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ConceptAGE Professional Classes LLP that owns the Brand ConceptAge Professional Classes is an educational Institution started by highly experienced and qualified professionals to provide quality, well structured and meaningful education to the students. The institution reputed for going beyond just education, to offer students holistic development so that they succeed in academics as well as in life.

ConceptAGE Professional Classes aims to equip students with the confidence to succeed in their exams, through a structured program prepared by Professionals and qualified faculties in the field. Their vast experience ensures the content is continuously upgraded and relevant. ConceptAGE Professional Classes has been pioneered to offer coaching for courses like CS, CWA, CA, CFA, M.Com and IPR certification.

All this, along with result-oriented teaching methodologies, comprehensive evaluation systems and an unprecedented rate of academic success, distinguishes ConceptAGE Professional Classes from others.

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Our motto is to continuously develop high caliber professionals ensuring good conceptual as well as practical knowledge, with emphasis on equipping students with the confidence to succeed in their examinations and Professional Career.

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Education gives Humility; Humility gives Character, from character one gets wealth, from wealth one gets righteousness, in righteousness there is joy.

Means to Achieve Objectives

  • Doubt Clearing Sessions, Revisionary Classes on all the Subjects.
  • Highly Interactive sessions and Guaranteed Personal Attention.
  • 100% Course Coverage within Scheduled Time.
  • Specialized Summary Notes at The End of Each Chapter.
  • Professional Faculties Comprising of Chartered Accountants, Company Secretaries, Cost & Work Accountants, Chartered Financial Analysts and other Industry Experts.

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The Ministry of Corporate Affairs has notified 98 sections of the new Companies Act, 2013. These sections have come into effect from 12th September 2013.
The Ministry of Corporate Affairs has notified 98 sections of the new Companies Act, 2013. These sections have come into effect from 12th September 2013. Download PDF FILE from Download option
Posted date: 2013-10-07

