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No TDS on Service Tax Component if Shown seperately

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RBI Notification List

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Notification No. RBI/2014-15/172 12/08/2014
Notification No. RBI/2014-15/173 12/08/2014
Notification No. RBI/2014-15/174 12/08/2014
Notification No. RBI/2014-15/171 11/08/2014
Notification No. RBI/2014-15/170 08/08/2014
Notification No. RBI/2014-15/167 07/08/2014
Notification No. RBI/2014-15/168 07/08/2014
Notification No. RBI/2014-15/169 07/08/2014
Notification No. RBI/2014-15/165 06/08/2014
Notification No. RBI/2014-15/166 06/08/2014
Notification No. RBI/2014-15/160 05/08/2014
Notification No. RBI/2014-15/161 05/08/2014
Notification No. RBI/2014-15/162 05/08/2014
Notification No. RBI/2014-15/163 05/08/2014
Notification No. RBI/2014-15/164 05/08/2014
Notification No. RBI/2014-15/159 04/08/2014
Notification No. RBI/2014-15/156 01/08/2014
Notification No. RBI/2014-15/157 01/08/2014
Notification No. RBI/2014-15/158 01/08/2014
Notification No. RBI/2014-15/155 31/07/2014
Notification No. RBI/2014-15/154 30/07/2014
Notification No. RBI/2014-15/148 28/07/2014
Notification No. RBI/2014-15/151 28/07/2014
Notification No. RBI/2014-15/150 28/07/2014
Notification No. RBI/2014-15/149 28/07/2014
Notification No. RBI/2014-15/153 28/07/2014
Notification No. RBI/2014-15/146 25/07/2014
Notification No. RBI/2014-15/147 25/07/2014
Notification No. RBI/2014-15/144 23/07/2014
Notification No. RBI/2014-15/145 23/07/2014
Notification No. RBI/2014-15/141 22/07/2014
Notification No. RBI/2014-15/142 22/07/2014
Notification No. RBI/2014-15/143 22/07/2014
Notification No. RBI/2014-15/136 22/07/2014
Notification No. RBI/2014-15/137 21/07/2014
Notification No. RBI/2014-15/138 21/07/2014
Notification No. RBI/2014-15/139 21/07/2014
Notification No. RBI/2014-15/140 21/07/2014

 

80GG Deduction of House Rent

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80GG Deduction of House Rent

Section 80GG allows the  Individuals to a deduction in respect of house rent paid by him for his own residence. Such deduction is permissible subject to the following conditions :-

(a)  the Individual has not been in receipt of any House Rent Allowance from his employer specifically granted to him which qualifies for exemption under section 10(13A) of the Act;

(b)  the Individual files the declaration in Form 10BA 

(c)  The employee does not own:

(i)  any residential accommodation himself or by his spouse or minor child or where such Individual  is a member of a Hindu Undivided Family, by such family, at the place where he ordinarily resides or performs duties of his office or carries on his business or profession; or

(ii)  at any other place, any residential accommodation being accommodation in the occupation of the Individual, the value of which is to be determined under Section 23(2)(a) or Section 23(4)(a) as the case may be.

(d)  He will be entitled to a deduction in respect of house rent paid by him in excess of 10% of his total income, subject to a ceiling of 25% thereof or Rs. 2,000/- per month, whichever is less. The total income for working out these percentages will be computed before making any deduction under section 80GG. In other word eligibility will be least amount of the following :-

1) Rent paid minus 10 percent the adjusted total income.
2) Rs 2,000 per month.
3) 25 percent of the adjusted total income.
The deduction will also not be available to an assessee if any residential accommodation is owned by the assessee at any other place, which he is occupying, and the concessions in respect of self-occupied house are claimed by him for that property. In such a case, no deduction will be allowed in respect of the rent paid, even if the person does not own any residential accommodation at the place where he ordinarily resides.
 FORM NO. 10BA

(See rule 11B)

DECLARATION TO BE FILED BY THE ASSESSEE

CLAIMING DEDUCTION U/S 80 GG

I/We………………………………………………………………………………………….

(Name of the assessee with permanent account number)

do hereby certify that during the previous Year…………..I/We had occupied the premise…………..(full address of the premise) for the purpose of my/our own residence for a period of………..months and have paid Rs……………….. In cash/through crossed cheque, bank draft towards payment of rent to Shri/Ms/M/s……….(name and complete address of the landlord).

It is further certified that no other residential accommodation is owned by

(a)  me/my spouse/my minor child/our family (in case the assessee is HUF), at ……………..where I/we ordinarily reside/perform duties of officer or employment or carry on business or profession, or

(a)  me/us at any other place, being accommodation in my occupation, the value of which is to be determined u/s 23(2)(a)(i) of u/s 23(2)(b).

AS 30, 31, & 32 — FINANCIAL INSTRUMENTS – A SNAPSHOT

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Applicability of AS 30, 31 and 32

These standards are not mandatory but earlier adoption is encouraged. It may be mentioned that it has not been adopted by NACAS and thus in case of a company an earlier adoption of these standards might not comply with certain standards like AS-13 investment: A Company needs to consult accounting experts in such situation. Needless to mention that in case the company wishes to adopt the standard then it shall adopt the entire standard and not a part of it .

ICAI Clarification – Principle of Prudence

Under situation where an item of financial instrument is suffering from losses, than based on principle of prudence the entity shall provide for such losses through its profit and loss account.

Objectives and scope

Financial instruments are addressed in three standards: AS-31, which deals with distinguishing debt from equity and with netting; AS 30, which contains requirements for recognition and measurement; and AS-32, which deals with disclosures. The objective of the three standards is to establish requirements for all aspects of accounting for financial instruments, including distinguishing debt from equity, netting, recognition, derecognition, measurement, hedge accounting and disclosure. The scope of the standards is wide-ranging. The standards cover all types of financial instrument, including receivables, payables, investments in bonds and shares, borrowings and derivatives. They also apply to certain contracts to buy or sell non-financial assets (such as commodities) that can be net settled in cash or another financial instrument.

Nature and characteristics of financial instruments

Financial instruments include a wide range of assets and liabilities. They can mostly be exchanged for cash. They are recognised and measured according to AS-30 requirements and are disclosed in accordance with AS-32.

Financial instruments (FI) :

  • represent contractual rights or obligations
  • to receive or pay cash or other financial asset.

A financial asset:

  • is cash;
  • a contractual right to receive cash or another financial asset;
  • a contractual right to exchange financial assets or liabilities with another entity under conditions that are potentially favourable; or
  • an equity instrument of another entity.

