DAILY GK UPDATE 10TH AUGUST

1.    Parliament passed Companies Bill 2012 

i. The Parliament has passed the historic Companies Bill 2012, moved by Sachin Pilot, Minister of Corporate Affairs

ii. The Bill was passed by the Rajya Sabha on 8^th August which had already been passed by the Lok Sabha in December 2012.

iii. The new Companies Bill, on its enactment, will allow the country to have a modern legislation for growth and regulation of corporate sector in India.

iv. The existing statute for regulation of companies in the country, viz. the Companies Act, 1956 had been under consideration for quite long for comprehensive revision in view of the changing economic and commercial environment nationally as well as internationally.

v. The new law will facilitate business-friendly corporate regulation, improve corporate governance norms, enhance accountability on the part of corporates/ auditors, raise levels of transparency and protect interests of investors, particularly small investors.

The salient features of the new Companies law are: 

Business friendly corporate Regulation/ pro-business initiatives; e-Governance Initiatives; Good Corporate Governance and CSR; Enhanced Disclosure norms; Enhanced accountability of Management; Stricter enforcement; Audit accountability; Protection for minority shareholders; Investor protection and activism; Better framework for insolvency regulation; and Institutional structure.

Other important features of the Companies Bill, 2012 are:

1. Enhanced Accountability on the part of Companies:

(a) In addition to the concept of Independent Directors (IDs) introduced, the provisions in respect of their tenure and liability etc have been provided. Code for IDs provided in a new Schedule to the Bill. Databank for IDs proposed to be maintained by a body/institute notified by the Central Government to facilitate appointment of IDs. (Clauses 149(10); 149(11); 149(7); 150);

(b) Corporate Social Responsibility (CSR) Committee of the Board proposed in addition to other Committees of the Board viz Audit Committee, Nomination and Remuneration and Stakeholders Relationship Committee. These committees shall have IDs/non executive directors to bring more independence in Board functioning and for protection of interests of minority shareholders. (Clauses 135, 177 and 178);

(c) Provisions in respect of vigil mechanism (whistle blowing) proposed to enable a company to evolve a process to encourage ethical corporate behavior, while rewarding employees for their integrity and for providing valuable information to the management on deviant practices. (Clause 177 (9) and 177 (10));

(d) New provisions suggested for allowing re-opening of accounts in certain cases with due safeguards. (Clause 130 and 131).

2.  Audit Accountability:

(a) Rotation of auditors and audit firms being provided for. (Clause 139 (2));

(b) Stricter and more accountable role for auditor being retained. Provisions relating to prohibiting auditor from performing non-audit services revised to ensure independence and accountability of auditor. (Clause 141 and Clause 144);

(c) National Advisory Committee on Accounting and Auditing Standards (NACAAS) proposed to be renamed as National Financial Reporting Authority (NFRA) with a mandate to ensure monitoring and compliance of accounting and auditing standards and to oversee quality of service of professionals associated with compliance.

3. Facilitating Mergers/ Acquisitions:

Simplified procedure (through confirmation by the Central Government), laid down for compromise or arrangement including for merger or amalgamation of holding companiesand wholly owned subsidiary (ies), between two or more small companies and for such other class or classes of companies as may be prescribed. This would result into faster decisions on approvals for mergers and amalgamations resulting effective restructuring in companies and growth in the economy. For other companies, such matters would be approved by Tribunal. (Clause 233 and 232).

4. Investor Protection:

(a) Acceptance of deposits from public subject to a more stringent regime. (Clause 76);

(b) Provisions for Class Action Suits revised to provide minimum number of persons who may apply for such suits. Safeguards against misuse of these provisions also being included. (Clause 245).

5. National Company Law Tribunal (Tribunal): 
Keeping in view the Supreme Court’s Judgment, on the 11th May, 2010 on the composition and constitution of the Tribunal, modifications relating to qualification and experience etc of the members of the Tribunal have been made. Appeals from Tribunal shall lie to National Company Law Appellate Tribunal. (Chapter XXVII).

2.    RBI’s tightening measures can drag GDP growth to sub 5%: experts warn

i. The Reserve Bank of India's (RBI's) liquidity tightening measures may have an adverse impact on the country's already sluggish economic growth, which could fall below 5 per cent, experts warned.

ii. In July, the central bank announced a series of liquidity tightening measures, such as issuing of more government bonds and limiting banks' overnight borrowing to 0.5 per cent. These measures were introduced to curb depreciation in the value of rupee, which has slipped more than 12 per cent against the US dollar since the start of current financial year.

iii. But, experts are of the view that such measures would increase the downside risk for the Indian economy.

iv. Chetan Ahya, managing director of Morgan Stanley, said, "A weak growth trend lasting for 4-5 quarters would increase the risk of a vicious cycle building, whereby the economy becomes vulnerable and the risk increases of GDP growth sliding to 3.5-4 percent."

v. Indranil Sen Gupta, chief economist at Merrill Lynch, said Indian economy's growth during the current financial year could fall to 4.8 per cent unless the central bank rolls back its liquidity tightening measures.

vi. India's gross domestic product (GDP) grew at a rate of 5 per cent during the financial year 2012-13. In the final three months of the last financial year, GDP growth slipped to just 4.8 per cent.

vii. Meanwhile, the RBI is struggling to arrest depreciation in the value of rupee, which slipped below the psychological level of 60 per US dollar in late June. The depreciation continued and the domestic currency crossed the 61-level in the recent past.

