winding up under companies act 2013 after ibc-decoded-by cs rohit kumarCS Rohit Kumar
In this article, we will discuss how the provisions or route related to winding up of companies changed after the introduction of the Insolvency & Bankruptcy Code 2016 (the "IBC" or "Code") because before the enactment of IBC, winding up of companies was under purview of Companies Act 1956 2013.
Taxmann's Insolvency and Bankruptcy Code 2016Taxmann
This book incorporates the Insolvency & Bankruptcy Code, 2016, and Regulations issued thereunder. Along with the above, the readers also get a specially curated Guide to Insolvency & Bankruptcy Code (Second Amendment) Act 2020 along-with Comprehensive Guide to Insolvency & Bankruptcy Code 2016.
The Present Publication is the 13th Edition, incorporating all the amendments made up to the Insolvency and Bankruptcy Code (Second Amendment) Act, 2020, and is updated till 24th September 2020.
· The book is divided into four Divisions as under:
o The Insolvency and Bankruptcy Code, 2016
o Circulars issued under Insolvency and Bankruptcy Code, 2016
o Rules and Regulations
o RBI (Prudential Framework for Resolution of Stressed Assets)
Directions, 2019
· The coverage of the book is as follows:
o List of Rules and Regulations
o Amendments made by the Insolvency & Bankruptcy Code
(Amendment) Act, 2020 and by the Insolvency & Bankruptcy
Code (Second Amendment) Act, 2020 at a glance
o Amendments made by the Insolvency & Bankruptcy Code
(Amendment) Act, 2019 at a glance
o Guide to the Insolvency & Bankruptcy Code (Second
Amendment) Act, 2020
o Guide to the Insolvency & Bankruptcy Code (Amendment)
Act, 2020
o Comprehensive Guide to the Insolvency and Bankruptcy
Code, 2016
o Table showing enforcement of provisions of the Insolvency &
Bankruptcy Code, 2016 from different dates
winding up under companies act 2013 after ibc-decoded-by cs rohit kumarCS Rohit Kumar
In this article, we will discuss how the provisions or route related to winding up of companies changed after the introduction of the Insolvency & Bankruptcy Code 2016 (the "IBC" or "Code") because before the enactment of IBC, winding up of companies was under purview of Companies Act 1956 2013.
Taxmann's Insolvency and Bankruptcy Code 2016Taxmann
This book incorporates the Insolvency & Bankruptcy Code, 2016, and Regulations issued thereunder. Along with the above, the readers also get a specially curated Guide to Insolvency & Bankruptcy Code (Second Amendment) Act 2020 along-with Comprehensive Guide to Insolvency & Bankruptcy Code 2016.
The Present Publication is the 13th Edition, incorporating all the amendments made up to the Insolvency and Bankruptcy Code (Second Amendment) Act, 2020, and is updated till 24th September 2020.
· The book is divided into four Divisions as under:
o The Insolvency and Bankruptcy Code, 2016
o Circulars issued under Insolvency and Bankruptcy Code, 2016
o Rules and Regulations
o RBI (Prudential Framework for Resolution of Stressed Assets)
Directions, 2019
· The coverage of the book is as follows:
o List of Rules and Regulations
o Amendments made by the Insolvency & Bankruptcy Code
(Amendment) Act, 2020 and by the Insolvency & Bankruptcy
Code (Second Amendment) Act, 2020 at a glance
o Amendments made by the Insolvency & Bankruptcy Code
(Amendment) Act, 2019 at a glance
o Guide to the Insolvency & Bankruptcy Code (Second
Amendment) Act, 2020
o Guide to the Insolvency & Bankruptcy Code (Amendment)
Act, 2020
o Comprehensive Guide to the Insolvency and Bankruptcy
Code, 2016
o Table showing enforcement of provisions of the Insolvency &
Bankruptcy Code, 2016 from different dates
Key Takeaways:
Important MCA updates announced in 2020
Special measures taken by MCA in view of COVID-19 outbreak
Introduction of CARO 2020
Relaxation of norms for conducting meetings
Pursuant to few amendments in Companies Act 2013, the document Loans under Companies Act 2013 has been revised and updated as Version 2.0 and is available at http://expertspanel.in/?qa=blob&qa_blobid=12209470514712245845
Earlier in the year the document Deposits under Companies Act 2013was also updated as Version 5.0. The same is available at http://expertspanel.in/?qa=blob&qa_blobid=10452760937625173148.
I hope both the documents are of use.