A financial liability:

  • is a contractual obligation to deliver cash or another financial asset or
  • to exchange financial instruments with another entity under conditions that are potentially unfavourable.

An equity instrument is any contract that evidences a residual interest in the entity’s assets after deducting all its liabilities.

A derivative is a financial instrument that derives its value from an underlying price or index, requires little or no initial investment and is settled at a future date. In some cases contracts to receive or deliver a company’s own equity can also be derivatives.

They can be classified as:

  • Futures
  • Forwards
  • Options ( Put and Call)

Embedded derivatives in host contracts

It means those derivatives which have features of more than one derivative attached to it. These instruments are required to be accounted on separate contract basis.

Host contract of liability                                ——-

Add: Advantages to holder of asset             ——-

(other party)

Less: Disadvantages to holder                    ——-

(other party)

Proceeds                                                     ——-

Advantages and disadvantages should be recorded as Equity Instruments.

Embedded derivatives that are not ‘closely related’ to the rest of the contract are separated and accounted for as if they were stand-alone derivatives (ie, measured at fair value, generally with changes in fair value recognised in profit or loss). An embedded derivative is not closely related if its economic characteristics and risks are different from those of the rest of the contract. AS-30 sets out examples to help determine when this test is (and is not) met. Analysing contracts for potential embedded derivatives and accounting for them is one of the more challenging aspects of AS-30.

Classification of financial instruments

The way that financial instruments are classified under AS-30 drives how they are subsequently measured and where changes in measurement are accounted for.

There are four classes of financial asset under AS-30A

Available for sale – those non – derivatives FAs which cannot be classified as held to maturity, loans and receivables and   fair value through profit and loss. They should be measured at fair value on the date of recognition plus directly attributable cost.

Held to maturity – these are non – derivative FAs with fixed or determinable payments and fixed maturity than an entity has positive intention and ability to hold till maturity.These are measured at fair value which means transaction cost plus directly attributable cost.

Loans and receivables – These are FAs which have fixed and determinable payments that are unquoted in active markets.Those which are short term are measured at acquisition price plus transaction cost.

Fair value through profit or loss – FAs which are

  • held for trading
  • acquired or incurred principally for the purpose of selling or repurchasing it in the near term,
  • part of a portfolio,
  • a Derivative (except for a derivative that is a Financial Guarantee Contract or an effective hedging instrument)

It should be measured at fair value on the date of acquisition which is the aquisition price plus directly attributable transaction cost which should be charged to Profit & Loss Account.

Financial liabilities are classified as fair value through profit or loss if they are so designated (subject to various conditions) or if they are held for trading. Otherwise they are classed as ‘ other liabilities’. Financial assets and liabilities are measured either at fair value or at amortised cost, depending on this classification. Changes are taken to either the income statement or directly to equity.

Financial liabilities and equity

The classification of a financial instrument by the issuer as either a liability (debt) or equity can have a significant impact on an entity’s reported earnings, its borrowing capacity,and debt-to-equity and other ratios that could affect the entity’s debt covenants. The substance of the contractual arrangements of a financial instrument, rather than its legal form, governs its classification. This means, for example, that since a preference share redeemable (puttable) by the holder is economically the same as a bond, it is accounted for in the same way as the bond. Therefore, the redeemable preference share is treated as a liability rather than equity, even though legally it is a share of the issuer. The critical feature of debt is that under the terms of the instrument the issuer is, or can be, required to deliver either cash or another financial asset to the holder and cannot avoid this obligation. For example, a debenture, under which the issuer is required to make interest payments and redeem the debenture for cash, is a financial liability. An instrument is classified as equity when it represents a residual interest in the issuer’s assets after deducting all its liabilities. Ordinary shares or common stock, where all the payments are at the discretion of the issuer, are examples of equity of the issuer. A special exception exists to the general principal of classification for certain subordinated redeemable (puttable) instruments that participate in the pro rata net assets of the entity. Where specific criteria are met such instruments would be classified as equity of the issuer. Some instruments contain features of both debt and equity. For these instruments, an analysis of the terms of each instrument in light of the detailed classification requirements will be necessary. Such instruments, such as bonds that are convertible into a fixed number of equity shares either mandatorily or at the holder’s option, must be split into debt and equity (being the option to convert) components. A financial instrument, including a derivative, is not an equity instrument solely because it may result in the receipt or delivery of the entity’s own equity instruments. The classification of contracts that will or may be settled in the entity’s own equity instruments is dependent on whether there is variability in either the number of own equity delivered and/or variability in the amount of cash or other financial assets received, or whether both are fixed. The treatment of interest, dividends, losses and gains in the income statement follows the classification of the related instrument. So, if a preference share is classified as debt, its coupon is shown as interest. But the dividend payments on an instrument that is treated as equity are shown as a distribution.

Recognition and derecognition

Recognition

Recognition issues for financial assets and financial liabilities tend to be straightforward.An entity recognises a financial asset or a financial liability at the time it becomes a party to a contract.

Derecognition

Derecognition is the term used for ceasing to recognise a financial asset or financial liability on an entity’s balance sheet. The rules here are more complex.

Assets

An entity that holds a financial asset may raise finance using the asset as security for the finance, or as the primary source of cash flows from which to repay the finance. The derecognition requirements of AS 30 determine whether the transaction is a sale of the financial assets (and, therefore, the entity ceases to recognise the assets) or whether finance secured on the assets has been raised (and the entity recognises a liability for any proceeds received). This evaluation might be straightforward. For example, it is clear with little or no analysis that a financial asset is derecognised in an unconditional transfer of it to an unconsolidated third party with no risks and rewards of the asset being retained. Conversely, it is clear that derecognition is not allowed where an asset has been transferred, but it is clear that substantially all the risks and rewards of the asset have been retained through the terms of the agreement. However, in many other cases, the analysis is more complex. Securitisation and debt factoring are examples of more complex transactions where derecognition will need careful consideration.

Liabilities

An entity may only cease to recognize (derecognise) a financial liability when it is extinguished — that is, when the obligation is discharged, cancelled or expired, or when the debtor is legally released from the liability by law or by the creditor agreeing to such a release.

Measurement of financial assets and liabilities

Under AS 30, all financial instruments are measured initially at fair value. The fair value of a financial instrument is normally the transaction price — that is, the amount of the consideration given or received. However, in some circumstances, the transaction price may not be indicative of fair value. In that situation, an appropriate fair value is determined using data from current observable transactions in the same instrument or based on a valuation technique whose variables include only data from observable markets.