The Ministry of Corporate Affairs has notified 98 sections of the new Companies Act, 2013. These sections have come into effect from 12th September 2013.
An analysis of the important Sections! The Ministry of Corporate Affairs has notified 98 sections of the new Companies Act, 2013. These sections have come into effect from 12th September 2013. Subsequent to coming into effect of these Sections under the new Act, the corresponding Sections under the Companies Act, 1956 automatically stand repealed. For other Sections, the Companies Act, 1956 still holds good till the relevant sections under the new Act are notified. In the present write up, we focus light on some of the important provisions which have been notified for attention of our readers. A complete list of all the sections which have been notified is also given at the end of write up for easy and ready reference of our readers. Many of the sections which have been notified have provisions similar to that of Companies Act, 1956. However, in some of the Sections new provisions have been inculcated which demands our immediate attention. Immediately after notifying these sections, the Ministry has also issued some clarifications regarding their applicability for stakeholder convenience. We will discuss on these clarifications also under the relevant sections. HIGHLIGHTS OF NEW PROVISIONS NOTIFIED UNDER CA, 2013 Section 2 – Definitions Section 2 under Companies Act, 2013 contains 94 definitions out of which all definitions except 12 definitions have been notified. In a few definitions, a particular portion has not been notified. A list containing the details of definitions notified and non-notified is given later at the end of the write up. The definition of Private Company given under CA, 2013 is different from the earlier Act and the new definition has got notified on 12th of September 2013. The Ministry on 13th September 2013 has clarified that all incorporation documents being filed on or after 12.09.2013 must contain the new definition only. Section 102 – Statement to be annexed to notice Section 102 of CA, 2013 corresponds to Section 173 of CA, 1956 which specifies the requirement of annexing a statement along with the notice of general meeting where any special business has to be transacted. The important changes in this section are: o Interest of not only directors/manager has to be disclosed (as prescribed in CA, 1956) but also that of every key managerial personnel and relatives of directors, manager and KMP. o Earlier, with regard to any special business concerning another company, disclosure of shareholding interest of director/manager in that other company had to be disclosed if such share holding was more than 20%. Now the percentage has been changed to 2% and also the same has been made applicable to all promoters, directors, manager and KMP. o CA, 2013 also specifies that if any benefit accrues to any director, manager, promoter or KMP or their relatives because of non-disclosure or insufficient disclosure, then the concerned person will be deemed to be holding the amount of benefit in trust for the company. This is a new specification under CA, 2013. o CA, 2013 also contains the penalty clause which provides for a penalty of Rs. 50,000/- or 5 times the amount of benefit, whichever is more. Earlier no specific penalty was provided. o This Section is applicable to all companies except to a One Person Company. Earlier, Section 170 of CA, 1956 provided that the provisions of section 173 will apply to private companies only if the Articles do not provide anything otherwise. MCA has clarified that the provisions of this section will apply to all notices issued on or after 12th September, 2013. Section 103 – Quorum for meetings This section corresponds to section 174 of the CA, 1956 which prescribes the quorum for general meetings. Section 103 has prescribed new quorum requirement for public companies which is as follows: No. of members as on date of Meeting Quorum Requirement 1000 or less 5 members personally present 1000-5000 15 members personally present More than 5000 30 members personally present The quorum requirement for private companies remains same at 2 members personally present.   Section 180 – Restrictions on powers of Board This section corresponds to section 293 of CA, 1956 which contains a list of items which can be transacted by the Board only after obtaining approval of the shareholders. The important points of difference are: o CA, 2013 mandates approval by means of special resolution only. o CA, 1956 mandated that approval has to be obtained in a meeting. This requirement seems to have been dispensed with in CA, 2013 as the word “meeting” has been replaced with “special resolution”. o This Section is applicable to all companies as compared to only public companies and subsidiaries of public companies as contained in CA, 1956. MCA has clarified that the provisions of this section will apply to all notices issued on or after 12th September, 2013. Section 185 – Loans to Directors etc. This section corresponds to Section 295 of Companies Act, 1956 which contains provisions regarding giving loans to directors and other entities in which directors are interested. The main points of difference in the new Act are: o This Section is applicable to all companies as compared to only public companies and subsidiaries of public companies as contained in CA, 1956. o In CA, 1956 loans were permitted with approval of Central Government. Now, the transaction is totally prohibited except in following cases: (a) the giving of any loan to a managing or whole-time director— (i) as a part of the conditions of service extended by the company to all its employees; or (ii) pursuant to any scheme approved by the members by a special resolution; or (b) a company which in the ordinary course of its business provides loans or gives guarantees or securities for the due repayment of any loan and in respect of such loans an interest is charged at a rate not less than the bank rate declared by the Reserve Bank of India. o Following transactions are prohibited subject to exception above: o Giving of loan, including any loan represented by a book debt o Giving any guarantee or providing any security in connection with any loan taken. o The above transactions by the company to following entities are prohibited subject to exception above: (a) any director of the lending company, or of a company which is its holding company or any partner or relative of any such director; (b) any firm in which any such director or relative is a partner; (c) any private company of which any such director is a director or member; (d) anybody corporate at a general meeting of which not less than 25% of the total voting power may be exercised or controlled by any such director, or by two or more such directors, together; or (e) anybody corporate, the Board of directors, managing director or manager, whereof is accustomed to act in accordance with the directions or instructions of the Board, or of any director or directors, of the lending company. Section 192 – Restrictions on non-cash transactions involving directors This is a new section introduced under CA, 2013. This Section contains that a company has to obtain prior approval its members by means of a special resolution for entering into any agreement relating to acquisition/sale of assets for consideration other than cash between the company and its director, or director of holding, subsidiary or associate company or any other person connected with the director. The Section also contains that the notice calling the general meeting should include the particulars of the arrangement along with the value of the assets involved in such arrangement duly calculated by a registered valuer. Section 447 to 449 – Punishment for fraud, false statement and false evidence Section 447 is a new Section under CA, 2013 which deals extensively with fraud. Section 447 defines fraud as: “fraud” in relation to affairs of a company or any body corporate, includes any act, omission, concealment of any fact or abuse of position committed by any person or any other person with the connivance in any manner, with intent to deceive, to gain undue advantage from, or to injure the interests of, the company or its shareholders or its creditors or any other person, whether or not there is any wrongful gain or wrongful loss Penalty for Fraud 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. This section has far reaching consequences as firstly the penalty is very stringent – imprisonment up to ten years, secondly, many sections in the Act are linked to this section by providing in those sections that the penalty is same as that for fraud and thirdly the definition of fraud is very wide in its connotation. It covers all persons including directors, employees, professionals etc. Section 448 and 449 correspond to Section 628 and 629 of the CA, 1956 respectively. There is no change in the sections except that the penalty has been increased. Section 450 – Punishment where no specific penalty or punishment is provided This section corresponds to Section 629A of Companies Act, 1956 and provides penalty for those cases where no specific penalty has been provided in the respective section or any where else in the Act. In CA, 2013 the amount has been raised to Rs. 10,000/- plus Rs. 1,000/- for every day of default as against Rs. 5,000/- plus Rs. 500/- provided in CA, 1956. This Section has been notified from 12.09.2013 and it means that now for any contravention under the Sections of Companies Act, 1956 also, for which no penalty is provided in the Act, the penalty as provided in CA, 2013 will be applicable. LIST OF SECTIONS NOTIFIED ON 12.09.2013 S.No Chapter Section Description 1 Chapter I - Preliminary 2 Definitions 2 Chapter II -Incorporation of Company and Matters Incidental Thereto 19 Subsidiary company not to hold shares in its holding company. 3 21 Authentication of documents, proceedings and contracts. 4 22 Execution of Acts of exchange, etc. 5 Chapter III -Prospectus and Allotment of Securities 23 Public offer and private placement. 6 24 Power of Securities and Exchange Board to regulate issue and transfer of securities, etc. 7 25 Document containing offer of securities for sale to be deemed prospectus 8 29 Public offer of securities to be in dematerialized form. 9 30 Advertisement of prospectus. 10 30 Shelf prospectus. 11 32 Red herring prospectus. 12 33 Issue of application forms for securities. 13 34 Criminal liability for misstatements in prospectus. 14 35 Civil liability for misstatements in prospectus. 15 36 Punishment for fraudulently inducing persons to invest money. 16 37 Action by affected persons. 17 38 Punishment for personation for acquisition, etc., of securities. 18 39 Allotment of securities by company. 19 40 Securities to be dealt with in stock exchanges. 20 Chapter IV -Share Capital and Debentures 44 Nature of shares or debentures. 21 45 Numbering of shares. 22 49 Calls on shares of same class to be made on uniform basis. 23 50 Company to accept unpaid share capital, although not called up. 24 51 Payment of dividend in proportion to amount paid-up. 25 57 Punishment for personation of shareholder. 26 58 Refusal of registration and appeal against refusal. 27 59 Rectification of register of members. 28 60 Publication of authorised, subscribed and paid-up capital. 29 65 Unlimited company to provide for reserve share capital on re-registration. 30 68 Transfer of certain sums to capital redemption reserve account. 31 70 Prohibition for buy-back in certain circumstances. 32 Chapter VI -Registration of Charges 86 Punishment for contravention. 33 Chapter VII -Management and Administration 100 Section 100- Calling of extraordinary general meeting. 34 102 Statement to be annexed to notice. 35 103 Quorum for meetings. 36 104 Chairman of meetings. 37 105 Proxies. 38 106 Restriction on voting rights. 39 107 Voting by show of hands. 40 111 Circulation of members’ resolution. 41 112 Representation of President and Governors in meetings. 42 113 Representation of corporations at meeting of companies and of creditors. 43 114 Ordinary and special resolutions. 44 116 Resolutions passed at adjourned meeting. 45 91 Power to close register of members or debenture holders or other security holders 46 Chapter VIII -Declaration and Payment of Dividend 127 Punishment for failure to distribute dividends. 47 Chapter IX -Accounts of Companies (128 – 138) 133 Central Government to prescribe accounting standards. 48 Chapter XI -Appointment and Qualifications of Directors 161 Appointment of additional director, alternate director and nominee director. 49 162 Appointment of directors to be voted individually. 50 163 Option to adopt principle of proportional representation for appointment of directors. 51 Chapter XII -Meetings of Board and its Powers 176 Defects in appointment of directors not to invalidate actions taken. 52 180 Restrictions on powers of Board. 53 181 Company to contribute to bona fide and charitable funds, etc. 54 182 Prohibitions and restrictions regarding political contributions. 55 183 Power of Board and other persons to make contributions to national defence fund, etc. 56 185 Loan to directors, etc. 57 192 Restriction on non-cash transactions involving directors. 58 194 Prohibition on forward dealings in securities of company by a key managerial personnel. 59 195 Prohibition on insider trading of securities. 60 Chapter XIII -Appointment and Remuneration of Managerial Personnel 202 Compensation for loss of office of managing or whole-time director or manager. 61 Chapter XXII-Companies Incorporated Outside India 379 Application of Act to foreign companies. 62 382 Display of name, etc., of foreign company. 63 383 Service on foreign company. 64 386 Interpretation. 65 Chapter XXIII-Government Companies 394 Section 394- Annual reports on Government companies. 66 Chapter XXV-Companies to Furnish Information or Statistics (405) 405 Power of Central Government to direct companies to furnish information or statistics. 67 Chapter XXVII-National Company Law Tribunal and Appellate Tribunal 407 Definitions 68 408 Constitution of National Company Law Tribunal. 69 409 Qualification of President and Members of Tribunal. 70 410 Constitution of Appellate Tribunal 71 411 Qualification of Chairperson and Members of Appellate Tribunal. 72 412 Selection of Members of Tribunal and Appellate Tribunal. 73 413 Term of office of President, Chairperson and other Members. 74 414 Salary, allowances and other terms and conditions of service of Members. 75 Chapter XXVIII- Special Courts 439 Offences to be non-cognizable. 76 443 Power of Central Government to appoint company prosecutors. 77 444 Appeal against acquittal. 78 445 Compensation for accusation without reasonable cause. 79 446 Application of fines. 80 Chapter XXIX Miscellaneous 447 Punishment for fraud. 81 448 Punishment for false statements. 82 449 Punishment for false evidence. 83 450 Punishment where no specific penalty or punishment is provided. 84 451 Punishment in case of repeated default. 85 452 Punishment for wrongful withholding of property. 86 453 Punishment for improper use of “Limited” or “Private Limited”. 87 456 Protection of action taken in good faith. 88 457 Non-disclosure of information in certain cases. 89 458 Delegation by Central Government of its powers and functions. 90 459 Powers of Central Government or Tribunal to accord approval, etc., subject to conditions and to prescribe fees on applications 91 460 Condonation of delay in certain cases. 92 461 Annual report by Central Government. 93 462 Power to exempt a class or classes of companies from provisions of this Act. 94 463 Power of Court to grant relief in certain cases 95 467 Power of Central Government to amend Schedules. 96 468 Power of Central Government to make rules relating to winding up. 97 469 Power of Central Government to make rules. 98 470 Power to remove difficulties.   LIST OF DEFINITIONS NOTIFIED U/S 2 ON 12.09.2013 CLAUSE DESCRIPTION clause 1 “abridged prospectus” means a memorandum containing such salient features of a prospectus as may be specified by the Securities and Exchange Board by making regulations in this behalf clause 3 “alter” or “alteration” includes the making of additions, omissions and substitutions clause 4 “Appellate Tribunal” means the National Company Law Appellate Tribunal clause 5 “articles” means the articles of association of a company as originally framed or as altered from time to time or applied in pursuance of any previous company law or clause 6 “associate company”, in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company. Explanation.—For the purposes of this clause, “significant influence” means control of at least twenty per cent. of total share capital, or of business decisions under an agreement; clause 8 “authorised capital” or “nominal capital” means such capital as is authorised by the memorandum of a company to be the maximum amount of share capital of the company clause 9 “banking company” means a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949; clause 10 “Board of Directors” or “Board”, in relation to a company, means the collective body of the directors of the company; clause 11 “body corporate” or “corporation” includes a company incorporated outside India, but does not include— (i) a co-operative society registered under any law relating to co-operative societies; and (ii) any other body corporate (not being a company as defined in this Act), which the Central Government may, by notification, specify in this behalf; clause 12 “book and paper” and “book or paper” include books of account, deeds, vouchers, writings, documents, minutes and registers maintained on paper or in electronic form; clause14 “branch office”, in relation to a company, means any establishment described as such by the company; clause15 “called-up capital” means such part of the capital, which has been called for payment; clause16 “charge” means an interest or lien created on the property or assets of a company or any of its undertakings or both as security and includes a mortgage; clause17 “chartered accountant” means a chartered accountant as defined in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 who holds a valid certificate of practice under sub-section (1) of section 6 of that Act; clause18 “Chief Executive Officer” means an officer of a company, who has been designated as such by it clause19 “Chief Financial Officer” means a person appointed as the Chief Financial Officer of a company clause20 “company” means a company incorporated under this Act or under any previous company law; clause21 “company limited by guarantee” means a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up; clause22 “company limited by shares” means a company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them clause24 “company secretary” or “secretary” means a company secretary as defined in clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 who is appointed by a company to perform the functions of a company secretary under this Act; clause25 “company secretary in practice” means a company secretary who is deemed to be in practice under sub-section (2) of section 2 of the Company Secretaries Act, 1980; clause26 “contributory” means a person liable to contribute towards the assets of the company in the event of its being wound up. Explanation.