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">mirajshah@djshahandco.<wbr></wbr>com</span></b></a><b><span style="color: #33cc00; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"><br />url: </span></b><a href="http://www.djshahandco.com/" target="_blank"><b><span style="color: #1155cc; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">www.djshahandco.com</span></b></a><b><span style="color: #33cc00; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></b></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">QUERY: My client have purchased land of Rs 45 lakh & constructed a building with cost of Rs 150 lakhs. This property will be used for commercial purpose. Pl advice on which amount depreciation to be charged. (150 lacs or 195 lacs)</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: red; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">sanjay </span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> </span><span style="color: #1f497d; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">REPLY : 150 lacs</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #1f497d; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"> JNGupta</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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<span style="color: #1f497d; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;">9331022920</span><span style="color: #222222; font-family: 'Verdana', 'sans-serif'; font-size: 10pt;"></span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-3050623846371713467.post-57167317463152369112013-05-18T23:56:00.000-07:002013-05-18T23:56:18.826-07:00companies bill highlights source ICSI<div dir="ltr" style="text-align: left;" trbidi="on">
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">HIGHLIGHTS OF THE COMPANIES BILL, 2011 </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(as passed in Lok Sabha on 18.12.12) </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Bill has 470 clauses as against 658 Sections in the existing Companies Act, 1956. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The entire bill has been divided into 29 chapters. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Many new chapters have been introduced, viz., Registered Valuers (ch.17); Government companies (ch. 23); Companies to furnish information or statistics (ch. 25); Nidhis (ch. 26); National Company Law Tribunal & Appellate Tribunal (ch. 27); Special Courts (ch. 28). </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Bill is forward looking in its approach which empowers the Central Government to make rules, etc. through delegated legislation (clause 469 and others). </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Companies Bill is the result of detailed consultative process adopted by the Government. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The salient and unique features of the Bill are as under: </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">1. DEFINITIONS </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">New definitions are introduced in the Bill, some of which are accounting standards, auditing standards, associate company, CEO, CFO, control, deposit, employee stock option, financial statement, global depository receipt, Indian depository receipt, independent director, interested director, key managerial personnel, promoter, one person company, small company, turnover, voting right etc.. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Definition of private company changed – the limit on maximum number of members increased from 50 to 200. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Private company which is a subsidiary of a public company shall be deemed to be a public company. Confusion whether such a company can retain the provisions in the articles of private company though now a public company removed. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Associate Company - A company is considered to be an associate company of the other, if the other company has <b>significant influence</b> over such company (not being a subsidiary) or is a joint venture company. Significant influence means control of at least 20 per cent. of total share capital of a company or of business decisions under an agreement. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Dormant Company - Where a company is formed and registered under this Act for a future project or to hold an asset or intellectual property and has no significant accounting transaction, such a company or an inactive company may make an application to the Registrar for obtaining the status of a dormant company. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">“expert” includes an engineer, a valuer, a chartered accountant, <b>a company secretary</b>, a cost accountant and any other person who has the power or authority to issue a certificate in pursuance of any law for the time being in force. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">“foreign company” means any company or body corporate incorporated outside India which,— </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<i><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(a)</span></i><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">has a place of business in India <b>whether by itself or through an agent, physically or through electronic mode; and </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<i><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(b)</span></i><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">conducts any business activity in India in any other manner.</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">“Key Managerial Personnel (KMP), in relation to a company, means— </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(i) the Chief Executive Officer or the Managing Director or the Manager, </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(ii) the Company Secretary; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(iii) the whole-time director;<u> </u></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(iv) the Chief Financial Officer; and </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(v) such other officer as may be prescribed </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">“officer who is in default”, means any of the following officers of a company, namely:— </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<i><span style="font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(i)</span></i><span style="font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">whole-time director; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<i><span style="font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(ii)</span></i><span style="font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">key managerial personnel; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<i><span style="font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(iii)</span></i><span style="font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">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; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<i><span style="font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(iv)</span></i><span style="font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">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; </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<i><span style="font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(v)</span></i><span style="font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">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; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<i><span style="font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(vi)</span></i><span style="font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">every director, in respect of a contravention of any of the provisions of this Act, <b>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</b>, or where such contravention had taken place with his consent or connivance; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<i><span style="font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(vii)</span></i><span style="font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">in respect of the issue or transfer of any shares of a company, <b>the share transfer agents, registrars and merchant bankers to the issue or transfer</b>.<b> </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Bill defines the term ‘promoter’ to mean a person - </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(a)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">who has been named as such in a prospectus or is identified by the company in the annual return, or </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(b)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">who has control over the affairs of the company, directly or indirectly whether as a shareholder, director or otherwise; or </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(c)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">in accordance with whose advice, directions or instructions the Board of Directors is accustomed to act. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Provided that nothing in sub-clause (c) shall apply to a person who is acting merely in a professional capacity. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Definition of subsidiary company in relation to any other company (that is holding company), changed to mean a company in which the holding company – </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Symbol; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">·</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Controls the composition of the Board of Directors; or </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Symbol; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">·</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Exercises or controls more than one half of <b>the total share capital</b> (instead of equity share capital as prescribed under the 1956 Act) <b>either at its own or together with one or more of its subsidiary companies.</b> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Provided that such class or classes of holding companies as may be prescribed shall not have layers of subsidiaries beyond such numbers as may be prescribed. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Small company has been defined</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> as a company other than a public company having a paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as may be prescribed not exceeding Rs.5 crore or turnover of which does not exceed two crore rupees or such higher amount as may be prescribed not exceeding twenty crore rupees. [clause 2(85)]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The number of persons in any association or partnership not to exceed such number of persons</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> as may be prescribed (not exceeding one hundred). The restriction not to apply to an association or partnership, constituted by professionals who are governed by special Acts. (clause 464)</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">2. CLASSIFICATION & REGISTRATION</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Concept of One Person Company (OPC limited) introduced </span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">[Clause 2(62)]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Concept of Small companies have been introduced which shall be</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> subjected to a lesser stringent regulatory framework [Clause 2(85)]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Provision for Conversion of Companies already registered </span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">has been introduced [Clause 18]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Registration process has been made faster and compatible with e-governance. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">For the first time, articles may contain provisions<b> for entrenchment</b> [clause 5(3)]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">A declaration, in the prescribed form,</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> required to be filed with the Registrar at the time of registration of a company that all the requirements of the Act in respect of registration and matters precedent or incidental thereto have been complied with, will be required to <b>signed by both</b> - a person named in the articles as a director, manager or secretary of the company as well as by an advocate, a chartered accountant, cost accountant or company secretary in practice, who is engaged in the formation of the company. (clause 7) </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Registered office </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">A company shall, on and from the 15<sup>th</sup> day of its incorporation and at all times thereafter have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Company is required to furnish to the Registrar verification of its registered office within 30 days of its incorporation in the prescribed manner. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Where a company has changed its name(s) during the last two years, it shall paint or affix or print, along with its name, the former name or names so changed during the last two years. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Notice of change, verified in the manner prescribed, shall be given to the Registrar, within 15 days of the change, who shall record the same. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Commencement of business</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">A company having a share capital shall not commence business or exercise any borrowing powers unless a declaration is filed with Registrar by a director verified in the manner as may be prescribed that: </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">every subscriber to the memorandum has paid the value of shares agreed to be taken by him; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Paid-up capital is not less than Rs. five lakh/ one lakh </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">the company has filed with the Registrar the verification of its registered office. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">3. PROSPECTUS AND ALLOTMENT OF SECURITIES </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">This chapter is divided into two parts. Part I relates to ‘Public offer’ and Part II relates to ‘Private Placement’ </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">“Public offer” includes initial public offer or further public offer of securities to the public by a company, or an offer for sale of securities to the public by an existing shareholder, through issue of a prospectus.’ </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The term 'private placement' has been defined to bring clarity. “Private placement” means any offer of securities or invitation to subscribe securities to a select group of persons by a company (other than by way of public offer) through issue of a private placement offer letter and which satisfies the conditions specified in this section. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Detailed disclosures are provided in the Bill itself. It includes disclosures about sources of promoter’s contribution. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">In case of variation in the terms of contract referred to in the prospectus or objects for which the prospectus was issued, the dissenting shareholders shall be given exit opportunity by promoters or controlling shareholders. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Punishment for fraudulently inducing persons to invest money (clause 36) </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Any person who, either knowingly or recklessly makes any statement, promise or forecast which is false, deceptive or misleading, or deliberately conceals any material facts, to induce another person to enter into, or to offer to enter into any agreement for, or with a view to, obtaining credit facilities from any bank or financial institution shall be liable for punishment for fraud. This provision is proposed to help in curbing a major source of corporate delinquency.<b> </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">4. SHARE CAPITAL AND DEBENTURES</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; letter-spacing: 0.05pt; mso-fareast-font-family: 'Times New Roman';">If a company <b>with intent to defraud, issues a duplicate certificate of shares,</b> the </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">company shall be punishable with fine which shall not be less than 5 times the face value of the shares involved in the issue of the duplicate certificate but which may extend to 10 times the face value of such shares or rupees 10 crores whichever is higher. Stringent penalties have also been imposed for defaulting officers of the company.<span style="letter-spacing: 0.05pt;"> [clause 46(5)]</span> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Where <b>any depository has transferred shares with an intention to defraud a person</b>, it shall be liable under section 447 i.e. provisions for punishment for fraud.[clause56(7)] </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; letter-spacing: 0.05pt; mso-fareast-font-family: 'Times New Roman';">Security Premium Account </span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; letter-spacing: 0.05pt; mso-fareast-font-family: 'Times New Roman';">may also be applied for the purchase of its own shares or other securities. [Clause 52(2)(e)]</span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; letter-spacing: 0.05pt; mso-fareast-font-family: 'Times New Roman';">A company <b>cannot issue share at a discount</b>. [Clause(53)]</span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">A company limited by shares <b>cannot issue any preference shares which are irredeemable.</b> However, a company limited by shares may, if so authorised by its articles, can issue preference shares which are liable to be redeemed within a period not exceeding twenty years from the <span style="letter-spacing: 0.1pt;">date of their issue. </span></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; letter-spacing: 0.1pt; mso-fareast-font-family: 'Times New Roman';">A company may issue preference shares for a period exceeding twenty years for </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; letter-spacing: 0.15pt; mso-fareast-font-family: 'Times New Roman';">infrastructural projects</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; letter-spacing: 0.15pt; mso-fareast-font-family: 'Times New Roman';"> subject to redemption of such percentage of shares as may be prescribed on an annual basis at the option of such preference shareholders. [</span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; letter-spacing: 0.1pt; mso-fareast-font-family: 'Times New Roman';">Clause 55].</span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Every company shall deliver <b>debenture certificate</b> within six months of allotment. [Clause 56(4)(d)]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Reduction of share capital</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> to be made subject to confirmation by the Tribunal. The Tribunal on receiving an application for reduction of share capital, shall give notice to the Central Government, Registrar and to the SEBI and consider the representations received in this behalf. (Clause 66)</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">5. E-GOVERNANCE </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">E-Governance proposed for various company processes like maintenance and inspection of documents in electronic form, option of keeping of books of accounts in electronic form, financial statements to be placed on company’s website, holding of board meetings through video conferencing/other electronic mode; voting through electronic means. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">6. BOARD AND GOVERNANCE </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Number of directors: </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Minimum : Public company -3 Private -2 , <b>OPC-1</b>. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Maximum : limit <b>increased to 15 from 12</b> . </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">More directors can be added by passing of special resolution without getting the approval of Central Government as earlier required.<b> </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Woman director</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">At least one woman director on the Board of such class or classes of companies as may be prescribed. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Resident Director </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Every company shall have at least <b>one director who has stayed in India for a total period of not less than one hundred and eighty-two days in the previous calendar year. </b>[clause 149(2)]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Appointment of Key Managerial Personnel [Clause 203(1)] </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Every company belonging to such class or classes of companies as may be prescribed shall have the whole-time key managerial personnel. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Unless the articles of a company provide otherwise, an individual shall not be the chairperson of the company as well as the managing director or Chief Executive Officer of the company at the same time [Proviso to Clause 203(1)] </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Every Company Secretary being a KMP shall be appointed by a resolution of the Board </span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">which shall contain the terms and conditions of appointment including the remuneration. If any vacancy in the office of KMP is created, the same shall be filled up by the Board at a meeting of the Board within a period of six months from the date of such vacancy [Clause 203 (2) & (4)]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">If a company <b>does not appoint a Key Managerial Personnel</b>, the penalty proposed is : </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">- On company – one lakh rupees which may extend to five lakh rupees. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">- On every director and KMP who is in default – 50,000 rupees and 1,000 </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">rupees per day if contravention continues. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Independent Directors</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Concept of <b>independent directors</b> has been introduced for the first time in Company Law: [clause 149(5)] </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Symbol; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">·</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">All listed companies shall have <b>at least one-third of the Board</b> as independent directors. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Symbol; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">·</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Such other class or classes of public companies as may be prescribed by the Central Government shall also be required to appoint independent directors. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Symbol; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">·</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The independent director has been clearly defined in the Bill. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Symbol; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">·</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Nominee director nominated by any financial institution, or in pursuance of any agreement, or appointed by any government to represent its shareholding shall not be deemed to be an independent director</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Symbol; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">·</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">An independent director shall not be entitled to any remuneration other than sitting fee, reimbursement of expenses for participation in the Board and other meetings and profit related commission as may be approved by the members. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Symbol; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">·</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">An Independent director shall not be entitled to any stock option. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Symbol; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">·</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Only an independent director can be appointed as alternate director to an independent director. [clause 161(2)]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Person other than retiring director</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">If a person other than retiring director stands for directorship but fails to get appointed, he or the member intending to propose him as a director, as the case may be, shall be refunded the sum deposited by him, if he gets more than twenty five per cent of total valid votes [clause 160(1)].</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Resignation of director</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">A director may <b>resign from</b> his office by giving notice in writing. The Board shall, on receipt of such notice, intimate the Registrar and also place such resignation in the subsequent general meeting of the company. [clause 168(1)]. The director shall also forward a copy of resignation alongwith detailed reasons for the resignation to the Registrar. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The notice shall become effective from the date on which the notice is received by the company or the date, if any, specified by the director in the notice, whichever is later. [clause 168(2)]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">If all the directors of a company resign from their office or vacate their office, the promoter or in his absence the Central Government shall appoint the required number of directors to hold office till the directors are appointed by the company in General Meeting</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> [clause 168(3)].</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Participation of directors through video-conferencing </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Participation of directors at Board Meetings has been permitted through video-conferencing or other electronic means</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">, provided such participation is capable of recording and recognizing. Also, the recording and storing of the proceedings of such meetings should be carried out [clause 173(2)]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Central Government may however, by notification, specify such matters which shall not be dealt with in the meeting through video-conferencing and such other electronic means as may be prescribed. [clause 173(2)] </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Notice of Board Meeting</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">At least seven days’ notice is required to be given for a Board meeting. The notice may be sent by electronic means</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> to every director at his address registered with the company. [clause 173(3)]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">A Board Meeting may be called at <b>shorter notice</b> subject to the condition that <b>at least one independent director</b>, if any, shall be present at the meeting. However, in the absence of any independent director from such a meeting, the decisions taken at such meeting shall be final only on ratification thereof by at least one independent director. [clause 173(3)].<b> </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Duties of directors (clause 166)</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">For the first time duties of directors have been defined in the Bill. A director of a company shall : </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">act in accordance with the articles of the company. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">act in good faith in order to promote the objects of the company for the benefit of its members as a whole, <b>and in the best interests of the company, its employees, the shareholders, the community and for the protection of environment</b>. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">exercise his duties with due and reasonable care, skill and diligence and shall exercise independent judgment. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">not involve in a situation in which he may have a direct or indirect interest that conflicts, or possibly may conflict, with the interest of the company. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">not achieve or attempt to achieve any undue gain or advantage either to himself or to his relatives, partners, or associates and if such director is found guilty of making any undue gain, he shall be liable to pay an amount equal to that gain to the company. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">not assign his office and any assignment so made shall be void.</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<i><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Penalty: </span></i><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">If a director of the company contravenes the provisions of this section such director shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Board Committees</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Besides the Audit Committee, the <b>constitution of Nomination and Remuneration Committee has also been made mandatory</b> in the case of listed companies and such other class or classes of companies as may be prescribed. [clause 178(1)]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The <b>Audit committee</b> shall consist of a minimum of three directors with <b>independent directors</b> forming a majority and majority of members including its Chairperson shall be persons with ability to read and understand the financial statement. [clause 177(2)]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Nomination and Remuneration Committee shall formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees [Clause 178(3)]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Nomination and Remuneration Committee shall consist of three or more non-executive director(s) out of which not less than one half shall be independent directors. [clause 178(1)]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Where the combined membership of the shareholders, debenture holders, deposit holders and any other security holders is more than one thousand at any time during the financial year, the company shall constitute a <b>Stakeholders Relationship Committee</b>. [clause 178(5)].