YEAR END REVIEW-2007- MINISTRY OF CORPORATE AFFAIRS
The name of
the Ministry has been changed from ‘Ministry of Company Affairs’ to the ‘Ministry
of Corporate Affairs’ vide Presidential Notification dated May
9, 2007
keeping in view the wide scope and activities of the Ministry and emergence
of new business models in the current economic environment in the country.
Stabilisation of operations under the MCA21 e-Governance Project leading to
efficiency in service delivery, strengthening of compliance management and
regulatory functions, amendment in the Competition Act, 2002, steps towards
improvement in the physical infrastructure and initiation of the process of
establishment of Indian Institute of Corporate Affairs have been the major
achievements of the Ministry during 2007.
Initiatives
undertaken by the Ministry – Progress achieved
(i) Notification
of New Accounting standards
On the basis
of recommendations of the National Advisory Committee on Accounting Standards
(NACAS), the Accounting Standards have been prescribed under the Companies
Act, 1956 through a Notification dated December 7,
2006 for
application for accounting year commencing April 1, 2007. The
new Accounting Standards would enable the Indian Accounting Standards to converge
conforming to International Financial Reporting Standards (IFRs) issued by
the International Accounting Standards Board.
(ii)
Amendments to the Acts governing the professions of Chartered Accountants,
Cost & Works Accountants and the Company Secretaries:
Reform of
the legal framework for professional institutes of Chartered Accountants,
Cost and Works Accountants, and Company Secretaries took place through amendments
enabled in 2006/ 2007 with a view to providing an enabling environment for
orderly growth of the professions along with increased accountability in discharge
of responsibilities. The amended Acts were implemented through preparation
and notification of Rules/ Regulations under the Acts. Councils for the three
Institutes were constituted in accordance with the revised statutory provisions.
(iii) Amendments
to the Competition Act, 2002
The Competition
Act, 2002 was amended in 2007 pursuant to the Report of the Standing Committee
of Parliament and keeping in view observations of the Hon’ble Apex Court and the submissions made by the Union
of India. The Competition (Amendment) Act, 2007 has been passed by the Parliament
and has also received the assent of the President of India. Action is being taken for early operationalsiation
of the Competition Commission of India which also constitutes a thrust area
of Prime Minister for this Ministry.
(iv) Limited
Liability Partnerships Bill.
Keeping in
view the need for a new form of body corporate and the vast potential for
the growth of the knowledge and service sector in the country, a Bill containing
proposals on Limited Liability Partnerships was introduced in the Parliament
in December, 2006. The draft Bill has since been examined by the Department
related Parliamentary Standing Committee and its Report tabled in the Parliament
on 27th November, 2007. The Ministry is now examining the
recommendations of the Standing Committee for preparation and introduction
of the LLP for consideration and passing by the Parliament.
(v) Comprehensive
Revision of Company Law:
Companies
Act, 1956 is a 50 year old legal framework having gone through 25 amendments
by now. In order to provide a simple,
forward looking legal framework that enables the growth of Corporate sector
with effective compliance, a massive exercise has been undertaken by the Ministry.
It is proposed to retain the substantive law on the statute book, while the
procedural aspects are envisaged to be relegated to the rules and regulations
under the Act. The draft Bill is proposed to be introduced in the Parliament
during the Budget Session, 2008.
(vi) National
Company Law Tribunal (NCLT) and NCLAT
NCLT is envisaged
to have its principal bench at Delhi and other benches at 15 locations
throughout the country, with a total of 62 members, along with the requisite
supporting organization staff. Besides,
National Company Law Appellate Tribunal (NCLAT) is to be constituted, which
will be an appellate body with its bench at Delhi. However,
NCLT and NCLAT have not yet been set up on account of legal challenge. The
Hon’ble Supreme Court, after hearing the matter has referred it for the consideration
of a Constitution Bench.
(vii) Indian
Institute of Corporate Affairs (IICA)
It is proposed
to set up IICA to serve as a think-tank and to provide knowledge support to
the Ministry in order to enable it to respond to the emerging requirements
of the present day corporate sector and plan future strategies in a dynamic
process of change. Additionally, it is proposed to serve as a capacity building
centre for the staff of the Ministry. This is the first Plan Scheme of this
Ministry. The scheme involves procurement of land in the NCR and construction
of building infrastructure with requisite facilities. The project involves
an outlay of Rs. 211 crore over the 11th Plan period.
Service
Delivery
(viii) MCA21 Project:
Implemented as a mission mode project of the Government of India under
the National e-governance Plan (NeGP), the MCA21 focuses on prompt and efficient
service delivery of services. The project is fully operational from all 20
registry locations. During the year 2007, the emphasis has been on stabilization
of operations and enhancement/ value addition, standardization of the processes
and testing of the system to meet the aspirations of stakeholders amidst an
unprecedented growth of the companies from about 30,000 in 1956 to more than
8 lakh at present.
(a) New
features under MCA21:
Besides stabilisation of operations, a
number of new features have been introduced in the project during 2007,
including the following:
·
Mandating regular DIN for e-filing from 1.7.2007. Details of
Directors of a company can now be viewed on the portal free of charge.
