The much-awaited Companies Bill, 2008 has been introduced in the Lok Sabha. Minister of Corporate Affairs, Shri Prem Chand Gupta introduce the Bill to consolidate and amend the law relating to companies. Two days ago, i.e., on 21.10.2008 Shri Gupta had withdrawn the Companies (Amendment) BIll, 2003 which was introduced in the Rajya Sabha on 7.5.2003 as the said Bill was not in tune with the present day requirements of corporates in India.

The Companies Bill, 2008 is intended to modernize the structure for corporate regulation in India and represents a major reform statement by the Government to promote the development of the Indian corporate sector through enlightened regulation.

The comprehensive revision of the Companies Act, 1956 was taken up by the Ministry since not only had the number of companies in India expanded from about 30,000 in 1956 to above 7 lakhs today, the Indian corporate sector had also transformed itself in a manner that was unimaginable even a decade ago. Today, Indian companies have expanded and grown into global entities, continuously entering into and bringing new activities into the fold of the Indian economy. In doing so, they are emerging internationally as efficient providers of a wide range of goods and services while increasing employment opportunities at home.

At the same time, there is a requirement to enable corporate regulation in an effective and efficient manner with reasonable costs of compliance so that Indian companies are competitive in attracting investment for growth.

The review and redrafting of the Companies Act, 1956 was taken up by the Ministry of Corporate Affairs on the basis of a detailed consultative process. A `Concept Paper on new Company Law’ was placed on the website of the Ministry on 4^th August, 2004. The inputs received were put to a detailed examination in the Ministry. The Government also constituted an Expert Committee on Company Law under the Chairmanship of Dr. J.J. Irani on 2^nd December 2004 to advise on new Companies Bill. The Committee submitted its report to the Government on 31^st May 2005. Detailed consultations were also taken up with various Ministries, Departments and Regulators. The Bill was thereafter drafted in consultation with the Legislative Department of the Central Government.

The Companies Bill, 2008 seeks to enable the corporate sector in India to operate in a regulatory environment of best international practices that foster entrepreneurship, investment and growth.

The Bill reinforces shareholders democracy, facilitates e-Governance in company processes, recognizes the liability of Boards, directors and senior management personnel of companies, provides for a new scheme for penalties and punishment for non compliance or violation of the law, harmonizes corporate regulation with action by sectoral regulators, incorporates a new framework for mergers and amalgamations of companies and provides an extensive Insolvency Code based on the latest principles recommended by the United Nations Commission on International Trade Law (UNCITRAL).

Briefly, the Bill provides for :-

(i) The basic principles for all aspects of internal governance of corporate entities and a framework for their regulation, irrespective of their area of operation, from incorporation to liquidation and winding up, in a single, comprehensive, legal framework to be administered by the Central Government. In doing so, the Bill also seeks to harmonise the Company law framework with the sectoral regulation;

(ii) articulation of shareholders democracy with protection of the rights of minority stakeholders, responsible self-regulation with adequate disclosures and accountability. Reduction of Government control over internal corporate processes;

(iii) easy transition of companies operating under the Companies Act, 1956, to the new framework as also from one type of company to another. Freedom with regard to the numbers and layers of subsidiary companies that a company may have, subject to disclosures in respect of their relationship and transactions or dealings between them;

(iv) a new entity in the form of One-Person Company (OPC) while empowering Government to provide a simpler compliance regime for small companies. Retention of the concept of Producer Companies, while providing a more stringent regime for companies with charitable objects to check misuse;

(v) application of the successful e-Governance initiative of the Ministry of Corporate Affairs (MCA-21) to all the processes involved in meeting compliance obligations. Company processes may also be carried out through electronic mode;

(vi) speedy incorporation process, with detailed declarations and disclosures about the promoters, directors etc., at the time of incorporation itself. Every company director would be required to acquire a unique Director Identification number (DIN);

(vii) relaxation of restrictions limiting the number of partners in entities such as partnership firms, banking companies etc., to a maximum 100, with no ceiling as to professional associations regulated by Special Acts;

(viii) duties and liabilities of the directors and every company to have at least one director resident in India. The Bill also provides for independent directors to be appointed on the Boards of such companies as may be prescribed, along with attributes determining independence. The requirement to appoint independent directors, where applicable, to listed public companies is a minimum of one-third of the total number of directors. For other public companies, the requirement and number may be prescribed through rules;

(ix) statutory recognition to audit, remuneration and stakeholders relationship committees of the Board and the Chief Executive Officer (CEO), the Chief Financial Officer (CFO) and the Company Secretary to be as Key Managerial Personnel (KMP);

