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.
Presently, ROC issues a number of certificates and standard letters physically, under the manual signature. Such certificates and standard letters would now be issued with digital signature of ROC. The digital certificates are expected to be available for issue by 30 June 2011, in a phased manner.
MCA has permitted use of video conference facility for Board / Committee meetings subject to following conditions: 1. The facility shall be capable of allowing all participants to communicate concurrently with each other without any intermediary; Every director must attend at least one Board / Committee meeting personally in each financial year; 2. Notice of Meeting should provide for the availability of the facility and necessary information to access the same;
MCA has permitted the use of video conference facility for shareholders’ meeting subject to following conditions: The facility shall be capable of allowing all participants to communicate concurrently with each other without any intermediary; Notice of Meeting should provide for the availability of the facility and necessary information to access the same; The requirement of Chairman and members being personally present would continue; Chairman and Secretary are responsible for integrity, proper functioning of the meeting and ensure participation by the shareholder himself / proxy (i.e. no other person except shareholder / proxy can attend such meeting);
A.P. (DIR Series) Circular No. 68 – It has been decided that for Initial Public Offers(IPO) related transient capital flows under the Application Supported by Blocked Amount(ASBA) mechanism, foreign currency-rupee swaps may be permitted to the FIIs subject to the following terms and conditions:
A. P. (DIR Series) Circular No. 67 – Currently, in terms of Section C (i) (d) of the A. P. (DIR Series) Circular No. 32 dated December 28, 2010, Foreign Institutional Investors (FIIs) are permitted to cancel and rebook upto two percent of the market value of the portfolio as at the beginning of the financial year. On a review, it has been decided to enhance the existing limit of two per cent as above to ten per cent with immediate effect. Other operational guidelines as also terms and conditions of the circular shall remain unchanged.
Please refer to our A.P.(DIR Series) Circular No.52 [A.P.(FL/RL Series) Circular No. 14], dated April 6, 2011 forwarding the Financial Action Task Force (FATF) Statement identifying a list of jurisdictions which have strategic AML/CFT deficiencies. Financial Action Task Force (FATF) has further issued a Statement on February 25, 2011 (copy enclosed) calling upon jurisdictions listed in the Statement to complete the implementation of their action plan within timeframe. The FATF, in the Statement has called upon its members to consider the information given in the Statement.