Warm Regards
CA Pramod Jain
Attached Newsletter is an attempt to cover monthly issues relevant in the context of transactions - covers SEBI, Companies Act, Income Tax, Stamp duty and other regulatory changes
Familiarisation with Forms and Formats under:
Insolvency and Bankruptcy (Application to Adjudicating Authority)Rules,2016
IBBI (Insolvency Resolution Process for Corporate Persons) Regulations,2016
IBBI (Liquidation Process) Regulations, 2016
IBBI (Voluntary Liquidation Regulations), 2017
IBBI (Inspection and Investigation Regulations),2017
IBBI (Grievances and Complaint Handling Procedure Regulations), 2017
Key Takeaways:
Important MCA updates announced in 2020
Special measures taken by MCA in view of COVID-19 outbreak
Introduction of CARO 2020
Relaxation of norms for conducting meetings
Pursuant to few amendments in Companies Act 2013, the document Loans under Companies Act 2013 has been revised and updated as Version 2.0 and is available at http://expertspanel.in/?qa=blob&qa_blobid=12209470514712245845
Earlier in the year the document Deposits under Companies Act 2013was also updated as Version 5.0. The same is available at http://expertspanel.in/?qa=blob&qa_blobid=10452760937625173148.
I hope both the documents are of use.
Warm Regards
CA Pramod Jain
Attached Newsletter is an attempt to cover monthly issues relevant in the context of transactions - covers SEBI, Companies Act, Income Tax, Stamp duty and other regulatory changes
Familiarisation with Forms and Formats under:
Insolvency and Bankruptcy (Application to Adjudicating Authority)Rules,2016
IBBI (Insolvency Resolution Process for Corporate Persons) Regulations,2016
IBBI (Liquidation Process) Regulations, 2016
IBBI (Voluntary Liquidation Regulations), 2017
IBBI (Inspection and Investigation Regulations),2017
IBBI (Grievances and Complaint Handling Procedure Regulations), 2017
Professionals Appointed Under Insolvency Bankruptcy Code, 2016 (IBC, 2016)LexComply
Government of India, Ministry of Corporate Affairs- Role of Insolvency Professional(Interim Resolution Professional(IRP) or Resolution Professional(RP) or Liquidator) appointed under Insolvency Bankruptcy Code, 2016 (IBC, 2016) for filing various forms/ documents with MCA-21 under Companies Act, 2013.
For More Updates, Sign Up Now: https://lexbuddy.com
Follow Us On http://linkedin.com/company/lexcomply
LexComply - Compliance Management Software India
Attached Newsletter is an attempt to cover monthly issues relevant in the context of transactions - covers SEBI, Companies Act, Income Tax, Stamp duty and other regulatory changes
Relief For LLP Firms - Settlement Scheme 2020LexComply
MCA introduces "LLP settlement Scheme, 2020" which gives relief to defaulted LLPs from paying a huge penalty for not filing form-3, Form- 4 and annual returns
For More Updates, Sign Up: https://lexbuddy.com
Follow Us: http://linkedin.com/company/lexcomply
LexComply - Compliance Management Software India
Disclosures in Board Report by Trupti Ranjan Mohanty.pptxssuser1b54031
Insights into Disclosures in Board Report: This includes all the broad disclosures required to be given in the Board Report of a Company under Companies Act, 2013 and SEBI Listing Regulations. Various cases/litigations have been referred to indicate the significance of each disclosure.
The Ministry of Corporate Affairs (MCA) vide notification no. S.O. 1932(E) and S.O.1933(E)dated June 1, 2016 notified constitution of the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT).
For more information visit here : http://www.nclt.in
Attached Newsletter is an attempt to cover monthly issues relevant in the context of transactions - covers SEBI, Companies Act, Income Tax, Stamp duty and other regulatory changes
Attached Newsletter is an attempt to cover monthly issues relevant in the context of transactions - covers SEBI, Companies Act, Income Tax, Stamp duty and other regulatory changes
Compromises, Arrangements & Amalgamations with special reference to Protectio...Corporate Professionals
A presentation ‘Compromises, Arrangements & Amalgamations with Special reference to Protection of Minority & Dissenting Shareholders under Companies Act, 2013 ‘ given by Mr. Chander Sawhney at IICA
Under the Companies Act, 2013 and its rules, numerous forms have to be filed by the company with the Registrar of Companies. We have prepared a note to help understand the requirement. Some of these forms are to be filed annually by the company and some of them are to be filed only once after the incorporation of the company, Some of the forms are filed when the event takes place, Failure to file these forms attracts heavy penalties.
