Final 2803.pptx

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Overview of Year

End Compliances under Companies

Act,2013

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INDE

1! "inancial #tatements

2! Deprecation

3! Dividend

$! Audit % Auditor&s 'eport

(! 'elated )art* +ransactions! -oans % Investments

.! Acceptance of Deposits

/! Corporate #ocial 'esponsiilit*

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Financial Statements

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FINANCIAL STATEMENTS…

+e term "inancial #tatements as een de4ned in te

Companies Act 2013 u5s 26$0! to include te followin78alance #eet at te end of 4nancial *ear

#tatement of )ro4t % -oss for te 4nancial *ear

Cash Flow statement 6not mandator* for small companies,O)Cs % Dormant companies! for te 4nancial *ear

#tatement of Can7es in e9uit*, if applicaleE:planator* statement Note anne:ed to % formin7 part of

"inancial statements;

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FINANCIAL STATEMENTS…Impact: Cas "low #tatement wic was not mandator* for #

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CONSOLIDATED FINANCIALSTATEMENTS….

As per section 129(3) of te Companies Act, 2013 ,te preparation of Consolidated "inancial #tatementsis made mandator* for all te companies wo aveone or more susidiaries

"rom te purpose of consolidation, de4nition ofsusidiar* compan* includes a @oint venture andassociate; >ence all te companies would re9uire toprepare C"# if te* ave an associate or @oint ventureas per A#23 and A#2. respectivel*;

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CONSOLIDATED FINANCIALSTATEMENTS….

E:emptions from consolidation are 7iven for "Y 201$

1( * amendment in 'ule of +e Companies6Accounts! 'ules,201$

6Noti4cation dated Banuar* 1, 201(!

1! In case of Compan* avin7 onl* forei7n #usidiaries 2) In case of Companies wic ave onl* one or more

associate companies or @oint ventures

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CONSOLIDATED FINANCIALSTATEMENTS…. )ursuant to 4rst proviso to section 1263! read wit rule

( of Companies 6Accounts! 'ules, 201$, a statementcontainin7 salient features of "# ofsusidiaries5associate companies5Boint venture in formAOC1 sould e attaced alon7 wit te "#;

It is furter clari4ed * 7eneral circular no 35201$ ,

tat #cedule III to te Act read wit A#21,23 % 2., inC"#, onl* te compan* would need to 7ive alldisclosures relevant for C"# onl* % does not envisa7e

tat a compan* wile preparin7 its C"# merel* repeatste disclosures made * it under standalone accountsein7 consolidated;

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A -td; >oldin7Compan*

8-td;

D INC F#A

C-td;

"

-td;

G INC

F#A +e re9uirement of preparin7 C"# at te intermediate oldin7 compan*

level arises from noti4cation dated 1$t Octoer,201$ wic providestat if te immediate parent of woll* owned susidiar* is incorporatedoutside India, C"# is not re9uired

A -td; to prepare C"# inclusive of 8 -td; ,C -td; and D -td;

8 -td; to prepare C"# inclusive of 8 -td; and " -td; D INC not re9uired to prepare C"# ein7 forei7n susidiar*

CONSOLIDATION AT INTERMEDIATELEVEL

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Depreciation

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OVERVIEW OF THE PROVISION1; #tructure of #cedule II of te Companies Act, 2013

2; #i7ni4cant can7es, oter tan rates, as compared to

#cedule IH of te Companies Act, 1(

3; Comparison of rates 5 useful lives etween #cedule IH of

Companies Act, 2013 and #cedule II of Companies Act, 2013

$; or?in7 of depreciation rate trou7 e:cel(; +ransitional provisions were useful life as per #cedule II is

over

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;+ransitional provisions were useful life as per #cedule II is

not *et over

.;Information re9uired for calculation of depreciation as per

#cedule II

/;Disclosure were useful life or residual value is diJerentfrom useful life speci4ed in #cedule II

;Oter aspects EJect on deferred ta:, impact on

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STRUCTURE OF SCHEDULE II OF THECOMPANIES ACT, 2013

Part A

De4nition of depreciation and it also includes amortiKation;

Fseful life of an assets sall not ordinaril* e diJerent from

te useful life speci4ed and residual value sall not e more

tan (L of ori7inal cost

If diJerent from aove tan disclose the diference and

provide justication supported by technical evidence

"or intan7ile assets, provisions of A# will appl*

E:cept in case of intan7ile assets 6+oll 'oads! created under8O+, 8OO+ amortiKation metod is prescried