</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Managerial Remuneration [clause 197]</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Provisions relating to limits on remuneration provided in the existing Act being included in the Bill. Maximum limit of 11% (of net profits) being retained.</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">For companies with no profits or inadequate profits remuneration shall be payable in accordance with new Schedule of Remuneration (Schedule V) and in case a company is not able to comply with Schedule V, approval of Central Government would be necessary.<b> </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Certain Insurance Premium not to be treated as part of the remuneration</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The prem ium paid on any insurance taken by a company on behalf of its managing director, whole-time director, manager, Chief Executive Officer, Chief Financial Officer or <b>Company Secretary </b>for indemnifying any of them against any liability in respect of any negligence, default, misfeasance, breach of duty or breach of trust for which they may be guilty in relation to the company, <b>shall not be treated as part of the remuneration </b>payable to any such personnel. [Clause 197 (13)]</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">7. DISCLOSURES </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Annual return [clause 92]</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Every company shall prepare a return (hereinafter referred to as the annual return) in the prescribed form containing the particulars as they stood on the close of the financial year regarding; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(i)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">its registered office, principal business activities, particulars of its holding, subsidiary and associate companies; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(ii)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">its shares, debentures and other securities and shareholding pattern; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(iii)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">its indebtedness; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(iv)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">its members and debenture-holders along with changes therein since the close of the previous financial year;; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(v)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">its promoters, directors, key managerial personnel along with changes therein since the close of the last financial year; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(vi)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">meetings of members or a class thereof, Board and its various committees along with attendance details; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(vii)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">remuneration of directors and key managerial personnel; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(viii)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">penalties imposed on the company, its directors or officers and details of compounding of offences; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(ix)</span></b><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">matters related to certification of compliances, disclosures as may be prescribed; </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(x)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">details in respect of shares held by foreign institutional investors; and </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(xi)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">such other matters as may be prescribed. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The prescribed disclosures under the Annual Return shows significant transformation in non financial annual disclosures and reporting by companies as compared to the existing format. </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Similar to the existing compliance certificate as stipulated under section 383A of Companies Act, 1956 certification of compliances has been prescribed under clause 92(1)(ix). </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Annual Return is required to be signed by : </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(i)</span></b><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">A director and the Company Secretary, or where there is no Company Secretary, by a Company Secretary in whole-time practice. </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">It means that now in respect of<b> all the companies (except one person companies and small companies), whether private or public, listed or unlisted, </b>the annual return has to be signed by either a <b>company secretary in employment or by a company secretary in </b>practice i.e. where no Company Secretary is appointed by the company, the Annual Return is compulsorily required to be signed by the Company Secretary in practice. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(ii)in addition to the above<b>, the annual return, filed by a listed company or by a company having such paid-up capital and turnover as may be prescribed, </b>shall be certified by a company secretary in practice that the annual return discloses the facts correctly and adequately and that the Company has complied with all the provisions of the Act. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">It means, in case of a listed company and other prescribed companies, even if the Annual Return is signed by the Company Secretary in employment, it is further required to be certified by the Company Secretary in Whole time practice. </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(iii)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">In relation to a One Person Company and Small Company, the annual return is required to be signed by the Company Secretary, or where there is no Company Secretary, by one director of the company. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<i><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Penalty </span></i><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">In case a Company Secretary in practice certifies the annual return otherwise than in conformity with the requirements of this section or the rules made there under, such Company Secretary shall be <b>punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees</b>.<b> </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Changes in shareholding of promoters and top ten shareholders </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">A return </span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">to be filed with the Registrar with respect to change in the number of shares held by promoters and top ten shareholders (to ensure audit trail of ownership) <b>by a listed company. </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Board’s report (Clause 134) </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Board’s Report</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> has been made more informative and includes extensive disclosures like – </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(i)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">extract of annual return in the prescribed form; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(ii)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">company’s policy on director's appointment and remuneration including the criteria for determining qualifications, positive attributes, independence of a director etc. ; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(iii)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">a statement of declaration by independent directors; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(iv)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made <b>by the auditor in his report and by the company secretary in practice in his secretarial audit report</b>; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(v)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">particulars of loans, guarantees, or investments made; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(vi)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">particulars of contracts or arrangements entered into; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(vii)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">the conservation of energy, technology absorption, foreign exchange earnings and outgo in the prescribed manner; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(viii)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">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; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(ix)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">the details about the policy developed and implemented by the company on corporate social responsibility initiatives taken during the year </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(x)</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">in case of listed companies and other prescribed class of companies, a statement indicating the manner in which formal <b>annual evaluation has been made by the Board of its own performance and that of committees and individual directors. </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Directors' Responsibility Statement shall also include the statement that the directors had devised proper systems to ensure compliance with the provisions </span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">of all applicable laws and that such systems were adequate and operating effectively.</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Boards’ Report is to be signed by the Chairperson of the company if he is authorized by the Board and where he is not so authorized, it shall be signed by at least two directors, one of whom shall be a managing director, or by the director where there is one director. (Clause 134).</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Related Party Transactions</span></b><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Every contract or arrangement entered into with a related party shall be referred to in the Board’s Report along with the justification for entering into such contract or arrangement </span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">[Clause 188(2)].</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Any arrangement between a company and its directors in respect of acquisition of assets for consideration other than cash shall require prior approval by a resolution in general meeting and if the director or connected person is a director of its holding company, approval is required to be obtained by passing a resolution in general meeting of the holding company [Clause 192].</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Where a one person company limited by shares or by guarantee enters into a contract with the sole member of the company who is also its director, the company shall, unless the contract is in writing, ensure that the terms of the contract or offer are contained in the memorandum or are recorded in the minutes of the first Board meeting held after entering into the contract. The company shall inform the Registrar about every contract entered into by the company and recorded in the minutes (Clause 193).</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">8. CORPORATE SOCIAL RESPONSIBILITY (CLAUSE 135) </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Every company having net worth of rupees 5000 crore or more, or turnover of rupees 1000 crore or more or a net profit of rupees 5 crore or more during any financial year shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The CSR Committee shall formulate and recommend Corporate Social Responsibility Policy which shall indicate the activity or activities to be undertaken by the company as specified in schedule VII and shall also recommend the amount of expenditure to be incurred on the CSR activities.</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Board of every company shall ensure that the company spends in every financial year atleast 2% of the average net profits of the company made during the three immediately preceding financial years in pursuance of its CSR policy.</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Where the company fails to spend such amount, the Board shall in its report specify the reasons for not spending the amount. The approach is to 'comply or explain’.</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The company shall give preference to local areas where it operates, for spending amount earmarked for Corporate Social Responsibility (CSR) activities. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">9. DEPOSITS (CLAUSE 173)</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">A company may, subject to the passing of a resolution in general meeting and subject to the prescribed rules, accept deposits from its members subject to fulfillment of the following specified conditions:<b> </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">i.</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">passing of resolution in a general meeting. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">ii.</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">issue of circular to members including therein a statement showing the financial position of the company, the credit ratings obtained, the total number of depositors and the amount due towards deposits in respect of any previous deposits accepted by the company and such other particulars in such form and in such manner as may be prescribed. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">iii.</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">filing a copy of the circular along with such statement with the registrar within 30 days before the date of issue of the circular. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">iv.</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Providing deposit insurance. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">v.</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Certification by the company that it has not defaulted in the repayment of deposits. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">vi.</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Provision of security in respect of deposit and interest and creation of charge on company’s properties and assets. An amount of not less than 15% of the deposits maturing during a financial year shall be deposited in <b>deposit repayment</b> reserve account. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">A public company having prescribed net worth or turnover may accept deposits from persons other than its members</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> subject to compliance of rules as may be prescribed by Central Government in consultation by Reserve Bank of India. (Clause 76). </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The penalty for failure to repay deposit</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> has been made extremely stringent. Where a company fails to repay the deposit and it is proved that the deposits had been accepted with intent to defraud the depositors or for any fraudulent purpose, every officer of the company who was responsible for the acceptance of such deposit shall, without prejudice to liability under section 447 i.e. punishment for fraud), be personally responsible, without any limitation of liability, for all or any of the losses or damages that may have been incurred by the depositors (Clause 75). </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Stringent punishment is proposed for failure to distribute dividend within thirty days of its declaration. (Clause 127)<b> </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">10. INVESTMENT COMPANIES (CLAUSE 186) </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">A company can make investment through not more than two layers of investment companies, unless otherwise prescribed. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">This shall not affect </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">a company from acquiring any other company incorporated in a country outside India if such other company has investment subsidiaries beyond two layers as per the laws of such country; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">a subsidiary company from having any investment subsidiary for the purposes of meeting the requirements under any law or under any rule or regulation framed under any law for the time being in force. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The restriction on the number of step-down subsidiary companies has been introduced to prevent the abuse of diversion of funds through many step-down subsidiaries.<b> </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">11. COMPANY SECRETARY </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Functions of Company Secretary (clause 205) </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The functions of the company secretary shall include<b>-</b> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">to report to the Board about compliance </span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">with the provisions of this Act, the rules made there under and other laws applicable to the company; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">to ensure that the company <b>complies with the applicable secretarial standards; </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">to discharge such other duties as may be prescribed.</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Secretarial Audit (Clause 204) </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Symbol; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">·</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Every listed company and a company belonging to other class of companies as may be prescribed shall annex with its Board’s report a <b>Secretarial Audit Report</b>, given by a <b>Company Secretary </b>i<b>n Practice</b>, in such form as may be prescribed. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Symbol; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">·</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">It shall be the duty of the company to give all assistance and facilities to the <b>Company Secretary in Practice, </b>for auditing the secretarial and related records of the company. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Symbol; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">·</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Board of Directors, in their report shall explain in full any qualification or observation or other remarks made by the <b>Company Secretary in Practice </b>in his report. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Symbol; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">·</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">If a company or any officer of the company or the <b>Company Secretary in Practice, </b>contravenes the provisions of this section, the company, every officer of the company or the <b>Company Secretary in Practice</b>, who is in default, shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Secretarial Standards Introduced [Clause 118(10) & 205]</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">For the first time, <b>the Secretarial Standards has been introduced and provided statutory recognition </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Clause 118(10) reads as: </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">“Every company shall observe Secretarial Standards with respect General and Board Meetings specified by the </span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Institute of Company Secretaries of India constituted under section 3 of the Company Secretaries Act, 1980 and approved by the Central Government.”</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Clause 205 casts duty on the Company Secretary to ensure that the company complies with the applicable Secretarial Standards.</span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">It is the beginning of a new era where non financial standards have been given importance and statutory recognition besides Financial Standards.</span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">12. GENERAL MEETINGS </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">To encourage wider participation of shareholders at General Meetings, <b>the Central Government may prescribe the class or classes of companies in which a member may exercise their vote at meetings by electronic means</b> [clause 108].</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">One person companies have been given the option to dispense with the requirement of holding an AGM. [clause 96(1)]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Report on annual general meeting [clause 121]</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Every listed company shall prepare <b>a Report on each Annual General Meeting including confirmation to the effect that the meeting was convened, held and conducted as per the provisions of the Act and the Rules made there under. </b>The report shall be prepared in the manner to be prescribed.<b> </b>A copy of the report shall be filed with the Registrar<b> within 30 days of the conclusion of the AGM. </b>Non-filing of the report has been made a punishable offence. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">13. AUDITORS</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">A company shall appoint an individual or a firm as an auditor at annual general meeting who shall hold office till the conclusion of <b>sixth annual general meeting</b>. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">However, the company shall place the matter relating to such appointment <b>for ratification by members at every annual general meeting. </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">No listed company or a company belonging to such class or classes of companies as may be prescribed,</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> shall appoint or re-appoint— </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(a) an individual as auditor for more than <b>one term</b> of five consecutive years; and </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(b) an audit firm as auditor for more than <b>two terms</b> of five consecutive years: </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Provided that— </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(i) an individual auditor who has completed his term under clause (a) shall not be eligible for re-appointment as auditor in the same company for five years from the completion of his term; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(ii) an audit firm which has completed its term under clause (b), shall not be eligible for re-appointment as auditor in the same company for five years from the completion of such term:</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Members of a company may resolve</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> to provide that in the audit firm appointed by it, the auditing partner and his team shall be rotated at such intervals as may be resolved by members<b> </b>. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The limit in respect of maximum number of companies in which a person may be appointed as auditor has been proposed <b>as twenty companies. </b>(clause 141)<b> </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Auditor <b>cannot render any of the following services, directly or indirectly to the company or its holding company or subsidiary company</b>: </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Accounting and book-keeping service</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Internal audit</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Design and implementation of any financial information system </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Actuarial services </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Investment advisory services </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Investment banking services </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Rendering of outsourced financial services </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Management services </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Other prescribed services<b> </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Internal Audit</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Internal audit</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> may be made mandatory for prescribed companies (clause 138)<b> </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Cost Audit (clause 148)</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Central Government after consultation with regulatory body may direct class of companies engaged in production of such goods or providing such services as may be prescribed to include in the books of accounts particulars relating to utilisation of material or labour or to such other items of cost.</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">If the Central Government is of the opinion, that it is necessary to do so, it may, direct that the audit of cost records of class of companies, which are required to maintain cost records and which have a net worth of such amount as may be prescribed or a turnover of such amount as may be prescribed, shall be conducted in the manner specified in the order.</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">‘cost auditing standards’</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> have been mandated.</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">14. FINANCIAL STATEMENT (CLAUSE 2(40)] </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">For the first time, the term<b> 'financial statement' has been defined to include:-</b> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(i) a balance sheet as at the end of the financial year; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(ii) a profit and loss account, or in the case of a company carrying on any activity not for profit, an income and expenditure account for the financial year; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(iii) cash flow statement for the financial year; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(iv) <b>a statement of changes in equity, if applicable</b>; and </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(v) any explanatory note annexed to, or forming part of, any document referred to in sub-clause (i) to sub-clause (iv): </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">the financial statement, with respect to One Person Company, small company and dormant company, may not include the cash flow statement;</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Signing of financial statement (Clause 134)</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The financial statement, including consolidated financial statement, if any, shall be approved by the Board of directors before they are signed on behalf of the Board <b>at least by the Chairperson of the company authorised by the Board or by two directors out of which one shall be managing director and the Chief Executive Officer, if he is a director in the company, the Chief Financial Officer and the company secretary of the company, wherever they are appointed, or in the case of a One Person Company, only by one director, </b>for submission to the auditor for his report thereon.<b> </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">15. NATIONAL FINANCIAL REPORTING AUTHORITY (NFRA) (CLAUSE 132) </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Central Government may be notification constitute a National Financial Reporting Authority to provide for matters related to accounting and auditing standards. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Notwithstanding anything contained in any other law for the time being in force, the National Financial Reporting Authority shall––</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(a) make recommendations to the Central Government on the formulation and laying down of accounting and auditing policies and standards for adoption by companies or class of companies or their auditors, as the case may be; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(b) monitor and enforce the compliance with accounting standards and auditing standards in such manner as may be prescribed; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(c) oversee the quality of service of the professions associated with ensuring compliance with such standards, and suggest measures required for improvement in quality of services and such other related matters as may be prescribed; and </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(d) perform such other functions relating to clauses (a), (b) and (c) as may be prescribed. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Notwithstanding anything contained in any other law for the time being in force, the National Financial Reporting Authority shall—</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(a) have the power to investigate, either <i>suo moto </i>or on a reference made to it by the Central Government, for such class of bodies corporate or persons<i>, </i>in such manner as may be prescribed into the matters of professional or other misconduct committed by any member or firm of chartered accountants, registered under the Chartered Accountants Act, 1949: </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Provided that no other institute or body shall initiate or continue any proceedings in such matters of misconduct where the National Financial Reporting Authority has initiated an investigation under this section; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(b) have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, while trying a suit. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(c) where professional or other misconduct is proved, have the power to make order for— </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(A) imposing penalty of - </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(I) not less than one lakh rupees, but which may extend to five times of the fees received, in case of individuals; and </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(II) not less than ten lakh rupees, but which my extend to ten times of the fees received, in case of firms; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">(B) debarring the member or the firm from engaging himself or itself from practice as member of the institute for a minimum period of six months or for such higher period not exceeding ten years as may be decided by the National Financial Reporting Authority. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Any person aggrieved by any order of the National Financial Reporting Authority, may prefer an appeal before the Appellate Authority constituted by the Central Government. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">16. INVESTOR PROTECTION MEASURES </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Issue and transfer</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> of securities and non-payment of dividend by listed companies, shall be administered by SEBI by making regulations.(Clause24)</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">An <b>act of fraudulent inducement</b> of persons to invest money is <b>punishable with imprisonment</b> for a term which may extend to ten years and with fine which shall not be less than three times the amount involved in fraud.(Clause 36)</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">A suit may be filed by a person who is affected by any misleading statement</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> or the inclusion or omission of any matter in the Prospectus or who has invested money by fraudulent inducement. (Clause 37).</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Class action suits</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">For the first time, a provision has been made for class action suits. It is provided that specified number of member(s), depositor(s) or any class of them, may, if they are of the opinion that the management or control of the affairs of the company are being conducted in a manner prejudicial to the interests of the company or its members or depositors, file an application before the Tribunal on behalf of the members or depositors. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Where the members or depositors seek any damages or compensation or demand any other suitable action from or against an audit firm, the liability shall be of the firm as well as of each partner who was involved in making any improper or misleading statement of particulars in the audit report or who acted in a fraudulent, unlawful or wrongful manner.</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The order passed by the Tribunal shall be binding on the company and all its members, depositors and auditors including audit firm or expert or consultant or advisor or any other person associated with the company. (clause 245)</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Serious Fraud Investigation Office (clause 211)</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Statutory status to SFIO has been proposed. Investigation report of SFIO filed with the Court for framing of charges shall be treated as a report filed by a Police Officer. SFIO shall have power to arrest in respect of certain offences of the Bill which attract the punishment for fraud. Those offences shall be cognizable and the person accused of any such offence shall be released on bail subject to certain conditions provided in the relevant clause of the Bill. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Stringent penalty provided for fraud related offences.<b> </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Fraud defined (Clause 447) </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The term "Fraud" has for the first time been defined in the Bill. Any person who is found to be guilty of fraud, shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to ten years and shall also be liable to fine which shall not be less than the amount involved in the fraud, but which may extend to three times the amount involved in the fraud. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Where the fraud in question involves public interest, the term of imprisonment shall not be less than three years</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Prohibition of insider trading </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">New clause has been introduced with respect to prohibition of insider trading of securities. The definition of price sensitive information has also been included [clause 195].</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Prohibition on Forward dealings </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Directors and the key managerial personnel of a company are prohibited </span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">from forward dealings in securities of the company.(clause 194). </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">17. INSPECTION, ENQUIRY AND INVESTIGATION</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">A new clause has been added to provide that where in connection with enquiry or investigation into the affairs of the company or reference by the Central Government, or on complaint by specified number of members or creditors or any other person having a reasonable any person that the transfer or disposal of funds, properties or assets is likely to take place which is prejudicial to the interest of the company, then the Tribunal may order for <b>the freezing of such transfer, removal or disposal of assets for a period of three years</b>. [clause 221] </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Another new clause seeks to provide that the provisions of inspection or investigation applicable to Indian companies shall also <b>apply <i>mutatis-mutandis</i> to inspection or investigation of foreign companies</b>. (clause 228).<b> </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">18. RESTRUCTURING AND LIQUIDATION</span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The entire rehabilitation and liquidation process has been made<b> time bound</b>. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Winding up is to be resorted to only when revival is not feasible. (clause 258). </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Tribunal may appoint an interim administrator or a company administrator from the panel of Company Secretaries, CAs, CWAs, etc. maintained by the Central Government.</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> [clause 259(1)]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Company Administrator shall prepare a scheme of revival and rehabilitation. [clause 261(1)]. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">If revival scheme is not approved by the creditors, the Tribunal shall order for winding up of the company. (clause 258). </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">No civil court shall have jurisdiction in respect of any matter on which Tribunal or Appellate Tribunal is empowered. (clause 268).</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">19. COMPANY LIQUIDATORS (CLAUSE 275)</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Tribunal may appoint Provisional Liquidator or the Company Liquidator from a panel maintained <b>by the Central Government consisting of Company Secretaries, Chartered Accountants, Advocates and Cost Accountants</b>. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">On an appointment as provisional liquidator or Company Liquidator, such liquidator is required to file a declaration in the prescribed form disclosing conflict of interest or lack of independence in respect of his appointment, if any, with the Tribunal. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Professional assistance to Company Liquidator (CLAUSE 291)</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Company Liquidator may, with the sanction of the Tribunal, appoint <b>one or more professionals including Company Secretaries</b> to assist him in the performance of his duties and functions under the Act.<b> </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">20. COMPOUNDING OF CERTAIN OFFENCES (CLAUSE 441)</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">This clause provides for the compounding of certain offences by Tribunal or regional director in certain cases before the investigation has been initiated or is pending under this Act. It further provides the procedure followed for compounding of offence. It clause also provides penalty for any officer or other employee of the company who fails to comply with the order of Tribunal or Regional Director. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">21. National Company Law Tribunal and Appellate Tribunal (Clause 408 and 410) </span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Central Government shall, by notification, constitute, a Tribunal to be known as National Company Law Tribunal and an Appellate Tribunal to be known as National Company law Appellate Tribunal.<b> </b></span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">22. SPECIAL COURTS</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">For the speedy trial of offences, the Central Government has been empowered to establish special courts in consultation with the Chief Justice of the High Court within whose jurisdiction the judge is to be appointed. (clause 435). </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">All offences under this Act shall be triable by the Special Court established for the area in which the registered office of the company in relation to which the offence is committed or where there are more special courts than one for such area, by such one of them as may be specified in this behalf by the High Court concerned. (clause 436) </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Special Court would have the liberty to try summary proceedings for offences punishable with imprisonment for a term not exceeding three years, although it may order for the regular trial. (clause 436). </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">23. MEDIATION AND CONCILIATION PANEL (CLAUSE 442)</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Central government shall maintain a panel of experts to be called <b>Mediation and Conciliation Panel for mediation between the parties during the pendency of any proceedings before the Central Government or the Tribunal or the Appellate Tribunal under this Act.</b> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">24. CROSS – BORDER MERGERS (CLAUSE 234)</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Bill has allowed cross border mergers with any foreign company; </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The cross border merger may be made between companies registered under this Act and companies incorporated under jurisdiction of such countries as may be notified by the Central Government. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">25. REGISTERED VALUERS (CLAUSE 247)</span></b><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">A new chapter has been inserted in relation to registered valuers </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Valuation in respect of any property, stock, shares, debentures, securities, goodwill, networth or assets of a company shall be valued by a person registered as a valuer.</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Central Government shall maintain a register of valuers. . </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The valuer shall be a person having such qualification and experience and registered as a valuer in such manner and on such terms and conditions as may be prescribed.</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">26. POWER TO EXEMPT CLASS OR CLASSES OF COMPANIES FROM PROVISIONS OF THIS ACT (CLAUSE 462)</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Central Government may in the public interest, by notification direct that any provisions of this Act: </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">1.</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">shall not apply to such class or classes of companies; or </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">2.</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">shall apply to class or classes of companies with such exceptions, modifications and adaptations as may be specified in the notification. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The notification in draft to be laid in both the Houses of Parliament for a period of 30 days. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: Wingdings; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Ø</span><span style="color: #000066; font-family: 'Times New Roman','serif'; font-size: 7pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">Houses may disapprove or modify.</span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">27. ADJUDICATION OF PENALTY (CLAUSE 454)</span></b><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';"> </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">The Central government may by an order publish in the Official Gazette, appoint as many officers of the Central Government, not below the rank of Registrar, as adjudicating officers for adjudicating penalty under the provisions of this Bill in the manner as may be prescribed. </span><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<i><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; mso-fareast-font-family: 'Times New Roman';">*********************** </span></i><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<i><span style="color: #000066; font-family: 'Book Antiqua','serif'; font-size: 14pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';">Disclaimer: This document has been prepared on the basis of Companies Bill, 2011 as passed in the Lok Sabha on 18<sup>th</sup> December, 2012. The Institute of Company Secretaries of India does not own the responsibility of any error or omission. The users and readers are advised to cross check with the original bill before acting upon this document. </span></i><span style="font-family: 'Times New Roman','serif'; font-size: 12pt; line-height: 115%; mso-fareast-font-family: 'Times New Roman';"><o:p></o:p></span></div>
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<span style="font-family: 'Times New Roman','serif'; font-size: 12pt; mso-fareast-font-family: 'Times New Roman';">**<o:p></o:p></span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-3050623846371713467.post-89443122627772018562013-05-18T23:51:00.003-07:002013-05-18T23:51:25.254-07:00Alternate Dispute Resolution and cases pending <div dir="ltr" style="text-align: left;" trbidi="on">
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<b><span style="font-size: small;"><span style="font-family: Calibri;">Alternate Dispute resolution and<span> </span>cases pending<span> </span>trails in various courts in india - By CS A Rengarajan</span></span></b></div>
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<span style="font-family: Calibri; font-size: small;">Let us see pending cases reported in various high courts, subordinate courts and Supreme Courts as per news items published Times of India<span> </span>dated 20-12-2011NEW DELHI: The government on Monday said around 3.2 crore cases were pending in high courts and subordinate courts across the country while 56,383 cases were pending in the Supreme Court.</span></div>