—For the purposes of this clause, it is hereby clarified that a person holding fully paid-up shares in a company shall be considered as a contributory but shall have no liabilities of a contributory under the Act whilst retaining rights of such a contributory; clause27 “control” shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner; clause28 “cost accountant” means a cost accountant as defined in clause (b) of subsection (1) of section 2 of the Cost and Works Accountants Act, 1959 clause 29(except sub clause (IV) “court” means— (i) the High Court having jurisdiction in relation to the place at which the registered office of the company concerned is situate, except to the extent to which jurisdiction has been conferred on any district court or district courts subordinate to that High Court under sub-clause (ii); (ii) the district court, in cases where the Central Government has, by notification, empowered any district court to exercise all or any of the jurisdictions conferred upon the High Court, within the scope of its jurisdiction in respect of a company whose registered office is situate in the district; (iii) the Court of Session having jurisdiction to try any offence under this Act or under any previous company lawany Metropolitan Magistrate or a Judicial Magistrate of the First Class having jurisdiction to try any offence under this Act or under any previous company law; clause 30 “debenture” includes debenture stock, bonds or any other instrument of a company evidencing a debt, whether constituting a charge on the assets of the company or not; clause 32 “depository” means a depository as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 clause 33 “derivative” means the derivative as defined in clause (ac) of section 2 of the Securities Contracts (Regulation) Act, 1956 clause 34 “director” means a director appointed to the Board of a company clause 35 “dividend” includes any interim dividend; clause 36 “document” includes summons, notice, requisition, order, declaration, form and register, whether issued, sent or kept in pursuance of this Act or under any other law for the time being in force or otherwise, maintained on paper or in electronic form; clause 37 “employees’ stock option” means the option given to the directors, officers or employees of a company or of its holding company or subsidiary company or companies, if any, which gives such directors, officers or employees, the benefit or right to purchase, or to subscribe for, the shares of the company at a future date at a pre-determined price; clause 38 “expert” includes an engineer, a valuer, a chartered accountant, a company secretary, 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 clause 39 “financial institution” includes a scheduled bank, and any other financial institution defined or notified under the Reserve Bank of India Act, 1934; clause 40 “financial statement” in relation to a company, includes— (i) a balance sheet as at the end of the financial year; (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; (iii) cash flow statement for the financial year; (iv) a statement of changes in equity, if applicable; and (v) any explanatory note annexed to, or forming part of, any document referred to in sub-clause (i) to sub-clause (iv): Provided that the financial statement, with respect to One Person Company, small company and dormant company, may not include the cash flow statement; clause 43 “free reserves” means such reserves which, as per the latest audited balance sheet of a company, are available for distribution as dividend: Provided that— (i) any amount representing unrealised gains, notional gains or revaluation of assets, whether shown as a reserve or otherwise, or (ii) any change in carrying amount of an asset or of a liability recognized in equity, including surplus in profit and loss account on measurement of the asset or the liability at fair value, shall not be treated as free reserves clause 44 “Global Depository Receipt” means any instrument in the form of a depository receipt, by whatever name called, created by a foreign depository outside India and authorised by a company making an issue of such depository receipts clause 45 “Government company” means any company in which not less than fiftyone per cent. of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a Government company clause 46 “holding company”, in relation to one or more other companies, means a company of which such companies are subsidiary companies; clause 49 “interested director” means a director who is in any way, whether by himself or through any of his relatives or firm, body corporate or other association of individuals in which he or any of his relatives is a partner, director or a member, interested in a contract or arrangement, or proposed contract or arrangement, entered into or to be entered into by or on behalf of a company clause 50 “issued capital” means such capital as the company issues from time to time for subscription; clause 51 “key managerial personnel”, in relation to a company, means— (i) the Chief Executive Officer or the managing director or the manager; (ii) the company secretary; (iii) the whole-time director; (iv) the Chief Financial Officer; and (v) such other officer as may be prescribed clause 52 “listed company” means a company which has any of its securities listed on any recognised stock exchange clause 53 “manager” means an individual who, subject to the superintendence, control and direction of the Board of Directors, has the management of the whole, or substantially the whole, of the affairs of a company, and includes a director or any other person occupying the position of a manager, by whatever name called, whether under a contract of service or not; clause 54 “managing director” means a director who, by virtue of the articles of a company or an agreement with the company or a resolution passed in its general meeting, or by its Board of Directors, is entrusted with substantial powers of management of the affairs of the company and includes a director occupying the position of managing director, by whatever name called. Explanation.—For the purposes of this clause, the power to do administrative acts of a routine nature when so authorised by the Board such as the power to affix the common seal of the company to any document or to draw and endorse any cheque on the account of the company in any bank or to draw and endorse any negotiable instrument or to sign any certificate of share or to direct registration of transfer of any share, shall not be deemed to be included within the substantial powers of management clause 55 “member”, in relation to a company, means— (i) the subscriber to the memorandum of the company who shall be deemed to have agreed to become member of the company, and on its registration, shall be entered as member in its register of members; (ii) every other person who agrees in writing to become a member of the company and whose name is entered in the register of members of the company; (iii) every person holding shares of the company and whose name is entered as a beneficial owner in the records of a depository; clause 56 “memorandum” means the memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous company law or of this Act clause 57 “net worth” means the aggregate value of the paid-up share capital and all reserves created out of the profits and securities premium account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation; clause 58 “notification” means a notification published in the Official Gazette and the expression “notify” shall be construed accordingly clause 59 “officer” includes any director, manager or key managerial personnel or any person in accordance with whose directions or instructions the Board of Directors or any one or more of the directors is or are accustomed to act; clause 60 “officer who is in default”, for the purpose of any provision in this Act which enacts that an officer of the company who is in default shall be liable to any penalty or punishment by way of imprisonment, fine or otherwise, means any of the following officers of a company, namely:— (i) whole-time director; (ii) key managerial personnel; (iii) where there is no key managerial personnel, such director or directors as specified by the Board in this behalf and who has or have given his or their consent in writing to the Board to such specification, or all the directors, if no director is so specified; (iv) any person who, under the immediate authority of the Board or any key managerial personnel, is charged with any responsibility including maintenance, filing or distribution of accounts or records, authorises, actively participates in, knowingly permits, or knowingly fails to take active steps to prevent, any default (v) any person in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act, other than a person who gives advice to the Board in a professional capacity; (vi) every director, in respect of a contravention of any of the provisions of this Act, who is aware of such contravention by virtue of the receipt by him of any proceedings of the Board or participation in such proceedings without objecting to the same, or where such contravention had taken place with his consent or connivance; (vii) in respect of the issue or transfer of any shares of a company, the share transfer agents, registrars and merchant bankers to the issue or transfer; clause 61 “Official Liquidator” means an Official Liquidator appointed under sub-section (1) of section 359; clause 63 “ordinary or special resolution” means an ordinary resolution, or as the case may be, special resolution referred to in section 114; clause 64 “paid-up share capital” or “share capital paid-up” means such aggregate amount of money credited as paid-up as is equivalent to the amount received as paidup in respect of shares issued and also includes any amount credited as paid-up in respect of shares of the company, but does not include any other amount received in respect of such shares, by whatever name called; clause 65 “postal ballot” means voting by post or through any electronic mode clause 66 “prescribed” means prescribed by rules made under this Act clause 67 “previous company law” means any of the laws specified below:— (i) Acts relating to companies in force before the Indian Companies Act, 1866; (ii) the Indian Companies Act, 1866; (iii) the Indian Companies Act, 1882; (iv) the Indian Companies Act, 1913; (v) the Registration of Transferred Companies Ordinance, 1942; (vi) the Companies Act, 1956; and (vii) any law corresponding to any of the aforesaid Acts or the Ordinances and in force— (A) in the merged territories or in a Part B State (other than the State of Jammu and Kashmir), or any part thereof, before the extension thereto of the Indian Companies Act, 1913; or in the State of Jammu and Kashmir, or any part thereof, before the commencement of the Jammu and Kashmir (Extension of Laws) Act, 1956, in so far as banking, insurance and financial corporations are concerned, and before the commencement of the Central Laws (Extension to Jammu and Kashmir) Act, 1968, in so far as other corporations are concerned; (viii) the Portuguese Commercial Code, in so far as it relates to sociedades anonimas; and (ix) the Registration of Companies (Sikkim) Act, 1961; clause 68 “private company” means a company having a minimum paid-up share capital of one lakh rupees or such higher paid-up share capital as may be prescribed, and which by its articles,— (i) restricts the right to transfer its shares; (ii) except in case of One Person Company, limits the number of its members to two hundred: Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member: Provided further that— (A) persons who are in the employment of the company; and (B) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased, shall not be included in the number of members; and (iii) prohibits any invitation to the public to subscribe for any securities of the company; clause 69 “promoter” means a person— (a) who has been named as such in a prospectus or is identified by the company in the annual return referred to in section 92; or (b) who has control over the affairs of the company, directly or indirectly whether as a shareholder, director or otherwise; or (c) in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act: Provided that nothing in sub-clause (c) shall apply to a person who is acting merely in a professional capacity; clause 70 “prospectus” means any document described or issued as a prospectus and includes a red herring prospectus referred to in section 32 or shelf prospectus referred to in section 31 or any notice, circular, advertisement or other document inviting offers from the public for the subscription or purchase of any securities of a body corporate; clause 71 “public company” means a company which— (a) is not a private company; (b) has a minimum paid-up share capital of five lakh rupees or such higher paid-up capital, as may be prescribed: Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles clause 72 “public financial institution” means— (i) the Life Insurance Corporation of India, established under section 3 of the Life Insurance Corporation Act, 1956; (ii) the Infrastructure Development Finance Company Limited, referred to in clause (vi) of sub-section (1) of section 4A of the Companies Act, 1956 so repealed under section 465 of this Act; (iii) specified company referred to in the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002; (iv) institutions notified by the Central Government under sub-section (2) of section 4A of the Companies Act, 1956 so repealed under section 465 of this Act; (v) such other institution as may be notified by the Central Government in consultation with the Reserve Bank of India: Provided that no institution shall be so notified unless— (A) it has been established or constituted by or under any Central or State Act; or (B) not less than fifty-one per cent. of the paid-up share capital is held or controlled by the Central Government or by any State Government or Governments or partly by the Central Government and partly by one or more State Governments clause 73 “recognised stock exchange” means a recognised stock exchange as defined in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956; clause 74 “register of companies” means the register of companies maintained by the Registrar on paper or in any electronic mode under this Act; clause 75 “Registrar” means a Registrar, an Additional Registrar, a Joint Registrar, a Deputy Registrar or an Assistant Registrar, having the duty of registering companies and discharging various functions under this Act; clause 76 “related party”, with reference to a company, means— (i) a director or his relative; (ii) a key managerial personnel or his relative; (iii) a firm, in which a director, manager or his relative is a partner; (iv) a private company in which a director or manager is a member or director; (v) a public company in which a director or manager is a director or holds along with his relatives, more than two per cent. of its paid-up share capital; (vi) any body corporate whose Board of Directors, managing director or manager is accustomed to act in accordance with the advice, directions or instructions of a director or manager; (vii) any person on whose advice, directions or instructions a director or manager is accustomed to act: Provided that nothing in sub-clauses (vi) and (vii) shall apply to the advice, directions or instructions given in a professional capacity; (viii) any company which is— (A) a holding, subsidiary or an associate company of such company; or (B) a subsidiary of a holding company to which it is also a subsidiary; (ix) such other person as may be prescribed clause 77 ‘‘relative’’, with reference to any person, means any one who is related to another, if— (i) they are members of a Hindu Undivided Family; (ii) they are husband and wife; or (iii) one person is related to the other in such manner as may be prescribed; clause 78 “remuneration” means any money or its equivalent given or passed to any person for services rendered by him and includes perquisites as defined under the Income-tax Act, 1961; clause 79 “Schedule” means a Schedule annexed to this Act; clause 80 “scheduled bank” means the scheduled bank as defined in clause (e) of section 2 of the Reserve Bank of India Act, 1934; clause 81 “securities” means the securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 clause 82 “Securities and Exchange Board” means the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992; clause 84 “share” means a share in the share capital of a company and includes stock clause 86 “subscribed capital” means such part of the capital which is for the time being subscribed by the members of a company clause 87 [except the proviso and explanation (d)] “subsidiary company” or “subsidiary”, in relation to any other company (that is to say the holding company), means a company in which the holding company— (i) controls the composition of the Board of Directors; or (ii) exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies clause 88 “sweat equity shares” means such equity shares as are issued by a company to its directors or employees at a discount or for consideration, other than cash, for providing their know-how or making available rights in the nature of intellectual property rights or value additions, by whatever name called; Explanation.—For the purposes of this clause,— (a) a company shall be deemed to be a subsidiary company of the holding company even if the control referred to in sub-clause (i) or sub-clause (ii) is of another subsidiary company of the holding company; (b) the composition of a company’s Board of Directors shall be deemed to be controlled by another company if that other company by exercise of some power exercisable by it at its discretion can appoint or remove all or a majority of the directors; (c) the expression “company” includes any body corporate; clause 89 voting right” means the right of a member of a company to vote in any meeting of the company or by means of postal ballot; if all the members thereof or their proxies having a right to vote on that matter are present at the meeting and cast their votes; clause 90 “Tribunal” means the National Company Law Tribunal constituted under section 408; clause 91 “turnover” means the aggregate value of the realisation of amount made from the sale, supply or distribution of goods or on account of services rendered, or both, by the company during a financial year; clause 92 “unlimited company” means a company not having any limit on the liability of its members; clause 93 “voting right” means the right of a member of a company to vote in any meeting of the company or by means of postal ballot; clause 94 “whole-time director” includes a director in the whole-time employment of the company; clause 95 words and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, 1956 or the Securities and Exchange Board of India Act, 1992 or the Depositories Act, 1996 shall have the meanings respectively assigned to them in those Acts. LIST OF DEFINITIONS TO BE NOTIFIED CLAUSE DESCRIPTION clause 2 “accounting standards” means the standards of accounting or any addendum thereto for companies or class of companies referred to in section 133 clause 7 “auditing standards” means the standards of auditing or any addendum thereto for companies or class of companies referred to in sub-section (10) of section 143; clause 13 “books of account” includes records maintained in respect of— (i) all sums of money received and expended by a company and matters in relation to which the receipts and expenditure take place; (ii) all sales and purchases of goods and services by the company; (iii) the assets and liabilities of the company; and (iv) the items of cost as may be prescribed under section 148 in the case of a company which belongs to any class of companies specified under that section clause 23 “Company Liquidator”, in so far as it relates to the winding up of a company,means a person appointed by— (a) the Tribunal in case of winding up by the Tribunal; or (b) the company or creditors in case of voluntary winding up, as a Company Liquidator from a panel of professionals maintained by the Central Government under sub-section (2) of section 275; clause 29 sub clause (iv) (iv) the Special Court established under section 435; clause 31 “deposit” includes any receipt of money by way of deposit or loan or in any other form by a company, but does not include such categories of amount as may be prescribed in consultation with the Reserve Bank of India; clause 41 “financial year”, in relation to any company or body corporate, means the period ending on the 31st day of March every year, and where it has been incorporated on or after the 1st day of January of a year, the period ending on the 31st day of March of the following year, in respect whereof financial statement of the company or body corporate is made up: Provided that on an application made by a company or body corporate, which is a holding company or a subsidiary of a company incorporated outside India and is required to follow a different financial year for consolidation of its accounts outside India, the Tribunal may, if it is satisfied, allow any period as its financial year, whether or not that period is a year: Provided further that a company or body corporate, existing on the commencement of this Act, shall, within a period of two years from such commencement, align its financial year as per the provisions of this clause; clause 42 “foreign company” means any company or body corporate incorporated outside India which— (a) has a place of business in India whether by itself or through an agent, physically or through electronic mode; and (b) conducts any business activity in India in any other manner clause 47 “Independent director” means an independent director referred to in sub-section (5) of section 149; clause 48 “Indian Depository Receipt” means any instrument in the form of a depository receipt created by a domestic depository in India and authorised by a company incorporated outside India making an issue of such depository receipts; clause 62 “One Person Company” means a company which has only one person as a member clause 67 sub clause (ix) (ix) the Registration of Companies (Sikkim) Act, 1961; clause 83 “Serious Fraud Investigation Office” means the office referred to in section 211 clause 85 ‘‘small company’’ means a company, other than a public company,— (i) paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as may be prescribed which shall not be more than five crore rupees; or (ii) turnover of which as per its last profit and loss account does not exceed two crore rupees or such higher amount as may be prescribed which shall not be more than twenty crore rupees: Provided that nothing in this clause shall apply to— (A) a holding company or a subsidiary company; (B) a company registered under section 8; or (C) a company or body corporate governed by any special Act clause 87 proviso 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 Explanation (d) “layer” in relation to a holding company means its subsidiary or subsidiaries; (Written by S.Dhanapal, Senior Partner, S Dhanapal & Associates, A firm of Practising Company Secretaries, Chennai.)
Posted date: 2013-10-07