VIETNAM - INVESTMENT AND DOING BUSINESS – CURRENT ISSUES AND HOW THE CPTPP FO...Dr. Oliver Massmann
VIETNAM - INVESTMENT AND DOING BUSINESS – CURRENT ISSUES AND HOW THE CPTPP FOREIGN DIRECT INVESTMENT CHAPTER AND THE EUVNA FREE TRADE AGREEMENT AND THE EU VN INVESTMENT PROTECTION AGREEMENT CAN SUPPORT LEGAL CERTAINTY AND BANKABILITY OF YOUR PROJECTS
Objective and Agenda:
In order to bring flexibility and to monitor the activities of the charitable organisations in India, non-governmental organisations are given the corporate status by forming companies under Section 8 of the Companies Act, 2013. The scope of the webinar is to cover the objects of forming a Section 8 Company, procedure to obtain license, benefits of forming a Section 8 Company, conversion of Section 8 Company into any other company, effects of non-compliance of objects and the tax benefits available to such companies.
A compendium of periodical compliances under various legislations, taxation rates applicable in FY 2012-13 and a glance of the previous year's corporate updates.
Implications of Service Tax & Value Added Tax on Works ContractCS Rahul Jain
Indirect taxation of works contracts has been a very complex area giving rise to considerable litigation. Thus, an attempt is made in the Article to address the perplexity of those commercial entities and professionals who are betrothed with works contract business and are bemused with the goods and service tax acquiescence”.
Top mailing list providers in the USA.pptxJeremyPeirce1
Discover the top mailing list providers in the USA, offering targeted lists, segmentation, and analytics to optimize your marketing campaigns and drive engagement.
3.0 Project 2_ Developing My Brand Identity Kit.pptxtanyjahb
A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
In the Adani-Hindenburg case, what is SEBI investigating.pptxAdani case
Adani SEBI investigation revealed that the latter had sought information from five foreign jurisdictions concerning the holdings of the firm’s foreign portfolio investors (FPIs) in relation to the alleged violations of the MPS Regulations. Nevertheless, the economic interest of the twelve FPIs based in tax haven jurisdictions still needs to be determined. The Adani Group firms classed these FPIs as public shareholders. According to Hindenburg, FPIs were used to get around regulatory standards.
Company Valuation webinar series - Tuesday, 4 June 2024FelixPerez547899
This session provided an update as to the latest valuation data in the UK and then delved into a discussion on the upcoming election and the impacts on valuation. We finished, as always with a Q&A
LA HUG - Video Testimonials with Chynna Morgan - June 2024Lital Barkan
Have you ever heard that user-generated content or video testimonials can take your brand to the next level? We will explore how you can effectively use video testimonials to leverage and boost your sales, content strategy, and increase your CRM data.🤯
We will dig deeper into:
1. How to capture video testimonials that convert from your audience 🎥
2. How to leverage your testimonials to boost your sales 💲
3. How you can capture more CRM data to understand your audience better through video testimonials. 📊
Kseniya Leshchenko: Shared development support service model as the way to ma...Lviv Startup Club
Kseniya Leshchenko: Shared development support service model as the way to make small projects with small budgets profitable for the company (UA)
Kyiv PMDay 2024 Summer
Website – www.pmday.org
Youtube – https://www.youtube.com/startuplviv
FB – https://www.facebook.com/pmdayconference
Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
involves recognizing relationships between elements of the marketing mix (e.g.,
price and product quality), as well as assessing competitive and market conditions
(i.e., industry structure in the language of economics).
Premium MEAN Stack Development Solutions for Modern BusinessesSynapseIndia
Stay ahead of the curve with our premium MEAN Stack Development Solutions. Our expert developers utilize MongoDB, Express.js, AngularJS, and Node.js to create modern and responsive web applications. Trust us for cutting-edge solutions that drive your business growth and success.
Know more: https://www.synapseindia.com/technology/mean-stack-development-company.html
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
2. Corporate Updates
July 2011
TABLE OF CONTENTS PAGE
NO.
