Director indemnity under Simplified Exit Scheme clarified; only zero asset companies qualify and magistrate sworn affidavits required.
Only companies with zero assets and zero liabilities qualify for the Simplified Exit Scheme; applications filed up to the scheme's last date will be processed. ROCs will publish applicant lists monthly and the Central Government will bear advertising costs; ROCs must notify IBA and financial institutions simultaneously. Applications require affidavits sworn before a magistrate, director signatures (minimum two), and an indemnity bond making directors personally responsible for subsequently discovered liabilities, subject to ordinary limitation laws.

Valuation of shares: expert group guidelines issued and published for stakeholder consultation on merger valuation practices.
The Department of Company Affairs convened an expert group to formulate comprehensive guidelines on valuation of corporate assets and shares, addressing methods, assumptions and their impact on exchange ratio computation in mergers and amalgamations. The expert group's report, informed by inputs from financial institutions, professional bodies, investor groups and commerce chambers, has been placed on the Department's website and is open for stakeholder comments and suggestions as part of a public consultation process.

Indemnity obligation for striking off allows directors to request name removal while undertaking to settle and indemnify against lawful claims.
The corrigendum supplies a standardized Indemnity Bond requiring directors of a defunct company to swear an affidavit that the company has no assets or liabilities, is not and will not carry on business, and to request the Registrar to strike the company's name; directors jointly and severally undertake to pay and settle all lawful claims, indemnify persons for losses arising from striking off, and discharge liabilities that may surface after removal, with signature, witnesses and Registrar acceptance as the procedural formality.

Debenture conversion rules amended; Companies Act provisions activated and notifications circulated for immediate administrative compliance.
The Government circulated three Gazette notifications: a corporate name change to IFCI Venture Capital Funds Ltd.; declaration of the effective date for specified provisions of the Companies (Second Amendment) Act, 2002; and the Public Companies (Terms of Issue of Debentures and Raising of Loans with Option to Convert such Debentures or Loans into Shares) Amendment Rules, 2003, which amend regulation of convertible debentures and loans. The circular forwards these notifications to all Regional Directors and Registrars of Companies and requires acknowledgement of receipt.

Simplified Exit Scheme enables administrative striking off of defunct companies after affidavit, audited accounts and indemnity.
Introduction of a Simplified Exit Scheme (SES) under Section 560 to permit administrative striking off of defunct companies upon prescribed application, fee, audited accounts showing no assets or liabilities, an affidavit by at least two directors affirming non operation, and a notarized indemnity bond by at least two directors to meet any future liabilities; the Registrar must publish applicants in local and national dailies, circulate lists to the Department and banking association, and strike off names where no objections are received within the specified notice periods, with related reporting and limited withdrawal of certain prosecutions.

Depreciation method: companies must use straight line or written down value; unit-of-production method disallowed to prevent manipulation.
Companies must charge depreciation using either the Straight Line Method or the Written Down Value method; the Unit of Production method is disallowed. The Department reasons that depreciation represents loss of value over time, a concept not reliably captured by a production-based approach which can imply no depreciation in non-production years, extend asset life beyond the period underlying prescribed rates, and enable profit manipulation through estimated production and technical assumptions.

Effective commencement of Companies Amendment Act triggers administrative circulation and issuance of Director's Relatives office-or-profit rules.
Notification under companies law transmits Gazette notices effecting commencement of the Companies (Amendment) Act, 2002 and promulgating the Director's Relatives (Office or Place of Profit) Rules, 2003, directing Regional Directors and Registrars of Companies to note, act on, and acknowledge receipt to ensure administrative compliance and dissemination.

TDS information on dividend warrants may be printed on the counterfoil reverse and signed by the deductor.
Substitutes paragraph 4 to require that the specified TDS format be printed on the reverse side of the dividend warrant counterfoil and be duly signed by the persons responsible for deduction of tax.

Circulation of companies amendment act: forwarded to company law administrators to inform and prompt necessary administrative action.
Circulation of the Companies (Second Amendment) Act, 2002 is conveyed as an administrative directive to Regional Directors, Registrars of Companies and Official Liquidators, transmitting the enacted amendment for information and requisite administrative action and requesting acknowledgment of receipt.

National Advisory Committee on Accounting Standards constituted under the Companies Act; Gazette notification circulated for acknowledgement.
An Advisory Committee titled National Advisory Committee on Accounting Standards is constituted under section 210A(1) of the Companies Act, 1956 by Government notification S.O. 31(E) dated 10.01.2003; the Department of Company Affairs circulated this Gazette notification to regional directors, registrars of companies and official liquidators and requested acknowledgement of receipt.

Refund of excess registration fees: companies may seek repayment for overpaid Form No.5 fees following fee computation anomaly.
Refunds are authorised for excess registration fees paid on or after 12 July 2000 where an anomaly in Schedule X's fee computation caused overpayment for Form No.5. Companies must apply to the Registrar of Companies with proof; refunds cover only the actual excess fees and any interest charged by the Registrar for late filing. The Registrar will forward certified claims via the Pay & Accounts Officer to the Department for a Refund Sanction Order.

Circulation of Companies Amendment Act: copy forwarded to regional directors and registrars for information and necessary action.
The Department of Company Affairs transmits a copy of the Companies (Amendment) Act, 2002 as published in the Gazette to all Regional Directors, Registrars of Companies and Official Liquidators for information and necessary action, and requests recipients to acknowledge receipt and use the enclosed amendment for implementation and dissemination.

Debenture Redemption Reserve requirement for NHB registered housing finance companies applies to public debentures but not to private placements.
Clarification of the Debenture Redemption Reserve (DRR) for housing finance companies registered under the housing finance directions: adequacy of DRR for debentures issued through public issues is fixed at fifty percent of the value of such debentures, while no DRR is required for privately placed debentures issued by those companies.

Amendment to company forms updates filing requirements; notification circulated for compliance and acknowledgement by registrars.
Circular transmitting Gazette Notification G.S.R. 5(E) dated 03.01.2003 amending Form No.25A and Form 26 under the Companies Act, 1956; directed Regional Directors and Registrars of Companies to note the amendments, implement necessary procedural adjustments to filings, and acknowledge receipt.

Director disqualification: defaults on privately placed debt by public financial institutions will not trigger disqualification.
Defaults on privately placed bonds, debentures or other privately issued debt instruments by public financial institutions shall not be treated as defaults that disqualify directors under the Companies Act; this clarification, issued in continuation of Circular No. 8/2002, is directed to Regional Directors and Registrars of Companies for administrative guidance.

Reopening of annual accounts permitted to comply with other laws, with revisions adopted in a general meeting and filed.
Companies may reopen and revise adopted annual accounts to comply with technical requirements of other laws and to achieve a true and fair view; revised accounts must be adopted in an extraordinary general meeting or the subsequent annual general meeting and filed with the Registrar of Companies.

Cost auditor participation in audit committee meetings permitted as non-member attendee with no voting rights.
Cost auditors may be invited to attend and participate in audit committee meetings to assist on cost management and related matters but are not members and have no voting rights. The audit committee is to be constituted only from directors; auditors and internal auditors may attend to present views, and where a cost auditor acts as an internal auditor they may participate without voting. Any view that cost auditors can be committee members is incorrect.