The measurement of financial instruments after initial recognition depends on their initial classification. All financial assets are measured at fair value except for loans and receivables, held-to-maturity assets and, in rare circumstances, unquoted equity instruments whose fair values cannot be measured reliably or derivatives linked to and which must be settled by the delivery of such unquoted equity instruments that cannot be measured reliably. Loans and receivables and held-to-maturity financial assets are measured at amortised cost. The amortised cost of a financial asset or liability is measured using the ‘ effective interest method’. Available-for-sale financial assets are measured at fair value with changes in fair value recognised in equity. For available-for-sale debt securities, interest is recognised in income using the ‘ effective interest method’. Available-for-sale equity securities dividends are recognised in income as the holder becomes entitled to them. Derivatives (including separated embedded derivatives) are measured at fair value. All fair value gains and losses are recognised in profit or loss except where they qualify as hedging instruments in cash flow hedges. Financial liabilities are measured at amortised cost using the effective interest method unless they are measured at fair value through profit or loss. Financial assets and liabilities that are designated as hedged items may require further adjustments under the hedge accounting requirements. All financial assets, except those measured at fair value through profit or loss, are subject to review for impairment. Therefore, where there is objective evidence that such a financial asset may be impaired, the impairment loss is calculated and recognised in profit or loss.

Hedge accounting

‘Hedging’ is the process of using a financial instrument (usually a derivative) to mitigate all or some of the risk of a hedged item. ‘ Hedge accounting’ changes the timing of recognition of gains and losses on either the hedged item or the hedging instrument so that both are recognised in profit or loss in the same accounting period. To qualify for hedge accounting, an entity (a) at the inception of the hedge, formally designates and documents a hedge relationship between a qualifying hedging instrument and a qualifying hedged item; and

(b) both at inception and on an ongoing basis, demonstrates that the hedge is highly effective.

Hedging can be done through:

  1. Currency Contracts
  2. Interest rate swap

There are three types of hedge relationship

  •  Fair value hedge: a hedge of the exposure to changes in the fair value of a recognised asset or liability, or a firm commitment.
  •  Cash flow hedge: a hedge of the exposure to variability in cash flows of a recognised asset or liability, a firm commitment or a highly probable forecast transaction.
  •  Net investment hedge: a hedge of the foreign currency risk on a net investment in a foreign operation.

A For a fair value hedge, the hedged item is adjusted for the gain or loss attributable to the hedged risk. That element is included in the income statement where it will offset the gain or loss on the hedging instrument.

For a cash flow hedge, gains and losses on the hedging instrument, to the extent it is an effective hedge, are initially included in equity.They are reclassified to the profit or loss when the hedged item affects the income statement. If the hedged item is the forecast acquisition of a non-financial asset or liability, the entity may choose an accounting policy of adjusting the carrying amount of the non-financial asset or liability for the hedging gain or loss at acquisition.

 Hedges of a net investment in a foreign operation are accounted for similarly to cash flow hedges.

Disclosure Requirements (AS 32):

  1.  All financial assets and financial liabilities should be disclosed as a reconciliation statement.
  2. If any financial asset has been furnished as a security to loan, the fact should be disclosed.
  3. Following risks should be disclosed: 
    market risk – risk regarding changes in interest rate / discounting rate, liquidity risk – risk regarding late realisation of assets, credit risk – risk regarding non – realisation of assets.

  4. Information should be given regarding hedging, hedged item, risk,% of effectiveness and hedge instrument.

  5. Information should be given regarding Derivative risk, Derivative Instrument, purpose of Derivative, underlying derivative.

  6. Information should be given regarding Securitisation, securitised asset, gain or loss on securitisation,yield rate applied for securitisation.

  7. Accounting method followed for investment along with valuation basis. Trade date or settlement date accounting opted for Company’s investment should be disclosed.

     

Nature of Limited Liability Parterneship (LLP)

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Limited Liability Parterneship (LLP)

1. Concept of “limited liability partnership”
  • LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.
  • The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name.
  • The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the partners is limited to their agreed contribution in the LLP.
  • Further, no partner is liable on account of the independent or un-authorized actions of other partners, thus individual partners are shielded from joint liability created by another partner’s wrongful business decisions or misconduct.
  • Mutual rights and duties of the partners within a LLP are governed by an agreement between the partners or between the partners and the LLP as the case may be. The LLP, however, is not relieved of the liability for its other obligations as a separate entity.

Since LLP contains elements of both ‘a corporate structure’ as well as ‘a partnership firm structure’ LLP is called a hybrid between a company and a partnership.

2. Structure of an LLP

LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession.

3. Advantages of LLP form
LLP form is a form of business model which:
(i) is organized and operates on the basis of an agreement.
(ii) provides flexibility without imposing detailed legal and procedural requirements
(iii) enables professional/technical expertise and initiative to combine with financial risk taking capacity in an innovative and efficient manner

4. Other countries where this form is available

The LLP structure is available in countries like United Kingdom, United States of America, various Gulf countries, Australia and Singapore. On the advice of experts who have studied LLP legislations in various countries, the LLP Act is broadly based on UK LLP Act 2000 and Singapore LLP Act 2005. Both these Acts allow creation of LLPs in a body corporate form i.e. as a separate legal entity, separate from its partners/members.

5. Difference between LLP & “traditional partnership firm”
  • Under “traditional partnership firm”, every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner.
  • Under LLP structure, liability of the partner is limited to his agreed contribution. Further, no partner is liable on account of the independent or un-authorized acts of other partners, thus allowing individual partners to be shielded from joint liability created by another partner’s wrongful acts or misconduct.
6. Difference between LLP & a Company
  • A basic difference between an LLP and a joint stock company lies in that the internal governance structure of a company is regulated by statute (i.e. Companies Act, 1956) whereas for an LLP it would be by a contractual agreement between partners.
  • The management-ownership divide inherent in a company is not there in a limited liability partnership.
  • LLP will have more flexibility as compared to a company.
  • LLP will have lesser compliance requirements as compared to a company.[archives]

DIGITAL SIGNATURE DSC

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DIGITAL SIGNATURE

DSC  

1  What is a Digital Signature Certificate?

Digital Signature Certificates (DSC) are the digital equivalent (that is electronic format) of physical or paper certificates. Examples of physical certificates are drivers’ licenses, passports or membership cards. Certificates serve as proof of identity of an individual for a certain purpose; for example, a driver’s license identifies someone who can legally drive in a particular country. Likewise, a digital certificate can be presented electronically to prove your identity, to access information or services on the Internet or to sign certain documents digitally.

2 Why is Digital Signature Certificate (DSC) required?
Physical documents are signed manually, similarly, electronic documents, for example e-forms are required to be signed digitally using a Digital Signature Certificate.

