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Vinod Kothari & Company –February, 2012
Touches..
February, 2012
Vinod Kothari & Company Vinod Kothari Consultants P Ltd Academy of Financial
Services P Ltd 1012 Krishna 224 AJC Bose Road Kolkata – 700017. India 91-33-22817715/ 1276/ 3742 Mumbai Office: 222, Ashoka Shopping Centre 2nd Floor, LT Road Near GT Hospital Mumbai- 400 001 022-22675600
In this Issue:
Editorial
Our Published
Articles
What’s
happening at
VK & Co.
Our Corner
Contact Us
Vinod Kothari & Company –February, 2012
Editorial
Highlights of February, 2012: Vinod Kothari’s Article on Factoring Bill published in Moneylife. Vinod Kothari’s Article on Compulsory Convertible Debentures published in ICSI-WIRC Focus
Aditi Jhunjhunwala’s Article on Fast Track Exit Mode published in ICSI-EIRC Newsletter. Article by Vinod Kothari and Nidhi Ladha published in Corporate Law Advisor Vinod Kothari appointed as Director in Paragon Asset Reconstruction. Aditi Jhunjhunwala and Nidhi Jain invited as speakers in the Sub-Regional Conference of Eastern India Regional Conference of Institute of Chartered Accountants of India EDP Sessions conducted by Nidhi Bothra and Nidhi Jain in ICSI of EIRC. 14th Securitization and Covered Bonds School Our Workshops
Office Picnic
“Happy is the unity of the Sangha. Happy is the discipline of the united ones.”
-Dhammapada Unity is the sine qua non for success and happiness. It is both the cause and effect of proper understanding, co-ordination, co-operation and, last but not the least, a feeling of being together. Touches, has covered a long journey till now to keep us together, and the journey is still on. Touches.. has contributed greatly in fostering unity amongst the present and past associates of VK & Co. We share latest happenings in our family with you and hope to get back your feedback. So, stay united, stay together and stay in touch with touches.. Please do not forget to drop your precious and valuable feedback and suggestions.
-Sikha Bansal
Vinod Kothari & Company –February, 2012
Factoring Bill: Blow to
Receivables Financing
Article by Vinod Kothari
published in Moneylife
The Factoring Regulation Bill, 2011 has been recently passed by the Parliament. Reserve Bank of India has been meaning to promote the idea of factoring over decades, though there has not been any substantial improvement in factoring volumes over the years. At this stage, the factoring business needed support and promotion. As opposed to this the Government has come up with something that has a regulatory grasp, “support” and “promotion” being far-fetched words. It would not be wrong to say that a factoring company was already covered by the regulatory ambit prior to the enactment of the new law. Most factors actually carry out full recourse factoring – with features that hardly imply an intention of purchase of receivables – hence, such activities nothing but lending on the security of receivables, and hence, would still amount to a “financial business” for being regulated as an NBFC. As stated in the Article, “No one would perhaps know what the urgency was for the Factoring Bill – it is not as if factoring business was a mushrooming business which needed regulation”. The Article can be viewed at: http://moneylife.in/article/factoring-bill-blow-to-
receivables-financing/23434.html
Our Articles Published Articles
Vinod Kothari & Company –February, 2012
Our Articles Published
Bonds and debentures are capital market instruments of sourcing debt. As the use of bonds and debentures is becoming wide-spread, there are numerous varieties of debentures being used. Understanding Compulsorily Convertible Debentures - this Article by Vinod Kothari focuses on compulsorily convertible debentures (CCDs), which are increasingly being used by lots of investors, particularly private equity (PE) investors. A CCD is a mix of debt and equity features – it is debt at the time of issuance, but equity in future. It is a debt instrument mandatorily and automatically convertible into equity at a specified time, or on happening of specified events, into equity. This article examines CCDs from a variety of viewpoints- the reason for issuance of a CCD, the nature of CCDs, regulations on issue of securities;, and accounting purposes among other things. The Article can be viewed at: http://www.icsi.edu/docs/wiro/efocus/Feb2012.pdf
Understanding Compulsorily
Convertible Debentures:
Article by Vinod Kothari published in
ICSI-WIRC Focus
Vinod Kothari & Company –February, 2012
Our Articles Published
On The Fast Track for Exit:
MCA paves the way out for
Defunct Companies
Article by Aditi Jhunjhunwala published
in ICSI-EIRC Newsletter
A Defunct Company is one the business of which ceased some time back but the company is lying like a shell entity with no fruitful existence. A Defunct Company may either be taken into winding up or may be written off as defunct by Registrar of Companies. Previously, any company desirous of getting its name struck off from the Register of the Registrar of Companies had to make an application in e-form 61. In the year 2010, the Ministry of Corporate Affairs introduced an Easy Exit Scheme for such inoperative companies. The Ministry re-launched the scheme in the year 2011 on huge demand being made by corporates who could not avail themselves of the Easy Exit Scheme. Therefore, the Ministry laid down guidelines for fast track exit mode of defunct companies, vide its General Circular No. 36/2011 dated June 7, 2011. The scheme facilitates prompt administration and acts as a mechanism to bring down the level of in-operative companies. On The Fast Track For Exit: MCA paves the way out for defunct companies, an Article by Aditi Jhunjhunwala gives a comprehensive and detailed description on the fast track exit scheme. The Article has been published in ICSI-EIRC Newsletter.