·
Implementation of Role-check for authorised signatory of a
company and for professionals introduced w.e.f. 1.7.2007 so as to ensure the
authenticity of the documents and non-repudiation by the signatory.
·
Internet Banking facility from SBI implemented. The number of authorised Bank branches almost
doubled from 200 to 399.
·
Master Data of about 60,000 companies corrected on request.
·
Provision for addendum for hassle-free filing of large size
documents (in particular, the Balance-sheets and the Annual Returns).
·
The operational statistics in the following table bring out
the stability in the system, increased volumes of filings and improved
compliance:
Volume Data (As of 30-Nov-2007)
|
Average no. of unique visitors
(approx)
|
6,000 per day
|
|
Average portal hits per day
|
1.7 million
|
|
Peak Portal hits on a single day (29 Nov. 2007)
|
14 million
|
|
Total filings
|
34 lakh (approx)
|
|
Peak filing (on 29 Nov. 2007)
|
41,800
|
|
New Co. registered online
|
84,000+
|
|
Total DIN issued till date
(approx)
|
7 lakh
|
|
Company docs viewed online
|
3.6
lakh
|
|
Pattern of E-filing
-
Made directly at MCA
Portal
-
Via Certified Filing
Centres
-
Via MCA Facilitation
Centres
|
84%
8%
7%
|
|
Revenue Receipts
-
As on 31st Mar ‘05
-
As on 31st Mar ‘06
-
As on 31st Mar ‘07
|
Rs. 474 Cr.
Rs. 728 Cr.
Rs. 1,038 Cr.
|
|
Payment realization reporting by Banks
|
97% in T+3 days
|
|
Online payment transactions (by volume)
|
47%
|
(b)
DIN Allotment facility:
The Director Identification Number
(DIN) has been made mandatory for all the existing Directors as well as the
future intending Directors. It is a unique identifier for a Director on a
company and captures the particulars of his identity and address. This feature
is expected to take care of the cases of frauds committed by individual Directors
and the phenomena of vanishing companies. Approximately 07 lakh DINs have
been issued so far.
(c) Turn around
time in service delivery:
There has been a remarkable
improvement in service delivery efficiencies. The Ministry intends to reach a
level of service delivery of 24 hours within the shortest possible time, in
order to match the international service benchmarks. There is a significant
improvement in reporting payment realization by the Banks with more than 97% of
the statutory payments being reported within T+3 days, and 47% of the payment
transactions being made using the on-line system of payment. A comparative
picture of the time taken in delivery of services under pre-MCA21 and post
MCA21 scenarios is given in the following statement:
Service Metrics
|
Type of Service
|
Prior to MCA21
|
After MCA21
|
|
Name Approval
|
7 days
|
1-2 days
|
|
Company Incorporation
|
15 days
|
1-3 days
|
|
Change of Name
|
15 days
|
3 days
|
|
Charge creation / modification
|
10-15 days
|
2 days
|
|
Certified Copy
|
10 days
|
2 days
|
Registration
of Other Documents
|
Type of Service
|
Prior to MCA21
|
After MCA21
|
|
Annual Return
|
60 days
|
Instantaneous
|
|
Balance-sheet
|
60 days
|
Instantaneous
|
|
Change in Directors
|
60 days
|
1-3 days
|
|
Change in Regd. Office Address
|
60 days
|
1-3 days
|
|
Increase in Authorized Capital
|
60 days
|
1-3 days
|
|
Inspection of Public Documents
|
Physical appearance
|
On-line
|
Empowering
Investors
A number of steps have
been taken in the direction of creating Investor Awareness and addressing
their grievances:
(ix) Investor Awareness
Month
The Ministry, under the aegis of Investor
Education Protection Fund (IEPF), organised ‘Investor Awareness Month’ in
September 2007 in association with the Institutes of Chartered Accountants
and Company Secretaries and Investor Awareness programmes organised at 61
locations across the country. These programmes generated encouraging response
from the general public as well as professionals.
(x) www.iepf.gov.in
A new website has been launched on September
27, 2007
with a view to provide online information regarding various activities undertaken
under Investor Education Protection Fund and educative information for investors
without any charges. It also provides the facility of download of forms for
applying for registration and submission of proposals. Besides, the website
provides valuable education content on capital markets, instruments of investments,
financial literacy, Dos and Don’ts, etc. along with details of NGOs and VOs
registered under IEPF and projects supported by IEPF. The website also gives
replies to queries on various topics on IEPF.
(xi) www.investorhelpline.in
Sponsored under the IEPF,
this website provides an interactive, internet-based service to the investors
for assistance in redressal of their grievances. It provides for on-line filing
of grievances/ online status to the complainant and reply to each complainant
is sent after redressal. Out of the
3690 valid grievances registered till 31
October 2007,
1092 grievances have been settled to the satisfaction of the complainants
so far.
(xii) www.watchoutinvestors.com
This website provides free of charge
online information about entities and persons indicted by regulators for any
economic offences. As on date, information of about 60,000 entities and 27,285
persons indicted by various regulators for economic offences is available
on the website.
BY- 68/07
(Release ID :34245)