3 Who issues the Digital Signature Certificate?
A licensed Certifying Authority (CA) issues the digital signature. Certifying Authority (CA) means a person who has been granted a license to issue a digital signature certificate under Section 24 of the Indian IT-Act 2000. The list of licensed CAs along with their contact information is available on the MCA portal. Certifying Authorities

4 What are the different types of Digital Signature Certificates valid for MCA21 program?
The different types of Digital Signature Certificates are:Class 2: Here, the identity of a person is verified against a trusted, pre-verified database.Class 3: This is the highest level where the person needs to present himself or herself in front of a Registration Authority (RA) and prove his/ her identity.

5 What type of Digital Signature Certificate (DSC) is to be obtained for e-Filing on the MCA Portal?
DSC of Class 2 and Class 3 signing certificate category issued by a licensed Certifying Authority (CA) needs to be obtained for e-Filing on the MCA Portal.

6 Is Director Identification Number (DIN) a pre-requisite to apply for DSC?

No.

7 What is the cost of obtaining a Digital Signature Certificate?

The cost of obtaining a digital signature certificate may vary as there are many entities issuing DSCs and their charges may differ.

8 How much time do CAs take to issue a DSC?

The time taken by CAs to issue a DSC may vary from three to seven days.

9 What is the validity period of a Digital Signature Certificate?

The Certifying Authorities are authorized to issue a Digital Signature Certificate with a validity of one or two years.

10 What is the legal status of a Digital Signature?

Digital Signatures are legally admissible in a Court of Law, as provided under the provisions of IT Act, 2000.

11 What are the Internet Explorer security settings required for registering the Digital Signature Certificate for ‘User Registration’ or ‘Role Check’ purpose?

You need to follow the steps given below:

  1. In Internet Explorer, click on Tools > Internet Options > Security.

  2. Click “Internet” and “Default Level” button and change the Security Settings to “Medium”.

  3. Click “Custom Level” Button.4. Enable the “Download Signed ActiveX controls” option.

  4. Enable the “Run ActiveX controls and Plugins” option.6. Enable the “Script ActiveX controls marked safe for              scripting” option.

12 Certificate carry the message “validity unknown” in the Digital Signature of ROC with question mark ?

  1. Download the Certificate corresponding to approved SRN from the FO portal.

  2. Open the certificate and check whether the signature is validated or not, if DSC marked as “?” then we need to          validate the same.

  3. Right click on the signature and click on “Show Signature Properties”.

  4. Click on “Show Certificate” tab.

  5. We will find 6 tabs in a single row, click on “Trust” tab.

  6. Click on “Add to Trusted Identities” tab as shown below

  7. Now a dialogue box will appear for the acrobat security on clicking the “Add to Trusted Identities” tab, click on         “ok”.

  8. Check all check boxes as shown below under Trust Tab. Click on “Ok” button.9. Click on the “Validate                       Signature” tab and check the Validity Summary points mentioned under Summary tab will change to green               coloured and warning sign as shown below10. Close the signature properties.

  9. The Signature is authenticated then the certificate DSC marked as “?” will turn into green coloured tick mark           as shown below. If signature is not valid then user has to raise ticket to get the valid signature.

13 I am currently the Bank Official/Nodal Administrator and want to update my Expired DSC. What should I do?

Please follow the following steps to update your expired DSC:-1. Go to MCA21 Portal (www.mca.gov.in/MCA21).2. Go to the ‘Services’ tab on the Home page3. Click on the ‘Register Digital Signature’ link4. Click on the link “Update DSC for Bank Official/Nodal Administrator”5. Fill-up the mandatory particulars likea) User Id of Bank Official/Nodal Administratorb) Namec) Email Id6. Click on the ‘Next’ button7. Select the Digital Certificate8. Submit

14 How to troubleshoot errors faced while using DCS?
Please refer the steps given in the Troubleshooting Errors WhileUsing DSC to resolve this.

15 How to register Digital Signature Certificate for Bank Officials?
Please refer the steps given in the How To Register Digital Signature Certificate For Bank Officials to register Digital Signature Certificate for Bank Officials.

ONE Person Company

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FAQ – Regarding ONE Person Company

1 How to incorporate an OPC?
Name reservation: Form INC-1 shall be filed for name availability.
Incorporate OPC: After name approval, form INC-2 shall be filed for incorporation of the OPC within 60 days of filing form INC-1.
Form DIR-12 shall be filed along with (linked) form INC-2 except when promoter is the sole director of the OPC.
The company shall file form INC-22 within 30 days once form INC-2 is registered in case the address of correspondence and registered office address are not same.

2 How to inform RoC about change in membership of OPC?
The company shall file form INC-4 in case of cessation of member of OPC on account of death, incapacity to contract or change in ownership. In the same form, user needs to provide details of the new member of the OPC

3 Is there any threshold limits for an OPC to mandatorily get converted into either private or public company?
In case the paid up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover exceeds during the relevant period exceeds two crore rupees, then the OPC has to mandatorily convert into private or public company.

4 How to intimate RoC that the OPC has exceeded the threshold limits and require conversion into private or public company?
The OPC shall inform RoC in form INC-5, if the threshold limits is exceeded and is required to be converted into private or public company.

5 What is the time limit for filing form INC-5?
Form INC-5 shall be filed within sixty days of exceeding threshold limits.

6 Is there any form that is to be filed for conversion of an OPC into private or public company? Is there any other purpose for filing this form?
Form INC-6 shall be filed by an OPC for conversion of an OPC into private or public company.
Yes, the private company will also file form INC-6 for converting itself into an OPC. The paid up share capital of private company should not be exceeding fifty lakh rupees and should not have average annual turnover more than two crore rupees at the time of such conversion into OPC. The company shall be having one member and shall appoint one nominee to act as member in case of death or incapacity of the member at the time of conversion into OPC.

7 What is the time limit for filing form INC-6?
Form INC-6 shall be filed within 30 days in case of voluntary conversion and within six months of mandatory conversion.

8 Who is eligible to act as a member of an OPC?
Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC.
For the above purpose, the term “resident in India” means a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one financial year.

9 A person can be a member in how many OPCs?
A person can be member in only one OPC.

10 What if a member of an OPC becomes a member in another OPC by virtue of being a nominee in that other OPC?
Where a natural person, being member in One Person Company becomes a member in another OPC by virtue of his being a nominee in that OPC, then such person shall meet the eligibility criteria of being a member in only one OPC within a period of one hundred and eighty days, i.e., he/she shall withdraw his membership from either of the OPCs within one hundred and eighty days.

