CIRCULAR NO. DBOD. NO.BC.NO. 95/29.39.001/2010-11, DATED 23-5-2011 It has been decided to partially modify the format of ‘Declaration and Undertaking’ prescribed for the purpose of conducting due diligence to determine the ‘fit and proper’ status of directors, incorporating an explanatory note against Column (IV)(g) of the said format which is given in Annex 1. Henceforth, banks should use the revised format for obtaining declaration and undertaking from existing directors as well as the person to be appointed/elected as director.
General Circular No. 30A/2011 Under section 226 (3) (a) of the Companies Act, 1956 (Act) a ‘body corporate’ is disqualified from being appointed as an auditor of a company, which means that LLP of Chartered Accountants is thereby disqualified from being appointed as auditors. To remove this anomaly, MCA has issued Notification No. S.O.1152(E) dated 23 May 2011 along with Circular No. 30A dated 26 May 2011 wherein LLP has not been recognized as ‘Body Corporate’ for the purpose of appointment as ‘Auditor’ under Section 226 of the Act. Accordingly, an LLP of Chartered Accountants will be eligible to be appointed as auditor of a company.
Central Government specifies LLP as a body corporate for the limited purpose of section 226 (3) (a) which deals with appointment of auditors vide notification dated 23.05.2011.The notification given clarifies that LLP will not be treated as body corporate for the purpose of f section 226(3)(a) of the Companies Act 1956 which is related to appointment of statutory auditor and put restriction on appointment of body Corporate as statutory auditor. The circular paves the way for appointment of LLP as statutory auditor of the company. It is to be noted that MCA has already allowed the CA/CS/CWA to practice under LLP in partnership with other fellow members of same institute and in case of CS, also with members of such recognized profession as may be prescribed.
Circular 30/2011 Sections 108A to 1081 of the Companies Act, 1956 were inserted in the Companies Act, 1956 through Monopolies and Restrictive Trade Practices (Amendment) Act, 1991. Section 108G (applicability of sections 108A to 108F) and Section 108H (construction of certain expressions used in sections 108A to 108G) of Companies Act, 1956 refer to applicability of provisions of sections 108A to 108F in reference to various requirements under the MRTP Act, 1969.
US market regulator SEC has asked IT major Wipro to prove independence of its auditor KPMG India, failing which the company may have to appoint new auditors or get its business books audited again. “We have received a voluntary document request from the SEC’s Division of Enforcement. The document request includes, among other things, issues relating to auditor independence,” Wipro said in a regulatory filing with the SEC.
The Supreme Court ruled last week that a mortgagor can file suits for redemption so long as the mortgage subsists. Dismissal of an earlier suit for redemption would not bar the mortgagor from filing a second such suit, the court held in the case, L K Trust vs EDC Ltd. In this case, Falcon Retreat Ltd took a loan from the Goa Government-owned investment company, EDC Ltd by mortgaging its property for a hotel project.
The Supreme Court has upheld the Delhi high court ruling and dismissed the appeal of Larsen & Toubro in its lost bid for fast patrol vessels for the Indian Coast Guard. The government sent request for proposal to several parties, and L & T claimed its bid was the lowest. However, in its commercial and technical bids, it declared its intention to claim the benefit of ‘foreign exchange rate variation benefit’, without specifying which currency was the basis of the foreign exchange component. Larsen and Toubro Ltd. & ANR. Vs. Union of India & Ors.
M/s Hans Steel Rolling Mill Versus Commnr. of Central Excise, Chandigarh – (SUPREME COURT OF INDIA ) – Recovery of amount due under compounded levy scheme – application of period of limitation – Section 11A of the Central Excise Act, 1944 – Held that: – In the case of Collector of Central Excise, Jaipur V. Raghuvar (India) Ltd as reported in (2000 -TMI – 45411 – SUPREME COURT OF INDIA), this court has categorically stated that Section 11A of the Act is not an omnibus provision which stipulates limitation for every kind of action to be taken under the Act or Rules. An example can be drawn with the Modvat Scheme, because even in that particular scheme, Section 11A of the Act had no application with regard to time limit in the administration of that scheme.
The International Monetary Fund’s selection process for a new managing director will kick off with nominations on Monday,and the final decision expected by June 30, the institution has said. I am very pleased to announce that the Fund’s Executive Board has adopted a procedure that allows the selection of the next managing director to take place in an open, merit-based, and transparent manner, A Shakour Shaalan, dean of the IMF executive board, said in a statement late yesterday.
The Income-Tax Department has started scrutinising over 6.5 lakh demat accounts, which were frozen following 2006 IPO scam, to see if blackmoney was used to purchase equities by persons through multiple accounts. Investigation and intelligence wings have started looking into the frozen accounts with substantial amounts lying in them to see if they are linked, a revenue official said.