3.    Bhutanese prime minister to visit India next week

i. Bhutan's new Prime Minister Tshering Tobgay will embark on his maiden visit to India next week during which he would discussed issues like rupee crunch and funds for the Himalayan nation's 11th five-year plan with Indian leadership.

ii. Tobgay's visit to India at the invitation of Prime Minister Manmohan Singh would be his first visit abroad after assuming the office last month.

iii. Tobgay's People's Democratic Party (PDP) won a landslide victory in Bhutan's second national elections held on 13^th July.

iv. According to a statement, one of the agenda would be to seek grant from India to inject into Bhutanese economy and to ease liquidity crunch.

v. Bhutan is facing Indian rupee crunch which has hit the Himalayan country's business community hard.

4.    India signs DTAC Protocol with Morocco

i. India signed a Protocol amending the India – Morocco Double Taxation Avoidance Convention (DTAC).

ii. The Protocol was signed by Dr Sudha Sharma, Chairperson, Central Board of Direct Taxes on behalf of Government of India and Mr. Larbi Reffouh, Ambassador of the Kingdom of Morocco to India on behalf of Government of the Kingdom of Morocco. 

iii. The Protocol is based on international standards of transparency and exchange of information.

iv. It provides for effective exchange of information including banking information between tax authorities of the two countries.

v. It also provides that each treaty partner shall use its information gathering measures to obtain the requested information even though it may not need such information for its own domestic tax purposes. 

vi.The Agreement will enhance mutual co-operation between the two countriesby having effective exchange of information in tax matters.

5.    INS Arihant nuclear reactor activated

i. In a major step towards completing its nuclear triad, India activated the atomic reactor on-board the indigenous nuclear submarine INS Arihant paving the way for its operational deployment by the Navy.

ii. Nuclear triad is the ability to fire nuclear-tipped missiles from land, air and sea. After the nuclear reactor is activated, the agencies concerned can work towards readying the warship for operational deployments soon.

iii. INS Arihant has been undergoing trials at Navy's key submarine base in Vishakhapatnam and would be launched for sea trials soon since the nuclear reactor has gone critical.

iv. The DRDO has also readied a medium-range nuclear missile BO-5 for being deployed on the Arihant and its last developmental trial was held on January 27 off the coast of Vishakhapatnam.

v. The nuclear submarine will help India achieve the capability of going into high seas without the need to surface the vessel for long durations. Conventional diesel-electric submarines have to come up on surface at regular intervals for charging the cells of the vessel.

6.    VP Sharma won the Gujar Mal Modi Award for Science and Technology

i. Vinod Prakash Sharma an eminent scientist on 9 August 2013 won the Gujar Mal Modi Award for Science and Technology 2013. He received the award for his contribution in the field of basic and applied research of Malaria and Vector Biology. 
ii.Vinod Prakash Sharma was presented with a scroll of honour, a silver shield and a cash prize of 2.01 lakh rupees. It was given away by physicist M G K Menon.

About the Gujar Mal Modi Innovative Science and Technology Award
The award was instituted by the G.M. Modi Foundation in the memory of industrialist Rai Bahadur Gujar Mal Modi in 1988. The award is presented on 9 August every year to a scientist of eminence, who has made outstanding contribution to science & technology. 9 August is the birth anniversary of the Founder of the Modi Group, Rai Bahadur Gujar Mal Modi.The award carries a cash prize of  2.01 lakh rupees, a scroll of honour and a silver shield

NOTE: Prof. Satish Dhawan was the first recipient of the award in the 1988 for his contribution in the field of space and Remote Sensing Technology

7.    Sindhu settles for bronze medal in World Championship

i. India's rising shuttler P V Sindhu has settled for a bronze medal at the World Championships after suffering a straight-game defeat against world number three Ratchanok Inthanon in the semifinals of the prestigious event in Guangzhou, China on Saturday.

ii. World number 12 Sindhu, playing in her maiden World Championships, had notched up stunning victories against two Chinese players in the run-up to the semifinals but she failed to out it cross Ratchanok, going down 10-21 13-21 in a 36-minute women's singles match.

iii. This is only the third instance, and first in women's singles, that an Indian will bring home a medal from the Worlds.

NOTE: Prakash Padukone won the men's singles bronze in 1983 at Copenhagen while Jwala Gutta and Ashwini Ponnappa won another bronze in women's doubles in the 2011 edition in London

8.    Sudhakar Jayant wins gold at IWF Weightlifting

i. Sudhakar Jayant has won gold medal at the IWF World Masters weightlifting championships, held in Turin, Italy.

ii. 45-year-old Jayant who is Lt Colonel in Indian Army, competing in 62kg weight category, lifted a total of 192kg. His lift of 87kg in Snatch was a Games record. The lift came in his second attempt.

iii. In Clean and Jerk, he lifted 105kg. Finland's Jari Huuskonen won silver while Jan-Olof Åkesson of Sweden was third.

iv. The Armyman had also won gold last year at the championship held in Ukraine.