11 Which form is to be filed in case of withdrawal of consent by the nominee of an OPC or in case of intimation of change in nominee by the member?
Form INC-4 shall be filed in case of withdrawal of consent by the nominee or in case of intimation of change in nominee by the member.

 

Budget 2014

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Budget 2014

 New Delhi: Bringing cheer to individual taxpayers, Finance Minister Arun Jaitley in his maiden Union Budget 2014-15 in Parliament on Thursday, raised personal tax exemption limit to Rs 2.5 lakh from the current Rs 2 lakh.

 Income tax exemption limit for senior citizens has been raised to Rs 3 lakh.

 The Investment limit under Section 80C has also been hiked to Rs 1.5 lakh from the current Rs 1 lakh, while the FM increased housing loan interest rate deduction limit to Rs 2 Lakh.
 In further relief to the depositors, the FM announced that the PPF (Public Provident Fund) deposit ceiling will be raised to Rs 1.5 lakh from the existing Rs 1 lakh.
 The FM also announced to raise FDI in Defence and Insurance sectors to 49 percent and said that the subsidy regime, particularly food and fuel, will be overhauled.
 Assuring investors that retrospective amendments to tax laws will be undertaken with extreme caution, Jaitley said all fresh cases arising out of the 2012 amendment of I-T Act will be looked into by a high-level CBDT committee.
 However, the existing tax disputes, arising out of Retrospective Amendment to the Income tax Act, 1961, and are pending in courts, will be allowed to reach their logical conclusions, he said.
 Stating that his predecessors have left a very daunting target of meeting the fiscal deficit, Jaitley said that the BJP government will take this as a challenge and meet the fiscal deficit target of 4.1 percent of GDP.
 Jaitley told Parliament that India`s 1.2 billion people were “exasperated” after two years of economic growth of below 5 percent.
 He vowed that Asia`s third largest economy would expand at a rate of 7-8 percent within three to four years.

Here are the key highlights of Union Budget 2014-15:

Taxation:
 Personal tax exemption limit raised to Rs 2.5 lakh from current Rs 2 lakh for taxpayers below 60 years
 Senior citizens’ tax exemption limit hiked from Rs 2.5 lakh to Rs 3 lakh
 No change in surcharge for corporates, individuals
 Education Cess to stay at current 3%
 Investment limit under Section 80C hiked to Rs 1.5 lakh from current Rs 1 lakh
 Exemption on housing loans interest on self-occupied property increased from Rs 1.5 lakh to 2 lakh

Other highlights:

 The people of India have decisively voted for change
 India unhesitatingly desires to grow
 We look forward to lower levels of inflation
 The country is no mood to suffer from unemployment, lack of infrastructure and apathetic governance
 The continuing slowdown in emerging economies has posed threat to global economic recovery
 Slow decision-making has led to slow growth
 Steps announced in the budget are aimed for sustained growth of 7-8% within the next three-four years
 It would not be wise to expect that the same can be done and must be done in the first budget being
 presented within the first 45 days of the new govt
 We will leave no stone unturned to create an vibrant and strong India
 Will lay down broad policy indicators in the budget

