ICSI Suggestions on Draft Rules Phase 2

8/12/2019 ICSI Suggestions on Draft Rules Phase 2

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ICSI Suggestions on second tranche of the draft rules under Companies Act, 2013:-

Chapter No.

SUGGESTIONS/PROVISIONS SUGGESTION TYPE

JUSTIFICATION

III Rule 3.1( !

(6) pursuant to sub-clause (viii), the capitalstructure of the company and its evolution shallbe presented in the following manner- *** But inany case, in addition to such disclosures, disclosethe number and rates at which each of theallotments were made in the last two years priorto public offer separately indicating the allotmentsmade for considerations other than case and thedetails of such considerations in each case;

Su""e#t$o%&

A '$%or t po"raph$)al )ha%"e to *e+o%e. To repla)e ,other tha% )a#e- $th,other tha% )a#h- $% the #e)o%+ la#t l$%eo #u*0rule ( ! o rule 3.1.

ra t$%"#u""e#t$o%

III Matters to be stated in the prospectus

Rule 3.1(12) Related party transactions

entered during last five years immediately preceding the year of issue of prospectus as wellas transactions proposed to be entered withrelated parties in coming future years.

Su""e#t$o%&0

Ju#t$ $)at$o% :

Under the Companies Act 2!13 certain ne"

transactions ha#e been brou$ht "ithin thepur#ie" o% related part& transaction. 'ith theob ecti#e o% clarit& the Rules ma& clari%& that inrespect o% %inancial &ears prior to thenoti%ication o% ection 1** o% the CompaniesAct 2!13 it "ould su%%ice i% the related part&

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JUSTIFICATION

A clari%ication on the %ollo"in$ lines be pro#ided

a%ter Rule 3.1(12):2It $# )lar$ $e+ that $% re#pe)t o $%a%)$alear# pr$or to the %ot$ $)at$o% o Se)t$o% 1 4$t oul+ *e #u $)$e%t $ relate+ parttra%#a)t$o%# a# +$#)lo#e+ $% the a%%ualreport or the re#pe)t$5e ear# are+$#)lo#e+.6

transactions as disclosed in the Annual Reportare disclosed in the prospectus.

III Rule 3.3(7!(a!($$!b& reason o% that ac+uisition or an&thin$ to bedone in conse+uence thereo% or in connectionthere"ith that bod& corporate "ill become asubsidiar& o% the compan&,a report shall be made b& Chartered Accountants("ho shall be named in the prospectus) upon:

Su""e#t$o%&

The or+ 2Co'pa% #e)retar 6 #houl+ *e$%#erte+ a ter 2Chartere+ A))ou%ta%t6.

Re +ra t

III O er o Sale * 8e'*er# Re +ra t Ju#t$ $)at$o% :

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JUSTIFICATION

Rule 3.-(2) !"n the case of offer for sale, thedividend for the entire year shall be payable tothe transferees

Su""e#t$o%&

It $# #u""e#te+ that the #a$+ Rule *e re0or+e+ a# ollo #&

2I% the )a#e o o er o #ale4 the +$5$+e%+ orthe e%t$re ear #hall *e pa a*le to thetra%# eree# $% re#pe)t o re)or+ +ate all$%"o% or a ter the +ate o ope%$%" o $##ue6.

I% the alter%at$5e e #u""e#t that the #a$+Rule 3.9(7! *e +elete+4 #$%)e pa 'e%t o+$5$+e%+ #hall *e at the +$#)ret$o% o the:oar+ o $re)tor# a%+ that +$5$+e%+ out lo 4$ a% 4 %earer to the $##ue o #hare# u%+er,o er or #ale- oul+ a% a ha5e $'pa)to% the pr$)$%" o the o er a%+ $t##u*#)r$pt$o%.

ormall& di#idend is paid to the persons "hoas on the record date hold the shares o% thecompan&.

