Specified Bank Notes: Disclosure as part of Financial Statements by Vallari Dubey

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What are Specified Bank Notes (‘SBN’)?

The Central Government on recommendation of the Central Board of Directors of the Reserve Bank of India (‘the Board’) decided to cease bank notes of denomination of value of five hundred rupees and one thousand rupees as legal tender, vide notification S.O. 3407(E)[1] dated Nov 8, 2016, a scheme which is commonly connoted as the ‘the Demonetization Scheme’. As per the notification, such bank notes shall be termed as ‘Specified Bank Notes’.

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Increased Capital Requirements for Asset Reconstruction Companies (ARCs) by Kirti Sharma, April 8, 2017

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RBI Announcement

With a view to increase more cash based sales of Non-Performing Assets (NPAs), the Reserve Bank of India (RBI) has amended the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 increasing the capital requirement for Asset Reconstruction Companies (ARCs) to 100 crores from 2 crores in the Statement on Developmental and Regulatory Policies issued on 6th April 2017.

Implications

This move of the regulator would raise concern for the smaller ARCs operating in the country to comply with the steep rise in the capital requirement norms.

The final guidelines in this regard shall be issued by the end of April 2017.

Voluntary Liquidation Regulations: Last, but not the Least, by Sikha Bansal

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The Insolvency and Bankruptcy Board of India, vide Notification No. IBBI/2016-17/GN/REG010 dated March 31, 2017 has issued the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 (“the VL Regulations”) pursuant to section 59 of the Insolvency and Bankruptcy Code, 2016 (“the Code”) and has appointed April 1, 2017 as the date on which the VL Regulations shall come into force.

The Ministry of Corporate Affairs vide Notification No. S.O. 1005(E) dated March 30, 2017[1] has notified April 1, 2017 as the date on which the following sections of the Code came into force: Read more →

Checklist on voluntary liquidation of corporate person as per Bankruptcy Code, 2016, by Barsha Dikshit and Deepa Devi

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Steps of Voluntary liquidation of Corporate Person as per Insolvency and Bankruptcy Code, 2016(‘Code’) and Insolvency and Bankruptcy Board of India ( Voluntary Liquidation) Regulations, 2017 (‘liquidation Regulation’)

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Consolidation of accounts of Section 8 companies- whether a correct practice?

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– Vallari Dubey | corplaw@vinodkothari.com

Intent of Consolidation

Consolidation is a combined representation of financials of a company and its subsidiaries, joint ventures and associates. Consolidated Financial Statements (‘CFS’) reflect the aggregate wealth of the holding company. Section 129(3) of the Act, 2013 mandates the preparation of CFS in addition to Standalone Financial Statements (‘SFS’), in case where the company has one or more subsidiaries.

In case of a not-for-profit organization, the need for consolidation does not arise. However, when such organization is registered under Section 8 of the Companies Act, 2013 (‘Act’), and by virtue of an interest in it by some company, the organization becomes a subsidiary of the other company, the question of consolidation arises. With the help of this article, we try and analyze the matter in question.

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Demonetization now hits Financial Statement of Companies by Megha Saraf and Abhirup Ghosh

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Background

Reserve Bank of India (“RBI”) on 8th November, 2016, has took a very bold move towards the currency market of India. Ministry of Finance (“MoF”) with effect from 9th November, 2016, has brought a serious revolution in the economy of the country by withdrawing Rs. 500 and Rs. 1000 as a legal tender. Due to this, people as well as corporates and Financial Institutions all over the country faced a serious glitch towards monetary transactions.

Further, MoF by its subsequent circulars brought stringent norms towards the monetary market. Several restrictions were imposed on cash and electronic transactions to curb the black market. Read more →

MCA amends Audit Rules and MBP Rules: its impact and analysis by Trupti Upadhyay

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The Ministry of Corporate Affairs (‘MCA’) has come up with amendments in the Companies (Audit and Auditors) Rules, 2014 (“ADT Rules”) and the Companies (Meetings of Board and its Powers) Rules, 2014 (“MBP Rules”) vide notification(s) G.S.R. 307(E)[1] and G.S.R. 309(E)[2] dated 30th March, 2017. The same shall come into force from the date of their publication in the Official Gazette viz, 30th March, 2017. In this write up both the amendments has been covered along with its implications.

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Stringent norms ahead for the issuers of Pre-paid Payment Instruments (PPIs) in India, Kirti Sharma

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Introduction

India Inc is witnessing a major shift from cash driven economy to a cashless economy with a steep rise in the mobile transaction services through digital payment modes in the financial technology industry undoubtedly pushing huge pressure on cash. The payment industry is striving to become an integral part of the economy. With the evolution of online wallets, consumers are provided with simpler and more efficient method to complete online transactions Read more →

FAQs on section 269ST of the Income-tax Act, Kanishka Jain

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Amid the brunt of the De-monetization, which was relatively fresh in the minds of the common people, Budget 2017 spelt out a loud message. The message was very clear; the government wanted the economy to be digitally equipped with no or very less cash transaction. While it seems impossible for the government to have an absolute cash free economy, but the tremors of the change can be felt. Read more →

Reforms to hit the Prepaid Payment Instrument issuers hard, by Ameet Roy

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The financial year 2017-18 is all set to bring in an array of reforms thought the Indian economy, all aimed to achieve one thing and one thing only – turn India into a 21st century super economy . Where business would be able to run without any hurdles involving regulatory, technological, man power, etc.

As India enters into the transformation stage into a super economy, new challenges have started to surface for the regulators, keeping the economy on track to achieve the national goal is of primary concern in this crucial stage. One of the many such challenges is the concern regarding the new age payments Read more →