 We cannot spend beyond our means, we needs to follow fiscal prudence
 We cannot leave a legacy of debt for our future generations
 Considering we have 2 years of GDP growth and static industrial sector, the target of 4.1% fiscal deficit is dauntin
 I accept this target as a challenge
 Black money is curse on our economy
 We have to take bold steps to spur growth in economy. They are directional
 Govt committed to minimum government maximum governance
 Aim to make food and fuel subsidy more targeted so that it helps those who need them
 Urgent need to generate more resources for the economy
 This govt will not bring any change in tax rates retrospectively
 All retro taxes to be scrutinized by a high-level committee
 GST by end of the year (sets no firm deadline)
 To encourage development of smart cities; FDI cap on minimum built up area reduced
 Policy of NDA govt is to promote FDI in select sectors
 GST will streamline tax administration and result in higher tax collection for Centre and states
 FDI in defence sector to go up to 49%
 Greater autonomy to banks
 PSU 247,944 cr capex to create industrial cycle
 Smart cities: PM has vision of developing 100 new cities
 Rs 7,060 cr fund for smart cities
 Tourism: e-visas to be introduced at nine airports in the country in a phased manner
 Real estate investment trusts – modified REITS is being announced for infrastructure projects to reduce pressure on banking system
 Kisan Vikas Patra to be pushed further
 New scheme for skill development called Skill India to be launched
 Sanitation in every household by 2019
 Shyama Prassad Mukherjee Rozgar mission to be launched
 New scheme for agricultural irrigation
 Rs 500 cr for rural electrification
 Rs 200 cr for Sardar Vallabhbhai statue in Gujarat
 Rs 50000 cr for SC/ST schemes
 Social security: minimum pension of Rs 1000 per month for all subscribers of EPFO scheme
 National level institute for mental health to be set up
 Currency notes with braille like signs to help the blind
 Rs 150 cr on new scheme to improve safety of women in big cities
 ‘Beti bacahao, beti padahao’ scheme to be launched – Rs 100 cr allocation
 Gender main-streaming: School curriculum to have a chapter on the issue
 MNREGA will be made more productive; it will be linked to agriculture related activities
 Women SHGs bank loan scheme to be extended to other districts
 Rural housing scheme: allocation increased to Rs 8000 cr
 Watershed programme: New prog with outlay of Rs 2000 cr
 Backward region grant fund for 272 backward districts – BRGF will be restructured
 Rs 3600 cr for national rural drinking water programme
 Health for all: free drug and free diagnostic services
 Four more AIIMS to be set up in AP, WB, Vidharbha and Purvanchal – Rs 500 cr allocation
 12 more govt medical colleges to be added
 Aim to create an AIIMS in every state
 Govt to provide toilet and drinking water in all girl schools
 New teachers training scheme is being launched: Rs 500 cr allocated
 Rs 100 cr for virtual classrooms
 National Centre of Humanities would be set up in MP
 Five more IITs and five more IIMs to be set up
 Pan-India programme called Digital India would be launched – it will provide broadband connectivity to villages
 5 new IITs in Jammu, Chhattisgarh, Goa, AP & Kerala
 5 new IIMs in HP, Punjab, Bihar, Odisha & Maharashtra
 Program for upgradation of skills and ancient arts for the minorities
 Two more research institutes on farming to be set up in Assam and Jharkhand
 New agri univ in AP, Rajasthan
 Horticulture univ in Telangana and Haryana
 National rural and tech mission is proposed – Rs 500 cr allocated
 New plan to promote community radio – Rs 100 cr allocated
 Urban renewal to get Rs 50000 cr
 Urabn metro: govt will encourage metro system in PPP mode
 Rs 100 cr for Lucknow and Ahmedabad metro projects
 New mission for low cost affordable housing for urban poor – Rs 4000 cr allocated
 Easier flow of FDI is also being encouraged in this sector
 Rs 100 cr for modernisation of madrasas
 Slum development to be included in Corporate Social Responsibility activities
 Urban renewal will address drinking water, use of recycled water,solid waste management, digital connectivity; 500 habitats supported
 15 Model Rural Health Research centers to be set up for rural health issues
 Anti-poverty programmes will be targeted well
 New scheme to provide soil health card to each farmer- Rs 100 cr allocated
 Climate change is a reality which we have to face – national adaptation fund for climate change to be set up – Rs 100 allocated
 Finance to 5 lakh joint farming groups through NABARD
 Price stabilisation fund to be set up – Rs 500 cr allocated
 State govts to be encouraged to set up farmers’ markets in cities and town
 Rs 8 lakh crore target for agriculture credit
 3% tax subvention for farmers who pay up on time
 RIDF target raised to 30000 cr
 Warehousing: Rs 5000 cr allocated
 Set up long term rural credit fund to be started by NABARD
 Rs 5000 cr for STRC fund
 To set up 100 mobile soil testing labs across country
 See FY’14 growth at 4%
 Committed to restructuring FCI
 Kisan Television will be launched this year – this will provide real time info to farmers on farming techniques – Rs 100 cr allocated
 All the govt departments and ministries will be integrated through e-platform by 31 Dec this year
 Export proportion mission to be set up
 Committed to revive SEZs
 Effective steps to revilatise SEZs
 SMEs form the backbone of economy
 Most SMEs are owned and run by SC/STs and OBCs
 Committee to be set up to look at financing this sector
 National Industrial Corridor with headquarters in Pune will be set up. Rs 100 crores allotted
 Apprentice Act to be suitably amended to strengthen the Apprentice Training Scheme
 6 more textile clusters to be set up at Bareily, Lucknow, Kutch, Mysore, Bhagalpur and TN
 Hastkala academy to be set up in Delhi
 Pashmina production prog in J&K
 To set up 7 new Industrial Smart Cities
 Manufacturing units will be allowed to sell products through retail, e-commerce
 Trade facilitation centre to promote handloom work in Varanasi
 Ganga inland navigation – jal marg from Allahabad to Haldia at the cost of Rs 4200 cr
 New scheme to develop new airports in tier 2 and tier 3 cities
 Road sector needs huge investment
 NHAI and state highways get 37,000 cr which includes Rs 3000 cr for Northeast
 New expressways to be developed in parallel to the development on industrial corridors
 Rs 100 cr for new coal based power generation technology
 Big solar projects in Rajasthan, TN and Ladakh – Rs 400 cr allocated
 Current impasse in mining sector will be resolved expeditiously
 Royalty on mining will be reviewed as suggested by many state governments
 Capital markets: Need to strengthen regulatory framework
 Essential to have modern monetary policy framework, Govt to work with RBI on this
 Liberalise AGR-GDR scheme part
 Indian capital market to be energized by introduction of single KYC scheme
 Urgent need to converge Indian accounting standards with international ones
 Adherence to Indian accounting standards to be made mandatory by 2017
 Two bank accounts in each household for marginal sections
 Banks to be encouraged to give long term loans to industrial sector
 NPA is a cause of worry
 6 new debt recovery tribunals to be set up
 Insurance penetration is still very low
 Pending Insurance Amendment Bill to be taken up in Parliament
 Benefits of insurance have not reached larger section of people, will address in multi-pronged manner with stakeholders
 Provide all households with banking facilities to empower the weaker sections
 Committee will be set up to examine how unused money in postal schemes can be utilized
 Govt committed to providing 24×7 power supply to all homes
 Chit Fund and Money Circulation Act will be overhauled
 PPF ceiling upped from Rs 1 lakh to be Rs 1.5 lakh
 Small savings scheme to be revitalized
 Capital outlay of defence increased by Rs 5000 cr
 New war memorial will be constructed at Princess Park – Rs 100 cr allocated
 Small savings scheme to promote girl child, which will mature at the time of her marriage, higher education will be introduced
 Renewed effort to link rivers, Rs 100 cr for detailed study on it
 New scheme Namami Ganga for rejuvenation of River Ganga gets Rs 2,037 cr
 Rs 990 crore for development of villages along the border
 Rs 100 cr set aside for development of Technology Development Fund
 National Police Memorial to be allocated Rs 50 cr
 Allocation for defence Rs 2,29,000 crore
 Budget proposes National Housing Banking programme; sets aside Rs 8,000
 Rs 500 cr for five tourists circuits
 National sports academies to be set up in different parts of India
 Rs 200 cr for upgradation of stadiums in J&K
 Sports university to be set up in Manipur, Rs 100 allocated
 Rs 100 cr for training for forthcoming Asian and Commonwealth Games
 Young leaders prog for youth to be started, Rs 100 cr set aside
 Displaced Kashmiri migrants rehabilitation gets Rs 500 cr
 National Centre for Himalayan studies to be set up in Uttarakhand
 National institute for customs and central excise to be set up in Karnataka
 Development of rail system in Northeast get Rs 1000 cr over and above what has been provided in interim budget
 New 24×7 TV channel for Northeast
 Union govt to help Andhra and Telangana in reorganization
 Rs 200 cr for power reforms and Rs 500 cr for water reforms in Delhi
 Rs 150 cr for communication needs of Andaman and Nicobar Islands
 Rs 100 cr set aside for development of organic farming in Northeast region

Budget estimates:

 Non-plan expenditure at Rs 12,19,892 crore
 Non-tax revenue at Rs 2,12,544 crore
 Revenue deficit pegged at 2.9 percent of GDP
 Plan expenditure at over Rs 5.75 lakh crore
 Impact of tax changes have been factored
 60 more Ayakar Sewa Kendras to be set up in the country
 Income Tax Dept is expected to function not only as an enforcement dept but also as a facilitator
 Net effect of direct tax proposals is revenue loss of Rs 22,200 cr
 Long-term Capital Gains tax on MFs raised to 20% from 10%

Company Letter Head

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Companies Account

Section 12(3)(c) of Companies Act 2013, which will be effective from 1.4.2014, provides that every company shall get its name, address of its registered office and the Corporate Identity Number along with telephone number, fax number, if any, e-mail and website addresses, if any, printed in all its business letters, bill heads, letter papers and in all its notices and other official publications. Pl ensure compliance.

Therefore, following details are required on Letter Head and Invoices.