/t ma& be possible that be%ore openin$ o% theissue o% shares under 0o%%er o% sale b& Membersthe compan& ma& pa& interim di#idend %or the&ear o% the said issue. he price o% the o%%er"ould accordin$l& $et ad usted in respect o% thesaid interim di#idend. /n #ie" o% the same it"ould not be possible to pa& di#idend %or the%ull &ear to the trans%erees.

III Rule 3.17

8a;$%" a% o er throu"h Pr$5ate Pla)e'e%to er letter

Other# To e%#ure a$r 5aluat$o% $% pr$5atepla)e'e%t#.

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JUSTIFICATION

Su""e#t$o%&A Re"$#tere+ Valuer 'a *e appo$%te+*e ore )o''e%)$%" the Pr$5ate pla)e'e%t

pro)e## or +eter'$%$%" the o er/$##ue pr$)eIII Part II- Private Placement

3.17 (1)(a) or the purposes o% sub4section (1) o%section 52 a compan& ma& ma6e an o%%er orin#itation o% securities throu$h issue o% a pri#ateplacement o%%er letter in orm o. 3.5.

Su""e#t$o%&

I% rule 3.17 (1!(a!4 the or+ of securities#houl+ *e repla)e+ * the phra#e to

subscribe for securities

ra t$%"

III Rule 3.17(1! (*!

Part II- Private Placement

3.17 (1) (b) A pri#ate placement o%%er letter shallbe accompanied b& an application %orm addressedspeci%icall& to the person to "hom the o%%er ismade and shall be sent to him either in "ritin$ orin electronic mode "ithin thirt& da&s o% recordin$the names o% such persons in accordance "ith

Nee+#Clar$t

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JUSTIFICATION

sub4section (7) o% section 52:

Su""e#t$o%& Share appl$)at$o% For' 'a *e pre#)r$*e+or 'a$%ta$%$%" #ta%+ar+$#at$o% ;eep$%" $%'$%+ all the re


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JUSTIFICATION

IIIPro5$#o to Rule No. 3.17 (7! (*!

8 rovided that any allottee under suchoffer$invitation shall not transfer his$its securitiesto more than %& persons during a 'uarter and thecompany shall not register any transfer which isnot in conformity with this re'uirement.

Su""e#t$o%&

The pro5$#o 'a plea#e *e +elete+ $%e%t$ret .

Other#'e propose deletion o% this rule in its entiret&

because o% %ollo"in$ 4(a) practical implementation in realmarket scenario:9 / (/ssues and ;istin$ o% ed securities and thereis no means b& "hich the /ssuer can ensurethat an allottee does not trans%er the securitiesto more than 2! persons in a +uarter. Also it isimpractical %or an allottee to ensure that thepurchasers o% securities are less than 2!.urther i% a compan& re%uses trans%er o%

securities as su$$ested in the rule it shallcreate disputes and in#estor $rie#ances.

(b) growth of omestic secon arycorporate market:Corporate bond mar6et needs measures toboost acti#it& in the se$ment. Restrictin$trans%er and tradabilit& o% debentures shall

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JUSTIFICATION

cause an impediment in the $ro"th o% thedomestic bond mar6ets and "ould ma6e thesecurities illi+uid b& it #er& nature.

III Rule3.17 (7! (+!(d) the value of such offer or invitation shall bewith an investment si e of not less than fiftythousand rupees per person.

Su""e#t$o%&

Rule 3.17 (7! (+! put# a )ap o% o er #$=e perper#o% o #hare# * the )o'pa%a""re"at$%" to R#. F$ t thou#a%+ or pr$5atepla)e'e%t. The Rule +oe# %ot #pe)$ a# tohether th$# a'ou%t relate# to No'$%al

a'ou%t or the a'ou%t $%)lu+$%" thepre'$u'. Th$# 'a *e #pe)$ $e+ to a5o$+ a%)o% u#$o% > There $# %o re#tr$)t$o%# $'po#e+u%+er the A)t a%+ $t $# elt that the$'po#$t$o% o #u)h re#tr$)t$o% $# %ot $%)o%#o%a%)e $th the A)t a%+ *e +elete+.

