The Bill, which replaces 57-year old regulations, aims to protect interest of employees and small investors while encouraging firms to undertake social welfare voluntarily instead of imposing that through “inspector raj”
Two years after it was introduced in parliament, the Companies Bill, that enhances corporate accountability, introduces the concept of corporate social responsibility and encourages e-governance, was finally cleared by the Rajya Sabha on Thursday.
In December 2011, the Bill was introduced in the Lok Sabha by the then corporate affairs minister Veerappa Moily after he withdrew a similar legislation of 2009 on the ground that the revised measure incorporating several recommendations and suggestions made by the Parliamentary Standing Committee on Finance and various stakeholders.
For the first time, the Bill makes it mandatory for firms to maintain their documents in electronic format, introduces the concept of e-governance, makes provision for encouraging ethical corporate behaviour and rewards employees for their integrity.
Among the measures proposed in the fresh bill to enhance accountability are those, which provide for additional disclosure norms, facilitate raising of capital, mergers and acquisition and protection of investors and minority shareholders, the Statement on Objects and Reasons of the Bill said.
The original Companies Act was enacted way back in 1956 and has been in operation ever since.
In view of changes in the national and international economic environment and growth in the economy, the need was felt to enact a new law, it said.
The Companies Bill 2009 was then introduced in Parliament and sent to the Standing Committee, which presented its report in August 2010. A large number of recommendations were made by it and suggestions came in from several stakeholders.
Many of these were accepted by the government, which then decided to withdraw the 2009 measure and introduce a fresh legislation incorporating the recommendations.
The Companies Bill, 2013, is organized as 29 chapters, 470 clauses and 7 scheduled. Here’s a look at some of its key highlights. (Courtesy: Corporate Professionals (India) Pvt Ltd)
INCORPORATION & CAPITAL RAISING
MANAGEMENT & ADMINISTRATION
AUDITORS & FINANCIAL STATEMENTS
Just last month, the government had promulgated an ordinance amending the securities law that would provide more powers to SEBI and plans to introduce a new bill to replace the ordinance in the ongoing Monsoon session
The Indian government on Thursday withdrew a bill to amend the Securities and Exchange Board of India (SEBI) Act ahead of introduction of a new bill that would give more powers to the market regulator.
Finance minister P Chidambaram proposed in the Lok Sabha to withdraw the bill, which was introduced in March this year, to amend the SEBI Act. The proposal was passed by the House.
The withdrawn bill was passed by the Rajya Sabha on 11th March and was tabled in the Lok Sabha the next day.
In July, President Pranab Mukherjee had promulgated an ordinance amending the securities law that would provide more powers to the capital market watchdog.
The government plans to introduce a new bill replacing the ordinance in the ongoing Monsoon session.
With amendments, SEBI would have more powers to crack down on ponzi schemes, access phone call records to check insider trading and carry out search and seizure operations.
Last month, the government had said promulgation of the ordinance demonstrated its firm commitment and resolve to act with speed and alacrity to curb irregularities and frauds in securities market.
Tata Motors unit Jaguar Land Rover is outperforming luxury brands like BMW, Audi and Mercedes overseas. However, on domestic front the Tata group company continues to report dwindling sales. Is it because the automaker is not experimenting with different, fresh designs?
Tata Motors, the country's largest vehicle maker, continued reporting disappointing sales performance. During July 2013, its overall sales fell 30% to 51,468 units. Its domestic medium and heavy commercial vehicle (MHCV) sales fell 28.5% to 9,758 units, while light commercial vehicle (LCV) declined 19% to 26,609 units. Tata Motor's domestic car sales fell 31%, while utility vehicle (UV) sales tumbled 56% taking its domestic passenger vehicle (PV) sales 60% down to 11,522 units from 26,908 units a year ago.
“The business was affected by a weak operating environment in the standalone business, but it was offset by strong demand, growth in volumes, richer product mix and favourable foreign exchange at Jaguar Land Rover (JLR),” the company said in a release.