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Part B

'e7ulator* Autorit* constituted under an Act of )arliament

or Central Government noti4es useful life or residual value

for accountin7 purpose, ten suc provision sall e applied;


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Part Ca;Fseful life of various assets

;Fseful life of industry specic special plant and maciner*

c;Notes

1;"actor* uildin7 does not include oMces, 7odowns and

staJ 9uarters

2;)rorata asis depreciation sould e calculated foradditions 5 deletions of assets

3;Information to e disclosed depreciation metod and

useful life of assets if it is diJerent from life speci4ed


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$;Fseful life speci4ed for te wole assets and were cost of

a part of assets is si7ni4cant to total cost of assets anduseful life of tat part is diJerent from useful life ofremainin7 assets, ten useful life of tat part sall edetermined separatel*; This requirement is voluntaryor the nancial year 2!" # !$ and mandatory rom

%&'& 2!$ # !( onards;

(;Fseful life of assets wor?in7 on sift asis as eenspeci4ed ased on sin7le sift e:cept for assets in respectof wic no e:tra sift depreciation is permitted indicated* NE#D; * an asset is used or any time or double

shit+ the deprecation ill increase by $, or thatperiod and in case o triple shit depreciation shallbe calculated on the basis o !, or that period;


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;"rom te date tis #cedule comes into eJect, te carr*in7

amount of te assets as on tat date #all e depreciated over te remainin7 useful life of

te assets as per tis scedule

After retainin7 te residual value, may be reco-ni.edin the openin- balance o retained earnin-s

were remainin7 useful life of an asset is nil;

.;Continuous process plant means a plant wic is re9uiredand desi7ned to operate for twent*four ours a da*;


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EJective date of #cedule II as per noti4cation dated

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SIGNIFICANT CHANGES, OTHER THANRATES, AS COMPARED TO SCHEDULE XIV OF THE COMPANIES ACT, 1956

/r&

0o&As per Companies Act+ !1$( As per Companies Act+ 2!

1 'ates speci4ed consideredas minimum rates;

Depreciation cannot eprovided less tan ratesspeci4ed;

Option is availale;Depreciation can e provided

for lon7er tan useful lifespeci4ed in te #cedule II;

2 No reference of residualvalue in te #cedule; (L

of residual value as per te#ection 20( of te Act fordividend pa*ment;

'eference of residual valuein te #cedule; 'esidual

value can e considered upto (L; Option is availale ifcompan* wants to considermore tan (L of residualvalue;

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/r&


3 Disclosure of rates or usefullives of assets if te* are

diJerent from te principalrates speci4ed in te#cedule

Disclosure of useful life,provide @usti4cation

supported * tecnicalevidence if it is diJerentfrom te useful life speci4edin te #cedule;

$ No reference of depreciationon component of assets; A# 10, Accountin7 for 4:edassets covers tis aspect;

'eference is 7iven fordepreciation on componentof assets; Optional for tecurrent ";Y; 201$ 1( andmandator* from ";Y; 201(

1 onwards;( 'ates for doule and triple Fseful life as per sin7le sift

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/r&


E:tra depreciation fordoule sift and triple sift

in te proportion of numerof da*s ears to totalnumer of normal wor?in7da*s;

If factor* wor?s on seasonal

asis ten actual da*swor?ed or 1/0 da*s,wicever is 7reater

In oter case, numer ofda*s on wic factor*

wor?ed or 2$0 da*s,wicever is reater;

"or an* time for doule sift,te deprecation will increase

* (0L for tat period and incase of triple siftdepreciation sall ecalculated on te asis of100L for tat period;

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SIGNIFICANT CHANGES, OTHER THANRATES, AS COMPARED TO SCHEDULE XIV OF THE COMPANIES ACT, 1956/r&


/ "or plant and maciner* 7eneralrates and industr* speci4c rates7iven; +ere was nospeci4cation of rates of diJerentplant and maciner* used indiJerent industries;

DiJerent useful lives for 7eneralplant and maciner* as well asindustr* speci4c assets; "orindustr* speci4c assets, plant andmaciner* wise rates are 7ivenrater tan 7eneral rate;

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SIGNIFICANT CHANGES, OTHER THANRATES, AS COMPARED TO SCHEDULE

XIV OF THE COMPANIES ACT, 1956/r&


10 Assets considered as part of)lant and

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• C34PA5*/30 3% 5AT6/ 7 8/6%89 9*:6/ B6T;660 /C*: 3% C34PA0*6/ ACT+ 2! A0= /C

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INFORMATION REUIRED FORCALCULATION OF THE DEPRECIATION

AS PER SCHEDULE II

/

r

0

o

=escr

iption

o

Assets

Purch

ase

date 7

date

on

hichput to

use

Co

st

5s&

Accumul

ated

=epreci

ation up

to

!&&2!"

