Vinod Kothari Consultants P Sparshvinodkothari.com/wp-content/uploads/2013/11/Sparsh_July... · The priority sector lending norms were announced on 1 July 2012 and were changed on

Vinod Kothari & Company –July, 2012

Touches...

Sparsh

Vinod Kothari & Company Vinod Kothari Consultants P Ltd Academy of Financial

Services P Ltd 1012 Krishna 224 AJC Bose Road Kolkata – 700017 91-33-22817715/ 1276/ 3742 Also at: 222, Ashoka Shopping Centre 2nd Floor, LT Road Near GT Hospital Mumbai- 400 001 91-22-22675600

In this Issue:

Editorial

Our Articles Published

What’s happening at VKC and VK & Co.

Our Corner Contact Us

July, 2012

Vinod Kothari & Company –July, 2012

Highlights of July, 2012:

Articles published in moneylife o Article on RBI’s report on Restructured Loans by Vinod Kothari o Article on revised priority sector norms may give boost to NBFC business o Article on “NBFC Factors: Ambiguities continue” by Anshuman Nandi

Articles in Professional Journals and websites o Vinod Kothari’s Article on AIF Regulations in the Chartered Accountant o Aditi Jhunjhunwala’s Article on Secretarial Standards in ICSI EIRC Newsletter o Article on amended format for Abridged Balance Sheet and Profit and Loss

Account by Aditi Jhunjhunwala and Nivedita Shankar in CA club India

Article on Islamic Securitization structures by Nidhi Bothra published in Islamic Finance Newsletter

Presentation by Vinod Kothari on Income tax aspects of Leasing and Assignment of Receivables.

Vinod Kothari’s views on GAAR flashed in ZEE Business

Infrastructure and Asset Finance Summit, on 6th-7th September, 2012

SIP sessions at ICSI undertaken by Nidhi Bothra and Aditi Jhunjhunwala

Our Organisation keeps on exploring newer areas for continual growth and development. It is to this effect that our views and our analysis have found place in leading journals, newsletters and news channels. This edition of “touches..” takes you to a journey of lots and lots of interesting articles and current news of what is happening in our organisation. Please do write to us. Stay in touch!!

-Sikha Bansal

[email protected]

Editorial

Vinod Kothari & Company –July, 2012

Our Articles Published

RBI’s report on Restructured Loans shirks the issue -By VINOD KOTHARI published in moneylife

The report of Reserve Bank of India (RBI) working group to review the existing prudential guidelines on restructuring of advances by banks/financial institutions, under the chairmanship of B Mahapatra was recently issued. While most of the recommendations of the Mahapatra Group fail to address the seriousness of the issue, the RBI may accept the recommendations and banks may happily use restructuring to keep their NPA levels cosmetically low. The report shirks the problem of bludgeoning NPAs (non-performing assets) in the banking system piling up as restructured loans and suggests solutions which are short term in nature for a problem that is long term—quite like an ostrich burying its head to avoid a danger. The article authored by Vinod Kothari was published in moneylife. The article can also be read here.

Vinod Kothari & Company –July, 2012

Our Articles Published

Revised Priority Sector Norms

may give boost to NBFC Business: By VINOD KOTHARI published in moneylife

The priority sector lending norms were announced on 1 July 2012 and were changed on 20 July 2012. The Nair Committee, in its report had made several recommendations, primarily putting a limit to the extent to which banks can fulfil their priority sector lending (PSL) requirements by buying portfolios generated by others. The Reserve Bank of India (RBI) has implemented some of these with immediate effect. Several of the recommendations of the Committee, which were unpleasant, have been dropped. The result is a lot more clarity on priority sector treatment, both in case of securitisation and direct assignments. In addition, some of the recommendations, such as a new structure of transferable participation structures, have been discarded. Vinod Kothari’s Article on the revised priority sector norms and their impact on the NBFC Business can be viewed here.