(x) companies not to be allowed to raise deposits from the public except on the basis of permission available to them through other Special Acts. The Bill prohibits insider trading by company directors or Key Managerial Personnel and declares it as an offence with criminal liability;

(xi) recognition of both accounting and auditing standards. The role, rights and duties of the auditors defined so as to maintain integrity and independence of the audit process. Consolidation of financial statements of subsidiaries with those of holding companies is proposed to be made mandatory;

(xii) a single forum for approval of mergers and acquisitions along with a shorter merger process for holding and wholly owned subsidiary companies or between two or more small companies as well as recognition of cross border mergers. Concept of deemed approval also provided in certain situations;

(xiii) a framework for enabling fair valuations in companies for various purposes. Appointment of valuers is proposed to be made by audit committee or in its absence by the Board of Directors;

(xiv) claim of an investor over a dividend or a benefit from a security not claimed for more than a period of seven years not to be extinguished, and Investor Education and Protection Fund (IEPF) to be administered by a statutory authority;

(xv) shareholders associations or group of shareholders to be enabled to take legal action in case of any fraudulent action on the part of company and to take part in investor protection activities and ‘Class Action Suits’;

(xvi) a revised framework for regulation of insolvency, including rehabilitation, liquidation and winding up of companies and the process to be completed in a time bound manner;

(xvii) consolidation of fora for dealing with rehabilitation of companies, their liquidation and winding up in the single forum of National Company Law Tribunal with appeal to National Company Law Appellate Tribunal with suitable transitional provisions. The nature of the Rehabilitation and Revival Fund proposed in the Companies (Second Amendment) Act, 2002 to be replaced by Rehabilitation and Insolvency Fund with voluntary contributions linked to entitlements to draw money in a situation of insolvency;

(xviii) a more effective regime for inspections and investigations of companies while laying down the maximum as well as minimum quantum of penalty for each offence with suitable deterrence for repeated defaults. Company is identified as a separate entity for imposition of monetary penalties from the officers in default. In case of fraudulent activities, provisions for recovery and disgorgement have been included;

(xix) levy of additional fee in a non-discretionary manner for procedural non-compliance, such as late filing of statutory documents, to be enabled through rules. Defaults of procedural nature to be penalised by levy of monetary penalties by the adjudicating officers not below the level of Registrars. The appeals against orders of adjudicating officers to lie with suitably designated higher authorities;

(xx) Special Courts to deal with offences under the Bill. Company matters such as mergers and amalgamations, reduction of capital, insolvency including rehabilitation, liquidations and winding up are proposed to be dealt with by the National Company Law Tribunal.

	Budget Estimates	Final Estimates	Expenditure incurred
2007-08	26.00	22.00	22.00
2008-09	30.00	To be decided in Jan./ Feb., 2009	11.85 (upto September, 2008)

Government is monitoring the price situation on a regular basis and containment of inflation remains high on its agenda. Anti-inflationary policies of the government include strict fiscal discipline, rationalization of duties of essential items, effective supply-demand management of essential commodities through liberal tariff and trade policies, and strengthening the public distribution system. Administrative measures have enabled States to put Stock Limits on wheat, rice, pulses, oilseeds/edible oils.

India has maintained a GDP growth of over 9 per cent in each of last three years, i.e. 2005-06, 2006-07 and 2007-08. In the current year information of GDP growth is available for only the first quarter. GDP growth of 7.9 per cent in first quarter of 2008-09, though low in terms of the growth record of last three years, is nonetheless impressive in view of the global uncertainties.

There has been some moderation in inflation in recent weeks from its peak of 12.91 per cent as on August 2, 2008 to 11.44 per cent (provisional) as on October 4, 2008. It is expected that the declining trend would continue in the coming months.

The global financial crisis which surfaced in August 2007 had its origin in the meltdown of the US housing market. Pursuant to this crisis and news about the bankruptcy of Lehman Brothers on September 15, 2008, Indian stock markets have witnessed a fall. As on October 10, 2008, the Sensex had fallen by 49.6 per cent from its highest level on January 8, 2008. The net equity investment by FIIs during the period from August 17, 2007 to Dec 31, 2007 was USD 7.8 billion approximately. Since January 2008, there has been a net disinvestment in equities to the tune of nearly $10.0 billion.

The fundamentals of the Indian economy have been strong and continue to be strong. Our banking system is stable and sound. RBI has pointed out that Indian banks have very limited exposure to the US mortgage market (directly or through derivatives) or to the failed/stressed financial institutions; hence the impact on their balance sheet will be marginal.