5s&

;=:

as on

!&"&

2!"

5s&

5esid

ual

:alue

@$,

o

purch

ase

cost)

5s&

6stima

ted

8seul

9ie as

per/ched

ule **

6stimate

d 9ie as

per

4ana-em

ent

5evie

@*

diferent

than )

Peri

od

or

hic

h

asset

used

5emainin

- 9ie o

Assets as

per

4ana-ement

revie

! 2 3 $ ( 6$(!.

/ 1011 6/ or

10!

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DISCLOSURE WHERE USEFUL LIFE ORRESIDUAL VALUE IS DIFFERENT FROMUSEFUL LIFE SPECIFIED IN SCHEDULE

IIDepreciation on tan7ile assets is provided on te strai7tlinemetod over te useful lives of assets estimated * te

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"or tese classes of assets, ased on internal assessment and

independent tecnical evaluation carried out * e:ternal

valuers, te mana7ement elieves tat te useful lives as

7iven aove est represent te period over wic mana7ement

e:pects to use tese assets; >ence te useful lives for tese

assets are diJerent from te useful lives as prescried under

)art C of #cedule II of te Companies Act 2013;

/ourceE *nosys Fuarterly Audited Accounts

DISCLOSURE WHERE USEFUL LIFE ORRESIDUAL VALUE IS DIFFERENT FROMUSEFUL LIFE SPECIFIED IN SCHEDULE

II

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OTHER ASPECTSEJect on deferred ta: as well as on

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a;If eJect of transitional provisions trou7 retained earnin7s's;

Particulars =r& Cr&5etained 6arnin-s @B7s

item)

1$,00,000

=eerred TaD 9iability @B7s

item)

,00,000

Assets A7c @B7s item) 20,00,000

0o impact on 4AT

OTHER ASPECTS

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If eJect of transitional provisions trou7 pro4t and loss statementParticulars =r& Cr&

=epreciation @PG9 item) 20,00,000Assets A7c @B7s item) 20,00,000 =eerred TaD 9iability @B7s

item)

,00,000

=eerred TaD Adjustment @PG9item)

,00,000

*4PACT 30 4AT

OTHER ASPECTS

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6fect o /chedule ** on depreciation ill be chan-e in

method or chan-e in estimatesHAs per A/ # (

+e useful lives of ma@or depreciale assets or classes of

depreciale assets ma* e reviewed periodicall*; ere tere

is a revision of te estimated useful life of an asset, teunamortiKed depreciale amount sould e car7ed over te

revised remainin7 useful life;

OTHER ASPECTS

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OTHER ASPECTS

As per A/ # $ +e nature and amount of a can7e in an accountin7 estimate

wic as a material eJect in te current period, or wic is

e:pected to ave a material eJect in suse9uent periods,

sould e disclosed; If it is impracticale to 9uantif* te

amount, tis fact sould e disclosed;

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Durin7 te 9uarter ended Bune 30, 201$, ased on internal and

e:ternal tecnical evaluation, mana7ement reassessed te

remainin7 useful life of assets, primaril* consistin7 of uildin7s

and computers wit eJect from April 01, 201$; Accordin7l*, te

useful life of certain assets re9uired a can7e from te

previous estimates; If te Compan* ad continued wit tepreviousl* assessed useful lives, car7e for depreciation for te

9uarter ended Bune 30, 201$ would ave een i7er * 's;

12. crore for te assets eld as at April 01, 201$;

OTHER ASPECTS

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Dividend

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DIVIDEND…

As per #ection 123, dividend can e declared or paid

from "ree 'eserves onl*; "ree reserves e:cludes

FnrealiKedGains, NotionalGains %'evaluation ofAssets

"air Halue

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DIVIDEND… Interim Dividend In case, as per 4nancials of last

9uarter compan* is avin7 loss ten, Interim dividend

sall not e i7er tan avera7e dividend declared *te compan* durin7 last tree 4nancial *ears;

Declaration payment o! Dividend

In case of failure to compl* wit te provisions ofacceptance 5repa*ment of pulic deposits prior tote commencement of te Act , compan* cannotdeclare dividend on te E9uit* #ares;

8efore declarin7 dividend compan* ma* transfer suc

percenta7e of its pro4t for te 4nancial *ear as it ma*consider appropriate to reserves;

DIVIDEND IN CASE OF INADEUAC"

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DIVIDEND ! IN CASE OF INADEUAC" #A$SENCE OF PROFITS%

Compan* to compl* Companies 6Declaration % pa*ment of

Dividend! 'ules, 201$;As per su rule 63!