he Ministry of Corporate Affairs has notified 98 sections of the new Companies Act, 2013. These sections have come into effect from 12th September 2013
The Ministry of Corporate Affairs has notified 98 sections of the new Companies Act, 2013. These sections have come into effect from 12th September 2013. Subsequent to coming into effect of these Sections under the new Act, the corresponding Sections under the Companies Act, 1956 automatically stand repealed. For other Sections, the Companies Act, 1956 still holds good till the relevant sections under the new Act are notified.
Posted date: 2013-10-07

Batches June 2014 for CS & CWA commenced from 06.10.2013
Batches June 2014 for CS & CWA commenced from 06.10.2013 Hurry up limited seats.
Posted date: 2013-10-07

Congrats !!!!!!!! to our CWA & CS Inter December 2012 Passouts
Congrats !!!!!!!! to our CWA & CS Inter December 2012 Passouts.
Posted date: 2013-02-25

Revised Dates for Registration of CS Executive & Final for December 2013 onwards
Revised Dates for CS Executive & Final For December Attempt – only one Module (Between 1st March, to 31st May, ) For December Attempt – Both Modules ( Before 28th Feb ) For June Attempt – only one Module (Between 1st September, to 30th Nov,) For June Attempt – Both Modules (Before 31st August,) Visit. www.icsi.edu
Posted date: 2013-02-13

December 2013 batches for CS & CWA to commence from 01.04.2013.
December 2013 batches for CS & CWA to commence from 01.04.2013. Limited seats.
Posted date: 2013-02-07

Congrats !!!!!!!! to our CS Foundation December 2012 Passouts we have secured 100% results.
Congrats !!!!!!!! to our CS Foundation December 2012 Passouts we have secured 100% results.
Posted date: 2013-02-06

Congrats !!!!!!!! to our CWA Foundation December 2012 Passouts we have secured 80% results this time
Congrats !!!!!!!! to our CWA Foundation December 2012 Passouts we have secured 80% results this time.
Posted date: 2013-02-06

CS New syllabus december 2013 attemp uploaded
CS New syllabus december 2013 attemp uploaded
Posted date: 2013-02-04

CWA New Syllabus from December 2013
CWA New Syllabus from December 2013
Posted date: 2013-02-04

CS Increasing training period from 15 months to 24 months, providing for alternate training for 36 months on enrolment
In view of the foregoing, it is hereby clarified that the new training structure proposed in the aforesaid draft regulations shall apply to those students only who shall register themselves for the Executive Programme on or after the date of publication of final notification of the draft regulations in the Gazette of India. Circular attached
Posted date: 2013-01-28

Thanx to our students we have achieved a 100 % result at CS Foundation level.
Thanx to our students we have achieved a 100 % result at CS Foundation level. We continue to maintain this standard even at Inter level.
Posted date: 2013-01-21

Congrats !!!!!!!! to our CS Foundation December 2012 Passouts.
jyoti gaikar- 256 Congrats !!!!!!!!
Posted date: 2013-01-21

Congrats !!!!!!!! to our CPT December 2012 Passouts.
Reena Yadav. Congrats !!!!!!!!
Posted date: 2013-01-21

Congrats !!!!!!!! to our CS Foundation December 2012 Passouts.
Passouts Pooja Tailor- 261 Aishwarya Nair- 271 Chandni patel- 240
Posted date: 2013-01-21

Demand for company secretaries to increase manifold
MADURAI: The demand for company secretaries would increase manifold once the Companies Bill, 2012, is passed in Parliament, President of the Institute of Company Secretaries Nesar Ahamad said today. There were only about 32,000 company secretaries at present, he said and to meet the huge demand, the ICSI would train even those who had completed intermediate level of examination and provide them a certificate so that they would be able to do part of the company secretary\'s job. Nesar said the new syllabus for executive and professional programme which laid emphasis on financial management, compliance management, corporate governance and ethics would be introduced from February one next. The students who had completed foundation examination and common proficiency test, held by Charted Accountants/any other accountancy institution of India, would be eligible to join the CS executive programme. He said several African countries including Nigeria, Kenya and Tanzania, had shown interest for student exchange programmes.
Posted date: 2012-12-13

new syllabus for Executive Programme w.e.f. February 1, 2013 and the Professional Programme w.e.f. September 1, 2013.
The new syllabus with greater emphasis on due diligence, financial management, compliance management, corporate governance, sustainability and ethics, etc. comprises Seven papers at Executive Programme and Nine papers at Professional Programme level including one Paper to be opted by the students out of five elective papers namely, (i) Banking Law and Practice; (ii) Capital, Commodities and Money Market; (iii) Insurance Law and Practice; (iv) Intellectual Property Rights-Law and Practice; and (v) International Business-Laws and Practice. The Council has decided to implement the new syllabus for Executive Programme w.e.f. February 1, 2013 and the Professional Programme w.e.f. September 1, 2013. The subject content has been uploaded on the website
Posted date: 2012-12-03

New “Syllabus 2012” for CWA Inter applicable from December 2013
The First Examination under “Syllabus 2012” shall be conducted in December 2013. The Last Examination under “Revised Syllabus 2008” shall be conducted in June 2015. Copy has been uploaded on the website
Posted date: 2012-12-03

Prelims time table for december 2012 Attempt
Prelims time table for december 2012 Attempt uploaded.
Posted date: 2012-11-19

Application for the post of Faculty invited.

Posted date: 2012-10-08

Time table for Accounts and Costing uploaded

Posted date: 2012-10-08

Companies Bill, 2011- Cabinet approves Amendments – Salient features
The Union Cabinet today approved the proposal to make official amendments to the Companies Bill, 2011. The Companies Bill, 2011, on its enactment, would allow the country to have a modern legislation for growth and regulation of corporate sector in India. The existing statute for regulation of companies in the country, viz. the Companies Act, 1956 had been under consideration for quite long for comprehensive revision in view of the changing economic and commercial environment nationally as well as internationally. In view of various reformatory and contemporary provisions proposed in the Companies Bill, 2011 together with omission of existing unwanted and obsolete compliance requirements, the companies in the country would be able to comply with the requirements of the proposed Companies Act in a better and more effective manner. The Salient features of amendments approved by the Cabinet are as follows: 1. The words ‘make every endeavour to’ omitted from Clause 135(5). Such clause is also amended to provide that the company shall give preference to local areas where it operates, for spending amount earmarked for Corporate Social Responsibility (CSR) activities, The approach to ‘implement or cite reasons for non implementation’ retained. (Amendment of Clause 135). 2. To help in curbing a major source of corporate delinquency, Clause 36 (c) amended, to also include punishment for falsely inducing a person to enter into any agreement with bank or financial institution, with a view to obtaining credit facilities. (Amendment in Clause 36). 3. Provisions relating to audit of Government Companies by Comptroller and Auditor General of India (C&AG) modified to enable C&AG to perform such audit more effectively. {Amendment in Clauses 143(5) and (6)}. 4. Clause 186 amended to provide that the rate of interest on inter corporate loans will be the prevailing rate of interest on dated Government Securities. (Amendment in Clause 186). 5. Provisions relating to restrictions on non-audit services modified to provide that such restrictions shall not apply to associate companies and further to provide for transitional period for complying with such provisions. (Amendment in Clause 144). 6. Provisions relating to separation of office of Chairman and Managing Director (MD) modified to allow, in certain cases, a class of companies having multiple business and separate divisional MDs to appoint same person as ‘chairman as well as MD’. (Amendment in Clause 203). 7. Provisions relating to extent of criminal liability of auditors particularly in case of partners of an audit firm reviewed to bring clarity. Further, to ensure that the liability in respect of damages paid by auditor, as per the order of the Court, (in case of conviction under Clause 147) is promptly used for payment to affected parties including tax authorities, Central Government has been empowered to specify any statutory body/authority for such purpose. (Amendments in Clause 147 and 245). 8. The limit in respect of maximum number of companies in which a person may be appointed as auditor has been proposed as twenty companies. {Amendment in Clause 141(3) (g)}. 9. Appointment of auditors for five years shall be subject to ratification by members at every Annual General Meeting (Amendment of Clause 139(1). 10. Provisions relating to voluntary rotation of auditing partner (in case of an audit firm) modified to provide that members may rotate the partner ‘at such interval as may be resolved by members’ instead of ‘every year’ proposed in the clause earlier. {Amendment in Clause 139(3)}. 11. ‘Whole-time director’ has been included in the definition of the term ‘key managerial personnel’ {Amendment of Clause 2(51)}. 12. The term ‘private placement’ has been defined to bring clarity. (Amendment in Clause 42). 13. Approval of the Tribunal shall be required for consolidation and division of share capital only if the voting percentage of shareholders changes consequent on such consolidation {Amendment of Clause 61(1) (b)}. 14. Clarification included in the Bill to provide that ‘Independent Directors’ shall be excluded for the purpose of computing ‘one third of retiring Directors’. This would bring harmonisation between provisions of Clause 149(12) and rotational norms provided in clause 152. (Amendment in Clause 152). 15. Provisions in respect of removal of difficulty modified to provide that the power to remove difficulties may be exercised by the Central Government upto ‘five years’ (after enactment of the legislation) instead of earlier upto ‘three years’. This is considered necessary to avoid serious hardship and dislocation since many provisions of the Bill involve transition from pre-existing arrangements to new systems. (Amendment in Clause 470). Background: (i) The Companies Bill, 2011 was introduced in the Lok Sabha on 14th December, 2011 and was considered by the Parliamentary Standing Committee on Finance which submitted its report to the Hon’ble Speaker, Lok Sabha on 26th June, 2012. The report was laid in Parliament on 13th August 2012. Keeping in view the recommendations made by such Committee it was decided to make certain modifications in the Companies Bill, 2011 through official amendments. (ii) In view of the developments taking place nationally as well as internationally, and with the intent to modernize the structure for corporate regulation in India and also to promote the development of the Indian corporate sector through enlightened regulation and good corporate governance practices, a decision has been taken to revise the existing Companies Act, 1956 comprehensively. Various stakeholders viz Industry Chambers, Professional Institutes, Government Departments, Legal Experts and Professionals etc. were consulted in the process and accordingly, the Companies Bill 2009 was introduced in the Lok Sabha on 3rd August, 2009 which was referred to Parliamentary Standing Committee on Finance for examination and report, which submitted its report to the Parliament on 31st August, 2010. (iii) Keeping in view the recommendations made by the Standing Committee and consultation with various Ministries/Departments etc. a revised Companies Bill, 2011 was prepared which was approved by the Cabinet on 24th November, 2011. The revised Bill was introduced in the Lok Sabha on 14th December, 2011. On introduction of the Companies Bill, 2011, the Companies Bill, 2009 was withdrawn. (iv) The Companies Bill, 2011 was referred to the Parliamentary Standing Committee on Finance for examination and report. The Committee examined the Bill and presented its report / recommendations to the Speaker, Lok Sabha on 26th June, 2012. The report was laid in the Parliament on 13th August, 2012. Keeping in view the recommendations made by the Committee and the inter-ministerial consultation held with concerned Ministries/Departments, it has been decided to make official amendments to the Companies Bill, 2011.
Posted date: 2012-10-05

