Financial Daily from THE HINDU group of publications
Monday, Sep 20, 2004
Financial Daily from THE HINDU group of publications Monday, Sep 20, 2004 |
|
|
|
|
|
Mentor
-
Accountancy Columns - For the Asking Loan against cars is `secured' though not registered
Sridhar, e-mail A charge that has not been registered is void only with regard to creditors inter se. The defaulting company itself cannot deny the lender the cover of security. This position of company law is in keeping with the common law that no man can take advantage of his own default. The loan, therefore, is very much secured as far as the company is concerned.
Advice on advisory
Bhavnik Desai, e-mail The management of a company is the prerogative and responsibility of its board. That is why Section 291 of the Companies Act has vested the board with plenary powers, almost. Section 292 enables the board to delegate its powers subject to certain exceptions. The issue raised by you is not one of the exceptions. Therefore, the divisional head himself can appoint such committee if he has the implied authority of the board to run the division the way he likes subject to the direction of the board. The board may choose not to intervene in the composition or in the working of the committee. There is no restriction on payment of fees to members of such committee. There is no statutory need to minute the proceedings of such committee because Section 193 requires maintenance of minutes of general meetings, board meetings and every committee of the board. Evidently a committee comprising outsiders is not a committee of the board. The reference in Section 193 is to a sub-committee of the board.
Market cap
Madhu Gorphade, Belgaum Market capitalisation of a company refers to the market value of the paid-up share capital. A company may have issue 10 crore shares at Rs 10 each. In its books, its share capital account would show Rs 100 crore. But if its shares are quoted at Rs 90 per share, that is, at nine times its face value, the market capitalisation of this company is Rs 900 crore. Make a similar calculation for all the listed companies and what you have is the aggregate market capitalisation. The steep fall in prices in the wake of negative sentiments have reportedly resulted in the aggregate market capitalisation coming down by Rs 55,000 crore with reference to the previous day's figure. To call this loss to the nation is an exaggeration, nay, inappropriate given the fact that share market is a zero-sums game and what is loss to the seller is a gain to the buyer. In any case, share markets do not remain rock steady even in the absence of political and economic upheavals. Demand and supply factors also play a role. There is thus no guarantee that on a given day all the investors would get in aggregate the aggregate market cap as their selling price assuming all of them turn sellers. This is because the sudden surge in supply vis-à-vis the demand would cause steep erosion in values independent of the erosion caused by factors such as Andhra results. Market cap, in other words, is a figure as volatile as the share market itself.
AO's accountability
R. M. Subramaniam, e-mail The AO is enjoined to grant refund or make demand according as tax has been paid in excess or in short with reference to the income disclosed in the return. This he is required to do within one year from the end of the financial year in which the return was filed. Similarly, there is a bar against issuing notice for scrutiny assessment after 12 months from the end of the month in which the return was filed. If the AO is remiss in performing his duties within the due date, the consequences are visited on the Revenue. He may attract an adverse entry in his CR for his laxity but the Act itself does not contemplate any action against delinquent officers.
Abatement puzzlement
Ajoy Chandani, e-mail In terms of Section 10A(4), the profits derived from export of software shall be the amount which bears to the profit of the business of the undertaking, the same proportion as the export turnover in respect of such software bears to the total turnover of the business carried on by the undertaking. This shows that while the unabsorbed deprecation of the unit to the extent it relates to the post April 2000 era must abate against current year's profit inasmuch as Section 32(2) deems such depreciation as part of current depreciation, brought forward loss relating to the same era should not abate against current profit because unlike Section 32(2), Section 72(2) does not come into picture at the stage of computation of profit of the unit in STP.
Transfer in a bind
Girish Gupta, Jaipur It is now well-settled legal position that the transferor is in a position of trustee and must do everything in his power to enable smooth mutation of the shares in favour of the transferee. The legal heirs of the deceased joint transferor are thus bound to cooperate with you failing which you can seek redress through a civil suit.
(ASK! Send in your queries on accounting, auditing, corporate law and taxation to ask@thehindu.co.in)
S. Murlidharan
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | Home |
Copyright © 2004, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|