The Foreign Exchange Management Act (FEMA), 1999

The Foreign Exchange Management Act (FEMA), 1999

authorised in this behalf by the Central Government in such manner as may be prescribed. However, no contravention shall be compounded unless the amount involved in such contravention is quantifiable. Where a contravention has been compounded, no proceeding can continue or be initiated against the person in respect of the contravention so compounded.

Q28. Mr. G., an Indian national desires to obtain Foreign Exchange on current account transactions for the following purposes:
(i) Payment of commission on exports made towards equity investment in wholly
owned subsidiary abroad of an Indian company.
(ii) Remittance of hiring charges of transponder. (iii) Remittance for use of trade mark in India.
Advise G whether he can obtain Foreign Exchange and, if so, under what
conditions? fC.A. (Final) Nov. 2001J
.9Lns. Under Section 5 of the Foreign Exchange Management Act, 1999, certain Rules have been framed for drawal of foreign exchange on current account. According to the said rules, drawal of foreign exchange for certain transactions is prohibited. In respect of certain transactions drawal of foreign exchange is permissible with the prior approval of the Central Government. In respect of some of the transactions, prior permission of RBI is necessary for drawal of foreign exchange.
(i) In respect of item No.1, Le., payment of commission on exports made towards equity investment in wholly owned subsidiary abroad of an Indian company is prohibited.
(m Orawal of foreign exchange for remittance of hiring charges of transponder,
can be made with the prior approval of the Central Government.
(iii) So far as remittance for use of Trade Mark in India is concerned, the necessary
foreign exchange can be obtained with the prior permission of the Reserve
Bank of India.
In the case of (ii) and (iii) above, approval of concerned authority is not required if the payment is made out of funds held in Resident Foreign Currency (RFC) Account or Exchange Earner's Foreign Currency (EEFC) Account of the remitter. Alternatively, foreign exchange can be drawn from an authorised person.

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The ,Securities and ExchaI.ge Board of India (SEBI) Act, 1992

The ,Securities and ExchaI).ge Board of India (SEBI) Act, 1992
8-67

17. What is the specific advantage of Book-building process in connection with issue of securities by a company? State the guidelines issued by SEBI in this regard in respect of the following matters:
(i) Deteqnination of issue price and that of successful bidders. (ii) Reservation for individual investors who have not participated in the
bidding process and basis of allotment to such investors.
[May, 2000]
18. What are the Securities and Exchange Board of India's important guidelines
regarding pricing of first issue of equity shares of new companies?
[November, 2000]
19. What provision has been made under Section 15G of the SEBI Act, 1992, in
connection with penalty for insider trading? [November, 2000]
20. State, what is Employees Stock Option Scheme. Are promoters and the part-time
directors entitled to receive securities under the Scheme? Give Reasons.

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Corporate Laws & Secretarial Practice

two Directors one of whom must be the Managing Di~ttor, if there is one. However, in case there is only one Director present for the time-being in India, he can sign the Board's Report provided he attaches a statement explaining the reason as to why it

~
cou~not be signed by at least two Directors.
A 12. The company of which you are the Secretary has adopted the calendar year
as its accounting year. Annual general meetings are usually held in the month of June
'-" each year. This year the audit of accounts has not been completed. Your Directors intend to hold the annual general meeting in the month of June, as usual, to transact the business other than the consideration of the accounts and to adjourn the meeting to a later date for the purpose of adoption of the an[lual accounts. They ask you whether this would be in order. State your views.
5tns. In case annual accounts are not ready for laying at the appropriate annual general m~ting, it is open to the company concerned to adjourn the said annual general meeting to a subsequent date when the annual accounts are expected to be ready for laying. Since consideration of accounts is only one of the matters to be dealt with at an AGM, Directors are under a statutory obligation to hold the meeting. The proper cour~shall ~ t Department of Company Affirirs communique dt, 2nd Feb, 1974). - --
The adjourned meeting must, however, be held within the maximum time limit allowed under Section 166 [Subal Dutta & Sons Pvt. Ltd. V s. Asstt. Registrar of Companies
W.B. (1986)].
..........
~ \
Q: '13. Discuss the provisions of the Companies Act relating to determination of net
pr6fits. .
5tns. The Companies Act provides that 'Net Profit' for the purposes of calculating managerial remuneration shall be computed in accordance with the provisions of Sees. 349 and 350 of the Act.
The provisions of the above Sections require that in computing net profits of a company in any financial year for the purpose of calculating managerial remuneration, the following points should be considered:

1. Credit shall be Given for
Bounties and subsidies received from any Government or any public authority constituted or authorised in this behalfby the Government unless the Central Government otherwise directs.