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<span style="font-family: Calibri; font-size: small;">It also said 74% of the total 3.2 crore cases were less than five years old. Similarly, 20,334 out of the 56,383 pending cases in the apex court were less than one year old.</span></div>
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<span style="font-family: Calibri; font-size: small;">Is there way out to reduce the<span> </span>pendency cases in various courts.<span> </span>The answer to the question is yes.<span> </span>Even during the pendency of<span> </span>court proceedings, the parties can go for settlement whether<span> </span>it is conciliation or judicial settlement or<span> </span>mediation.</span></div>
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<span style="font-family: Calibri; font-size: small;">The Parliament has amended Civil Procedure code<span> </span>in July 2002 to provide speedy justice including<span> </span>the Courts have been given the power to refer the disputes to: </span></div>
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<span style="font-family: Calibri; font-size: small;">a) Arbitration;</span></div>
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<span style="font-family: Calibri; font-size: small;">b) Conciliation;</span></div>
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<span style="font-family: Calibri; font-size: small;">c) Judicial settlement including settlement through Lok Adalat;</span></div>
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<span style="font-family: Calibri; font-size: small;">d) Mediation. </span></div>
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<span style="font-family: Calibri; font-size: small;">The Court will endeavor in case of such disputes to formulate the terms of settlement between the parties and will also effect a compromise as per the prescribed procedure</span></div>
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<span style="font-family: Calibri; font-size: small;">Considering the above pendency in various courts, all concerned will come forward to settle the disputes<span> </span>to reduce the pendency.<span> </span>3.2 crores cases pending with various high courts and subordinate courts is alarming one.</span></div>
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<span style="font-family: Calibri; font-size: small;">In order to clear backlog, the government should ensure to bring electronic trails so that more such cases will be referred to<span> </span>settlement and reduce the pendency</span></div>
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<span style="font-family: Calibri; font-size: small;">Worldwide Alternate Dispute resolution has<span> </span>been successful.<span> </span>In India, there has been little progress<span> </span>to settle outside the court .</span></div>
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<span style="font-family: Calibri; font-size: small;">The main aim of Section 89 of the code of civil procedure code is that to provide alternate settlement mechanism to the parties to end the trails and also reduced burden on the courts. The court shall formulate and reformulate the schemes and refer to the settlement mode .<span> </span>The unique feature of the amendment to Section 89 of the Code of Civil procedure code is that during pendency of trails, the parties may opt for disputes outside court settlement.<span> </span>The power has been give to the court to enable them to refer the matter</span></div>
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<span style="font-size: small;"><span style="font-family: Calibri;"><b>Conclusion</b>:<span> </span>To reduce the huge pendencies in various courts, the affected parties may come forward to<span> </span>settle their disputes outside<span> </span>the court. </span></span></div>
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<span style="font-family: Calibri; font-size: small;">In case the above settlement mechanism is not possible, then parties ultimately go to trail</span></div>
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<span style="font-size: small;"><span style="font-family: Calibri;"><span> </span><b>Suggestion:</b><span> </span>The question is not number of pending cases alone but also duration of pendency say 20-30 years.It is very much annoying to note the cases pending more than 20 years, many cases parties would have been died and the beneficiary will not be the person who filed the case. To reduce the pendencies<span> </span>court to sit on Saturday <span> </span>exclusive for <span> </span>old cases<span> </span>and should be heard <span> </span>the order<span> </span>of <span> </span>seniority so that in the period of time , old cases will vanish<span> </span>and only cases<span> </span>of five years old left. For<span> </span>these no adjournment <span> </span>should l be given.</span></span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-3050623846371713467.post-34994879204031106322013-05-18T21:54:00.002-07:002013-05-18T21:54:55.500-07:00Registration of documents <div dir="ltr" style="text-align: left;" trbidi="on">
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<b style="mso-bidi-font-weight: normal;"><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;">Registration of documents<span style="mso-spacerun: yes;"> </span>is compulsory<o:p></o:p></span></b></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;">The main objects<span style="mso-spacerun: yes;"> </span>of Registration Act is <span style="mso-spacerun: yes;"> </span>to consolidate the<span style="mso-spacerun: yes;"> </span>registration of documents.<span style="mso-spacerun: yes;"> </span>To bring clarity and<span style="mso-spacerun: yes;"> </span>regulate the<span style="mso-spacerun: yes;"> </span>registration of documents.<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;">Section 17 of the Registration Act, 1908<span style="mso-spacerun: yes;"> </span>provides<span style="mso-spacerun: yes;"> </span>various documents are<span style="mso-spacerun: yes;"> </span>to be<span style="mso-spacerun: yes;"> </span>compulsorily<span style="mso-spacerun: yes;"> </span>registered.<span style="mso-spacerun: yes;"> </span>The following documents which <span style="mso-spacerun: yes;"> </span>are compulsorily<span style="mso-spacerun: yes;"> </span>to be registered and<span style="mso-spacerun: yes;"> </span>section also provides<span style="mso-spacerun: yes;"> </span>documents which are not <span style="mso-spacerun: yes;"> </span>required<span style="mso-spacerun: yes;"> </span>to be compulsorily registered.<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">1)<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;">Instrument of gift of immovable property<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">2)<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;">other non- testamentary instruments of the value of one hundred rupees and upwards, to or in immovable property</span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">3)<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;">non- testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest; and</span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">4)<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;">leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent</span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">5)<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;">non- testamentary instruments transferring or assigning any decree or order of a Court or any award when such decree or order or award purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property</span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;">Provided that the State Government may, by order published in the Official Gazette, exempt from the operation of this sub- section any leases executed in any district, or part of a district, the terms granted by which do not exceed five years and the annual rents reserved by which do not exceed fifty rupees</span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;">This Section will not apply in the following cases : <o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;">1) <span style="mso-spacerun: yes;"> </span>any composition deed; or .any instrument relating to shares in a joint stock company, notwithstanding that the assets of such company consist in whole or in part of immovable property; or</span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;">2)any debenture issued by any such company and not creating, declaring, assigning, limiting or extinguishing any right, title or interest, to or in immovable property except in so far as it <span style="mso-spacerun: yes;"> </span>entitles the holder to the security afforded by a registered instrument whereby the company has mortgaged, conveyed or otherwise transferred the whole or part of its immovable property or any interest therein to trustees upon trust for the benefit of the holders of such debentures; or</span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">3<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;">any endorsement upon or transfer of any debenture issued by any such company; or</span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">4<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;"><span style="mso-spacerun: yes;"> </span>any document not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest of the value of one hundred rupees and upwards to or in immovable property, but merely creating a right to obtain another document which will, when executed, create, declare, assign, limit or extinguish any such right, title or interest; or</span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">5<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;">any decree or order of a Court 1[ except a decree or order expressed to be made on a compromise and comprising immovable property other than that which is the subject- matter of the suit or proceeding]; or</span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">6<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;">any grant of immovable property by the Government; or</span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">7<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;">any instrument of partition made by a Revenue- officer; or</span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">8<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;">any order granting a loan or instrument of collateral security granted under the Land Improvement Act, 1871 (26 of 1871 ), or the Land Improvement Loans Act, 1883 (19 of 1883 ); or</span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: 'Trebuchet MS'; mso-fareast-font-family: 'Trebuchet MS';"><span style="mso-list: Ignore;">9<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;">any order granting a loan under the Agriculturists Loans Act, 1884 (12 of 1884 ), or instrument for securing the repayment of a loan made under that Act; or</span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Georgia','serif'; font-size: 14.5pt; line-height: 115%; mso-bidi-font-family: Georgia; mso-bidi-font-size: 12.0pt; mso-fareast-font-family: Georgia;"><span style="mso-list: Ignore;">a)<span style="font: 7pt 'Times New Roman';"> </span></span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;"><span style="mso-spacerun: yes;"> </span>any order made under the Charitable Endowments Act, 1890 (6 of 1890 ), vesting any property in a Treasurer of Charitable Endowments or divesting any such Treasurer of any property; or</span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;">11<span style="mso-spacerun: yes;"> </span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;">any endorsement on a mortgage- deed acknowledging the payment of the whole or any part of the mortgage money, and any other receipt for payment of money due under a mortgage when the receipt does not purport to extinguish the mortgage; or<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;">12 any certificate of sale granted to the purchaser of any property sold by public auction by a Civil or Revenue officer</span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;"><o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%;">In the light of the<span style="mso-spacerun: yes;"> </span>Section 17 of the Registration Act, the following are<span style="mso-spacerun: yes;"> </span>some of the<span style="mso-spacerun: yes;"> </span>case laws<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; line-height: 115%; mso-bidi-font-family: Arial;">In Mangan Lal Deoshi Vs. Mohammad Moinul Haque & Others [(1950) SCR 833], this Court considered a case where the effect of a decree was to create a perpetual under-lease and considered the case whether under such circumstances that decree required registration in the context of Section 17(1)(b) of the Act<o:p></o:p></span></div>
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<b><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; mso-bidi-font-family: Arial; mso-fareast-font-family: 'Times New Roman';">In the case of Som Dev & Ors vs Rati Ram & </span></b><b><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; mso-bidi-font-family: Arial;">Anr on 6 September, 2006, the Hon’ble Supreme court has </span></b><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; mso-bidi-font-family: Arial;">held that as a family arrangement the relinquishment had followed and on that basis the decree in the earlier suit recognizing that arrangement did not require registration<o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; mso-bidi-font-family: Arial;">Registration of Lease deed:<span style="mso-spacerun: yes;"> </span></span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt;">.<span style="mso-spacerun: yes;"> </span>For example, the lease deed more than 11 months requires<span style="mso-spacerun: yes;"> </span>registration <span style="mso-spacerun: yes;"> </span>.<span style="mso-spacerun: yes;"> </span>Many corporate <span style="mso-spacerun: yes;"> </span>are not willing to<span style="mso-spacerun: yes;"> </span>register<span style="mso-spacerun: yes;"> </span>lease deed due to<span style="mso-spacerun: yes;"> </span>the fact that we need to pay<span style="mso-spacerun: yes;"> </span>registration<span style="mso-spacerun: yes;"> </span>charges <span style="mso-spacerun: yes;"> </span>not only <span style="mso-spacerun: yes;"> </span>for advance<span style="mso-spacerun: yes;"> </span>but also for <span style="mso-spacerun: yes;"> </span>rent for the<span style="mso-spacerun: yes;"> </span>whole period,. The charges vary<span style="mso-spacerun: yes;"> </span>from state to state.<span style="mso-spacerun: yes;"> </span>In the absence of registration,<span style="mso-spacerun: yes;"> </span>both lessor and lessee will not be entitled for <span style="mso-spacerun: yes;"> </span>any claim<span style="mso-spacerun: yes;"> </span>for damages or losses.<span style="mso-spacerun: yes;"> </span></span><span style="color: #333333; font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; mso-bidi-font-family: Arial;">In Andhra Pradesh, it is now mandatory to get all <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> </span>lease deeds to be registered in the sub registrar's office. They<span style="mso-spacerun: yes;"> </span>have segregated into three categories<span style="mso-spacerun: yes;"> </span>- lease deed upto 11 months, lease deed between 1 year and 100 years and<span style="mso-spacerun: yes;"> </span>above 100 years The charges are vary for the above periods. Both the lessor and lessee have to be present themselves before the Sub Registrar to have the deed executed</span><span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt; mso-bidi-font-family: Arial;"><o:p></o:p></span></div>