+e rate of dividend declared sall not e:ceed te avera7e ofte rates at wic dividend was declared * it in te tree*ears immediatel* precedin7 tat *ear; >owever, tis

condition sall not appl* to a compan*, wic as notdeclared an* dividend in eac of te tree precedin7 4nancial*ear;

+e total amount to e drawn from suc accumulated pro4tssall

not e:ceed onetent of te paidup sare capital and freereserves

as appearin7 in te latest audited 4nancial statements;

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DIVIDEND ! IN CASE OF INADEUAC" #A$SENCE OF PROFITS%

8efore an* dividend in respect of e9uit* sares is declared,te amount so drawn sall 4rst e utiliKed to set oJ te lossincurred in te 4nancial *ear in wic dividend is declared;

After witdrawal, alance of reserves sall not fall elow 1(Lof paid up sare capital;

Fnless c5f losses and depreciation not provided for are not setoJ, dividend can not to e declared;

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Audit and Auditor’sReport

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APPOINTMENT…

"irst Auditor to e appointed * 8OD witin 30 da*s

from Incorporation wo sall old oMce till conclusionof 4rst AG< if 8OD fails to appoint te auditors,appointment to e made in EG< witin ne:t 0 da*s;

Appointment 5 'eappointment "or 4ve *ears period

'ati4cation at ever* AG

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APPOINTMENT…

Auditor to -ive ritten consent and also to -ivecerticate that appointment ill be in complianceith conditions prescribed in 5ule " and satisescriteria provided in section !"!&

Company to inorm Auditor and 53C about

appointment ithin !$ days o the date o themeetin-&

* at AI4 auditors are not appointed7reappointed+eDistin- auditors ill continue&

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APPOINTMENT OF AUDITORS OF GOVT.COMPAN"

"irst Auditor to e appointed * C%AG witin 0 da*sfrom date of re7istration of te compan*;

If tis is not done, 8OD to appoint auditors witin ne:t30 da*s; In case 8OD fails to appoint Auditors witinne:t 30 da*s, te appointment will e made witin 0da*s at e:traordinar* 7eneral meetin7;

#use9uent appointment of auditors to e made *C%AG witin 1/0 da*s from te end of 4nancial *ear;Auditor to old oMce till conclusion of AG

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CASUAL VACANC"…

Casual vacanc* arisin7 in te oMce of auditor to e 4lled *8OD witin 30 da*s;

Casual vacanc* as a result of resi7nation of auditor to e4lled * appointment at 7eneral meetin7 witin 3 montsfrom te date of recommendation * 8OD;

In case of Government compan*, C%AG to appoint auditorwitin 30 da*s; In case tis is not done 8OD to 4ll tevacanc* witin ne:t 30 da*s;

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ROTATION Ever* -isted compan* and speci4ed companies to appoint5re

appoint

An individual as auditors for not more tan one term of 4veconsecutive *ears

An audit 4rm as auditors for not more tan two terms of 4veconsecutive *ears;

#peci4ed Companies as per 'ule 3 are

Fnlisted pulic Compan* )aid up sare capital of 's; 10 Cr or

more )rivate Compan* )aid up sare capital of 's; 20 Cr or more

Oter tan aove )ulic orrowin7 from 8an?s5"Is5Deposits of's; (0 Cr or more;

+e memers of te compan* ma* resolve for rotation of auditin7partner and is team at suc interval as te* ma* resolve;

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ROTATION

'etrospective application of provision

+ree *ears time 7iven to companies "irm wit common partner or under same networ? not

eli7ile;

In case of @oint auditors, rotation to e arran7ed in amanner tat all te @oint auditors do not complete teir

term in same *ear; A partner of a 4rm wic carried out te audit of te

compan*, retires from te 4rm and @oins oter 4rm, teoter 4rm not eli7ile to e appointed for a term of "ve*ears;