2. Credit Shall Not be Given for the Following
(a) profits, by way of premium, on shares or debentures of the company which
are issued or sold by the company;
(b) profit on sales by the company of forfeited shares;
(c) profits of capital nature including profits from the sale of the undertaking or
any of the undertakings of the company, or any part thereof; and
(d) profits from the sale of any immovable property or fixed assets of a capital

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Report of Board of Directors

AII-12

Coroorate Laws & Secretarial Practice

(a) a copy of the balance sheet of the subsidiary;

(b) a copy of its Directors' report;

(c) a copy of its profit and loss account;

(d) a copy of its Auditor's report;

(e) a statement containing the following particulars:

(i) extent of holding company's interest in the subsidiary at the end of last

financial year; and "

(ii) the net aggregate amount of profits and losses of the subsidiary, whether

dealt with or not in the holding company's accounts;

if) a statement containing the following:

(i) details of any change in holding company's interest in the subsidiary

between the end of financial year of the subsidiary company and the end

of the financial year of holding company, and

(ii) details of any material changes since last financial year in respect of:

. the subsidiary's fixed assets,

. its investments,

. the moneys lent by it, and

. the moneys borrowed by it for every purpose other than that of

meeting current liabilities;

(g) where Directors of the holding company are unable to obtain"the necessary

information for any of the matters required to be specified by sub-section (4),

then a report in writing to that effect should be attached.

Where the financial year of the subsidiary company does not coincide with that of the holding company, the financial year of the subsidiary shall not end on a day which precedes the day on which the holding company's financial year ends by more than six months.

The documents referred to in (e), if), (g) above shall be signed by the persons by

whom the balance sheet of the holding company is required to be signed.

Q 10. "There shall be attached to every balance sheet laid before a company in general meeting a report by its Board of Directors." What are the matters which are required by law to be mentioned in the Director's Report?

As a Secretary of a public limited company, what methods would you include while preparing a report on behalf of the Board of Directors of your company, to be attached to the Balance Sheet of the company so that the report meets the disclosure require

ments as required under the Companies Act, 1956? [CA. (Final) May, 1996]

Yl.ns .

Report of Board of Directors

Section 217 provides that there shall be attached to every balance sheet laid before a company in a general meeting (in practice, the annual general meeting), a report by its Board of Directors, with respect to :

(a) the state of the company's affairs;

(b) the amounts, if any, which it proposes to carry to any reserves in such balance

sheet;

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google97c0c3c4d6e80756.html

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What is mutual funds

MUTUAL FUNDS: It means "collects the savings from small
investors and invest them according to certain investment
objectives"

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Classification of Errors as per Accounting

Error of ommission 
Error of commission 
Error of dulplication
Error of principle

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what is cash profit and how to define it ?

U know about accural basis and monetary basis. accural basis means every transaction which are done 1 financial year are entered and cash basis means every sales which are form in cash are enter. book profit means profit which are earned in 1 financial yera (accural basis) and cash profit means profit earned on the basis of cash basis. book profit are shown in the profit and loss a\c for the purpose of income tax and cash pofit are for bussiness men with help of this they known about what the standard of cash inflow and outflow.

AND 

IT is profit after tax plus depreciation

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Service Tax List of Services