Requirement for Accounts & Costing Professor for CS & CWA Inter.
Requirement for Accounts & Costing Professor for CS & CWA Inter
Posted date: 2012-10-03

Sucessful Introduction lecture on 02.10.2012 for June 2013 Attempt for CS, CWA and CPT students.
Sucessful Introduction lecture on 02.10.2012 for June 2013 Attempt for CS, CWA and CPT students
Posted date: 2012-10-03

updates for CS & CWA ,TAX Direct & Indirect for December 2012 uploaded.
updates for CS & CWA ,TAX Direct & Indirect for December 2012 uploaded.
Posted date: 2012-09-27

Batches for CS, CWA & CPT for June 2013 Attempt commences from 01.10.2012.
Batches for CS, CWA & CPT for June 2013 Attempt commences from 01.10.2012.
Posted date: 2012-09-27

Interest on Share Application Money till allotment is taxable in hands of applicant
Though a total sum of Rs. 5 crores was placed by the State Government at the disposal of the assessee-company for allotment of shares, such sum was not utilized for the purpose for which the same was transferred. As per the understanding between the assessee and the State Government pending allocation of shares, whatever interest was earned, should be paid over to the State of Gujarat. The suggestion that the corporation should pay interest on such amount to the State of Gujarat was not found workable. Instead, the Government staked its claim over the interest earned by the Government on such sum of money transferred by the Government to the assessee for allotment of shares. The assessee was justified in contending and claiming that such interest cannot be treated as income in its hands and that the same, therefore, cannot be taxed accordingly, when the State Government placed such funds at the disposal of the assessee, the specific stipulation was that the same should be utilized for the purpose of allotment of shares. If for whatever reason the assessee could not immediately allot the shares, the amount which remained with the corporation, must be held to have been held by the corporation in trust for and on behalf of the State Government. If during such period when assessee was holding such amount in trust, any interest accrued by investment of such amount in short-term deposits, such interest also must belong to the Government and till it remained in the hands of the assessee, must be treated to have been held in trust. Merely because the initial agreement between the parties did not make any provision with respect to treating such interest would not be sufficient to change the nature and basic character of such income. In absence of specific stipulation to the contrary, such interest must be treated to be held by the assessee in trust for the Government. Further, on 17-9-1992, the State Government and the assessee both after due deliberations, agreed that the best solution would be to transfer such interest income to the State Government. The suggestion that the corporation should bear the interest liability and pay interest to the Government on such unutilized funds, was not found workable. Instead, the Government only insisted that the interest which the assessee earned on such sums of money, should be transferred to the State Government. Thus, even if initially the agreement between the parties was silent on the treatment of the interest, subsequently by virtue of the further understanding and arrangement between the parties, sufficient clarity was given to the issue. The arrangement arrived at between the assessee and the Government was not prohibited by any provisions of the Companies Act. Even if under the Companies Act, the assessee was under the obligation to issue share certificates within specified time, that would not in any manner imply that the assessee could not have paid the interest to the Government for non-utilization of the funds for the purpose for which it was made available namely for allotment of shares. Mere fact that in the earlier year, the assessee had treated such income differently, or that in the year under consideration, initially had paid advance tax on such basis would not be conclusive of the nature of the income. What needed to be ascertained was whether the assessee is legally correct in ascertaining that the income did not belong to it, but that was of the State Government, and that therefore, it cannot be taxed in the hands of the assessee. The assessee is perfectly justified in raising such a contention which was erroneously turned down by the Tribunal. In the result, the appeal is allowed. The judgment of the Tribunal was set aside to that extent.
Posted date: 2012-09-27

Supreme Court Judgment in Sahara India Real Estate Corporation Ltd & Ors vs. SEBI & Anr.
The Supreme Court on 31st August, 2012 in its most anticipated judgment of recent times has directed the Sahara Group and its two group companies Sahara India Real Estate Corporation Limited (SIRECL) and Sahara Housing Investment Corporation Limited (SHICL) to refund around Rs 17,400 crore to their investors within 3 months from the date of the order with an interest of 15%. The Supreme Court while confirming the findings of the SAT has further asked SEBI to probe into the matter and find out the actual investor base who have subscribed to the Optionally Fully Convertible Debentures (OFCDs) issued by the two group companies SIRECL and SHICL. Background: Earlier SIRECL and SHICL floated an issue of OFCDs and started collecting subscriptions from investors with effect from 25th April 2008 up to 13th April 2011. During this period, the company had a total collection of over Rs 17,656 crore. The amount was collected from about 3 million investors in the guise of a \"Private Placement\" without complying with the requirements applicable to the public offerings of securities. The Whole Time Member of SEBI while taking cognizance of the matter passed an order dated 23rd June, 2011 thereby directing the two companies to refund the money so collected to the investors and also restrained the promoters of the two companies including Mr. Subrata Roy from accessing the securities market till further orders. Sahara then preferred an appeal before SAT against the order of the Whole Time Member and after hearing the SAT confirmed and maintained the order of the Whole Time Member by an order dated 18th October, 2011. Subsequently Sahara filed an appeal before the Supreme Court of India against the SAT order. Issues in Question and Observations of the Supreme Court: The Supreme Court of India while interpreting various provisions of the Companies Act, SEBI Act, SCRA and various Rules and regulations made there under made some interesting observations on the issues raised before it which forms the operative part of the judgment in the form of ratio decidendi. The issues raised and the corresponding observations made by the Supreme Court are enumerated below: Issue 1. Whether SEBI has the power to investigate and adjudicate in this matter as per Sec 11, 11A, 11B of SEBI Act and under Sec 55A of the Companies Act. Or is it the MCA which has the jurisdiction under Sec 55A (c) of the Companies Act. Observations of SC: The Supreme Court held that SEBI does have power to investigate and adjudicate in this matter. It categorically iterated that the SEBI Act is a special legislation bestowing SEBI with special powers to investigate and adjudicate to protect the interests of the investors. It has special powers and its powers are not derogatory to any other provisions existing in any other law and is analogous to such other law and should be read harmoniously with such other provisions and there is no conflict of jurisdiction between the MCA and the SEBI in the matters where interests of the investors are at stake. To support this view, the Supreme Court laid emphasis on the legislative intent and the statement of objectives for the enactment of SEBI Act and the insertion of Section 55A in the Companies Act to delegate special powers to SEBI in matters of issue, allotment and transfer of securities. The Court observed that as per provisions enumerated under Section 55A of the Companies Act, so far matters relate to issue and transfer of securities and non-payment of dividend, SEBI has the power to administer in the case of listed public companies and in the case of those public companies which intend to get their securities listed on a recognized stock exchange in India. Issue 2. Whether the hybrid OFCDs fall within the definition of \"Securities\" within the meaning of Companies Act, SEBI Act and SCRA so as to vest SEBI with the jurisdiction to investigate and adjudicate. Observations of SC: The Supreme Court held that although the OFCDs issued by the two companies are in the nature of \"hybrid\" instruments, it does not cease to be a \"Security\" within the meaning of Companies Act, SEBI Act and SCRA. It says although the definition of \"Securities\" under section 2(h) of SCRA does not contain the term \"hybrid instruments\", the definition as provided in the Act is an inclusive one and covers all \"Marketable securities\". As in this case such OFCDs were offered to millions of persons there is no question about the marketability of such instrument. And since the name itself contains the term \"Debenture\", it is deemed to be a security as per the provisions of Companies Act, SEBI Act and SCRA. Issue 3. Whether the issue of OFCDs to millions of persons who subscribed to the issue is a Private Placement so as not to fall within the purview of SEBI Regulations and various provisions of Companies Act. Observations of SC: The Supreme Court went on to hold that although the intention of the companies was to make the issue of OFCDs look like a private placement, it ceases to be so when such securities are offered to more than 50 persons. Section 67(3) specifically mentions that when any security is offered to and subscribed by more than 50 persons it will be deemed to be a Public Offer and therefore SEBI will have jurisdiction in the matter and the issuer will have to comply with the various provisions of the legal framework for a public issue. Although the Sahara companies contended that they are exempted under the provisos to Sec 67 (3) since the Information memorandum specifically mentioned that the OFCDs were issued only to those related to the Sahara Group and there was no public offer, the Supreme Court however did not find enough strength in this argument. The Supreme Court observed as the companies elicited public demand for the OFCDs through issue of Information Memorandum under Section 60B of the Companies Act, which is only meant for Public Issues. Supreme Court also observed that since introducers were needed for someone to subscribe to the OFCDs, it is clear that the issue was not meant for persons related or associated with the Sahara Group because in that case an introducer would not be required as such a person is already associated or related to the Sahara Group. Thus, the Supreme Court concluded that the actions and intentions on the part of the two companies clearly show that they wanted to issue securities to the public in the garb of a private placement to bypass the various laws and regulations in relation to that. The Court observed that the Sahara Companies have issued securities to more than the threshold statutory limit fixed under proviso to Section 67(3) and hence violated the listing provisions attracting civil and criminal liability. The Supreme Court also observed that issue of OFCDs through circulation of IM to public attracted provisions of Section 60B of the Companies Act, which required filing of prospectus under Section 60B(9) and since the companies did not come out with a final prospectus on the closing of the offer and failed to register it with SEBI, the Supreme Court held that there was violation of sec 60B of the Companies Act also.
Posted date: 2012-09-07

OUR JUNE 2012 PASS-OUTS CWA FOUNDATION/INTER/ FINAL CONGRATS!!!!!!!!!
OUR JUNE 2012 PASS-OUTS CWA FOUNDATION/INTER/ FINAL CONGRATS!!!!!!!!! CWA Foundation Amey CWA INTER Krima CWA FINAL Suraj
Posted date: 2012-09-07

OUR JUNE 2012 PASS-OUTS CS INTER CONGRATS
OUR JUNE 2012 PASS-OUTS CS INTER CONGRATS!!!!!!!!! Sagar Pooja Priya Pratibha Jagannath
Posted date: 2012-09-07

OUR JUNE 2012 PASS-OUTS CS FINAL CONGRATS
OUR JUNE 2012 PASS-OUTS CS FINAL CONGRATS!!!!!!! Dhara Madhur Prabha Anil Aditi Avani
Posted date: 2012-09-07

List of students passing out in previous attempts for CS,CWA, CPT
Chirag Anil Dhara Madhur Sonali Gyatri Shruti Prasad Arjun Vicky Rakesh Shruti Uday Rajesh Supriya
Posted date: 2012-08-04

Recent News & Updates Amey Pandit passed CWA Foundation June 2012 exams. Congrats!!!!!!!!!!!!!!!!!!!