Vinod Kothari & Company –July, 2012

Our Articles Published

AIF Regulations: Paving the way for a variety of Collective Investment Devices

-By VINOD KOTHARI published in “The Chartered Accountant” Journal of ICAI- August 2012

The Securities and Exchange Board of India (SEBI) has brought an all-in regulation that covers all private collective investment devices under one omnibus regulation. Thus, other than mutual funds (whether public or private) and public collective investment schemes, all other collective investment devices come into the fold of the new SEBI (Alternative Investment Funds) Regulations, 2012 [AIF Regulations]. It is now possible to have a hedge fund, or a real estate fund, or a gold fund, or an art fund, or any other fund with any other focus, as long as the minimal conditions of the AIF Regulations are complied with. The conditions are not very stringent – broadly, there is a registration requirement, minimum corpus requirement and a minimum investment that every investor must make. This article analyses several significant aspects of the AIFs. This article authored by Vinod Kothari was published in the ICAI Journal for the month of

August. The article can be read here.

Vinod Kothari & Company –July, 2012

Our Articles Published

Islamic Securitization Structures: More needs to be done?

- By NIDHI BOTHRA published in Islamic Finance Newsletter

Islamic financial instruments are yet to stabilize in the markets and have inherent risks in their current structures. The basic proponents of Islam, which include socio-economic justice, equitable distribution of wealth and so on, have trickled down to the financial system as well to ensure religiously legitimate financial operations, giving the world a whole new distinctive and fast growing segment in the international banking and capital markets. The Islamic finance industry represents a fraction of the global financial market but has been growing fast and has gained significance in the recent times; wherein a number of non-Islamic countries are working to reform their tax, legal and regulatory frameworks to attract Islamic investments. The article talks about the why Islamic structures have gained popularity, inherent risks in the current structures and the way forward. The article was published in the Islamic Finance Newsletter.

Vinod Kothari & Company –July, 2012

Our Articles Published

Though we have the law in place for taking necessary action and steps as and when required and thereafter the rules and regulations to follow the procedure laid down for business activities but in order to bring harmony and unity between the secretarial practice adopted by all the companies, a need was felt to develop some kind of standards by means of which in certain areas professionals could have standard format of work and there could be integration of secretarial practice. In need of the same, Institute of Company Secretaries of India (ICSI) constituted Secretarial Standards Board (SSB) for formulating Secretarial Standards (SS) in the year 2000-01. The SSB in consultation with the Council is to determine the areas in which SS are to be developed. The article highlights the various secretarial standards, the need for the same, relevant proposals for mandating the standards, etc. This article was published in the ICSI-EIRC Newsletter for June. See the article here.

Secretarial Standards: Guide to professionals for

Healthy Corporate Governance -By Aditi Jhunjhunwala published in ICSI-EIRC Newsletter

Vinod Kothari & Company –July, 2012

Our Articles Published

At the verge of Financial Reporting: MCA comes up with amended format for Abridged Balance Sheet and

Profit and Loss Account -By ADITI JHUNJHUNWALA and NIVEDITA SHANKAR

published in CAclub India

Just as companies have declared the financial results for FY 2011-12, the MCA has come out up with notification G.S.R (E) dated May 31st 2012, whereby Form 23AB has been notified containing a statement of the salient features of Balance Sheet and Profit and Loss account as per Section 219(1) (b) (iv) of the Companies Act, 1956. The provisions of Section 219(1) (b) (iv) of the Act are exclusively applicable to listed companies only and thus the requirement of filing Form 23AB are also applicable to listed companies only. Section 219 refers to the right of members to obtain copies of balance sheet an auditors’ report. However subsection (1) (b) (iv) of 219 allowed listed companies to do away with the requirement of sending a copy of balance sheet, profit and loss account, auditors’ report and any other document. The Article highlights requirements of Clause 32 of Listing Agreement, changes incorporated in the new format of Form 23AB. The Article co-authored by Aditi Jhunjhunwala and Nivedita Shankar was published in CA club India. The article can be read here.