CORPORATE AFFAIRS
Filing of event based forms not to be accepted until Annual forms/returns are filed
Settlement of prosecutions cases through Lok Adalats
Clarification regarding participation in meetings through e-mode
Fast Track Exit mode for defunct companies
Implementation of issue of certificates by RoC using digital signature
Clarification regarding filing of financial statements in XBRL form
Special Drive to clear pendency of e-forms filed with RoC prior to implementation of revised Regulation 17
The Companies (Cost Audit Report) Rules, 2011 notified
The Companies (Cost Accounting Records) Rules, 2011 notified
Payment of MCA 21 Fees via NEFT
TAXATION
Exemption from filing of Income Tax return for persons with income up to Rs 5 lacs
Limits specified for exempted interest income received from post office saving bank account
RBI / FEMA
Remittance of assets by foreign nationals-Opening of NRO Accounts
Opening of branch / subsidiary / joint venture / representative office or undertaking investment abroad by
NBFCs
RBI hikes Repo rate by 25 BPS to 7.5%, Reverse Repo by 25 BPS to 6.5%
Issue of equity shares under the FDI Scheme allowed under the Government route
Buyback / Prepayment of Foreign Currency Convertible Bonds (FCCBs)
SEBI
New norms for change of name by listed companies
Shareholding of promoters/ promoters group in demat mode
Processing of investor complaints against listed companies in SCORES
OTHERS
HUF is a “relative” for gifts exemption u/s 56(2)(v), (vi) & (vii)
Page 2 of 16
3. Corporate Updates
July 2011
Filing of event based forms not to be accepted until Annual forms/returns are filed
The Ministry of Corporate Affairs vide Circular No. 33/2011 dated June 01, 2011 has decided that
from 3rd July, 2011 all the Companies will have to file their updated Balance Sheet and Profit & Loss
Accounts and Annual Return with the Registrar of Companies before recording any event based
information/changes made. This circular shall be applicable to those defaulting companies and their
Directors which have not financials for any of the FYs 2006-07, 2007-08, 2008-09 and 2009-10 with
the RoC.
Impact / Highlights:
No request, whether oral, in writing or through e-forms will be accepted in this regard.
No e-filing shall be accepted by the RoC from Directors of these defaulting companies for any other
company also.
In the interest of other stakeholders, eforms 32, 20B, 21A, DIN-3, 21, 23AC & ACA, Form 1-INV, 66, 23B
will be continued to be accepted by RoC.
Company Secretaries and Auditors of defaulting Companies will also not be allowed to sign and certify such
company’s filing with MCA-21 system, until the defect is rectified.
Members of ICSI, ICAI and ICWAI must not issue any certificates to such defaulting companies other than
above mentioned e-forms.
Action will be taken against the defaulting companies and their Directors/ officers in default in co-ordination
with RBI and SEBI.
Settlement of prosecutions cases through Lok Adalats
Ministry of Corporate Affairs vide Circular No. 34/2011 dated June 03, 2011 decided to organize Lok
Adalats for swift disposal of pending prosecution cases against companies/directors.
Impact / Highlights:
The object of organizing Lok Adalats is to ascertain the legal cases where the companies and their officers
in default are inclined to get the offences compounded on payment of compoundable fees.
Page 3 of 16
4. Corporate Updates
July 2011
Such cases should be cleared then and there by taking report from ROC & RD. Cases for withdrawal shall
be sent to MCA for approval.
All ROCs be advised to review:
a. pending prosecution cases with reference to circulars issued by the Ministry to submit report with their
recommendation through Regional Director.
b. prosecutions filed against nominee/independent directors so as to withdraw the cases where
nominee/independent directors were not liable.
c. prosecutions filed for non-filing of statutory returns/reports u/s 159, 162, 220 of the Act where the
companies/directors are not available/traceable and no public interest is involved in defaulting
companies.
The chapters of ICSI, ICWAI, ICAI and Bar Council may be used for wide publicity and efforts should be
made to dispose off compoundable offences there itself.
Clarification regarding participation in meetings through e-mode.
In furtherance of the MCA Circulars No. 27/2011 and 28/2011 dated 20.05.2011 which allowed
shareholders/directors to participate in meetings under the provisions of the Companies Act, 1956
through electronic mode, Ministry vide Circular No. 35 issued clarifications on e-voting.
Impact / Highlights:
It is not mandatory for companies to provide its directors, the facility to attend meetings through video
conferencing.
FY 2012-13 onwards video conferencing facilities for shareholders shall be mandatory in respect of
shareholders meetings of all listed companies.
NSDL and CDSL are the only authorized agencies for providing and supervising electronic platforms for
electronic voting in general meetings.
Fast Track Exit mode for defunct companies
The Ministry of Corporate Affairs vide Circular 36/2011 dated 07th June 2011 introduced Fast Track
Exit mode for defunct under section 560 of the Companies Act, 1956 for defunct companies..
Page 4 of 16
5. Corporate Updates
July 2011
Impact / Highlights:
Companies inoperative since incorporation or commenced business but became inoperative/defunct later
on may apply for getting their names strike off from the RoC.
Application to be filed electronically in Form FTE accompanied with duly notarized affidavit, Indemnity bond
from Directors, Statement of Account from a Chartered Account and filing fee of Rs. 5,000/-.
The Form FTE shall be certified by a CS/CA/CWA in whole time practice.
If the application is found in order, the RoC shall give a notice to the company under section 560(3) of the
Companies Act, 1956 via email.
After passage of the prescribed time and on being satisfied that the case is otherwise in order, RoC shall
strike company’s name off the Register and the applicant company shall stand dissolved from the date of
publication of the notice in the Official Gazette.