RBI has also informed that India’s real economy would be affected to a lesser degree than USA or Europe since our growth is largely domestically driven and our export markets not concentrated. Moreover, the current boom in the oil economies will be supportive of exports and inward remittances.

As regards the stock markets, it must be noted that the loss or gain arising from market movement is notional. In this context, it may also be mentioned that only a very small portion of our total population, less than two per cent, has any sort of exposure to the stock market.

What we are witnessing today in the Indian markets is an indirect effect of the global financial situation. This is only a reflection of the uncertainty and anxiety in the global financial markets. However, there is no reason for any anxiety or uncertainty in India.

Some of the steps taken by the Government, RBI and SEBI to balance the financial economy in the country are as follows:

1. Hike in interest rates on FCNR(B) deposits to LIBOR/Swap+25 basis points and on NR(E) Rupee deposits to LIBOR/Swap+100 basis points

2. Market Intervention by RBI to augment supply in the domestic foreign exchange market. All the transactions by the RBI will be at prevailing market rates and as per market practice

3. Allowing Scheduled banks to avail additional liquidity support under the Liquidity Adjustment Facility (LAF)to the extent of up to one per cent of their Net Demand and Time Liabilities (NDTL)

4. Allowing banks to avail of additional liquidity support exclusively for the purpose of meeting the liquidity requirements of mutual funds to the extent of up to 0.5 per cent of their NDTL

5. The Reserve Bank has decided to conduct the Second LAF on a daily basis with effect from September 17, 2008.

6. Reducing the Cash Reserve Ratio by 250 basis points from 9 per cent to 6.5 per cent of NDTL

7. Under the Agricultural Debt Waiver and Debt Relief Scheme, Government has agreed to provide to commercial banks, RRBs and co-operative credit institutions a sum of Rs. 25,000 crore as the first instalment

8. It has been decided to increase the Foreign Institutional Investors (FIIs) investment limit in corporate bonds from $3 billion to US$6 billion.

9. SEBI has decided that the position of the securities lent by FIIs and their sub-accounts abroad shall be disseminated on a consolidated basis twice a week i.e. on Tuesday and Friday of every week.

10. SEBI has further informed that it has been monitoring the activities of a few large financial institutions in India to ensure that the orderly functioning of the market is not hampered. SEBI is also continuously reviewing the situation in consultation with the stock exchanges and the depositories. RBI – SEBI Technical Committee is also closely monitoring the developments in the global financial markets and its impact on the Indian markets.

Mascots of the Beijing 2008

Designed to express the playful qualities of five little children who form an intimate circle of friends, Fuwa also embody the natural characteristics of four of China's most popular animals -- the Fish, the Panda, the Tibetan Antelope, the Swallow -- and the Olympic Flame.

Each of Fuwa has a rhyming two-syllable name -- a traditional way of expressing affection for children in China. Beibei is the Fish, Jingjing is the Panda, Huanhuan is the Olympic Flame, Yingying is the Tibetan Antelope and Nini is the Swallow.

When you put their names together -- Bei Jing Huan Ying Ni -- they say "Welcome to Beijing," offering a warm invitation that reflects the mission of Fuwa as young ambassadors for the Olympic Games.

Fuwa also embody both the landscape and the dreams and aspirations of people from every part of the vast country of China. In their origins and their headpieces, you can see the five elements of nature -- the sea, forest, fire, earth and sky -- all stylistically rendered in ways that represent the deep traditional influences of Chinese folk art and ornamentation.


In China's traditional culture and art, the fish and water designs are symbols of prosperity and harvest. And so Beibei carries the blessing of prosperity. A fish is also a symbol of surplus in Chinese culture, another measure of a good year and a good life.
The ornamental lines of the water-wave designs are taken from well-known Chinese paintings of the past. Among Fuwa, Beibei is known to be gentle and pure. Strong in water sports, she reflects the blue Olympic ring.


Jingjing


Huanhuan

In the intimate circle of Fuwa, Huanhuan is the big brother. He is a child of fire, symbolizing the Olympic Flame and the passion of sport -- and passion is the blessing he bestows. Huanhuan stands in the center of Fuwa as the core embodiment of the Olympic spirit. And while he inspires all with the passion to run faster, jump higher and be stronger, he is also open and inviting. Wherever the light of Huanhuan shines, the inviting warmth of Beijing 2008 -- and the wishful blessings of the Chinese people -- can be felt. The fiery designs of his head ornament are drawn from the famed Dunhuang murals -- with just a touch of China's traditional lucky designs. Huanhuan is outgoing and enthusiastic. He excels at all the ball games and represents the red Olympic ring.