Further4 the rule# a# al#o the For' #houl+re)o%#$+er the a'ou%t a# th$# 'a h$t the$%5ol5e'e%t o #'all #harehol+er# ho 'a*e a #our)e or $%5e#t'e%t or pu*l$) "oo+.

Other#

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JUSTIFICATION

/// Rule3.17 (7! (e!

(e) the payment to be made on subscription ofsecurities shall be made from the ban account ofthe person subscribing to such securities*

#rovided that monies payable on subscription tosecurities to be held by +oint holders shall be paidfrom the ban account of the person whose nameappears first in the application.

Su""e#t$o%&The Rule 3.17 (7! (e! put# a )ap o% pa 'e%tto )o'e ro' the :a%; a))ou%t o theappl$)a%t o%l . Th$# 'a *e +$ $)ult to$+e%t$ $% )a#e pa 'e%t $# 'a+e throu"hpa or+er or +e'a%+ +ra t. Further4 $% )a#e#o e?$"e%)$e# to 'eet the +ea+ l$%e or otherplau#$*le )o"e%t rea#o%# $ the 'o%e $#re)e$5e+ ro' a th$r+ part $th proper$+e%t$ $)at$o% the #a'e 'a al#o *e)o%#$+ere+ u%+er th$# rule > There $# %ore#tr$)t$o%# $'po#e+ u%+er the A)t a%+ $t $#elt that the $'po#$t$o% o #u)h re#tr$)t$o% $#%ot $% )o%#o%a%)e $th the A)t a%+ *e+elete+.

I% )a#e o pro5$#o to the a ore#a$+ rule the

?thers

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JUSTIFICATION

#a'e la #houl+ *e 'a+e appl$)a*le ./// Rule No. 3.17 (9!

he provisions of this rule shall not be applicableto any non-ban ing financial company which isregistered with the Reserve Ban of "ndia underRB" ct, /01.

Su""e#t$o%

@e #u""e#t that Rule 3.17(9! *e re0 or+e+

a# ollo #&2The pro5$#$o%# o th$# rule #hall %ot *eappl$)a*le to the %o%0*a%;$%" $%a%)$al)o'pa%$e# re"$#tere+ $th the Re#er5e :a%;o I%+$a u%+er R:I A)t4 1 3B4 ou#$%"F$%a%)e Co'pa%$e# re"$#tere+ $th Nat$o%alou#$%" :a%; u%+er Nat$o%al ou#$%" :a%;A)t4 1 D4 :a%;$%" Co'pa%$e# a# %ot$ $e+u%+er #e)t$o% 7 ( ! o Co'pa%$e# A)t4 7 134F$%a%)$al I%#t$tut$o%# a# %ot$ $e+ u%+er#e)t$o% 7 (3 ! o Co'pa%$e# A)t4 7 13 a%+Pu*l$) F$%a%)$al I%#t$tut$o%# a# %ot$ $e+u%+er #e)t$o% 7 (D7! o Co'pa%$e# A)t47 13.6

Re4


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JUSTIFICATION

/ Rule B.7 ("!&

($) the compan& has not been con#icted o% an&o%%ence under Reser#e an6 o% /ndia Act 1B35 ecurities and 9=chan$e oard o% /ndia Act 1BB2ecurities Contract Re$ulation Act 1B- orei$n9=chan$e Mana$ement Act 1BBB or an& otherspecial Act.D

Su""e#t$o%&

1. Rule B(7! ("! 'a *e re ra'e+ a# u%+er&

2("! the )o'pa% ha# %ot *ee% )o%5$)te++ur$%" la#t 3 ear# o a% o e%)e u%+erRe#er5e :a%; o I%+$a A)t4 1 3B4 Se)ur$t$e#a%+ E?)ha%"e :oar+ o I%+$a A)t4 1 74Se)ur$t$e# Co%tra)t Re"ulat$o% A)t4 1 9 ora% other #pe)$al A)t.6