Posted date: 2012-08-04

Admissions open for June 2013 attempt for CS, CWA and CPT

Posted date: 2012-08-04

Amey Pandit passed CWA Foundation december 2011 exams. Congrats!!!!!!!!!!!!!!!!!!!

Posted date: 2012-08-04

Note On Service Tax Amendments – June 2012
Note On Service Tax Amendments – June 2012 uploaded.
Posted date: 2012-07-02

Report of Parliamentary Standing Committee on Finance on The Companies Bill, 2011 Presented
Report of Parliamentary Standing Committee on Finance on The Companies Bill, 2011 Presented
Posted date: 2012-07-02

Companies Bill 2011, towards a higher level of transparency & accountability
Companies Bill 2011, if passed, will take the place of nearly 55 years old yet significant law Companies Act 1956. This act came into force when our fore fathers use to do the business but the things have changed now the number of companies in India in 1956 was 30,000 which is more than 7laks now. Although the companies act has gone nearly 24 amendments since its enactment, in order to adapt itself with the changing requirement it has not been able to been able to satisfy India Inc. It may be said that though there are many accolades but there are some brickbats too. The most significant amendment of 2002 in the companies act is still waiting to get itself notified. The idea about the New Companies bill emerged in 2004 however since then it has gone through several changes finally the bill has been presented in the parliament as Companies Bill 2011. The new law was considered inevitable especially after the Satyam scam where the transparency and accountability of the management and auditor was greatly questioned. This law promises to bring more transparency and accountability. Step towards transparency and accountability: Companies Bill 2011 is designed on the principles of accountability and transparency. Thus almost all the provision aims towards achieving higher level of transparency and accountability. But the bigger question is how far these provisions can be practically implemented. Some of the major provisions of new bill which brings about more transparency and accountability are – Independent Director The new bill broadens the roles and responsibility of independent directors. The responsibility of independent director has been significantly increased. The appointment of an independent director should be through a transparent process under the guidance of the remuneration and nomination committee of the BOD of the company. Schedule IV of the Bill contains a code that sets out the role, functions and duties of IDs and incidental provisions relating to their appointment, resignation and evaluation. It seems that they want independent director to be a magician the roles and responsibility that they have chalked out is supposed to be umpire, mediator, The independent directors shall be appointed for a period of 5 years and can be reappointed for another 5 years only after a cooling period of 3 years. Role of NFRA The bill provides for the reconstitution of National Advisory Committee on Accounting and Auditing Standards (NACAAS) as National Financial Reporting Authority (NFRA). ICAI wings seem to be clipped with the constitution of NFRA and it will act as a big daddy of ICAI. Till date ICAI was the sole authority to regulate auditing matters from the past 60 years and NACAAS was responsible to recommend accounting and auditing standards but now the things would reverse. NFRA will be a 15 members committee to be formed by the central government. Scope of officer in default The scope of “officer who is in default” has been broadened. The share transfer agents, registrars and merchant bankers to the issue or transfer related to issue of shares & Chief Financial Officer are also brought under its ambit. Directors who are aware of the default by way of participation in board meeting or receiving the minutes without objecting to the same will also be included in this category even if company has Managing Director /Whole Time Director / other Key Managerial Personnel’s. Role of Auditors and Audit firms One of the vested interest group who will not be happy with the new companies bill are the auditors, the primary reason being that the responsibility and accountability of the auditors has been extended to a great extent. Audit firms are to be appointed for a period of a term of 5 years and can be reappointed for a further period of 5 years. In case of individuals being the auditor it can be appointed for a term of 5 years. The major drawback of this is that it is difficult to maintain the audit panel. Provisions relating to prohibiting auditor from performing non-audit services revised to ensure independence and accountability of auditor. Thus only those services are to be performed which are approved by the board except the 8 services specifically provided The new company’s bill provides a strict penalty for the default of the auditor. It provides for 3 times the amount of fraud and up to 10 years of imprisonment. This will act as a big hammer on the audit profession as the risk involved will increase to a large extent. Moreover the bill does not differentiate between the auditor and the firm thus the other partners of the firm will be equally liable for the default of the other partner. Another important aspect is that now the multinational audit firms can audit under its own brand name. Apart from increasing the transparency and accountability on the part of auditors, directors, management there are various other provision that brings about more accountability on the management like – There can be a maximum of two layers of subsidiary, these has been widely criticized by the India Inc as the layers of subsidiary should depend upon the nature of business Accounts of foreign subsidiary should also be attached with the annual accounts of the company There should be at least one independent director on board. The judicial function of company law which is handed by High court will be transferred to a new body known as NCLT and NCALT. This will help to judge the matters relating to company law by a more specialized body Every third party communication should contain the companies registration number The bill also provides for Whistle Blower Policy Conclusion: Thus new companies bill 2011 indeed is a step towards a higher level of transparency and accountability however the biggest drawback of this bill is that a major portion of the law is yet to be covered by the rules thus until the rules comes into picture the entire law cannot be critically interpreted. Another hurdle for the new bill is that with DTC, GST, IFRS, etc already in the pipeline without knowing the length of the pipeline the position of this bill is uncertain. As per the statement by the govt this bill will be presented in winter session but even if everything goes well with the presidential election the UPA 2 has another big hurdle waiting in winter session relating to constitutional amendment bill in relation to Indo Bangladesh Agreement.
Posted date: 2012-07-02

Time Table for June 2012 Attempt uploaded
Time Table of classes for December 2012 Attempt scheduled, daily lectures from Monday- Sunday at 7.45pm to 9.45pm started.
Posted date: 2012-06-14