Implementation of issue of certificates by RoC using digital signature
In pursuance of Ministry’s General Circular No. 29/2011, dated 20-5-2011 wherein it was informed
that in order to cut timelines all certificates and standard letters issued by the Registrar of Companies
(RoC) will now be issued electronically using Digital Signature, MCA has already developed thirteen
(13) such digitally signed certificates and the same has been implemented under MCA-21 system as
mentioned below:
S. No. Certificate Description Form ID Implementation
date
1 Certificate of Registration for Modification of Mortgage, etc., under Form 8 29-May-11
section 132 read with section 135 of the Companies Act, 1956.
(STP)
2 Memorandum of Satisfaction of Mortgage, etc., section 140 of the Form 17 29-May-11
Companies Act, 1956 (STP)
3 Certificate of Registration of Mortgage, etc., under section 132 of Form 8 29-May-11
the Companies Act, 1956 (STP)
4 Certificate of Incorporation Form 1 12-Jun-11
5 Certificate for Establishment of Place of Business in India Form 44 12-Jun-11
6 Certificate of Registration for Modification of Mortgage, etc., under Form 8 12-Jun-11
section 132 read with section 135 of the Companies Act, 1956.
(NON STP)
7 Memorandum of Satisfaction of Mortgage, etc., section 140 of the Form 17 12-Jun-11
Companies Act, 1956 (NON STP)
8 Certificate of Registration of Mortgage, etc., under section 132 of Form 8 12-Jun-11
the Companies Act, 1956 (NON STP)
Page 5 of 16
6. Corporate Updates
July 2011
9 Fresh Certificate of Incorporation Consequent upon Change of Form 1B 12-Jun-11
name
10 Fresh Certificate of Incorporation Consequent upon Change of Form 62 12-Jun-11
Name on Conversion to Public Limited Company
11 Certificate of Registration of Company Law Board order for Change Form 18 12-Jun-11
of State
12 Certificate of Registration of the Special Resolution Confirming Form 23 12-Jun-11
Alteration of Object Clause(s)
13 Fresh Certificate of Incorporation Consequent upon Change of Form 1B 12-Jun-11
Name on Conversion to Private Limited Company
Clarification regarding filing of financial statements in XBRL form
In supersession of the Ministry's Circular No. 9/2011, dated 31-3-2011 and 25/2011 dated 12-5-2011,
MCA vide Circular 37/2011 dated 07-06-2011 clarified that certain class of companies are required to
file balance sheets and profit and loss account along with Director’s and Auditor’s Report for the year
2010-11 onwards by using XBRL taxonomy.
Impact / Highlights:
In phase I the following class of companies have to file the financial statements in XBRL form only:
a. All companies listed in India and their Indian subsidiaries;
b. All companies having a paid up capital of Rs. 5 crore and above
c. All companies having a turnover of Rs. 100 crore and above.
NBFCs, banking, insurance and power companies are exempted from the above requirement.
To enable filing in this format, the MCA-21 portal would be updated with XBRL filing module by July, 2011.
Companies that consider March 31 as the closing day for a given fiscal can file their balance sheets in the
new format by September, without paying an additional fee.
Companies which hold the Annual general Meeting in the month of September, 2011 would have to file the
balance sheet within 30 days from that date.
Special Drive to clear pendency of e-forms filed with RoC prior to implementation of revised
Regulation 17
A large no. of e-forms filed by the companies with the ROCs prior to the implementation of revised
regulation 17 of the Companies Regulation, 1956 (i.e. 15.02.2009) are still pending in folders like
Page 6 of 16
7. Corporate Updates
July 2011
RESUB, PUCL etc. for want of action on part of stakeholders. Unless the companies respond to this,
ROCs are unable to process the said forms. In order to reduce such pendency, Ministry vide circular
40/2011 dated 23rd June 2011 has decided to re-open and clear all such pending forms.
Impact / Highlights:
Pending forms shall be placed in the category "Held in Abeyance" (HIAB) so that ROCs can review the
same and dispose it by 07.07.2011.
It has clearly been mentioned that this is the last opportunity provided by the Ministry to clear the pendency.
The Companies (Cost Audit Report) Rules, 2011 notified
The Ministry of Corporate Affairs has notified new set of rules for Cost Audit Report which will
supersede the existing Cost Audit Report Rules, 2001. The new rules may be called The Companies
(Cost Audit Report) Rules, 2011.
These rules shall apply to every company in respect of which an audit of the cost records has been
ordered by the Central Government under sub-section (1) of section 233B of the Act.
Impact / Highlights:
Earlier there’s only a single form for cost audit report and now 3 forms – Form I, Form II and Form III are
introduced.