7. Further4 the ter' 2#pe)$al a)t6 'u#t *ee?pla$%e+ to a5o$+ a% a'*$"u$t .

?thers

?thers

eedsClarit&

1. To a5o$+ a% #u)h a'*$"u$t 4 e#u""e#t a per$o+ o 3 ear# a ter)o%5$)t$o% o o e%)e4 'a *e ;ept a# al$'$t.

7. @$th re#pe)t to ,Other Spe)$al A)t#-4 $t'a *e a+5$#a*le to %a'e a e Spe)$alA)t#. ,O e%)e# u%+er Pa);a"eCo''o+$t$e# A)t/Rule#- OR ,O e%)e#u%+er E##e%t$al Co''o+$t$e# A)t a%+

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Chapter No.


JUSTIFICATION

Co%trol- $ll al#o *e )o5ere+ u%+er Spe)$alA)t# a%+ 'a lea+ to a'*$"u$t $%

$%terpretat$o%.

/ Rule 5.3(3)(b)

(b) the secretar& or an& person authori>ed b&the oard %or the purpose,

8ro#ided that in companies "herein aCompan& ecretar& is appointed under thepro#isions o% la" he shall be authori>ed %orthe purpose o% this rule.D

Su""e#t$o%&

!he wor s " eeme to be# shoul bea e after the wor s "shall be#


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JUSTIFICATION

in lieu of those that are lost or destroyed, withoutthe prior consent of the $oar or without

payment of such fees as the Board thin s fit, note3ceeding rupees fifty per certificate and on suchreasonable terms, such as furnishing supportingevidence and indemnity and the payment of out-of-poc et e3penses incurred by the company ininvestigating the evidence produced;

%uggestion:

In sub-rule (&) of rule ' ' the wor "$oaror# shoul be replace with the wor "$oaran #

/ 1. Rule 5.B(2) 4 /n the case of a companyhaving no share capital pro#isions o% sub4rule (1) shall appl& as i% the re%erences thereinto securities "ere re%erences instead to theinterest o% the member in the compan&.D

Su""e#t$o%&

The rule B. (7! 'a *e re ra'e+ a#u%+er&

> 0/n the case o% a company not having


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JUSTIFICATION

share capital pro#isions o% sub4 rule (1)shall appl& as i% the re%erences therein to

securities "ere re%erences instead to theinterest o% the member in the compan&.

ha5$%" #hare )ap$tal.-

/ Rule o. 5.1 ( ) (b)4ompany shall create ebenture +e emption+eserve e,uivalent to at least ./ of theamount raise through the debenture issuebefore debenture redemption commences .

Su""e#t$o%&

No%0*a%;$%" F$%a%)$al Co'pa%$e# re"$#tere+$th the Re#er5e :a%; o I%+$a u%+er

Re#er5e :a%; o I%+$a A)t4 1 3B4 ou#$%"F$%a%)e Co'pa%$e# re"$#tere+ $th Nat$o%alou#$%" :a%; u%+er Nat$o%al ou#$%" :a%;A)t4 1 D4 F$%a%)$al I%#t$tut$o%#4 Pu*l$)F$%a%)$al I%#t$tut$o%# %ot$ $e+ u%+er #e)t$o%7 (3 ! o the Co'pa%$e# A)t4 7 13 a%+:a%;$%" Co'pa%$e# %ot$ $e+ u%+er #e)t$o% 7( ! o the Co'pa%$e# A)t4 7 13 #hall *ee?e'pt ro' )reat$o% o e*e%tureRe+e'pt$o% Re#er5e $% )a#e o +e*t#e)ur$t$e# $##ue+ e$ther throu"h pu*l$) $##ueor throu"h pr$5ate pla)e'e%t route.Further there #hall *e %o re


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JUSTIFICATION

)reat$o% o RR a"a$%#t +e*t #e)ur$t$e#$##ue+ * other e%t$t$e# throu"h pr$5atepla)e'e%t route h$le a+e


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JUSTIFICATION

// Rule 7. (2): 9ntries in the %orei$n re$ister shall beauthenticated b& the person authori>ed b& theoard b& appendin$ his si$nature to each entr&.D

Su""e#t$o%&

I% #u*0 rule (7! o Rule D. 4 the or+# 2*the )o'pa% #e)retar or6 #hall *e $%#erte+a ter the or+ 2 authe%t$)ate+6

Re dra%t he Compan& ecretar& must be authorised toauthenticate entries in the %orei$n re$ister.