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REMOVAL#RESIGNATION

'emoval of auditor efore e:pir* of te term can e made

* passin7 special resolution and after otainin7 priorapproval of Central Government;

'emoval of auditor at te time of e:pir* of te term can emade * 7ivin7 a special notice; Auditor 7iven ri7t to

ma?e representation;

In case of resi7nation * auditor, to 4le a statement in formAD+3 to 'OC witin 30 da*s;

In case of Government compan* also to 4le form to C%AG;

Auditor to sow reasons and oter facts as ma* erelevant;

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ISSUES…

1! eter appointment of auditor as to e made for ( *ears

2! If appointment is not rati4ed * sareolders wat will e teposition

3! If audit 4rm is dissolved or reconstituted , newl* reconstituted 4rmcan e eli7ile for appointment

$! >ow to interpret te term partner incar7e of audit 4rm and also

certi4es 4nancial statement of te compan* in case of retirementand rotation

(! eter reconstitution of 4rm on account of retirement oradmission of partner would result in to casual vacanc*

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ELIGI$ILIT" AND UALIFICATION

A person 4rm--) are eli7ile for appointment as auditor;

"irm 5--) sould ave ma@orit* of partner as practicin7 CAsin India;

In case of 4rm and --) te partners wo are CAs autoriKedto act and si7n on ealf of te 4rm5--);

Ceilin7 on numer of audit to 20 companies 6No distinctionetween private and pulic compan*!;

DISUALIFICATION

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DISUALIFICATION 8od* corporate oter tan --)

OMcer or emplo*ee of te compan*

)artner or emplo*ee of te oMcer or emplo*ee of tecompan*

)erson or relative or partner

>oldin7 securit* or interest in compan* 5 susidiar* 5oldin7 5associates5susidiar* of oldin7 of te face valuemore tan 's; 1 -a?6-imit for onl* relative!

Indeted to te compan* and oter companies as aove foran amount of more tan 's; ( la?;

)rovided 7uarantee or securit* in connection witindetedness of te tird part* to te compan* or otercompanies as aove in eDcess o 5s& ! la?h;

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DISUALIFICATION

)erson or 4rm avin7 direct or indirect usiness relationsip

wit te compan*5 susidiar*5oldin75 susidiar* ofoldin75associate as prescried;

A person wose relative is director or emplo*ee of compan* as

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DISUALIFICATION

Business 5elationshipJ To be construed any

transaction entered into or a commercial purposeeDceptJ

Commercial transactions hich are in nature oproessional services permitted to be rendered byan auditor or audit rm

Commercial transactions wic are in te ordinar*

course of usiness of te compan* at arm&s len7tpriceli?e sale of products or services to auditor ascustomer in ordinar* course of usiness * companiesen7a7ed in telecommunication5 airlines5ospital5oteletc;

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ISSUES

1! --) speci4c e:emption

2! >oldin7 of securit* wat it will include eterdeenture5 ond5"D

3! eter dis9uali4cation attracted if securities are eld *partner oter tan audit partner

$! Dis9uali4cation due to oldin7 appointment of more tan

20 companies; No rela:ation so far;(! eter no; of audit to e considered per partner or wit

reference to audit partner

! P8usiness 'elationsip& ordinar* course of usiness atarm&s len7t price issue of interpretation;

RESTRICTION ON NON AUDIT

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RESTRICTION ON NON!AUDITSERVICES

Accountin7 and oo? ?eepin7 servicesQ

Internal auditQ Actuarial servicesQ

Investment advisor* servicesQ

Investment an?in7 servicesQ

'enderin7 of outsourced 4nancial servicesQ

4ana-ement services and

#n* oter ?ind of services as ma* e prescried

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POWERS AND DUTIES *nquiry o certain matters u7s !"@!) J same as

u7s 22K@!A) o !1$( Act&

Contents o the report u7s !"@) more or lessthe same J the chan-es are

Information to e sou7t and otained; Ifinformation is not provided, to report aout detailstereof and eJect on "#;

Oservation or comments on 4nancial transactions ormatters wic ave adverse eJect on functionin7 ofte compan*;

An* 9uali4cation, reservation or adverse remar?relatin7 to maintenance of accounts and oter

matters connected terewit;Commentin- on adequacy o internal nancialcontrol system and operatin- efectiveness osuch controlsJ made efective rom %'2!$J!(;

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REPORTING

In terms of section 1$363!6@! read wit 'ule 11 of Companies6Audit and Auditors! 'ules, 201$, te report to includevies and comments on followin7 matters

eter disclosure of impact if an*, of pendin7 liti7ationson 4nancial position is made in "#;

eter provision is made for material foreseeale losses,if an* on lon7 term contracts includin7 derivative contracts;

eter tere as een an* dela* in transferrin7 amountsto Investors Education and )rotection "und;

+e auditor to state te reason for 9uali4cation or adverseremar? in is report;

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REPORTING ON FRAUD….