The term ‘product’ is defined and also a new term ‘Product Group’ is introduced.
Application to appoint cost auditor to be filed with the Central Government electronically within 90 days of
the commencement of financial year.
The Cost Auditor to inform his appointment within 30 days from the receipt of letter of appointment
Every Company shall keep and maintain cost details, statements, schedules etc. for each unit and each
product or activity comprised in each product group, duly authenticated by at least two Directors of the
company and the cost auditor.
Every cost auditor, who submits a report, shall also furnish performance appraisal report, duly authenticated
by him, to the Board/Audit Committee of the company in form III.
Page 7 of 16
8. Corporate Updates
July 2011
The Companies (Cost Accounting Records) Rules, 2011 notified
The Ministry of Corporate Affairs has notified new set of rules called as The Companies (Cost
Accounting Records) Rules, 2011.
These rules shall apply to every company:
a. Which is engaged in the production, processing, manufacturing, or mining activities and
b. wherein, the aggregate value of net worth as on the date of balance sheet exceeds Rs. 5 Crore; or
c. wherein, the aggregate value of the turnover made by the Company as on the date of balance sheet
exceeds Rs. 20 Crore; or
d. wherein, the company’s equity or debt securities are listed or are in the process of listing on any stock
exchange, whether in India or outside India.
Impact / Highlights:
All such cost records, cost statements and reconciliation statements, maintained under these rules, relating
to a period of not less than eight financial years shall be kept in good order.
Every company shall submit a compliance report along with annexures duly certified by a cost accountant in
respect of each financial year commencing from 2011-12, to the Central Government in the form A within
180 days from the close of financial year.
The Annexure prescribed with the compliance report shall be approved by the Board of Directors before
submitting the same to the Central Government by the company.
Payment of MCA 21 Fees via NEFT
Ministry of Corporate Affairs is introducing payment of MCA fees via NEFT (National Electronic Fund
Transfer) mode, in addition to already exiting payment methods i.e. via Credit Card, Internet
Banking & Physical Challan. NEFT is a nation-wide system that facilitates electronic transfer of funds
from any bank branch to account holder of any other bank branch.
Impact / Highlights:
NEFT payment option will eliminate inconveniences caused due to payment processing delays,
Page 8 of 16
9. Corporate Updates
July 2011
Transaction charges for NEFT are in addition to MCA21 filing fee.
SRN will expire if payment doesn’t reach MCA21 on time. Hence users should transfer funds well in
advance taking into consideration of bank holidays and the settlement window mentioned as earlier.
Full amount has to be transferred in single transaction for a particular SRN. Amount can’t be divided into
multiple payments.
Exemption from filing of Income Tax return for persons with income up to Rs 5 lacs
The Central Board of Direct Taxes vide has notified the scheme exempting salaried taxpayers with
total income up to Rs.5 lakh from filing income tax return for assessment year 2011-12, which will be
due on July 31, 2011.
Impact / Highlights:
Individuals having total income up to Rs.5,00,000 for FY 2010-11, after allowable Deductions, consisting of
salary from a single employer and interest income from deposits in a saving bank account up to Rs.10,000
shall fall under this scheme of exemption.
Such individuals must report their Permanent Account Number (PAN) and the entire income from bank
interest to their employer, pay the entire tax by way of deduction of tax at source, and obtain a certificate of
tax deduction in Form No.16.
The scheme shall also not be applicable in cases wherein notices are issued for filing the income tax return
under section 142(1) or section 148 or section 153A or section 153C of the Income Tax Act 1961.
Persons receiving salary from more than one employer, having income from sources other than salary and
interest income from a savings bank account, or having refund claims shall not be covered under the
scheme.
Limits specified for exempted interest income received from post office saving bank account
The Central Government vide Notification No. 32/2011[F.No.173/13/2011-Ita.I] /S.O.1296 (E), dated
3-6-2011 has notified the limits for post office saving bank account certificates.
Page 9 of 16
10. Corporate Updates
July 2011
Earlier the whole of the amount of interest received from post office saving bank account were
notified as tax free deposits and the whole of the interest earned through such deposits were
exempted from income tax. As per the new provisions of the Income tax Act, exemption available on
Interest income from Post office Savings bank account has been limited to Rs. 3,500 Per annum in
case of individual, Rs. 7,000 in case of Joint account.
Remittance of assets by foreign nationals-Opening of NRO Accounts
To facilitate foreign nationals in collecting dues in India, the Reserve Bank of India vide A.P. (DIR
Series) Circular No. 70 dated June 9, 2011 stated that banks can re-designate their accounts in the
country as Non-Resident Ordinary (NRO) accounts after foreign nationals leave the country for taking
up employment, or for carrying on business or vocation outside India or for any other purpose
indicating her / his stay outside India for an uncertain period.