Company Name

Registered Office

Company Identity NO (CIN)

Telephone No

Fax No

Email Address

Website Address (If any)

Advances checklist for LFAR

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Advances checklist for LFAR

 In respect of common irregularities, the Auditors can give their comments borrower–wise in the LFAR in the format given hereunder:

Name of Borrower

Name of Branch

Region

IRAC Status

Facility

Sanctioning Authority

Limit

Amount o/s. as at the year end

Irregularity No.

1

2

3

4

5

6

7

8

9
  1. In respect of Column 9 above, “Irregularity No.”, the number as given in the

“Glossary to Irregularities” in Point 5, under the head “Item” below should be given for the irregularity applicable to respective borrower. In case the auditors feel that in spite of the list of irregularities given below, there are some other irregularities, which the auditor would like to bring to notice, the auditor may separately disclose under the given head by giving “appropriate number”

For the aforesaid purpose, “appropriate number” would mean, for example, if the auditors feels that in case of “Review/ Monitoring/ Supervision”, which has the number “4”, any additional irregularity has to be incorporated, he may give a number after the last number appearing in the list, such as “4.62”, and onwards. Similarly in case of “Credit Appraisal” which has the number “1”, any additional irregularity may be given “1.19”, and so on

  1. The borrower–wise details may be given in descending order based on the Amount outstanding
  2. Glossary to irregularities

SN

Remark

1

Credit Appraisal

1.1

Loan application not on record at Branch

1.2

The appraisal form was not filled up correctly and thereby the appraisal and assessment was not done properly

1.3

Loan application is not in the form prescribed by Head Office

1.4

The Bank did not receive certain necessary documents and Annexures required with the application form

1.5

Basic documents such as Memorandum & Articles of Association, Partnership deed, etc, which are a pre–requisite to determine the status of the borrower, not obtained

1.6

Certain adverse features of the borrower not incorporated in the appraisal note forwarded to the management

1.7

Industry/group exposure and past experience of the Bank is not dealt in the appraisal note sent to the management for sanction

1.8

The level for inventory/book–debts/creditors for finding out the working capital is not properly assessed

1.9

Techno–economic feasibility report, which is required to know the technical aspects of the borrower’s business, is not obtained from Technical Cell

1.10

Credit report on principal borrowers and confidential report from their banks are not insisted from the borrowers

1.11

The opinion reports of the associate and/or sister concerns of the borrower are not scrutinized

1.12

The opinion reports of the associate and/or sister concerns of the borrower are not called for

1.13

The opinion reports of the associate and/or sister concerns of the borrower are not updated

1.14

The opinion reports of the associate and/or sister concerns of the borrower are not satisfactory

1.15

The opinion reports of the associate and/ or sister concerns of the borrower are not scrutinised/ called for/ not updated/ not satisfactory

1.16

The procedure/instructions of head office regarding preparation of proposals for grant not followed

1.17

The procedure/instructions of head office regarding preparation of proposals for renewal of advances not followed

1.18

The procedure/instructions of head office regarding preparation of proposals for enhancement of limits, etc. not followed

1.19

No exposure limits are fixed for forward contract for foreign exchange sales/purchase transactions

2

Sanctioning and disbursement

2.1

Credit facility sanctioned beyond the delegated authority or limit of the branch

2.2

Certain proposals were sanctioned pending approval of higher authorities wherever required

2.3

Ad hoc limits were granted for which sanctions were pending since long

2.4

Facilities were disbursed before completion of documentation

2.5

Facilities were disbursed without following sanction terms

2.6

Facilities were disbursed without any sanction

2.7

Sanction letter was missing in the branch

2.8

Guarantor as required in the sanction letter was not obtained

2.9

Required promoters stake not invested before disbursement of loan

2.10

Sanctions were made without proper appraisal

2.11

Security charge not created before disbursement as required by sanction letter/renewed letter

2.12

Full disbursement of the facility not made

2.13

Sanction terms were not complied with or were not recorded

2.14

Disbursement made without proper sanction

2.15

Term loan was disbursed by creating the cash credit or savings account of the borrower

3

Documentation

3.1

The security against which the advance was sanctioned was not available/was not on record

3.2

Mortgage for the property given as security is not created

3.3

Mortgage for the property given as security created, was inadequate, as compared to terms of sanction

3.4

Second charge as required, on assets is not created in favour of the bank

3.5

Documents of second charge on assets is not on the record

3.6

Documents pertaining to registration of charges with ROC or any other concerned authority requiring charging of assets is not obtained

3.7

Copies evidencing lodgment of the original conveyance/sale deeds with the Sub–Registrars for registration not on record

3.8

Authority letter/Power of Attorney to the Bank to collect the original documents from the Sub–Registrar not on record

3.9

Documents pertaining to consortium advances not yet executed/not available with bank

3.10

Documents signed by persons not duly authorised to sign or who have signed in other capacity accepted by the bank

3.11

Signatures of the executants were not found on all the pages of the documents

3.12

Some documents on record were blank, without signatures of Branch Manager, witnesses, or guarantors, etc.

3.13

Revival letters in respect of documents to be reviewed from the borrowers not received

3.14

Guarantors have expired

3.15

Guarantors not on record

3.16

Guarantors not renewed

3.17

Guarantors not assigned

3.18

Worth of the guarantors not available

3.19

Stamping not as per the amended Stamps Act

3.20

Documents have become mutilated, soiled, time barred or not obtained

3.21

Opinion report by the field officer for the borrowers not found on record

3.22

“Nil Encumbrance Certificate/s” or “No Dues Certificate/s” or “No Lien Letters” not obtained for the mortgage/s

3.23

Advances for vehicle loans, Registration certificate, transfer certificate, etc. not obtained

3.24

Work completion certificate, sale deeds, share certificates in societies, etc. not on record for housing loans

3.25

Documents are not duly attested/signed by concerned officials/not renewed

3.26

The agreements for hypothecation do not contain details regarding goods hypothecated

3.27

Copy of Bills/receipts, on the basis of which the amount was disbursed not found on record. For example, Vehicle Loans, Plant & Machinery

Charge on main &/or collateral securities not created in terms of sanction letter

Original security papers/sale deed/lease deed/title deed/agreement of sale not available on record

3.30

TDR are not discharged or renewed

3.31

Control returns not sent to the HO

3.32

The branch has not taken any action for not compliance with terms of agreement

3.33

No documents executed for enhancement of limit/document not on record

3.34

ECGC Post shipment policy not obtained

3.35

Credit facility released without execution of all necessary documents

3.36

Common Seal not affixed on Letter of Comfort

3.37

Confirm orders for export credit not found on record for facilities released

4

Review/Monitoring/Supervision

4.1

The account is frequently overdrawn

4.2

The account is continuously overdrawn

4.3

The account is overdrawn and the branches have not taken sufficient steps to regularise the accounts promptly