Revised Schedule VI – Normally Asked Questions
1 . If the requirements of Company Act and/or Accounting Standards are different from that of Revised Schedule VI, what is the treatment to be given? If requirements of a regulatory authority like RBI are different from that of Revised Schedule VI, what treatment should be given? Para 4.1.1 of the Revised Schedule VI necessitates that if compliance with the requirements of the Act and/or accounting standards requires a change in the treatment or disclosure in the financial statements, the requirements of the Act and/or accounting standards will prevail over the Schedule VI. As per the general instruction for preparation of the balance sheet, the regulatory authority requirements that override Schedule VI and Schedule VI shall automatically stand modified to that extent. 2. A company is preparing its financial statements in accordance with the Revised Schedule VI for the first time. For certain information required to be disclosed in the notes, the current year amounts are nil. For example, let us assume that there is no default in repayment of loan and interest existing as at the end of current year. Is the company required to present previous year figures for such notes? Alternatively, can it omit the previous year information since no disclosure is required in the current year? Revised Schedule VI requires that “Except in the case of the first financial statements laid before the company (after its incorporation), the corresponding amounts (comparatives) for the immediately preceding reporting period for all item s shown in the financial statements including notes shall also be given.” The objective of presenting comparative information is to help users of financial statements in understanding the trends and key changes vis-à-vis the previous period financial statements. The inter-period comparability of information assists users in taking their economic decisions. Hence, a company needs to present comparative information for disclosures required under Revised Schedule VI even if their current period amount is nil. 3. Can a company prepare abridged financial statem ents (AFS) in accordance with the Revised Schedule VI? Companies, where they are permitted / allowed to publish abridged financial statements, are not precluded from doing so using the format recently prescribed for this purpose. 4. A company having a December year-end will prepare its first Revised Schedule VI financial statements for statutory purposes for the period 1 January to 31 December 2012. Should such a company prepare its tax financial statements for the period from 1 April 2011 to 31 March 2012 in accordance with Revised Schedule VI or pre-Revised Schedule VI? It is only proper that accounts for tax filing purposes are also prepared in the Revised Schedule VI format for the year ended 31 M arch 2012. 5. According to the M CA circular, presentation of financial statements for the limited purpose of IPO / FPO during the financial year 2011–12 may be made in the pre-Revised Schedule VI format. However, for periods beyond 31 March 2012, they need to present financial statements only in the Revised Schedule VI format. This gives rise to the following questions: (a) A company having 31 March year-end is going for IPO/FPO in May 2012. In the offer document, it will include restated financial information for the period ending 31 January 2012. Can it prepare the said financial information using pre-Revised Schedule VI format? (b) A company having 31 December year-end is going for IPO /FPO in September 2012 and its IPO process is expected to close by 30 November 2012. In the offer document, it will include restated financial information for the stub-period ending 30 June 2012. Can it prepare the said financial information using the pre-Revised Schedule VI format? (c) Also, for inclusion in Qualified Institutional Placement (QIP) document, is a company required to prepare its financial statements in accordance with Revised Schedule VI? As explained in the Circular dated 5 September 2011, the one-time exemption is available only if the IPO / FPO gets closed before 31 March 2012. For any IPO/ FPO, which will get closed after 31 March 2012, the company will prepare its restated financial information in accordance with Revised Schedule VI, irrespective of the period for which the information is being included in the offer document. 6. Revised Schedule VI requires a balance to be maintained between excessive detail and too much aggregation. Can a company use this principle to avoid giving disclosures specifically required by Revised Schedule VI / Guidance Note on the Revised Schedule VI, say, security details for each loan? A company should not use this principle to avoid making material disclosures, which are specifically required under Revised Schedule VI, accounting standards, guidance notes and so on. Since disclosure regarding security for each loan is required by Revised Schedule VI and Guidance Note on the Revised Schedule VI, a company cannot avoid making this disclosure. 7. Any clarification, which is not covered or sufficiently covered in Accounting Standards or Revised Schedule VI, can it be referred to as in IND AS? Reference can be made only to such material, which is official and recognised. Thus, clarification may have to be sought in this regard within the framework of the Companies Act, Accounting Standards, Revised Schedule VI and ICAI publications. CLASSIFICATION 8. If during the lean period, there is some activity being carried out by the company, which is not in its normal course of business, and there is a receivable or outstanding from such activity, is it considered as “Trade Receivable”? If the receivables arise out of sale of materials or rendering of services in the normal course of business, it should be treated as trade receivables. Otherwise, it is treated as other assets. 9. In accordance with Guidance Note on the Revised Schedule VI, a payable is classified as “trade payable” if it pertains to amount due towards goods purchased or services received in the normal course of business. Based on this principle, can a company include in trade payables the liability towards employees, leases or other contractual liabilities? What is the treatment for amounts due towards capital goods purchased? Paragraph 8.4.1 of Guidance Note on the Revised Schedule VI provides the following information with regard to identification of trade payables: “A payable shall be classified as trade payable if it is in respect of amount due on account of goods purchased or services received in the normal course of business. As per the old Schedule VI, the term sundry creditors included amounts due in respect of goods purchased or services received or in respect of other contractual obligations as well. Hence, amounts due under contractual obligations can no longer be included within trade payables and only commercial dues can be included under trade payables. Amounts due towards purchase of capital goods should also not be included in trade payables. They must be disclosed under other current liabilities with a suitable description. 10. What is the meaning of “for the purpose of being traded”? Does it mean those directly related to the operating activity? It should be considered as related to the normal operating business activity of the entity. 11. Should a company classify the following items as other operating revenue or other income? - Liability written back (net) - Insurance claim - Bad debts recovery (net) If a company needs to classify one or more of these line items as “other income,” should these items be included under the line “other non-operating Income” or presented as a separate line item in the “other income” note? Whether an item should be classified as “other operating revenue” or “other income” is a matter of judgment and requires consideration of specific facts. In a number of cases, the dividing line between these two items may be very blur. It requires an exercise of significant judgment. 12. What is the definition of “Related Party”? Would the definition from the Accounting Standard prevail as the Companies Act does not have any definition of “Related Party” and has only “Relatives” defined u/s 6? As per para 4.1.1 of Guidance Note on the Revised Schedule VI, Accounting Standards will override Schedule VI and hence, related party shall be as defined in the Accounting Standard. 13. The Revised Schedule VI provides that in the ‘Statement of Profit and Loss’, the head “Other Income” includes interest income under which “Interest from customers on amounts overdue” is specifically included. However, under AS 17 (segment reporting – refer to “FAQ’ published on AS 17), the same is treated as Operating Income and not as Other Income. Then, should interest income from customers on amounts overdue instead be classified under other operating income? Accounting Standards override Schedule VI. In AS 17, segment reporting, particularly interest income and interest expense is not treated as segment revenue. Further, Revised Schedule VI has specifically included interest income as operating income for finance companies. Also, in specific cases of industries (such as power generation); interest could be part of the operating income as this also forms the basis for tariff setting. In case of a manufacturing company, normally, interest income is not material and business is not done with an aim of earning interest. Practically, it is generally difficult to enforce the interest clause even though it is normally contained in all cases. Based on materiality and provisions in AS 17, the interest income on overdue outstanding is not an operating income. However, if a company, on the facts of its own case, determines that it would be appropriate to treat is as an operating income, it would have to disclose it as an accounting policy, if material. 14. If a third party gives a personal security for any borrowings and creates, by means of a legal deed, a charge on the assets held by such third party, can such borrowings be described as ’secured’ instead of ’unsecured’? If the deed properly conveys a security, it can be suitably disclosed in the terms of the loan. However, the loan itself is disclosed under unsecured loan because the assets of the company are not provided as a security for the loan. CURRENT VS NON-CURRENT CLASSIFICATION 15. A company has classified the loan as non-current liability in the previous year. The loan becomes a current liability in the current year’s financial statements. Is the company required to reclassify the loan as current liability in previous year also to match the current year classification? Current / non-current classification of assets / liabilities is determined on a particular date, viz., the balance sheet date. Thus, the company should have determined the current / non-current classification of previous year balances based on the position existing as at the end of the previous year. If there is any change in the position at the end of current year resulting in different classification of assets / liabilities in the current year, it will not impact the classification made in the previous year. In other words, the company will continue to classify the loan as non-current liability in the figures of the previous period. 16. A company is preparing its financial statements in accordance with Revised Schedule VI for the first time. W hen identifying current / non-current assets / liabilities at the end of previous year, can a company apply hindsight based on the development that happened in the current year? Current / non-current classification of assets / liabilities is determined on a particular date, viz., the balance sheet date. If there is any new development in the current period, it should not impact the classification of assets and liabilities for the previous year. Hence, a company is not allowed to use hindsight in arriving at the current / non-current classification of assets or liabilities at the end of previous year. However, in our view, it is important to distinguish from hindsight the facts existing at the previous balance sheet date. In certain cases, the events happening in the current period may not be new developments. Rather, they m ay merely be an additional evidence of conditions existing as at the previous year balance sheet. Obviously, these events need to be incorporated in arriving at current / non-current classification of assets or liabilities at the end of previous year. In many cases, identification of the two events separately may not be straightforward and would require exercise of significant judgment. 17. How should “fixed assets held for sale” be classified in the balance sheet? They should be classified as a current asset since the intent of the company to sell is established. 18. How will a company classify its investment in preference shares, which are convertible into equity shares within one year from the balance sheet date? Will it classify the investment as a current asset or a non-current asset? In accordance with the Revised Schedule VI, an investment realisable within 12 months from the reporting date is classified as a current asset. Such realisation should be in the form of cash or cash equivalents, rather than through conversion of one asset into another non-current asset. Hence, the company must classify such an investment as a non-current asset, unless it expects to sell the preference shares or the equity shares on conversion and realise cash within 12 months. 19. Revised Schedule VI requires that a company present trade receivables in the following format: Trade receivable Secured, considered good XX,XXX Unsecured, considered good XX,XXX Doubtful X,XXX Total XX,XXX Less: Provision for bad and doubtful debts X,XXX Trade receivables XX,XXX A company needs to disclose trade receivables under “current” and “non-current” assets depending on the Revised Schedule VI criteria. Should the company divide the “provision for bad and doubtful debts” also on the same basis? Yes. 20. How should a slow moving stock of stores and spares be classified when it will neither be consumed within the normal operating cycle nor will be sold within 12 months from the balance sheet date? Inventory should always be categorised as a current asset. 21. There is a breach of a major debt covenant as on the balance sheet date related to long-term borrowing. This allows the lender to demand im mediate repayment of loan. However, the lender has not demanded repayment till authorisation of financial statements for issue. Can the company continue to classify the loan as non-current? Will the classification be different if the lender has waived the breach before authorisation of financial statements for issue? As per the Guidance Note on the Revised Schedule VI, a breach is considered to impact the non-current nature of the loan only if the loan has been irrevocably recalled. Hence, in the Indian context, long-term loans, which have a minor or major breach in terms, will be considered as current only if the loans have been irrevocably recalled before authorisation of the financial statements for issue. 22. What will be the scenario if a long-term loan has been classified as a non-performing asset by the bank / financial institution? Can it still be classified as non-current? The situation in case of a loan being classified as a non-performing asset will also be the same as the case of a performing asset. The essential ingredient to impair the long-term nature of the loan would be irrevocable recall of the loan by the lender. 23. How would a rollover / refinance arrangement entered for a loan, which was otherwise required to be repaid in six months, impact current / non-current classification of the loan? Consider three scenarios: (a) Rollover is with the same lender on the same terms, (b) Rollover is with the same lender but on substantially different terms, and (c) Rollover is with a different lender on similar / different terms. In general, the classification of the loan will be based on the tenure of the loan. Thus, in all the above cases, if the original term of the loan is short term, the loan would be treated as only current, irrespective of the rollover / refinance arrangem ent. However, in exceptional cases, there may be a need to apply significant judgment on substance over form . In such cases, categorisation could vary as appropriate. 24. A company has taken a three-year loan specifically for a business whose operating cycle is four years. Hence, it needs to classify the three-year loan as current liability. This gives rise to the following issues: (a) Should the loan be classified in the balance sheet under the head “long-term borrowing”, “short-term borrowing” or “current maturities of long-term debt”? (b) Does the company need to make all the disclosures required for long-term borrowings for this loan also? Any borrowing whose repayment falls within the operating cycle will be only a current liability. Hence, it will be included under short-term borrowings. Disclosures will also be required accordingly. 25. Fixed deposits have a maturity of more than 12 months from the balance sheet date. Will they be classified as current or non-current? They will be classified as non-current. 26. In case there is lien over FDs, thereby making it impossible to convert them into cash before the agreed period, how will the FDs be presented in the balance sheet? Moreover, will the interest accrued over such FDs be also classified as current and non-current? Such fixed deposits will be coterminous with the liability. Current or non-current distinction will be applied based on the expectation to be realised within 12 months after the reporting date. Interest accrued on such deposit will also be treated on the same basis. 27. The company has received security deposit from its customers / dealers. The company or the customer / dealer can terminate the agreement by giving two month’s notice. The deposits are refundable within one month of termination. However, based on past experience, it is noted that deposits refunded in a year are not material, with 1% to 2% of the amount outstanding. The intention of the company is to continue long-term relationship with its customers /dealers. Can the company classify such security deposits as non-current liability? As per Revised Schedule VI, a liability is classified as current if the company does not have an unconditional right to defer its settlement for at least 12 months after the reporting date. This will apply generally. However, in specific cases, based on the commercial practice, say for example electricity deposit collected by the department, though stated on paper to be payable on demand, the company’s records would show otherwise as these are generally not claimed in short term . Treating them as non-current m ay be appropriate and m ay have to be considered accordingly. A similar criterion will apply to other deposits received, for example, under cancellable leases. 28. The company has taken premises on operating leases for which it has paid a security deposit to the lessor. The lease term is five years. However, both parties can terminate the agreement after giving a three months’ notice. The deposits are refundable immediately on termination of agreement. The intention of the company is to continue the lease agreement for 5 years. Further, the company has taken electricity connection for which it has paid security deposits. These deposits are repayable on demand on surrender of the electricity connection. Can the company classify these security deposits as current assets? Classification of deposits paid depends on the expectation of its realisation. Hence, a company will classify lease / electricity deposits given as a non-current asset, unless it expects to recover the same within 12 months after the reporting date, that is, by cancelling the lease contract or surrendering the electricity connection. 29. For funded defined benefit plans, Guidance Note on the Revised Schedule VI requires that amount due for payment to the fund within next 12 months be treated as current liability. Since a company will also recognise service cost in the next year, how should it determine the component of net deficit in the fund to be classified as current liability? For example, deficit is 500 and the LIC is expected to demand a payout of 300 in the next year. The expected cost for the next year is 200. Current / non-current classification will depend on the relevant provisions of the Contract Act and Arrangement with LIC. If the LIC demand is known, then that portion will be reflected as a current liability. If the actuarial valuation is higher, then the difference between the actuarial valuation and the LIC demand will be treated as a long-term provision. 30. In case of Provision for Gratuity and Leave Encashment, can current and non-current portions be bifurcated on the basis of Actuarial valuation? The actuary should be specifically requested to indicate the current and non-current portions, based on which the disclosure is to be made. 31. Guidance Note on the Revised Schedule VI requires deferred tax assets / liabilities to be classified as non-current. Does it imply that the provision for tax (net of advance tax) / advance tax (net of provision) also be classified as non-current? Current year tax provision (net of advance tax) will generally be treated as current liability, as this will become due in the short term. Current year advance tax (net of provision) as well as past year’s advance tax (net of provision) shall generally be classified as non-current as these are not likely to arise in the short term. Advance tax against which refund orders have been passed, and if not adjusted towards other liabilities, will only be treated as a current asset. 32. The Reserve Bank of India (RBI), vide its notification No. DNBS.223/CGM (US)-2011 dated 17 January 2011, has issued directions to all NBFCs to make a provision of 0.25% on standard assets. The RBI requires this provision to be shown as a liability and not netted from loan balance. Will the NBFC have to split the provision into “current” and “non-current” portions? An NBFC creates provision on the standard assets at the rate prescribed by RBI. In accordance with the Revised Schedule VI, it will classify these standard assets into current and non-current portions. Since the provision is closely linked to the underlying asset, we believe that an NBFC should split the standard asset provision also into current and non-current portions by using the same criterion. 33. The issue is whether NCI (Minority Interest) must be broken up and classified as current and non-current. To the extent of the share of provision of dividend to subsidiary, should it be current? The non-controlling interest is not subject to current and non-current distinction as it forms a part of the shareholders’ funds. OPERATING CYCLE 34. Should an operating cycle be disclosed? Yes. As a matter of best practice, a company may disclose the same, especially if the same is more than 12 months. This disclosure will be particularly helpful to the users of financial statements, where determination of the operating cycle involves significant judgment and it is more than 12 months. 35. Should the operating cycle be calculated for each item separately, say for debtors, inventory or for the company as a whole? Operating cycle should not be considered for each component separately but, at the same time, it may not be so for the company as a whole. It will have to be calculated for each business line separately. 36. Is the operating cycle to be considered customer wise, especially where a large customer is provided a significantly different credit period? The Revised Schedule VI and the Guidance Note on the Revised Schedule VI contemplates the company to identify its operating cycle for each of its businesses and not based on each of its customers. Hence, the operating cycle must be defined in terms of each business. 37. What will be the basis for determining the operating cycle, where say the private sector clients and government sector clients have a significantly different credit period? Can the operating cycle be determined on the basis of customer category? The Revised Schedule VI and the Guidance Note on the Revised Schedule VI contemplates that the company identify its operating cycle for each of its business and not based on each customer. Hence, the operating cycle must be defined in terms of each business and not customer category wise. The company needs to suitably determine the normal operating cycle for the business considering the significance of the different credit periods, among other matters. 38. Is the lead-time for procuring raw material (time taken by the supplier from the order to delivery) included in the operating cycle? Operating cycle of a business should comprise the normal time required to complete its processes of (i) Acquiring raw material, (ii) Processing the same into finished goods, (iii) Making the sale, and (iv) Realising the sale proceeds in cash. Hence, in the given case, the norm al lead-time to acquire raw material should be included in determining the operating cycle. 39. Is the credit period allowed by supplier reduced when determining the operating cycle? In accordance with the Revised Schedule VI, operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. This suggests that the operating cycle should comprise the normal time spent on various activities, starting from purchase of raw material till realisation of cash and there is no need to reduce the credit period allowed by supplier from the same. Further, though the company has not paid for the raw material during the first six months, it m ight have started incurring expenses on other item s such as labour and overhead costs. Hence, the credit period allowed by the supplier need not be reduced when determining the operating cycle. CASH FLOW STATEMENT 40. How will the Revised Schedule VI impact presentation of the cash flow statement? The following key issues need to be specifically considered for this: (i) Revised Schedule VI requires presentation of lines items, either on face or in the notes, which are different vis-à-vis those required under pre-Revised Schedule VI. For example, Revised Schedule VI requires presentation of trade receivables as against sundry debtors required by pre-Revised Schedule VI. Is it mandatory for a company to present revised line items in the cash flow statement also? (ii) As part of working capital movement, is it mandatory to present a separate movement for current and non-current components? For example, a company has segregated trade receivables into current and non-current components based on the Revised Schedule VI criteria. Is it mandatory for the company to disclose movement in current and non-current trade receivables separately? (iii) As part of investing and financing activities, is a company required to present cash inflows and outflows separately for current and non-current items? For example, a company has taken a loan of 10,00,000. Out of this, 8,00,000 is classified as non-current liability and 2,00,000 is current liability. Is it mandatory for the company to disclose inflow from the current and non-current component of loan separately? The line items / headings used in cash flow statement should be in sync with those used in other parts of the financial statements. In accordance with Guidance Note on the Revised Schedule VI, the terms “trade receivables” and “sundry debtors” can have different meanings. Hence, a company cannot present trade receivables in the balance sheet and show movement in “sundry debtors” in cash flow statement. The cash flow statement should also refer to them as trade receivables. With respect to the issues (ii) and (iii), AS 3 Cash Flow Statements does not mandate such presentation. Nor is such presentation required in Revised Schedule VI or Guidance Note on the Revised Schedule VI. Hence, it is not mandatory for a company to present separate movement / inflows and outflows from current and non-current components of various line items separately. OTHER DISCLOSURES 41. A company has a single class of equity shares. Is the company still required to disclose rights, restrictions and preferences with respect to the same? Revised Schedule VI requires disclosures of rights, preferences and restrictions attached to each class of shares. If a company has only one class of equity shares, it is still required to make this disclosure.
Posted date: 2012-05-24