As per section !"@!2) o the Companies Act+ 2! coversthe person or reportin- on raudEIf an auditor of te compan*, in te course of performance of is duties as auditor, as reason to elieve tat an oJence involvin7 fraud is ein7 or as een committed a7ainst te

compan* * oMcers or emplo*ees of te compan*

'eport to Central Government witin suc time as ma* eprescried;

'eportin7 is re9uired onl* in case of "raud * oMcers % emplo*eesand not * +ird )arties suc as Hendors % Customers;

REPORTING ON FRAUD

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REPORTING ON FRAUD….

Auditor&s 'esponsiilit* "or consideration of "raud in Audit of"inancial #tatementsAuditor as to compl* wit #As and encecan appl* te concept of

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Related Party Transactions

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RELATED PART" TRANSACTION…

Applicable provisionsE

/ection ! o CA+ 2!Clause "1 o listin- a-reement

A/J! J 5elated Party disclosures

/A $$ J 5elated Party

/ection "@A) @2) o the *ncome taD Act and

=omestic Transer Pricin-& /ectionE 21"721K7!" o !1$( Act combined in

/ection !&

RELATED PART" TRANSACTIONS…

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'elated )art* is de4ned in #ec 26.! includes

Director

R is relative

R "irm in wic director 5 relative is a partnerR )rivate compan* in wic director5relative is a

memer5director

R )ulic compan* in wic director sareoldin7 is more tan2L

R 8od* corporate wose 8oard5

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RELATED PART" TRANSACTIONS… 'elative is de4ned in sec 26..! includes is

R>F"

R#pouse

R)arentsRCildren

R#ilin7s

R#pouses of cildren;

Fnder clause $ related part* is de4ned as related part* under A#

includesR Boint Henture

REnterprise wit common

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RELATED PART" TRANSACTION U#SSEC 1&&%

R'()*'+ P)*- T)/)*/

a; #ale5 purcase5 suppl* of 7oods and material or appointmentof a7ent for te same;

; #ellin7 5disposin7 or u*in7 property of an* ?ind;

c; -easin7 of property of an* ?ind

d; Availin7 or renderin7 services or appointment of te a7entfor te same

e; Appointment of related part* to an* oMce or place of pro4tin te compan*, its susidiar* or associate compan*

f; Fnderwritin7 of suscription of an* securities;

RELATED PART" TRANSACTION U#S

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#SEC 1&&%

In case of transactions aove speci4ed limit special resolution

is re9uireda; -ower of 10L of turnover or 's; 100 Cr;

; -ower of 10L of net wort or 's; 100 Cr;

c; -ower of 10L of net wort or 10L of turnover or 's; 100 Cr;;

d; -ower of 10L of turnover or 's; (0 Cr;

e;

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MATERIAL RELATED PART"TRANSACTIONS ! CLAUSE 9 % +ransactions wit one related part*

ic eiter sin7l* or in a77re7ate durin7 te 4nancial *ear E:ceeds 10L of consolidated annual turnover of te compan*

as per latest audited 4nancial statement;

Compliances re9uired Companies Act,2013

If transaction is in ordinar* course of usiness at Arm&s -en7t

)rice no compliance re9uired;

In oter cases prior approval of 8OD re9uired

In case of transactions aove speci4ed limits special resolutionis re9uired;

RELATED PART" TRANSACTIONS

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RELATED PART" TRANSACTIONS… Compliances 'e9uiredFnder clause $

Compan* to formulate polic* for all related part* transactions,

Approval of audit committee 6prior! for all related part* +ransactions

"or material 'elated )art* +ransactions approval of oard and specialresolution re9uired;

'elated part* not entitled to vote;

'ela:ation

In case of related part* transactions wit a woll* owned susidiar*,

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SA 550! R'()*'+ P)*'/

#A deals wit te auditors responsiilities re7ardin7 relatedpart* relationsips and transactions wen performin7 anaudit of "#;

+e #A re9uires te auditor to 7ain understandin7 ofentit*&s ')+, identi4cation and assessment of ris? ofmaterial misstatement associated wit ')+ and ma?in7 anassertion tat ')+&s were conducted on terms e9uivalent totose prevailin7 in an A-+;

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Loans & Investments

LOANS TO DIRECTORS # AN" OTHER

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#PERSON IN WHOM DIRECTOR ISINTERESTED 4SECTION 1&5….