Impact / Highlights:
Banks should obtain the details of the legitimate dues expected to be received into the account from the
account holder.
The amount repatriated abroad should not exceed $1 million per financial year.
The funds credited to the NRO account should be repatriated abroad immediately, subject to banks being
satisfied about the payment of applicable taxes in India.
The debit to these accounts should be only for repatriation to the account holder’s account maintained
abroad.
Account should be closed immediately after all the dues have been received and repatriated.
Opening of branch / subsidiary / joint venture / representative office or undertaking
investment abroad by NBFCs
Reserve Bank of India (RBI) vide its notification No. DNBS (PD) 229/CGM (US)/2011 dated June 14,
2011 has notified directions for opening of branch/ subsidiary/ JV/ RO which are termed as Non-
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11. Corporate Updates
July 2011
Banking Financial Companies (Opening of Branch/ Subsidiary/ Joint Venture/ Representative Office
or Undertaking Investment Abroad by NBFCs) Directions, 2011.
Even earlier as per circular DNBS (PD).CC. No.173/03.10.01 /2009-10 dated May 09, 2010, ''No
Objection'' (NoC) of the Department of Non-Banking Supervision (DNBS) was required before making
such investment but the conditions subject to which ''No Objection'' will be issued are prescribed now
through the said notification.
Impact / Highlights:
A NoC in this regard will be issued by Reserve Bank to a NBFC, subject to the NBFC fulfilling the conditions
enumerated in the Directions issued in this regard by Reserve Bank.
The aggregate overseas investment should not exceed 100% of the NoF. The overseas investment in a
single entity, including its step down subsidiaries, by way of equity or fund based commitment shall not be
more than 15% of the NBFC's owned funds.
An annual certificate from statutory auditors shall be submitted by the NBFC to the Regional Office of
Department of Non-Banking Supervision (DNBS) where it is registered, certifying that it has fully complied
with all the conditions stipulated under the RBI Guidelines for overseas investment;
A quarterly return in a prescribed format shall be submitted by the NBFC to the Regional Office of DNBS
and also Department of Statistics and Information Management (DSIM).
RBI hikes Repo rate by 25 BPS to 7.5%, Reverse Repo by 25 BPS to 6.5%
The Reserve Bank of India (RBI) raised interest rates for the tenth time since March 2010 to battle
inflation.
The repo rate, at which RBI lends to banks, has been increased by 25 basis points to 7.5 percent,
and reverse repo (rate at which it borrows) to 6.5%.
Issue of equity shares under the FDI Scheme allowed under the Government route
The extant guidelines for issue of equity shares/ preference shares under the Government route have
been reviewed in consultation with the Government of India. The RBI circular No. 74 dated June 30,
2011 provides for the conditions under which an Indian company may issue equity shares/preference
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12. Corporate Updates
July 2011
shares to a person resident outside India under the government route of FDI scheme in consideration
of import of capital goods/ machineries / equipments (including second-hand machineries), and Pre-
operative/pre-incorporation expenses (including payments of rent, etc.)
Impact / Highlights:
In case of Import of capital goods/ machineries / equipments:
Independent valuation of the capital goods / machineries / equipments (including second-hand
machineries) by a third party entity, preferably by an independent valuer from the country of import
All such conversions of import payables for capital goods into FDI should be completed within 180
days from the date of shipment of goods.
In case of Pre-operative/pre-incorporation expenses:
Payments should be made directly by the foreign investor to the company. Payments made
through third parties citing the absence of a bank account or similar such reasons will not be
eligible for issuance of shares towards FDI; and
The capitalization should be completed within the stipulated period of 180 days permitted for
retention of advance against equity under the extant FDI policy.
Buyback / Prepayment of Foreign Currency Convertible Bonds (FCCBs)
The existing RBI policy on the premature buyback of FCCBs has been reviewed and it has been decided to
extend the time limit for such facility and liberalise the procedure. Accordingly, the apex bank of India vide
circular No. 75 dated June 30, 2011 issued new norms for buyback of FCCBs by Indian companies, both under
the automatic and approval routes.
Impact / Highlights:
Automatic Route:
Banks may allow Indian companies to prematurely buyback FCCBs subject to the following:
the buyback value of the FCCB shall be at a minimum discount of 8 per cent on the book value.
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13. Corporate Updates
July 2011
the funds used for the buyback shall be out of existing foreign currency funds held either in India (including
funds held in the EEFC account) or abroad and / or out of fresh ECB raised in conformity with the current
ECB norms.