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JUSTIFICATION

// Rule D.13(9!

he %orei$n re$ister shall be 6ept in the custod& o%the person authori>ed b& the oard %orauthentication o% the entries made therein.

Su""e#t$o%&

I% #u*0 rule (9! o Rule D.134 the or+# 2orthe )o'pa% #e)retar 6 #hall *e $%#erte+a ter the or+# 2$% the )u#to+ o the per#o%author$=e+ * the :oar+6

Re dra%t

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JUSTIFICATION

// Rule 7.17(2) 4 2o person shall act as pro=& onbehal% o% members not e=ceedin$ %i%t& and

holdin$ in the a$$re$ate not more than tenpercent o% the total share capital o% thecompan& carr&in$ #otin$ ri$hts.

Su""e#t$o%&

A '$%or t po"raph$)al )ha%"e to *e +o%e.The or+ ,No- ha# to *e repla)e+ $th ,A-

e%)e the Rule D.1D(7! 'a rea+ a#ollo #&

0 per#o% #hall a)t a# pro? o% *ehal o'e'*er# %ot e?)ee+$%" $ t a%+ hol+$%"$% the a""re"ate %ot 'ore tha% te%per)e%t o the total #hare )ap$tal o the

)o'pa% )arr $%" 5ot$%" r$"ht#.-


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JUSTIFICATION

// Vot$%" throu"h ele)tro%$) 'ea%#.D.1 .(3!

(i=) he oard o% directors shall appoint onescrutini>er "ho is not in emplo&ment o% thecompan& and is a person o% repute "ho in theopinion o% the oard can scrutini>e the e4#otin$process in a %air and transparent manner:

Su""e#t$o%&

I% #u*0 rule 3 ($?! o rule D.1 4 repla)e theor+ 2#)rut$%$=er6 $th the or+# 2Co'pa%Se)retar $% pra)t$)e6

?thers Co'pa% Se)retar $% pra)t$)e is #er& muchcompetent to be appointed as a #)rut$%$=er

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JUSTIFICATION

// Report o% A%%ual Ge%eral 'eet$%"

Rule D.7

Su""e#t$o%&

2The Co'pa% Se)retar #houl+ *e "$5e% a%author$t to #$"% the report.6

?thers CS $# 5er 'u)h )o'pete%t to #$"% th$#report *e)au#e he $# the )o'pl$a%)e o $)era%+ "e%erall 'a;e# all the arra%"e'e%t#re"ar+$%" the a%%ual "e%eral 'eet$%" o%the +$re)t$o%# o the :oar+.

// For' No. D.1BF$l$%" o Re#olut$o%# a%+ a"ree'e%t# to theRe"$#trar u%+er #e)t$o% 11D 5#ursuant tosection ( ) and rule .%%7 ,Cert$ $)ate *Se)retar - $# pro5$+e+ $% the )ert$ $)at$o%)olu'%4 *ut at #$"%$%" pla)e Chartere+A))ou%ta%t/Co#t A))ou%ta%t/Co'pa%Se)retar all are 'e%t$o%e+. Th$# $# )ler$)alerror h$le prepar$%" the or' a%+ there oreo%l #$"%ature opt$o% or Co'pa% Se)retar


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JUSTIFICATION

#hall re'a$% $% pla)e.

Su""e#t$o%&

,Cert$ $)ate * Se)retar - $# pro5$+e+ $% the)ert$ $)at$o% )olu'%4 *ut at #$"%$%" pla)eChartere+ A))ou%ta%t/Co#tA))ou%ta%t/Co'pa% Se)retar all are'e%t$o%e+. Th$# $# )ler$)al error h$leprepar$%" the or' a%+ there ore o%l#$"%ature opt$o% or Co'pa% Se)retar #hallre'a$% $% pla)e.