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<span style="font-family: 'Trebuchet MS','sans-serif'; font-size: 12pt;">Conclusion: It is evident that<span style="mso-spacerun: yes;"> </span>if mandatory documents are <span style="mso-spacerun: yes;"> </span>not registered, the person cannot claim loss or damages <span style="mso-spacerun: yes;"> </span>. It is always advisable<span style="mso-spacerun: yes;"> </span>to get a Lease deed/Rent deed<span style="mso-spacerun: yes;"> </span>registered in the Sub Registrar to avoid complication in future .<o:p></o:p></span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-3050623846371713467.post-19293567338100482512013-05-18T19:59:00.001-07:002013-05-18T19:59:30.113-07:00Clarification on issue of equity shares under FDI<div dir="ltr" style="text-align: left;" trbidi="on">
From: <b class="gmail_sendername">R V Seckar</b> <span dir="ltr"><rvsekar2007@gmail.com></span><br />Date: Sat, May 18, 2013 at 11:05 AM<br />Subject: {Amresh's CA's} RBI Clarification on Issue of equity shares under the FDI scheme allowed under the Government route against pre-operative/pre-incorporation expenses<br /><br /><u></u><br />
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Dear Professional Colleagues,</div>
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RBI Clarification on Issue of equity shares under the FDI scheme allowed under the Government route against pre-operative/pre-<wbr></wbr>incorporation expenses.</div>
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For more details , please click the following link:</div>
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<a href="http://rvseckarfema.blogspot.in/2013/05/rbi-clarification-on-issue-of-equity.html" target="_blank">http://rvseckarfema.blogspot.<wbr></wbr>in/2013/05/rbi-clarification-<wbr></wbr>on-issue-of-equity.html</a></div>
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<br clear="all" /><br />-- </div>
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<span style="color: #000099; font-size: medium;"><span style="font-family: comic sans ms, sans-serif;">R.V.Seckar </span></span></div>
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<span style="color: #000099; font-size: medium;"><span style="font-family: comic sans ms, sans-serif;">Mobile- 09848915177</span><br style="font-family: comic sans ms, sans-serif;" /><br style="font-family: comic sans ms, sans-serif;" /><span style="font-family: comic sans ms, sans-serif;">Pl do visit my blogs :<br /></span><a href="http://www.rvseckarcompanylaw.blogspot.com/" target="_blank">http://www.rvseckarcompanylaw.<wbr></wbr>blogspot.com/</a><br style="font-family: comic sans ms, sans-serif;" /><br style="font-family: comic sans ms, sans-serif;" /><a href="http://rvseckarfema.blogspot.com/" style="font-family: comic sans ms, sans-serif;" target="_blank">http://rvseckarfema.blogspot.<wbr></wbr>com/</a></span><br /><br /><a href="http://rvseckarindianlaws.blogspot.com/" target="_blank"><span style="color: #000099; font-size: medium;"><span style="font-family: comic sans ms, sans-serif;">http://rvseckarindianlaws.<wbr></wbr>blogspot.com</span></span></a></div>
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<a href="http://rvseckarincometaxcaselaws.blogspot.in/" target="_blank"><span style="font-size: medium;">http://<wbr></wbr>rvseckarincometaxcaselaws.<wbr></wbr>blogspot.in/</span></a></div>
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Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-3050623846371713467.post-80018567359895955912013-05-18T19:57:00.003-07:002013-05-18T19:57:54.969-07:00New Format for raising query on FDI<div dir="ltr" style="text-align: left;" trbidi="on">
Dear Friends,<br /><br />DIPP has prescribed a New Format for raising query on Foreign Direct Investment with the Department of Industrial Policy & Promotion.<br /><br />Please click the following link for more details .<br /><br /><a href="http://rvseckarfema.blogspot.in/2013/05/new-format-for-raising-query-on-foreign.html">http://rvseckarfema.blogspot.in/2013/05/new-format-for-raising-query-on-foreign.html</a><br />-- <br />
R.V.Seckar <br />Mobile- 09848915177<br />
Pl do visit my blogs :</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-3050623846371713467.post-75249222873082298252013-05-18T19:55:00.000-07:002013-05-18T19:55:00.763-07:00Postal ballot<div dir="ltr" style="text-align: left;" trbidi="on">
From: <b class="gmail_sendername">BIPIN ACHARYA</b> <span dir="ltr"><bipinsacharya@gmail.com></span><br />Date: Wed, Sep 21, 2011 at 10:09 AM<br />Subject: [CS_yahoogroups) Voting on resolution through Postal Ballot<br />To: cs <charteredsecretaries@yahoogroups.co.in>, Company_Secretary <company_secretary@yahoogroups.com><br /><br /><br /><u></u><br />
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Dear friends,<br /><br />Recently, I came across a Postal Ballot circulated to members providing for Voting as under:<br /><br /><br />I/we assent to the resolution I/we assent to the resolution<br />FOR <wbr></wbr> AGAINST<br />===================== <wbr></wbr> =====================<br /><br />The dictionary meaning of the word assent is : approval, consent, permission, agreement.<br /><br />Is the above mode not perplexing? Not confusing?<br /> <wbr></wbr> <wbr></wbr> ==============================<wbr></wbr>====<br /><br />Secondly, when a member holding shares votes, he has the discretion to vote for/ vote against/vote neither in favour or against the resolution.He is deprived of the opportunity to so signify, record.<br />Normally, it is found that Ballot Paper does not contain the third option.<br />People not providing for the third option may argue that by absenting from voting also, the member can signify the same. Then why provide for the third option?<br />[1]In fact,the member may be desiring to get it recorded that he participated in the voting and did not vote in favour or against the resolution.<br />[2]Also, a member holding 100 shares and desiring to cast 40 FOR, 50 AGAINST and 10 NEITHER IN FAVOUR NOR AGAINST the resolution .<br />Are we not depriving him to signify his voting in the manner desired by him?<br /><br />Is it not advisable to provide for all the three modes of voting in all circular resolutions, all ballots and postal ballots?<br /><br />Members may share their views, work-experiences,please.<br /><br />charms,<br />bipin<br clear="all" /></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-3050623846371713467.post-83318154870368993952013-05-18T19:51:00.001-07:002013-05-18T19:51:17.096-07:00Appointment of MD in Private Company<div dir="ltr" style="text-align: left;" trbidi="on">
From: <b class="gmail_sendername">BIPIN ACHARYA</b> <span dir="ltr"><bipinsacharya@gmail.com></span><br />Date: Sun, Nov 6, 2011 at 1:09 PM<br />Subject: Re: [CharteredSecretaries] query...<br />To: CharteredSecretaries@yahoogroups.co.in<br /><br /><br /><u></u><br />
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Dear friends,<br /><br />Even if it is a private company and its specified Articles provide for non-applicablity for Explanatory Statement for special business at a general meeting of its shareholders, the fact may be mentioned by way of a NOTE to be submitted to ROC also pointing out that the Resolution appointing MD under reference was passed at a Board Meeting as allowed under section 2[26] of the Companies Act, 1956.<br /><br />charms,<br />bipin
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On Sun, Nov 6, 2011 at 12:46 PM, rekha soni <span dir="ltr"><<a href="mailto:rekhasoni.cs@gmail.com" target="_blank">rekhasoni.cs@gmail.com</a>></span> wrote:<br /><blockquote class="gmail_quote" style="border-left: rgb(204,204,204) 1px solid;">
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Hello Frds</div>
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i have a query</div>
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one private company filed f23 for appointment of MD by passing Board Resolution</div>
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but the ROC put f23 under userclarification demanding Notice and Self Explantory Statement for such Board Meeting </div>
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however there is no such requirement if he is appointed by Board Resolution</div>
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plz guide and if possible plz provide me such Notice and Explanatory Statement.... <br clear="all" /><br />-- </div>
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Thanks and Regards</div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-3050623846371713467.post-53292675521192431042013-05-18T19:42:00.003-07:002013-05-18T19:43:23.100-07:00Indebtness - Annual Return<div dir="ltr" style="text-align: left;" trbidi="on">
Dear friends,<br />
Technically, the compliance of the requirement of disclosure of indenbedness as on the date of AGM would be complete if the amount disclosed thereunder includes in such amount the interest accrued but not due as on the date of AGM, please.<br />
Disclosure of the amount outstanding in the books of accounts of the company only would not tantamount to sufficient compliance of the requirement,please.<br />
charms,<br />
bipin<br />
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On Mon, Nov 14, 2011 at 11:47 AM, SIMPAL SINGH VERMA <<a href="mailto:simpalalways@yahoo.co.in">simpalalways@yahoo.co.in</a>> wrote:<br />
Hi,<br />
Annual return contains all the information as on date of AGM. So obviously indebtedness of the company will be as on date of AGM whether it is audited or not.<br />
THANKS & WARM REGARDS<br />
Simpal Singh Verma<br />
Company Secretary<br />
Cosmas Pharmacls Ltd<br />
Ludhiana<br />
--- On Mon, 14/11/11, rekha soni <<a href="mailto:rekhasoni.cs@gmail.com">rekhasoni.cs@gmail.com</a>> wrote:<br />
From: rekha soni <<a href="mailto:rekhasoni.cs@gmail.com">rekhasoni.cs@gmail.com</a>><br />
Subject: [CharteredSecretaries] annual return<br />
To: <a href="mailto:CharteredSecretaries@yahoogroups.co.in">CharteredSecretaries@yahoogroups.co.in</a>, <a href="mailto:csmysore@googlegroups.com">csmysore@googlegroups.com</a>, <a href="mailto:legalquery@googlegroups.com">legalquery@googlegroups.com</a><br />
Date: Monday, 14 November, 2011, 10:55 AM<br />
hello Members i have a query the amount of indebtedness of the company to be entered in the annual return will be at the date of AGMbut the accounts of the Company are audited upto 31st March the audited figure is given in the balance sheet then which figure to be entered in the annual return audited figure as given in balance sheet or unaudited figure as on AGM <br />
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Thanks and Regards---------------------------------CS REKHA SONIRekha Soni & AssociatesCompany SecretariesBlock C-1880, Ansal Palam Vihar,Gurgaon 122017M. No. 9911789098Landline:0124-4077139email id: <a href="mailto:rekhacs19@rediffmail.comURL">rekhacs19@rediffmail.comURL</a>: csrekhasoni.com<br />
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<br />
-- <br />
Bipin S. Acharya<br />
Practising Company Secretary<br />
CP 8 FCS 424</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-3050623846371713467.post-34496489316038005972013-05-18T19:40:00.000-07:002013-05-18T19:40:07.794-07:00Dividend out of reserves<div dir="ltr" style="text-align: left;" trbidi="on">
From: <b class="gmail_sendername">BIPIN ACHARYA</b> <span dir="ltr"><bipinsacharya@gmail.com></span><br />Date: Fri, Nov 18, 2011 at 6:25 PM<br />Subject: Re: Fw: [CharteredSecretaries] dividend out of reserves .<br />To: CharteredSecretaries@yahoogroups.co.in, Company_Secretary <company_secretary@yahoogroups.com><br /><br /><br /><u></u><br />
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Dear friends,<br /><br />[1] the basic requite to be complied before paying any dividend is that it has to be paid out of profits arrived at after providing for depreciation.<br /><br />[2] Such profits may be current year's profits <br /> or profits of the company for any financial year or years and remaining <br /> <wbr></wbr> un-distributed<br /> or out of both <br />as has been provided in section 205[1] of the Companies Act, 1956 [ Act ].<br /><br />[3] Profits of the company for any previous financial year or years and remaining undistributed may be reflected in the Balance Sheet either in General Reserve or in the credit /surplus balance of Profit & Loss Account comprised in RESERVES AND SURPLUS on the Liabilities Side of Balance Sheet.<br /><br />[4] No dividend of the company can be declared or paid by a company for any financial year out of the profits of the company for that year except after the transfer to the reserves of the company of such percentage of its profits for that year , not exceeding ten percent as may be prescribed as has been provided in section 205[2A] of the Act. The relevant rules are the Companies [ Transfer of Profits to Reserves ] Rules, 1975.<br /><br />[5] Unlike section 205[2A] referring to the required percentage as may be prescribed and the same being prescribed in the Companies [ Transfer of Rules to Reserves ] Rules, 1975, is there any provision in sections 205, 205A, 205C, 206, 206A and 207 of the Act which prescribes to the effect that no dividend shall be paid out of un-profits of previous years [ reflected in General Reserve of the company ] except after complying with regulations as may be prescribed?????<br /> Members of the Group may kindly enlighten others in the matter.<br /><br />[6] Interim dividend can be declared and paid by the Board of Directors.as has been provided in section 205[1A],[1B] and the provisions of sections 205, 205A, 205C, 206 , 206A and 207 of the Act apply thereto as far as may be possible as has been provided in section 205[1C] of the Act.<br /><br />[7] Dividend includes interim divided as per section 2[14A] of the Act.<br /><br />[8] Dividend , under the Act, goes through three procedural stages. viz. [i] recommendation/ decision to pay the dividend per section 217[1][c] of the Act. [ii] declaration of dividend per section 206[1] and 205[1C] of the Act and [iii] payment of dividend as envisaged in sections 205 and 205A of the Act.<br /> Declaration or payment of dividend can be effected only after the transfer of profits to reserves such percentage of profit for that financial year as may be prescribed as per section 205[2A] of the Act.<br /><br />[9] Notwithstanding the submission in para [5] hereof, when we examine the Companies [ Transfer of Profits to Reserves ] Rules, 1975, it is found that they are made pursuant to section 205[3] and 642[a]<br />{ which appears to be inadequate and which inadequacy could have been cured by invoking the powers under section 642[1][b] of the Act }.<br /> Basically, the above Rules provide for matters relating to DECLARATION of dividend.Such declaration can be made by the company in annual general meeting per the items of ordinary business mentioned in section 173[1][a][ii] of the Act and in case of interim dividend by the Board of Directors as per section 205[1A].Declaration of dividend in conformity with section 2[14A] is thus envisaged.<br /><br />[10] Rule 2 of the above Rules provides as how dividend dividend can be declared IN THE EVENT OF INADEQUACY OR ABSENCE OF PROFITS IN ANY YEAR. <br /> Inadequacy or absence of profits in any year can be determined, under the scheme of the Act, after the closure of the financial year.<br /> Under the above circumstances, the Act does not envisage the applicability of the above Rules to the interim dividend which is envisaged, under the Act, to be declared by the Board and paid during the course of a financial year and undoubtedly, the Act envisages the above Rules to apply to the dividend declared at an annual general meeting of the Company before which the final audited Balance Sheet & Profit and Loss Account for the financial year are laid and in which accounts the inadequacy or absence of profits is duly decided upon by the Board before recommending the dividend for that financial year.<br /><br />[11] The response to the query under reference would be YES to para 2 and also to para 1 on account of the relevant statutory provisions discussed here-in-before, please.<br /><br />Members in the Groups may kindly share their views and work-experinces in the above matters.<br /><br />charms,<br />bipin </div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-3050623846371713467.post-48359130376212777102013-05-16T18:05:00.002-07:002013-05-16T18:05:53.275-07:00First Board meeting<div dir="ltr" style="text-align: left;" trbidi="on">