Approval Route
Indian companies may be permitted to buyback FCCBs up to USD 100 million of the redemption value per
company, out of their internal accruals with the prior approval of the Reserve Bank, subject to a :
minimum discount of 10 per cent of book value for redemption value up to USD 50 million.
minimum discount of 15 per cent of book value for the redemption value over USD 50 million and up to USD
75 million; and
minimum discount of 20 per cent of book value for the redemption value of over USD 75 million and up to
USD 100 million.
New norms for change of name by listed companies
The Securities and Exchange Board of India, vide its Circular no. CIR/MRD/DP/07/2011 dated 16th
June 2011 issued the fresh norms for change of name by listed companies.
As per the revised norms, a listed company can change its name if it satisfies either of two criteria:-
a. At least 50% of its total revenue in the preceding 1 year period should have been accounted for by the
new activity suggested by the new name. Or
b. The amount invested in the new activity/project (Fixed Assets + Advances + Works in Progress) is at
least 50% of the assets of the company. The ‘Advances’ shall include only those extended to
contractors and suppliers towards execution of project, specific to new activity as reflected in the new
name.
Impact / Highlights:
As per the existing norms, a listed Company proposing a name change must make sure that atleast 50% of
its total revenues in the preceding 1 year should have been accounted for from the new business activity.
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14. Corporate Updates
July 2011
Under the liberalized clause the Companies will not be required to wait for the earnings from the new
business activity for a name change. Now, the same can be proposed on the basis of their Investments in
the new activity/ the Project.
The new norms will relieve the companies engaged in such business activities wherein the gestation period
is usually longer and the revenue stream is often delayed.
Shareholding of promoters/ promoters group in demat mode
SEBI (vide circular No Cir/ISD/ 3/2011 dated June 17, 2011) in consultation with Stock Exchanges,
has decided that the securities of companies shall be traded in the normal segment of the exchange,
only if, the company has achieved 100% of promoter’s and promoter group’s shareholding in
dematerialized form.
Impact / Highlights:
There was no mandatory requirement of promoters’ holdings to be in Demat mode under the existing
guidelines.
In addition to 50% public holding being in demat mode, 100% of the promoters’ holding should be held in
demat mode, including pledge/ usage as collateral.
This has to be complied with by the Quarter ended September 2011.
In case a Company fails to comply with the same, the trading of such securities shall take place in trade to
trade segment.
Processing of investor complaints against listed companies in SCORES
SEBI has circular no. CIR/OIAE/2/2011 dated June 3, 2011commenced processing of investor
complaints in a centralized web based complaints redress system ‘SCORES (SEBI Complaints
Redress System’).
Impact / Highlights:
Scores will enable creation Centralized database of all complaints;
Online movement of complaints to the concerned listed companies made possible;
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15. Corporate Updates
July 2011
All complaints pertaining to companies will be electronically sent through SCORES at
http://scores.gov.in/Admin and the companies are required to view the complaints pending against them
and upload Action Taken Reports (ATRs). Failure to do so will be treated as non redressal of investor
complaints.
.
HUF is a “relative” for gifts exemption u/s 56(2)(v), (vi) & (vii)
Case of: Vineetkumar Raghavjibhai Bhalodia vs. ITO (ITAT Rajkot)
The assessee received a gift of Rs.60 lakhs from his HUF. The AO & CIT(A) held that as HUF was
not covered by the definition of “relative”, the gift was chargeable to tax u/s 56(2)(v). The alternate
submission that gift was exempt u/s 10(2) was rejected on the basis that s. 10(2) applied only to
amounts received “out of income of the estate” on partial or total partition of the HUF.
On appeal by the assessee, held allowing the appeal:
S. 56(2)(v) exempts gifts from a “relative”. Though the definition of the term “relative” does not specifically
include a Hindu Undivided Family, a ‘HUF” constitutes all persons lineally descended from a common
ancestor and includes their mothers, wives or widows and unmarried daughters. As all these persons fall in
the definition of “relative”, an HUF is ‘a group of relatives’. As a gift from a “relative” is exempt, a gift from a
‘group of relatives’ is also exempt since the singular will include the plural;
The gift was also exempt u/s 10(2) because the two conditions required to be satisfied for relief viz (1) that
the assessee is a member of the HUF and (2) that he receives the sum out of the income of such HUF (may
be of an earlier year) were satisfied.
……………
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16. Corporate Updates
July 2011
Disclaimer: The above information is only indicative and solely for informational purpose and private circulation. RANJ &
Associates, Company Secretaries intend to, but do not guarantee or promise that it is correct, complete / up-to-date. We
expressly disclaim any liability to any person in respect of anything, and of consequences of anything done, or omitted to be
done by any such person in reliance upon the contents of this document.
The information in this document is as of June 30, 2011.
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