F/// Rule 13.9(2) (i) 8a&ment o% remuneration is appro#ed b& aresolution passed b& the oard and in the case o%a compan& co#ered under sub4section (1) o%section 17* also b& the omination andRemuneration Committee i% an& and "ild doin$so 7 record in "ritin$ clear reason and

usti%ication %or pa&ment o% remuneration be&ondthe said limit,

Su""e#t$o%&

I% the ourth l$%e o the Rule 13.9(7! ($! theor+ 2 $l+6 ha# to *e repla)e+ $th the

Re4


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or+ 2 h$le6.F Rule 1-.1(1) 4 An application alon$ "ith a otice

o% Admission supported b& an a%%ida#it in For'No. 19.1 under sub4section (1) o% section 23! %oran order o% a meetin$ ma& be mo#ed b& acompan& or an& creditor or member o% thecompan& or in the case o% a compan& "hich isbein$ "ound up of the li+uidator %or an order o%a meetin$ o% the creditors or class o% creditors oro% the members or class o% members as the casema& be and such application shall be

accompanied b& documents mentioned therein.

Su""e#t$o%& I% #u*0rule (1! o rule 19.1 a '$%ort po"raph$)al )ha%"e to *e +o%e. I%$ th l$%e The or+ ,o the- to *e

repla)e+ $th ,* the-.


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I% #u*0rule (7! o rule 19.14 there $#'$%or t po"raph$)al error. Su*0po$%t ($!

#houl+ *e +elete+.

F pro5$#o to rule 19.11(1!

19.11 O er o Ta;eo5er o a )o'pa% othertha% a l$#te+ )o'pa% a# a re#ult o)o'pro'$#e or arra%"e'e%t.(1) he ta6eo#er o%%er under sub4section (11) o%section 23! "hether b& e=istin$ shareholder ornot at a price determined b& re$istered #aluer asappro#ed b& shareholders:

Provi e that where the company, beingac'uired is regulated under a special ct,approval of the regulatory body constituted orestablished under that ct as re'uired under suchact, shall also be obtained.

Su""e#t$o%&

U%+er pro5$#o to rule 19.11(1!4 there ha# to*e )lar$t o% the 'ea%$%" o the or+2%pecial 0cts # 1oreover it is not clear

eedsClarit&

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whether prior approval will be re,uire fromthese regulators

F Rule 1-.11(*)

(*) ot"ithstandin$ an&thin$ contained in sub4sections (1) to (B) o% section 23! shall appl& tota6eo#er o% an unlisted compan& i% the conditionsspeci%ied in this rule are complied "ith.@o"e#er i% an& shareholder or an& othersta6eholder has an& $rie#ance "ith respect tosuch ta6eo#er o%%er he ma& %ile his ob ections"ith the ribunal in accordance "ith sub4section(12) o% section 23!.D

Su""e#t$o%&

I% #u*0rule ( ! o Rule 19.11 the or+#Not $th#ta%+$%" a% th$%"4- 'a *e repla)e+$th the or+ Noth$%" .


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8ro#ided that the ribunal ma& i% it thin6s %itpermit at an& time e#en a%ter the %inal hearin$an& person to %ile ob ections a%ter $i#in$ notice tothe petitioner.(5) Upon the hearin$ the petition or an&ad ourned hearin$ thereo% the Re$istrar ma&pass such an order sub ect to such terms andconditions as it thin6s %it.

Su""e#t$o%&

I% #u*0 rule (3! (B! o rule 19.174 $t #houl+*e )lar$ $e+ that the pet$t$o% #houl+ *e#er5e+ o% the Re"$#trar o the Tr$*u%al.

F Rule 19.1B

Su""e#t$o%&

The or+ ,O*He)tor#- #houl+ *e

repla)e+ * ,a% per#o% ho ha# 5al$+lo*He)te+-.