During the June quarter, the Tata group company said its sales, including exports, fell 19% to 1.54 lakh units as weak macro-economic environment and competitive pressures on pricing, continued to affect the operations during the quarter.
Interestingly, while the Tata group company has taken a beating on the domestic front, its unit continued to report strong sales. During July 2013, JLR's US retail volume grew 31% to 5,663 units, outperforming other luxury OEMs like BMW, Audi and Mercedes. Jaguar volumes have increased by 59%, helped by the launch of new Jaguar F-Type and strong growth in XF and XJ models. Land Rover volumes have increased by 22%, led by strong improvement in Range Rover volumes, up 111% to 1,420 units.
Following strong response to its new products and powertrain options, Jaguar’s wholesale and retail volumes grew 57.8% and 28% to 18,577 units and 17,459 units, respectively during the first quarter.
The robust performance from JLR only shows that unless you keep introducing new models and not just keep adding variants, you would not be able to sell vehicles. And this applies to all automakers across the world. So the question is why Tata Motors is unable to replicate its JLR success story at its home ground?
It must be noted that after launching Nano, the world's cheapest small car, in 2009 the Tata group company has not launched any new, noteworthy model. Since the launch of the Indica in 1998, the company brought out variants like Indica V2, Indica V2 Turbo Diesel, Indica V2 Xeta and Indica Vista, but all these models have failed to maintain steady sales.
Passenger car sales at domestic front for Tata Motors have been lacklustre primarily due to softening of euphoria, as products like Indigo Manza and Vista are getting older. The company has not yet announced any new variant for the Indigo Manza launched in October 2009 or Indigo eCS launched in 2010, whereas the Indica Vista, though a low-cost car, is facing stiff competition from other players.
After receiving lacklustre response for its Aria, the high-end SUV, the company preferred to play safe. Instead of coming out with a new offering in SUV space, it stuck with its Safari range (launched in 1998) and launched new variants with few modifications. However, in an environment with stiff competition, over-dependence on its Safari model, which was never a top selling SUV in any case, is not going to help Tata Motors for too long. The company is even too reluctant to replace its old warhorse, the Sumo (launched in 1994) with a new model. Instead, it is coming out with new variants based on the same, old Sumo. By the way, do you remember Tata Sierra, a multi-utility vehicle with which Tata entered in passenger vehicle market in 1991 or Tata Estate, a station wagon launched in 1992?
While other carmakers are experimenting with different and fresh designs, Tata Motors is not ready to leave the 'bean shape' of the Indica. In fact, the company is so smitten by the 'bean theme' that it has expanded the bean shape in its other high-end models as well, including its SUV variant Aria. Even the Nano comes in a modified bean shape.
This is in contrast with other prominent players like Maruti Suzuki, the leader in PV segment and Mahindra & Mahindra (M&M), the leader in UV market. Maruti Suzuki, the unit of Japanese Suzuki Motor Corp, has at least one model in every segment based on price and design. It offers 15 models, Maruti 800, Alto, Maruti Alto 800, Wagon R, Estilo, A-star, Ritz, Swift, Swift DZire, SX4, Omni, Eeco, Gypsy, Grand Vitara, Kizashi and the newly launched Ertiga.
On the other hand, M&M, after tasting success with its Marshal, Commander, Armada and Bolero models, shifted gear with Scorpio, its SUV model. Even after the grand success of Scorpio, the company moved ahead and launched its high-end model XUV500, which is based on a completely new platform. At present, M&M sells over 20 types of vehicles, including SUV, cars, tractors, three and two wheelers.
On the other hand, Tata Motors continues to churn out products based on the same, old platform. For a company like Tata Motors this is surprising, especially, when it has majority stake in Italian design and engineering firm Trilix SRL.
After sticking to the bean shape for over 15 years (remember Indica was launched in 1998), it is high time for the Tata group company to move to other fresh designs, before someone starts comparing Tata cars with the everlasting (and unchanging but lovable) Ambassador from Hindustan Motors.