SEBI notifies SEBI (Alternative Investment Funds) Regulations 2012
SEBI notifies SEBI (Alternative Investment Funds) Regulations 2012 1. The SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”) have been notified today. The AIF Regulations are available on the SEBI website http://www.sebi.gov.in/ 2. AIFs Regulations endeavour to extend the perimeter of regulation to unregulated funds with a view to systemic stability, increasing market efficiency, encouraging formation of new capital and consumer protection. Salient features of the AIF Regulations, inter alia, include the following: Scope of the Regulations and applicability to existing funds a. All AIFs whether operating as Private Equity Funds, Real Estate Funds, Hedge Funds, etc. must register with SEBI under the AIF Regulations. b. SEBI (Venture Capital Funds) Regulations, 1996 (“VCF Regulations”) have been repealed. However, existing VCFs shall continue to be regulated by the VCF Regulations till the existing fund or scheme managed by the fund is wound up. Existing VCFs, however, shall not increase the targeted corpus of the fund or scheme as it stands on the day of Notification of these Regulations. Such VCFs may also seek re-registration under AIF regulations subject to approval of 66.67% of their investors by value. c. Existing funds not registered under the VCF Regulations will not be allowed to float any new scheme without registration under AIF Regulations. However, schemes floated by such funds before coming into force of AIF Regulations, shall be allowed to continue to be governed till maturity by the contractual terms, except that no rollover/ extension or raising of any fresh funds shall be allowed. d. Existing funds not registered under the VCF Regulations which seek registration but are not able to comply with all provisions of AIF Regulations may seek exemption from the Board from strict compliance with the AIF Regulations. Categories of funds The Regulation seeks to cover all types of funds broadly under 3 categories. An application can be made to SEBI for registration as an AIF under one of the following 3 categories:- i. Category I AIF – those AIFs with positive spillover effects on the economy, for which certain incentives or concessions might be considered by SEBI or Government of India or other regulators in India; and which shall include Venture Capital Funds, SME Funds, Social Venture Funds, Infrastructure Funds and such other Alternative Investment Funds as may be specified. These funds shall be close ended, shall not engage in leverage and shall follow investment restrictions as prescribed for each category. Investment restrictions for VCFs are similar to restrictions in the existing VCF Regulations. ii. Category II AIF – those AIFs for which no specific incentives or concessions are given by the government or any other Regulator; which shall not undertake leverage other than to meet day-to-day operational requirements as permitted in these Regulations; and which shall include Private Equity Funds, Debt Funds, Fund of Funds and such other funds that are not classified as category I or III. These funds shall be close ended, shall not engage in leverage and have no other investment restrictions. iii. Category III AIF – those AIFs including hedge funds which trade with a view to make short term returns; which employs diverse or complex trading strategies and may employ leverage including through investment in listed or unlisted derivatives. These funds can be open ended or close ended. Category III funds shall be regulated through issuance of directions regarding areas such as operational standards, conduct of business rules, prudential requirements, and restrictions on redemption, conflict of interest as may be specified by the Board. Other salient features a. The Alternative Investment Fund shall not accept from an investor an investment of value less than rupees one crore. Further, the AIF shall have a minimum corpus of Rs. 20 crore. b. The fund or any scheme of the fund shall not have more than 1000 investors. c. The manager or sponsor for a Category I and II AIF shall have a continuing interest in the AIF of not less than 2.5% of the initial corpus or Rs.5 crore whichever is lower and such interest shall not be through the waiver of management fees. d. For Category III Alternative Investment Fund, the continuing interest shall be not less that 5% of the corpus or rupees ten crore, whichever is lower. e. Category I and II AIFs shall be close-ended and shall have a minimum tenure of 3 years. However, Category III AIF may either be close-ended or open-ended. f. Schemes may be launched under an AIF subject to filing of information memorandum with the Board along with applicable fees. g. Units of AIF may be listed on stock exchange subject to a minimum tradable lot of rupees one crore. However, AIF shall not raise funds through Stock Exchange mechanism. h. Category I and II AIFs shall not be permitted to invest more than 25% of the investible funds in one Investee Company. Category III AIFs shall invest not more than 10% of the corpus in one Investee Company. i. AIF shall not invest in associates except with the approval of 75% of investors by value of their investment in the Alternative Investment Fund. j. All AIFs shall have QIB status as per SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. k. The Regulations provide for transparency and disclosures and mechanism for avoidance of conflict of interest. Mumbai May 21, 2012
Posted date: 2012-05-24

Time Table for June 2012 Attempt uploaded
Time Table for June 2012 Attempt for Conceptage Professional Classes uploaded.
Posted date: 2012-05-09

Law Foundation
6th April, 2012, Sunday, Lectures at 10.30 am of Law, CS Foundation for December 2012 Attempt.
Posted date: 2012-05-04

GCL Lectures
5th April, 2012, Saturday Lectures at 7.45 pm of GCL, CS Inter Group 1 for December 2012 Attempt.
Posted date: 2012-05-04

Introduction lectures for CS & CWA for December 2012 attempt
Dear All, ConceptAge Professional classes has conducted it\'s 4th Batch Introduction lecture today at 10.00 am.
Posted date: 2012-04-08

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