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JUSTIFICATION

Rule 19.7B +oe# %ot 'e%t$o% ,S$);

Co'pa% - $% the rule4 h$)h 'a lea+ to)o% u#$o% $% $%terpretat$o% o thepro5$#$o%. e%)e $t $# a+5$#a*le to'e%t$o% the , amalgamation of a %ickcompany with any other company -.

F Rule 1-.31 (2) (pro#iso)8ro#ided that a certi%icate %rom a CharteredAccountant is submitted to the ribunal to thee%%ect that both 0demer$ed compan& and

0resultin$ compan& ha#e complied "ith conditionsas abo#e and accountin$ treatment prescribed inthis rule

Su""e#t$o%&I% pro5$#o to Rule 19.31 (7!4 the or+#2Co'pa% Se)retar $% pra)t$)e6 'u#t *e$%#erte+ a ter the or+# )hartere+a))ou%ta%t.6

R9


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trade mana$ement technolo$& or such otherdiscipline as he deems necessar& to assist him inconductin$ the en+uir&.

%uggestion &

I% #u*0rule (9!($$! o rule 1D.B4 the or+#Co'pa% #e)retar$e#/ #e)retar$al e?pert$#e#houl+ *e a++e+ $% the l$#t o e?pert#.

F // 8etho+# o 5aluat$o%.17. . or the purposes o% clause (c) o% sub4section(2) o% section 257(i) e%ore adoption o% the methods o% #aluation asdetailed belo" the re$istered #aluer shall decidethe approach to #aluation based upon the purposeo% #aluation:(a) Asset approach,(b) /ncome approach,(c) Mar6et approach.

%uggestion:

I% rule 1D. ($!4 to a++ po$%t (+! A% otherApproa)h a# %ot$ $e+ * Ce%tral Go5er%'e%tro' t$'e to t$'e.


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F // 8etho+# o 5aluat$o%.17. (ii) he #aluer shall consider the %ollo"in$

points "hile underta6in$ #aluation:(a) ature o% the business and the @istor& o% the9nterprise %rom its inception,(b) 9conomic outloo6 in $eneral and outloo6 o%the speci%ic industr& in particular,(c) oo6 #alue o% the stoc6 and the %inancialcondition o% the business,(d) 9arnin$ capacit& o% the compan&,(e)


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Hu#t$ $)at$o%.

F // Rule 17. (iii) A re$istered #aluer shall ma6e a#aluation o% an& asset as on #aluation date inaccordance "ith an& one or more o% the %ollo"in$methods:

(6) An& other method accepted or noti%ied b& theReser#e an6 o% /ndia ecurities and 9=chan$eoard or /ncome a= Authorities.

%uggestion:

I% Rule 1D. ($$$!(;!4 to a++ Nat$o%alF$%a%)$al Report$%" Author$t (NFRA!4I%#ura%)e Re"ulator a%+ e5elop'e%tAuthor$t (IR A!4 Tele)o' Re"ulatorAuthor$t o I%+$a (TRAI! or a% otherauthor$t a# a"e%) o )e%tral "o5er%'e%tperta$%$%" to #u)h $%+u#tr .

+e rafting:

(;! A% other 'etho+ a))epte+ or %ot$ $e+ *the Re#er5e :a%; o I%+$a(R:I!4 Nat$o%alF$%a%)$al Report$%" Author$t (NFRA!4I%#ura%)e Re"ulator a%+ e5elop'e%tAuthor$t (IR A!4 Tele)o' Re"ulator

2ustification:ational inancial Reportin$ Authorit& ( RA)/nsurance Re$ulator& and


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Author$t o I%+$a (TRAI! Se)ur$t$e# a%+E?)ha%"e :oar+ o I%+$a (SE:I!or I%)o'eTa? Author$t$e# or a% other author$t areal#o $'porta%t author$t ho#e 'etho+# )a%*e a))epte+ a%+ )o%#$+ere+.

F // Co%te%t# o Valuat$o% Report.

