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Contributed by CS DVK Phanindar |
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Sl. |
Section(s) under the CA, |
Clause No. in the |
Proposed amendment relating to |
Remarks/Comments/Penalty |
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No. |
2013, amended |
Amendment Bill |
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30. |
Section 123 |
31 |
Substitution of sub-section (3)of Section 123 to allow |
Welcome amendment, as it |
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Declaration of Dividend |
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declaration and payment of interim dividend, during the |
allows a new criteria for |
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period from closure of financial year till date of Annual |
declaration of Interim Dividend, |
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General Meeting for a financial year, and out of the profits of |
and clarity on the rate of |
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the said year; or from the surplus in the profit and loss |
dividend in the absence of |
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account; or out of profits generated in the financial year till |
profits. |
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the quarter preceding the date of declaration of the interim |
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dividend. |
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In addition to the above, the substitution also prescribes the |
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rate at which the interim dividend can be declared, in case of |
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loss is incurred during the financial year. |
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31. |
Section 129 -Financial |
32 |
Substitution of sub-section (3) of section 129, in connection |
Amendment/inclusion to |
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Statements |
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with preparation of Consolidated Financial Statements in the |
remove ambiguity. |
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same form and manner as that of its own in accordance with |
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applicable accounting standards, for associate companies |
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also in addition to subsidiary. |
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Sl. |
Section(s) under the CA, |
Clause No. in the |
Proposed amendment relating to |
Remarks/Comments/Penalty |
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No. |
2013, amended |
Amendment Bill |
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32. |
Section – 130 – |
Accounts |
33 |
Amendment to sub-section (1) of Section 130, so as to |
Welcome amendment, as there |
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Re-opening |
of |
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provide that in addition to authorities already specified in the |
is a increased scope of |
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on Court’s |
or |
Tribunal’s |
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section, any other person concerned shall be given notice |
authorities, to whom notice as |
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Orders (Section notified |
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before passing an order for re-opening of accounts. |
to re-opening of accounts is to |
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w i t h e f f e c t f r o m |
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be given by the Tribunal; and |
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01.06.2016) |
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Insertion of a new sub-section (3) to provide that no order |
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also giving the periods for |
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shall be made for re-opening of books of account relating to a |
which order can be given by |
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period earlier than eight financial years immediately |
Tribunal, for re-opening of |
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preceding the current financial year, unless there is a specific |
accounts. |
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direction under section 128(5) [i.e., maintenance of books of |
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accounts] from the Central Government for longer period. |
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33. |
Section 132- Constitution |
34 |
Amendment (reduction) of the minimum penalty that can be |
Welcome amendment. |
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of National |
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Financial |
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levied by way of an order by NFRA on CA Firms, if professional |
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Reporting |
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Authority |
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or other misconduct is proved from Rs. 10 Lakhs to Rs.5 Lakhs. |
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(NFRA). (Section yet to |
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be notified) |
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34. |
Section 134 |
– |
Financial |
35 |
Substitution of sub- section (1)of section 134, with a new |
Welcome amendment as the |
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statements |
& Board |
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section, thereby removing the requirement that the CEO signing |
proposed amendments reduce |
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Report |
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the financials shall be a Director, and accordingly, a CEO shall |
the reporting requirements in |
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now sign financial statements irrespective of whether he is a |
the Board Report. |
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director or not. |
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Amendments to sub-section (3) of section 134 seeks to modify |
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the disclosure requirements with respect to (a) removal of the |
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requirement of attaching the extract of annual return to the |
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Board report, and just mentioning the web-address, if any, |
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where the extract of annual return is placed is to be mentioned |
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Sl. |
Section(s) under the CA, |
Clause No. in the |
Proposed amendment relating to |
Remarks/Comments/Penalty |
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No. |
2013, amended |
Amendment Bill |
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(b)amendment to clause (p) of the sub-section relating to |
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statement on annual performance of the Board, its |
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committees and independent directors by the companies to |
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which the provision is applicable(c)mentioning only the salient |
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features of the Remuneration and nomination policy (Section |
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178) and CSR policy( Section 135) in the Board Report, and |
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providing the web-address where the complete policy is |
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available. |
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Insertion of a new section 3A, which empowers the Central |
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Government to prescribeabridged Board's report for small |
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company and one person company. |
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35. |
Section - 135 – Corporate |
36 |
Amendment to sub-section (1) of section 135,with regard to |
Amendment to |
remove |
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Social Responsibility. |
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the period for which the criteria for applicability of CSR to a |
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ambiguity and |
ease of |
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Company (i.e., Turnover, Net worth & Net Profit) are to be seen |
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operations. |
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from “any financialyear” to “immediately preceding financial |
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year”. |
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Insertion of a proviso to sub-section (1) regarding composition |
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of CSRcommittee with two or more directors, by a company |
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which is not required to appointindependent director under |
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section 149. |
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Amendment of Clause (a) in sub-section (3) with regard to |
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areas in which CSR activity can be undertaken "as specified in |
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Schedule VII", the words and figures "in areas or subject, |
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specified in Schedule VII", thereby providing more scope in |
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the CSR activities. |
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Sl. |
Section(s) under the CA, |
Clause No. in the |
Proposed amendment relating to |
Remarks/Comments/Penalty |
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No. |
2013, amended |
Amendment Bill |
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Amendment to the explanation given in sub-section (5) earlier |
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with regard to “Average Net profit”, now changed to “Net |