From: <b class="gmail_sendername">BIPIN ACHARYA</b> <span dir="ltr"><bipinsacharya@gmail.com></span><br />
Date: Fri, Dec 18, 2009 at 10:54 AM<br />
Subject: Re: [CharteredSecretaries] First Board Meeting<br />
To: CharteredSecretaries@yahoogroups.co.in<br />
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Dear friends,<br />
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During every quarter, one Board Meeting is required to be held pursuant to the provisions under section 285 of the Act. Convene the first Board Meeting accordingly.<br />
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Then, the first Board Meeting is held,but, the requisite quorum was not present thereat. Section 288[1] will be attracted and accordingly, the Board- Meeting will stand adjourned to the same day next week.<br />
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According to section 288[2], section 285 has not been contravened.<br />
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What would happen at the adjourned Board Meeting whereat again, there is no quorum? Can it be adjourned sine die with an authority to the Director resident in India to convene it at a convenient date during the current quarter?<br />
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As to the solution of appointing an alternate director through circular resolution, there is no legal infirmity if the Director abroad and the one in India approve and pass the same.<br />
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Incidentally, if in the given case of the private company, if the two directors are the only shareholders, it would be better to pass through circular resolution the approval to the registration of transfer of shares so as to add one joint-holder in both cases or alternative to approve the registration of transfer of one share each in both LFs to the joint-account of each director-shareholde<u></u>r. The joint-holder in respective cases may be residing in India and abroad.<br />
EGMs and even AGMs can be held abroad in case of private companies.<br />
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Khush Raho Charms,<br />
bipin <br />
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On Fri, Dec 18, 2009 at 10:10 AM, aditya narayana <span dir="ltr"><<a href="mailto:adi_1996_1@yahoo.co.in" target="_blank">adi_1996_1@yahoo.<u></u>co.in</a>></span> wrote:<br />
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for circular resolution also I believe required quorum of two directors is required</div>
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please check</div>
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this is a very complicated situation and views of other members solicited for my knowledge also</div>
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regards,</div>
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<i><span style="color: #4040ff; font-family: arial black; font-size: small;">CS S.S.NARAYANA</span></i></div>
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<i><span style="color: #4040ff; font-family: Arial Black; font-size: small;">(m) 09867436989</span></i></div>
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--- On <b>Thu, 17/12/09, ANIL DULANI <i><<a href="mailto:dulanianil@gmail.com" target="_blank">dulanianil@gmail.<u></u>com</a>></i></b> wrote:<br />
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From: ANIL DULANI <<a href="mailto:dulanianil@gmail.com" target="_blank">dulanianil@gmail.<u></u>com</a>><br />
Subject: Re: [CharteredSecretari<u></u>es] First Board Meeting<br />
To: <a href="mailto:CharteredSecretaries@yahoogroups.co.in" target="_blank">CharteredSecretarie<u></u>s@<wbr></wbr>yahoogroups.<u></u>co.in</a><br />
Date: Thursday, 17 December, 2009, 9:59 PM<br />
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<span style="font-family: 'Times New Roman', 'serif'; font-size: 12pt;">You can appoint Alternate Director and same can be appointed by circular resolution also. </span></div>
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<span style="font-family: 'Times New Roman', 'serif'; font-size: 12pt;">Anil Dulani</span></div>
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On Wed, Dec 16, 2009 at 10:10 AM, Ashish Aggarwal <span dir="ltr"><<a href="http://in.mc940.mail.yahoo.com/mc/compose?to=ashish_cs06@yahoo.com" rel="nofollow" target="_blank">ashish_cs06@ yahoo.com</a>></span> wrote:</div>
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Deeksha u can appoint an alternate director in place of foreign director. See sec.313 of Cos Act.<br />
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<span style="color: red; font-size: 13.5pt; font-weight: bold;"><span style="font-family: bookman old style, new york, times, serif; font-size: medium;"><i> Best Regards,</i></span></span><span style="color: red;"><span style="color: red; font-size: 13.5pt; font-style: italic; font-weight: bold;"><br /><span style="font-family: bookman old style, new york, times, serif; font-size: medium;">Ashish Aggarwal, A.C.S.</span></span></span></div>
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<span style="font-family: bookman old style, new york, times, serif;"><span style="font-size: medium;"><span style="color: red;"><span style="color: red; font-size: 13.5pt; font-style: italic; font-weight: bold;"> +9811739821 </span></span></span></span></div>
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<span style="font-family: Arial; font-size: x-small;">--- On <b>Mon, 14/12/09, Deeksha <i><<a href="http://in.mc940.mail.yahoo.com/mc/compose?to=chopra.deeksha@yahoo.com" rel="nofollow" target="_blank">chopra.deeksha@ yahoo.com</a>></i></b> wrote:</span></div>
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From: Deeksha <<a href="http://in.mc940.mail.yahoo.com/mc/compose?to=chopra.deeksha@yahoo.com" rel="nofollow" target="_blank">chopra.deeksha@ yahoo.com</a>></div>
Subject: [CharteredSecretari es] First Board Meeting<br />
To: "char sec" <<a href="http://in.mc940.mail.yahoo.com/mc/compose?to=CharteredSecretaries@yahoogroups.co.in" rel="nofollow" target="_blank">CharteredSecretarie s@yahoogroups. co.in</a>> <br />
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Date: Monday, 14 December, 2009, 2:50 PM <br />
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How to conduct the first Board meeting when in a Pvt company having two directors, one of them is abroad?</div>
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Regds,</div>
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Deeksha</div>
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The INTERNET now has a personality. YOURS! <a href="http://in.rd.yahoo.com/tagline_yyi_1/*http://in.yahoo.com/" rel="nofollow" target="_blank">See your Yahoo! Homepage</a>. <br />
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The INTERNET now has a personality. YOURS! <a href="http://in.rd.yahoo.com/tagline_yyi_1/*http://in.yahoo.com/" rel="nofollow" target="_blank">See your Yahoo! Homepage</a>. </div>
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The INTERNET now has a personality. YOURS! <a href="http://in.rd.yahoo.com/tagline_yyi_1/*http://in.yahoo.com/" target="_blank">See your Yahoo! Homepage</a>. <br />
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-- <br />
Bipin S. Acharya<br />
Practising Company Secretary<br />
CP 8 FCS 424<br />
B/3, Ripple Apartments, <br />
Near Hindu Mahila Milan Mandir,<br />
Narayan Nagar,<br />
Paldi, Ahmedabad- 380007<br />
Ph: (079) 32516425<br />
Mibile: 09327046425<br />
email: <a href="mailto:bipinsacharya@gmail.com" target="_blank">bipinsacharya@<u></u>gmail.com</a></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-3050623846371713467.post-23843078581604079082013-05-16T18:05:00.001-07:002013-05-16T18:05:03.330-07:00Query regarding Section 266A of Companies Act, and Allotment of DIN<div dir="ltr" style="text-align: left;" trbidi="on">
From: <b class="gmail_sendername">BIPIN ACHARYA</b> <span dir="ltr"><bipinsacharya@gmail.com></span><br />Date: Fri, Jan 13, 2012 at 11:21 AM<br />Subject: [CharteredSecretaries] Re: [CS_yahoogroups) Query regarding Section 266A of Companies Act-Allotment of DIN<br />To: company_secretary@yahoogroups.com, cs <charteredsecretaries@yahoogroups.co.in><br /><br /><br /><u></u><br />
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Dear friends,<br /><br />What is the date of appointment of a director?<br />The date of Board-Meeting at which he is appointed ?<br />The date from which his appointment becomes effective?<br /><br />In the given case, the Board has met on 12-12-2011 and appointed a director who acquired DIN subsequently on 3-1-2012.<br /><br />There can be two situations.<br /><br />[1] The Board appointed him on 12-12-2011, a simpliciter. The appointee had no DIN. This is in violation of section 253, the proviso to which lays down that no company shall appoint any individual as director of the company unless he has been allotted DIN.Such an appointment is illegal.<br /><br />[2] Under another situation, the Board met on 12-12-2011 and appointed the individual as its director with effect from the date when he acquires DIN. The appointee acquired DIN on 3-1-2012 and his appointment as director became effective from 3-1-2012 in terms of the Board Resolution of 12-12-2011.The requirement under the Proviso to section 253 is fulfilled on 3-1-2012 from which the appointment as director, in the given case, has become effective.......Is such an appointment illegal?Is there any prohibition appointing a director with a prospective, future date? [ Have we not come across Managing /Whole-time Directors being appointed/re-appointed at Board Meetings with future/prospective dates/s of appointment/re-appointment?] Is there any prohibition against the Board appointing an individual as director effective from the date when he fulfills the legal requirement of acquiring DIN?<br /> Noticeably, the second Proviso to section 266A allows an individual, not having DIN, to be appointed as director and also allows that appointee to hold the office as director till such time such applicant has been allotted DIN. This Proviso to section 266A subsists even after the insertion of the Proviso to section 253.<br /> In the given case, there is no effective appointment on 12-12-2011. The individual does not hold the office of director on and from 12-12-2011. His appointment as director becomes effective on and from 3-1-2012 upon his acquiring DIN. The appointee does not hold the office of director between 12-12-2011 and 3-1-2012. His appointment as director becomes effective only upon his acquiring DIN and neither earlier nor otherwise.<br /><br />In my considered view, in absence of any specific prohibition in the Companies Act, 1956 against a director being appointed with effect from a prospective/future date, there is no legal impediment upon the Board of Directors of a company in appointing an individual as a director subject to the condition that his appointment as a director shall become effective upon his acquiring DIN on a future date.<br /><br />Incidentally, under MCA21 System, presently, the software does not check the date of appointment of a director with the date when the appointee acquired DIN.<br /><br />Members may share their views and work-experiences in the above matters,please.<br /><br />charms,<br />bipin
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On Thu, Jan 12, 2012 at 7:15 PM, Rupal Gambhir <span dir="ltr"><<a href="mailto:grupal2011@yahoo.in" target="_blank">grupal2011@yahoo.in</a>></span> wrote:<br /><blockquote class="gmail_quote" style="border-left: rgb(204,204,204) 1px solid;">
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<span>Dear Member,</span></div>
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<span>Yes the concerned person can be appointed as a Director with a previous date.</span></div>
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<span>Thanks,</span></div>
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<span>Rupal Gambhir<var></var></span></div>
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<b><span style="font-weight: bold;">From:</span></b> Anita Rawat <<a href="mailto:anita.rawat85@yahoo.in" target="_blank">anita.rawat85@yahoo.in</a>><br /><b><span style="font-weight: bold;">To:</span></b> "<a href="mailto:company_secretary@yahoogroups.com" target="_blank">company_secretary@<wbr></wbr>yahoogroups.com</a>" <<a href="mailto:company_secretary@yahoogroups.com" target="_blank">company_secretary@<wbr></wbr>yahoogroups.com</a>> <br /><b><span style="font-weight: bold;">Sent:</span></b> Wednesday, 11 January 2012 5:15 PM<br /><b><span style="font-weight: bold;">Subject:</span></b> [CS_yahoogroups) Query regarding Section 266A of Companies Act-Allotment of DIN</span></div>
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Dear Learned Members,</div>
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The Board of Directors of a Company have approved the appointed of a person "Mr. A" as Director of the Company w.e.f. 12.12.2011. </div>
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Mr. A does not have a DIN and therefore Form DIN 1 for allotment of DIN was filed on 03.01.2012 and the approved DIN was generated on 03.01.2012.</div>
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Is is possible that a person to whom DIN is allotted on 03.01.2012 be appointed as Director of the Company w.e.f. 12.12.2011(a date prior to the date of allotment of DIN)</div>
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You are requested to give your valuable inputs.</div>
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Regards</div>
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Anita Rawat</div>
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For D.Verma & Associates</div>
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Company Seceretary</div>
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