4.4

The balance outstanding have exceeded the drawing power

4.5

Balance confirmation and acknowledgment of debt not obtained

4.6

The stock, book–debts statements not received regularly/promptly

4.7

The FFI/financial statements/audited statements/FFR 1 & 2/other operational data, etc, not received regularly/promptly

4.8

The stock, book–debts statements, etc, not scrutinised and no suitable action is taken

4.9

The FFI/financial statements/audited statements/FFR 1 & 2/other operational data, etc, not received regularly/promptly/not scrutinised and no suitable action is taken

4.10

Non–moving stock is not deducted to arrive at the drawing power

4.11

The age–wise break–up of debtors is not found on record. The borrowers are allowed to draw money on entire outstanding debt, which must rather be for the recent debts as prescribed for particular industries and as per margin prescribed in the sanction letter

4.12

Wide discrepancies observed in the stock statements and stock figures in the annual audited financial statements

4.13

No penal interest has been charged for delay in submission of various statements as per the terms of agreement depending upon the type of loan/credit availed by the borrower

4.14

Many branches have not adhered to prescribed frequency of physical verification of securities given against loans & advances

4.15

Drawing power limits are not revised as per market value of shares for advances against security of shares

4.16

End–use of funds not ensured/not known funds utilised for purpose other than for which granted

4.17

The projections submitted by the borrower stay far beyond the actual performance. Further, no explanation for the same is taken from the borrower

4.18

Major sale proceeds of the borrower not routed through the Bank

4.19

Audited statements of non–corporate borrowers having limit beyond Rs10 lakh not received

4.20

Renewal proposals of advances not received on time and in many cases the limits are not renewed

4.21

Application of wrong rate of interest, processing charges, commission, other charges, etc resulting in income leakage/excess booking of interest of the Bank

4.22

Insurance cover for stock/property is inadequate/not on record/not renewed/not endorsed in favour of the Bank

4.23

Inspection/physical verification of security charged, not been carried out

4.24

Expired bills/foreign currency sight bills which are outstanding, have not been crystallized

4.25

EBW statements on write–off of overdue export bills of ECM not found on record

4.26

Confirmation as to genuineness of export transactions not obtained from Bank’s foreign offices/correspondents/customs department

4.27

Import credit, bill of entry evidencing import of goods not found

4.28

Documents are not obtained for bills discounted under Letter of Credit

4.29

Advances eligible for whole turnover packing credit guarantee cover of ECGC, are not brought under its cover

4.30

Though government guaranteed accounts are irregular since long, the issue of invocation of guarantee does not seem to have been considered

4.31

Prescribed margins not maintained as per sanctions

4.32

Allocated limits, full terms of sanctions, stock statements, inspection reports, margin, etc. not available at monitoring branches

4.33

For allocated limits, inordinate delays were noticed in responding to transfer by the allocator branch

4.34

Regular meetings not held with other consortium members to review the performance of borrowers and to assess the current state of affairs/not been held as per norms

4.35

Individual members of consortium are not advised about quarterly operating limits/D. P. allocated to each of them

4.36

Minutes of the consortium meetings not found on record/not been held as per norms

4.37

Inspection report from the consortium members not obtained

4.38

The capital of the borrower has eroded/networth is negative/decreasing. Close monitoring needs to be done

4.39

Drawing power is calculated wrongly and/or hence borrower allowed to enjoy excess credit than actually eligible

4.40

Signboard of the bank is not displayed in godown, where the pledged/hypothecated stock is stored

4.41

Limit not fully utilised by borrower/No commitment charge is levied for limit not fully utilised by the borrower

4.42

Loan against TDR/STDR, which is matured, is neither renewed nor credited to loan account

4.43

The Stock and Debtors Audit Report not found on record. No audit has been done for accounts of the borrower

4.44

The valuation report in respect of tangible security from government approved valuer have not been obtained

4.45

Guarantees, Opinion Reports Financial statements, IT assessment orders and etc. of guarantor not found on record

4.46

Opinion report on guarantor is not obtained

4.47

For Small Government Sponsored loan accounts, security cover could not be ascertained since neither any record was available at branch nor physical verification conducted by the branch

4.48

Pre–sanctions and/or post–sanctions inspection reports were not on record

4.49

The account was overdue for repayment and/or no credit was received from the borrower for a long time

4.50

The borrower is absconding or deceased and legal formalities are incomplete and there is willful default from the borrower. Either establishment was closed or security was disposed of or no action taken by the branch

4.51

Subsidy claim process was incomplete or subsidy was yet to be received or needs follow–up

4.52

Security disposed of/Entity closed by borrower and no action taken by the branch

4.53

Irregularity not advised to controllers

4.54

Letter of subordination of deposits not taken

4.55

Secured and unsecured portion not segregated properly in advance return of the branch

4.56

Renewal of limits was done before the receipt of financial statements

4.57

Heavy cash withdrawal for which consent of corporate guarantor is not taken

4.58

Proper valuation of stock not done/needs critical scrutiny

4.59

Security obtained is inadequate/lower as compared to amount of outstanding/no collateral security

4.60

The party was dealing with other bank also though it was not permitted

4.61

Sticky accounts require close follow–up by the management

5

Bad and doubtful advances

5.1

The IRAC norms for classification of advances were not followed and the same is implemented through Memorandum of Changes by auditors during audit

5.2

Installments were not received from the borrowers

5.3

Interest was not received from the borrowers

5.4

Legal action for recovery of advances was not taken although authorised by the Board/Controlling Authority

5.5

Discontinuance of application of interest not followed although authorised by the Board/Controlling Authority

5.6

Government guarantees have expired and fresh guarantees not obtained/not renewed

5.7

Terms of the BIFR scheme not complied

5.8

Payment from government not received although guarantees were unconditional, irrevocable, payable on demand

5.90

Delays in the settlement/repayment in respect of sanctioned proposals

5.10

The repayment accepted in case of compromise cases inadequate vis–à–vis value of security

5.11

Compromise proposals pending at various levels where guarantors are local government/outside agencies

5.12

Copy of Search Report not on record

5.13

Decree awarded but no further steps taken for recovery

5.14

DI & CGC claims submitted/rejected/pending data not available

5.15

Irregular/ sticky advance not reported to the controlling authority promptly

5.16

Compromise/ OTS proposal is recommended and is under negotiation since long but not finalised. Suit is filed in the court/ DRT and pending to be finalized

5.17

ECGC claim not submitted/lodged for recovery
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