Vinod Kothari & Company –February, 2012
Our Articles Published
Meaning of Encumbrance under
the Takeover Code:
Article by Vinod Kothari and Nidhi
Ladha published in Corporate Law
Adviser
Ever since the Securities and Exchange Board of India in the beginning of 2009 made it mandatory by introducing new Regulation 8A in SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 requiring mandatory disclosure of pledges and made similar amendments in reporting formats under Clauses 35 and 41 of the Listing Agreement, requiring disclosure of pledged and encumbered shares in the quarterly financial results of the companies, the companies have been resorting to innovative ways of creating false security on shares. In this context, serious questions of interpretation have arisen. “Meaning of Encumbrance under the Takeover Code”- the Article by Vinod Kothari and Nidhi Ladha makes an attempt to answer questions pertaining to the meaning of a “pledge” or an “encumbrance” and whether the documentation entered by the listed companies with the lenders amounts to a pledge or an encumbrance.
Vinod Kothari & Company –February, 2012
What’s Happening at VK & Co.
Vinod Kothari appointed as Director in
Paragon Asset Reconstruction
Mr. Vinod Kothari holds directorship in a number of reputed Companies. A new jewel in the crown is the directorship in Paragon Asset Reconstruction Private Limited. Mr. Kothari has been welcomed to the Board of Directors of the Company as a Non-executive Director. Soon, Paragon will be applying for registration with the Reserve Bank of India as an Asset Reconstruction company under the SARFAESI Act.
Vinod Kothari & Company –February, 2012
What’s Happening at VK & Co.
Aditi Jhunjhunwala and Nidhi Jain
invited as speakers in the Sub-Regional
Conference of Eastern India Regional
Council of Institute of Chartered
Accountants of India
The Sub-Regional Conference of Eastern India Regional Council of the Institute of Chartered Accountants of India was hosted by Sambalpur Branch on 4th and 5th February, 2012 at MCL Auditorium, Sambalpur. Aditi Jhunjhunwala was invited as Guest Speaker to deliver her take on “Recent Developments in Corporate Law” and Nidhi Jain was invited as Speaker on the topic “Takeover Code and SEBI Related issues”. Aditi Jhunjhunwala presented her take on the Companies Bill, 2011 vis-à-vis the Companies Act, 1956 and Nidhi Jain gave a presentation on Initial Public Offer, Further Public Offer and Listing Norms.
Vinod Kothari & Company –February, 2012
What’s Happening at VK & Co.
EDP Sessions conducted by
Nidhi Bothra and Nidhi Jain
in EIRC OF ICSI
The Institute of Company Secretaries of
India (ICSI) has made it mandatory for
students who wish to take up Management
Training to attend Executive Development
Programme (EDP).
Nidhi Bothra conducted one such
interactive session of EDP organized by
Eastern India Regional Council (EIRC) of
ICSI held on 20th
February, 2012 on the
topic “Regulatory Insight, Capital Markets
and Oppurtunities”.
Nidhi Jain gave her presentation on the
topic “Reserve Bank of India and Foreign
Exchange Market in India” in the EDP held
on 24th
February, 2012
Vinod Kothari & Company –February, 2012
What’s Happening at VK & Co.
Vinod Kothari Consultants Private Limited hosted 14th Securitization and Covered Bonds School from 20th February to 25th February, 2012 in Kolkata. The Workshop was actively participated by candidates from Securities & Exchange commission, Nigeria. The relevant details pertaining to the Workshop are available at: http://www.vinodkothari.com/14th%20securitisation%20and%20covered%20bonds%20school%20-%2020-25%20February,%202012.pdf
14TH SECURITIZATION AND COVERED BONDS SCHOOL
Vinod Kothari & Company –February, 2012
What’s Happening at VK & Co.
Our Workshops
A Workshop on Operating Leasing and Asset Backed Financing was hosted by Vinod Kothari Consultants Private Limited on 15th-16th February, 2012 in Mumbai.
A 3- day workshop on Cashflow Modelling was hosted by Genpact on 17th-19th February, 2012 n Gurgaon.
Vinod Kothari Consultants Private Limited is organizing Aarohan - the second phase of the mentoring Programme for SREI at different locations all over India. Click here to see our calendar of events: http://vinodkothari.com/secwork.htm Udaan, the first phase was successfully perceived all over the country by SREI employees; hence it was the right time to fly.
Vinod Kothari & Company –February, 2012
Our Corner
Office Picnic
“All work and no play makes Jack a dull boy.”
How true is this!! Taking a break from our regular office work, we planned to arrange a picnic. The picnic was organized far from the noisy city environment. We played, ate together, sang, did all the mischievous activities. In short, we enjoyed a lot. Coming together like this and having fun is important to enhance co-ordination and co-operation.
Welcome Note
We welcome Miss Sanchaita Saha to our family. She is a Company Secretary. She has worked with with HSBC, Kolkata as Fund accountant of Hedge Funds. and has worked as Management Trainee in the Secretarial and Legal department of Berger Paints India Ltd- one of India’s largest listed Companies. Her areas of expertise include Companies Act and Listing Agreement of Stock Exchanges.
Vinod Kothari & Company –February, 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