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profit”, and further to empower the CentralGovernment to |
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prescribe sums which shall not be included for calculating 'net |
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profit' of a Company for the purpose of section 135. |
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36. |
Section - 136 – Right of |
37 |
Amendment to sub-section (1) of section 136 by inserting a new |
Welcome amendment. |
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member |
to copies of |
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proviso to provide that copies of audited financial statements |
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a u d i t e d |
f i n a n c i a l |
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and other documents can be sent at shorter notice if 95 % of |
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statement. |
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members entitled to vote at the meeting agree for the same; |
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and accordingly aligning the existing provisos, after the |
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insertion. |
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Substituting the existing 4th proviso to Sub-section (1) with new |
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proviso, to rationalise the requirements with respect to |
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financial statements of foreign subsidiaries of a listed company |
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subject to conditions. |
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Insertion of a proviso to Sub-section (2) thereby companies |
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having subsidiaries to provide financials of the subsidiary for |
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inspection by the member who asks for it. |
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37. |
Section – 137 – Copy |
38 |
Insertion of a new proviso after the existing 4th proviso to sub- |
Welcome amendment. |
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section (1) so as to enable filing of unaudited financial |
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offinancialstatement |
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tobe filed with |
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statements by listed companies, of their foreign subsidiaries |
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Registrar. |
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which is not required to get its accounts audited, under the laws |
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of the country of incorporation. The filing of unaudited |
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financial statements are to be accompanied by a declaration by |
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the listed company, to the above effect. |
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Sl. |
Section(s) under the CA, |
Clause No. in the |
Proposed amendment relating to |
Remarks/Comments/Penalty |
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No. |
2013, amended |
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Amendment Bill |
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38. |
S e c t i o n |
– |
1 3 9 |
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39 |
Omission of the first proviso to sub-section (1), i.e., |
Welcome amendment. |
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Appointment of Auditors |
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ratification of the appointment of auditors by the members at |
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every AGM. |
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39. |
S e c t i o n |
– |
1 4 0 |
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40 |
Amendment to sub-section (3) of section 140 to reduce the |
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penalty/penalty criteria, withrespect to failure to file |
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Removal,resignation |
of |
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auditor and giving of |
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resignation form (ADT-3) by auditor to the Registrar concerned |
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Specialnotice |
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and also to the Comptroller and Auditor General (CAG) for the |
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applicable companies, from the existing “Rs.50,000/-“ to |
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“Rs.50,000/-or the remuneration of auditors whichever is |
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less”. |
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40. |
Section – 141 - Eligibility, |
41 |
Insertion of an explanation to clause (d) of sub-section (3) of |
Amendment to remove |
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section 141, to clarify the meaning of relative with reference to |
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Qualifications and |
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eligibility for appointment of auditors. |
ambiguity. |
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disqualifications of |
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auditors. |
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Substitution of the existing clause (i) of sub-section (3) along |
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with explanation, for harmonisation with section 144 in respect |
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of providing of certain non-audit services to holding or |
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subsidiary company of a company. |
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41. |
Section 143 - Powers and |
42 |
Amendment to sub-section (1) of section 143 of the Act to |
Amendment to remove |
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include associate companies in addition to subsidiary |
ambiguity. |
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duties of |
auditors and |
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companies with respect to right of auditors to have access to |
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auditing standards. |
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accounts and records for the purpose of consolidation. |
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Amendment to clause (i) of sub-section (3) to provide that |
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auditors shall report on internal financial control systems |
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relating to financial statements. |
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Amendment to sub-section (14) to replace the term “cost |
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accountant in practice” with “cost accountant”. |
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Sl. |
Section(s) under the CA, |
Clause No. in the |
Proposed amendment relating to |
Remarks/Comments/Penalty |
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No. |
2013, amended |
Amendment Bill |
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43 |
Section 148 - Central |
44 |
Amendment to substitute the words 'cost accountant in |
Amendment to remove |
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Government to specify |
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practice' with the words 'cost accountant' in sub-section (3) |
ambiguity. |
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audit of items of cost in |
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& (5) of Section 148 and also to substitute the words 'Institute |
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respect of certain |
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of Cost and Works Accountants of India' with the words |
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companies. |
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'Institute of Cost Accountants of India',in the explanation to |
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Sub-section (3) of Section 148. |
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44 |
Section 149 - |
45 |
Amendment to Sub-section (3) of Section 149, relating to the |
Welcome Amendment to |
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requirement of resident director, the amendment proposed |
remove ambiguity and ease of |
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requires that “every company shall have at least one director |
operations. |
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who stays in India for a total period of not less than 182 days |
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during the financial year”instead of the existing requirement |
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of “shall have at least one director who has stayed in India for |
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a total period of not less than 182 days in the previous |
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calendar year.” |
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Further the amendment proposes that in case of a newly |
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incorporated company the requirement under this sub-section |
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shall apply proportionately at the end of the financial year in |
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which it is incorporated. |
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Amendment to clauses in sub-section (6) of Section 149, to |
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specify limits with respect to pecuniary relationship of a |
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director with respect to eligibility of a director to be appointed |
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as an independent director. It also seeks to specify the scope of |
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restriction on pecuniary relationship entered into by a relative. |
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