Vinod Kothari & Company –July, 2012

Our Articles Published

NBFC-Factors: Ambiguities continue

By ANSHUMAN NANDI published in moneylife

The Reserve Bank of India (RBI) brought into force a new kind of Non Banking Financial Company—Factors. An NBFC-Factor has to comply with the requirements of the Factoring Regulations Act, 2011 (“Act”). The RBI’s direction would be applicable to all the NBFC- Factors which are registered with the RBI under Section 3 of the Act, which mandates every factor to obtain a certificate of registration from the RBI for carrying out or commence the business of Factoring. Factoring is a financial transaction where an entity sells its receivables to a third party called a ‘factor’, at discounted prices. A factor means an NBFC, a body corporate or any other company. The RBI issued directions but has not clearly spelt out its intentions, which may give room to confusion in the mind of those who carry out factoring as an ancillary business. The article authored by Anshuman Nandi was published in moneylife. The article can be read here.

Vinod Kothari & Company –July, 2012

What’s happening at VKCPL

Presentation on “Income Tax Aspects of Leasing and Assignment of Receivables” by VINOD KOTHARI

Tax officers often face ambiguous situations while dealing with taxing issues in leasing transactions and transactions involving assignment of receivables. The Direct Taxes Regional Training Institute, Kolkata organized a 'five-day’ course on 'Technical and Management Skills' from 2nd to 6th July, 2012. Mr. Vinod Kothari took sessions on crucial taxation issues in the case of “Hire Purchase & Lease Transactions” and “Securitization and Assignment of Receivables”. It was an interactive session whereby the tax officers came up with practical issues they have faced while dealing with the transactions.

Vinod Kothari & Company –July, 2012

What’s happening at VKCPL

VINOD KOTHARI’S views on GAAR Provisions

-flashed in ZEE Business

The draft guidelines on General Anti-Avoidance Tax Rules (GAAR) were released on Thursday, 28 June 2012. The guidelines are only draft guidelines and have been put out for receiving wide-ranging feedback and for discussion purposes only. Vinod Kothari’s views on GAAR provisions were flashed in ZEE Business-a leading business news channel.

Vinod Kothari & Company –July, 2012

What’s happening at VKCPL INFRASTRUCTURE AND ASSET FINANCE SUMMIT, 2012

After the success of Securitisation Summit, 2012; VKCPL is coming with another grand event in Mumbai-“Infrastructure and Asset Finance Summit, 2012” on 6th-7th September. The Non-banking finance companies in the asset-based financing space are growing at an impressive growth rate, hence it is an excellent opportunity to sit across and take stock of the developments. As asset finance and infrastructure finance companies have come of age, it is important to bring together the stakeholders. The Summit brings together NBFCs, asset finance and infrastructure finance companies in particular, under one roof to discuss matters of significance to them. Get to know more about the forthcoming Summit, here.

Vinod Kothari & Company –July, 2012

What’s happening at VK & Co.

SIP SESSION undertaken by

NIDHI BOTHRA and ADITI JHUNJHUNWALA at ICSI

The Institute of Company Secretaries of India has made EDP and SIP classes mandatory for certain class of students. Our colleagues have been undertaking various sessions of EDP/SIP/OTS classes. Nidhi Bothra undertook a Session of SIP on “The usefulness of reading newspapers” on 25th July, 2012. Aditi Jhunjhunwala took session on “Personality Development” on 24th July, 2102.

Vinod Kothari & Company –July, 2012

1012 Krishna 224 AJC Bose Road Kolkata – 700017, India Ph: 91-33-22817715/ 1276/ 3742 Mumbai office: 222, Ashoka Shopping Centre 2nd Floor, LT Road Near GT Hospital Mumbai- 400 001 022-22675600

Mail to: [email protected]; [email protected] Our Websites: www.vinodkothari.com www.india-financing.com