Like all antelopes, Yingying is fast and agile and can swiftly cover great stretches of land as he races across the earth. A symbol of the vastness of China's landscape, the antelope carries the blessing of health, the strength of body that comes from harmony with nature. Yingying's flying pose captures the essence of a species unique to the Qinghai-Tibet Plateau, one of the first animals put under protection in China. The selection of the Tibetan Antelope reflects Beijing's commitment to a Green Olympics. His head ornament incorporates several decorative styles from the Qinghai-Tibet and Sinkiang cultures and the ethnic design traditions of Western China. Strong in track and field events, Yingying is a quick-witted and agile boy who represents the yellow Olympic ring.


Nini

Every spring and summer, the children of Beijing have flown beautiful kites on the currents of wind that blow through the capital. Among the kite designs, the golden-winged swallow is traditionally one of the most popular. Nini's figure is drawn from this grand tradition of flying designs. Her golden wings symbolize the infinite sky and spread good-luck as a blessing wherever she flies. Swallow is also pronounced "yan" in Chinese, and Yanjing is what Beijing was called as an ancient capital city. Among Fuwa, Nini is as innocent and joyful as a swallow. She is strong in gymnastics and represents the green Olympic ring.

				G	S	B	T
1.		China		51	21	28	100
2.		United States		36	38	36	110
3.		Russia		23	21	28	72
4.		Great Britain		19	13	15	47
5.		Germany		16	10	15	41
6.		Australia		14	15	17	46
7.		South Korea		13	10	8	31
8.		Japan		9	6	10	25
9.		Italy		8	10	10	28
10.		France		7	16	17	40
11.		Ukraine		7	5	15	27
12.		Netherlands		7	5	4	16
13.		Jamaica		6	3	2	11
14.		Spain		5	10	3	18
15.		Kenya		5	5	4	14
16.		Belarus		4	5	10	19
17.		Romania		4	1	3	8
18.		Ethiopia		4	1	2	7
19.		Canada		3	9	6	18
20.		Poland		3	6	1	10
21.		Hungary		3	5	2	10
		Norway		3	5	2	10
23.		Brazil		3	4	8	15
24.		Czech Republic		3	3	0	6
25.		Slovakia		3	2	1	6
26.		New Zealand		3	1	5	9
27.		Georgia		3	0	3	6
28.		Cuba		2	11	11	24
29.		Kazakhstan		2	4	7	13
30.		Denmark		2	2	3	7
31.		Mongolia		2	2	0	4
		Thailand		2	2	0	4
33.		North Korea		2	1	3	6
34.		Argentina		2	0	4	6
		Switzerland		2	0	4	6
36.		Mexico		2	0	1	3
37.		Turkey		1	4	3	8
38.		Zimbabwe		1	3	0	4
39.		Azerbaijan		1	2	4	7
40.		Uzbekistan		1	2	3	6
41.		Slovenia		1	2	2	5
42.		Bulgaria		1	1	3	5
		Indonesia		1	1	3	5
44.		Finland		1	1	2	4
45.		Latvia		1	1	1	3
46.		Belgium		1	1	0	2
		Dominican Republic		1	1	0	2
		Estonia		1	1	0	2
		Portugal		1	1	0	2
50.		India		1	0	2	3
51.		Iran		1	0	1	2
52.		Bahrain		1	0	0	1
		Cameroon		1	0	0	1
		Panama		1	0	0	1
		Tunisia		1	0	0	1
56.		Sweden		0	4	1	5
57.		Croatia		0	2	3	5
		Lithuania		0	2	3	5
59.		Greece		0	2	2	4
60.		Trinidad and Tobago		0	2	0	2
61.		Nigeria		0	1	3	4
62.		Austria		0	1	2	3
		Ireland		0	1	2	3
		Serbia		0	1	2	3
65.		Algeria		0	1	1	2
		Bahamas		0	1	1	2
		Colombia		0	1	1	2
		Kirghyzstan		0	1	1	2
		Morocco		0	1	1	2
		Tajikistan		0	1	1	2
71.		Chile		0	1	0	1
		Ecuador		0	1	0	1
		Iceland		0	1	0	1
		Malaysia		0	1	0	1
		South Africa		0	1	0	1
		Singapore		0	1	0	1
		Sudan		0	1	0	1
		Vietnam		0	1	0	1
79.		Armenia		0	0	6	6
80.		Chinese Taipei		0	0	4	4
81.		Afghan		0	0	1	1
		Egypt		0	0	1	1
		Israel		0	0	1	1
		Moldova		0	0	1	1
		Mauritius		0	0	1	1
		Togo		0	0	1	1
		Venezuela		0	0	1	1