Rule 17.7 he report o% #aluation b& a re$istered#aluer shall be as near to and shall contain suchin%ormation as set out in orm o. 17.3.

%uggestion:

I% Valuat$o% Report u%+er For' No. 1D.34 a%e Po$%t #hall *e a++e+ a# u%+er&2( ! A% other I% or'at$o% or O*#er5at$o%or )o''e%t# h$)h 5aluer l$;el to #hare.6

?therso $et aluers #ie"s as the& are e=perts in the%iles to pro#ide their true and %air opinion on thereport.

FF //

C;ANat$o%al Co'pa% a AppellateTr$*u%al Rule#4 7 13

Fe t po"raph$)al )ha%"e# to *e +o%e$% the rule B a# u%+er.

Re4


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1. The hea+$%" o Rule B #houl+ *e,Pro)e+ure or $l$%" Appeal.

7. I% #u*0rule (7! o rule B4 the or+#2$t a# re)e$5e+ $% the re"$#tr 6'u#t *e )ha%"e+ to 2$t $# re)e$5e+ $%the re"$#tr .6

3. I% #u*0rule (B! o rule B4 the or+2the6 'u#t *e a++e+ *e ore theor+# 'e'ora%+u' o appeal6.

FF //4

C;A

Nat$o%al Co'pa% a Appellate Tr$*u%alRule#4 7 13

Rule 77 (7! &

77. 8e'ora%+u' o Appeara%)e

(2) he Central Ho#ernment or the Re$ional


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$% pra)t$)e or Co'pa% Se)retar $% pra)t$)eor Co#t A))ou%ta%t $% pra)t$)e #hall ha5epo#t


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FF ///Chapter VIII& 8e+$at$o% a%+ Co%)$l$at$o%

Se)t$o%

Su""e#t$o%&

I% rule 7 .74 e #u""e#t thatpro e##$o%al#4 ho ha5e *ee% $%e'plo 'e%t or 'ore 7 ear# a%+ ha5$%"rele5a%t e?per$e%)e4 #houl+ al#o *eallo e+ to a)t a# a% e?pert $% the pa%el o8e+$ator/ Co%)$l$ator#. e%)e e #u""e#t4to $%)lu+e a po$%t a ter po$%t ($!.

"(4) Professional in employment havingmore than &. years of relevant e5perience #

Re4


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7 .1 . T$'e l$'$t or )o'plet$o% o'e+$at$o%/)o%)$l$at$o%.8n the e3piry of ninety days from the date fi3edfor the first appearance of the parties before themediator$conciliator, the mediation$conciliationshall stand terminated, unless the 4entral9overnment or the ribunal or the ppellateribunal, which referred the matter, either suomotu, or upon re'uest by any of the parties, andupon hearing all the parties, is of the view thate3tension of time is necessary or may be useful;but such e3tension shall not be beyond a further

period of thirty days.

Su""e#t$o%&

,Rule 7 .1 allo # a t$'e l$'$t o +a #$th$% h$)h the 8e+$ator or the Co%)$l$ator#houl+ pro%ou%)e h$# a ar+ a%+ toter'$%ate the 8e+$at$o% a%+ Co%)$l$at$o%pa%el u%le## the ter' $# e?te%+e+ * the

Ce%tral Go5er%'e%t or the Tr$*u%al up to aurther per$o+ o 3 +a # a%+ %ot *e o%+

that. The ollo $%" $##ue# are $'porta%t $%th$# re"ar+&

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Rule %:.%1(d)- he e3pense of themediation$conciliation including the fee of theme iator6conciliator costs of administrativeassistance, and other ancillary e3pensesconcerned, shall be borne e'ually by the variouscontesting parties or as may be otherwisedirected by the ribunal.

Su""e#t$o%&

:oth rule# 7 .7B()! a%+ (+! ha5e 'e%t$o%e+the ee# pa a*le to 'e+$ator# / )o%)$l$ator#7e therefore suggest the removal of either

sub clause (c) or sub clause ( ) from the sai rules

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ICSI Suggestions on Draft Rules Phase 2