Sl.N	Service Category	Date Of introduction
1	Advertising	01.11.1996
2	Air Travel Agent	01.07.1997
3	Airport Services	10.09.2004
4	Architect	16.10.1998
5	Asset management (by other than Banking company)	01.06.2007
6	ATM Operations, Management or Maintenance	01.05.2006
7	Auctioneers' service, other than auction of property under directions or orders of a count of or auction by Central Govt.	01.05.2006
8	Authorised Service Station	16.07.2001
9	Auxiliary to General Insurance / Life Insurance	16.07.2001 / 16.08.2002
10	Banking & Other Financial Services	16.07.2001
11	Beauty Parlour	16.08.2002
12	Broadcasting	16.07.2001
13	Business Auxiliary Services	01.07.2003
14	Business Exhibition Service	10.09.2004
15	Business Support Service	01.05.2006
16	Cable Operator	16.08.2002
17	Cargo Handling	16.08.2002
18	Chartered Accountant	16.10.1998
19	Cleaning Service	16.06.2005
20	Clearing & Forwarding Agent	16.07.2001
21	Clubs and Associations	16.06.2005
22	Commercial or Industrial Construction	10.09.2004
23	Commercial Training or Coaching	01.07.2003
24	Company Secretary	16.10.1998
25	Construction of Complex	16.06.2005
26	Consulting Engineer	07.07.1997
27	Convention Centre	16.07.2001
28	Cost Accountant	16.10.1998
29	Courier	01.11.1996
30	Credit Card, Debit Card, Charge Card or other payment card related services	01.05.2006
31	Credit Rating Agency	16.10.1998
32	Custom House Agent	15.06.1997
33	Design Services	01.06.2007
34	Development & Supply of Content	01.06.2007
35	Dredging	16.06.2005
36	Dry Cleaning	16.08.2002
37	Erection, Commissioning or Installation	01.07.2003
38	Event Management	16.08.2002
39	Fashion Designer	16.08.2002
40	Forward Contract Services	10.09.2004
41	Franchise Service	01.07.2003
42	General Insurance	01.07.1994
43	Health Club & Fitness Centre	16.08.2002
44	Intellectual Property Service	10.09.2004
45	Interior Decorator	16.10.1998
46	Internet Café	01.07.2003
47	Internet Telephony Service	01.05.2006
48	Life Insurance	10.09.2004
49	Mailing List Compilation and Mailing	16.06.2005
50	Management Consultant	01.07.1997
51	Management, Maintenance or Repair Service	01.07.2003
52	Mandap Keeper	16.10.1998
53	Manpower Recruitment or Supply Agency	07.07.1997
54	Market Research Agency	16.10.1998
55	Mining of Mineral, Oil or Gas	01.06.2007
56	On-line Information & Database Access or Retrieval Service	16.07.2001
57	Opinion Poll Service	10.19.2004
58	Outdoor Caterer	10.09.2004
59	Packaging Service	16.06.2005
60	Pandal or Shamiyana Services	10.09.2004
61	Photography	16.07.2001
62	Port Service	16.07.2001
63	Public Relations service	01.05.2006
64	Rail Travel Agent	16.08.2002
65	Real Estate Agent / Consultant	16.10.1998
66	Recovery Agent	01.05.2006
67	Registrar to an Issue	01.05.2006
68	Rent - a - Cab Operator	16.07.1997
69	Renting of Immovable Property	01.06.2007
70	Sale of space or time for Advertisement, other than print media	01.05.2006
71	Scientific or Technical Consultancy	16.07.2001
72	Security Agency	16.10.1998
73	Share Transfer Agent	01.05.2006
74	Ship Management service	01.05.2006
75	Site Preparation	16.06.2005
76	Sound Recording	16.07.2001
77	Sponsorship service provided to any body corporate or firm, other than sponsorship of sports event	01.05.2006
78	Steamer Agent	15.06.1997
79	Stock Broker	01.07.1994
80	Storage & Warehousing	16.08.2002
81	Survey & Exploration of Minerals	10.09.2004
82	Survey and Map Making	16.06.2005
83	T.V. & radio Program Production Services	10.09.2004
84	Technical Testing & Analysis Agency / Technical Inspection & Certification Agency	01.07.2003
85	Telecommunication Service	1.6.20007
86	Tour Operator	01.09.1997
87	Transport of goods by Air	10.09.2004
88	Transport of goods by Road	01.01.2005
89	Transport of goods in Containers by rail by any person other than Government railway	01.05.2006
90	Transport of goods other than water, through Pipeline or other conduit	16.06.2005
91	Transport of passengers Embarking on international journey by air, other than economy class passengers	01.05.2006
92	Transport of persons by cruise ship	01.05.2006
93	Travel Agent other than Air & Rail Travel	10.09.2004
94	Underwriter	16.10.1998
95	Video Tape Production	16.07.2001
96	Works Contract	01.06.2007

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