#ection 1/(, imposes a total prohi$ition on companiesprovidin7 loans, 7uarantee or securit* to te directoror an* oter person in wom te director isinterested;

"or tis provision tere e:ists no diJerence for pulic

% private compan*; i;e; e:emption for privatecompan* is ta?en awa*;

LOANS TO DIRECTORS # AN" OTHERPERSON IN WHOM DIRECTOR IS

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PERSON IN WHOM DIRECTOR ISINTERESTED 4SECTION 1&5….

Certain %&emptions are provided !or:

'nder section 1 Certain cate7ories of loans to a mana7in75 wole time director,

Companies wic provide loans5 7ive 7uarantees or securities inte ordinar* course of its usiness * and in s+ch cases interestis char,ed at a rate not lower than -an. /ate

'nder s+$ r+le 10 o! Companies (Meetin,s o! -oard) /+les* 201

-oans, 7uarantees 7iven or securit* provided * oldin7compan* to its woll* owned susidiar*,

Guarantees 7iven or securit* provided in respect of loan made* an* an? or 4nancial institution to its woll* ownedsusidiar*,

E:emptions onl* if loans made under tese rules ave to eutiliKed * susidiar* compan* for its principal usinessactivities

ISS'%S

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1! eter a manufacturin7 compan* wic as surplus funds7ives a loan to director interested part* can claim tat it isnot covered * section 1/(

2! #ection 1/( starts wit te wordin7s #ave as oterwiseprovided in tis ActT;, weter it can e interpreted tat

* tese words, loans 5 7uarantee5securit* 7iven inpursuance of section 1/ would e saved from operations ofsection 1/( of te Act

ISS'%S:

LOANS AND INVESTMENT $"

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COMPAN"… As per provisions o section !(E

Investment permissile up to two la*ers of investmentcompanies

Oter provisions similar to section 3.2A of 1( Act;

-imit of loan5investments57uarantee5securit* up to 0Lof paid up capital and free reserves or 100L of reserves wicever is more, approval * 8OD; An* e:cesstereof re9uire approval of sareolders * specialresolution;

LOANS AND INVESTMENT $"

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COMPAN"… Disclosure in "inancial #tatements aout full particulars of

loan 7iven, investment made or 7uarantee 7iven or securit*provided and te purpose for wic te utiliKation is to emade * te recipient;

)ermission of "I re9uired if an* term loan is susistin7 andamount of loan 5 investment5 7uarantee is in e:cess of tespeci4ed limit and tere is default in repa*ment of loaninstallments5pa*ment of interest;

'ate of interest not lower tan te prevailin7 *ield onGovernment #ecurities;

'e7ister to e maintained;

EXCEPTIONS

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EXCEPTIONS

-oan * 8an?in75Insurance5>ousin7 "inance companies;

Investment * Investment Compan*; -oan * N8"C;

#ares allotted as ri7t sares;

-oan * compan* in usiness of 4nancin7 or of providin7

infrastructure facilit*;

#evere penalt* for noncompliance;

ISSUES

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ISSUES%

1! at are companies en7a7ed in usiness of 4nancin7companies

2! +e compan* en7a7ed in usiness of providin7infrastructure facilit* weter fall in e:emption

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Acceptance of deposits

SECTION 73

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SECTION 73

/ummary o provisionsE Compan* can accept deposits from memers onl* after compl*in7

provision of section .362!;

Compliance requiredE Issuances and 4lin7 of circular Depositin7 1(L amount in sceduled an? as deposit repayment

reserve account&

)rovidin7 insurance Co; not in default of repa*ment of deposit 5 interest )rovidin7 securit* 6if an*! for repa*ment of deposit or interest

tereof includin7 creation of car7e on assets5propert* of tecompan*;

DEPOSITS

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DEPOSITS

Noti4cation dated 2$0201$ A private compan* wit(0 or less memer 7iven e:emption provided eaccompan* cannot accept deposits e:ceedin7 2(L ofa77re7ate of paid up capital % free reserve or 100L ofpaid up capital wicever is i7er

Deposits outstandin7 as on 01;0$;201$ to e repaid on

te due date or * 31;03;201( wicever is earl*Compan* to 4le form D)+1

#ection .3 not applicale to N8"C

ACCEPTANCE OF DEPOSITS $"

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Public company ith net orth 5s& ! Cr& orturnover o 5s& $ Cr&

6ach company to pass special resolution o thesame ith 53C&

The company to obtain ratin- rom reco-ni.ed

credit ratin- a-ency&

*n case o secured deposit to create char-e onassets ithin days o acceptance o deposits&

ACCEPTANCE OF DEPOSITS $"ELIGI$LE COMPAN"%

DEPOSIT INCLUDE %

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DEPOSIT INCLUDE %

An* noninterest earin7 amount received or eld in +rust

An* amount received as advance for suppl* of 7oods orprovision of services and wic is not appropriated witina period of 3( da*s from te date of receipt;

Advance received in connection wit consideration forsale of propert*,if not ad@usted a7ainst propert* inaccordance wit terms of a7reement or arran7ement

Application mone* received towards suscription to an*securities includin7 sare application mone* a7ainstwic allotment not made witin 0 da*s and refund not7iven witin 1( da*s from completion of 0 da*s;

ISSUES

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ISSUES%

!) ;hether resolutions u7s K@!) to be passed every yearor only once beore startin- acceptance o depositsH

2) %orm =PT "

+ime wen to e 4led

eter onl* in respect of deposits outstandin7 as on01;0$;201$ or also in respect of deposit maturin7 after

01;0$;201$ and repaid on due date) /ection K@) provides or repayment only& =oes this

mean that company canLt rene the depositsH 5ules@!)+ @")+ @$)+ @()& reer to both terms accept andrene&

ISSUES%

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ISSUES%

) 4aintenance deposit rom members o schemehether eDempts depositH

") Advances received rom buyers in case o realestate developer co& hether depositH

$) Any solution to provision o /ection K" inrespect o repayment o deposits outstandin-

on !&"&2!" by !&&2!$H

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Corporate #ocial'esponsiilit*

CORPORATE SOCIAL

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As per #ection 13( of CA,2013 ,Compan* avin7

Networt of

IN' (00Cr ormore

Net )ro4tof ( Cr or

more

+urnoverof IN'

1000 Cror more

RESPONSI$ILIT"…..

Is re9uired to compl* wit te provisions of C#'

CORPORATE SOCIAL

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RESPONSI$ILIT"….. A compan* is re9uired to compl* wit tis provision

ased on te

tresold limits in te audited 4nancials commencin7from 1st April, 201$;

A C#' Committee consistin7 of tree 63! or moredirectors, out of wic at least one 61! director soulde an independent director is re9uired to econstituted in te ensuin7 8oard

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REUIREMENTS%

#pend at least 2L of avera7e net pro4ts 6efore ta:!precedin7 3 *ears computed in accordance wit sec1/;

In case of failure to spend, oard to 7ive reasons fornoncompliance;

)reference to e 7iven to local areas and areas around

were it operates; 8road areas to e as per #cedule HII;

Onl* activities witin India can e considered;

CLARIFICATIONS%

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CLARIFICATIONS%

Onetime events will not 9ualif* as C#' e:penditure;

E:penses mandated under an* oter law will not 9ualif* as C#' e:penditure; Emplo*ee cost for ours spent on C#' will e considered as C#' e:penditure;

E:pense incurred * forei7n oldin7 compan* on C#' activities in India can econsidered as C#' e:penditure su@ect to routin7 trou7 Indian compan*;

In states were trusts are not re9uired to e re7istered, re7istration underIncome +a: Act will suMce;

Contriution to Corpus of a +rust 5 #ociet* 5 #ection / companies considered asC#' e:penditure;

ISSUES%

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ISSUES%

1! eter C#' E:penditure is a car7e a7ainst )ro4t orAppropriation

2! C#' E:penditure if not spent durin7 te *ear weterprovision is re9uired or not

3! eter Auditor will e re9uired to 9ualif* report insuc situation

$! eter e:penses on C#' e:penditure for an eli7ilepro@ect u5s 3( can e claimed as deduction or treatedas donation to caritale institution u5s /0G

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Thank ou

Documents

Final 2803.pptx