372A (5) Register of investment

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Guest

Wanted to know the practice being followed on following specific investment situation; please comment

1. As Companies generally do lots of investment in shares of other companies on daily basis (in a year there are numerous buy and sale of shares), what is the practice in recording these transactions in register of investment.

2. Register of investment records all investment, irrespective of whether investment exceeds 60% of paid up + Free Reserves or 100% Free Reserves or not.

3. What about the investment done in mutual funds, are they part of investment register under said section.

4. 372A (8) exempt some investment, do that exemption apply for register of investment as well.

I have seen various different practices being followed, wanted to have opinion from learned members.

Thanks a Ton

Regards

Replies (2)

neha AWASTHI

126 Points Posted on 01 July 2010

Every Company shall keep a Register showing the following particulars in respect

of every investment or loan made, guarantee given or security provided by it in relation to

Body Corporate:

a. Name of the Body Corporate.

b. Amount, terms and purpose of the investment / loan / security / guarantee.

c. Date on which the investment / loan has been made, and

d. Date on which the guarantee has been given or security has been provided in connection

with a loan.

2.The particulars should be entered within 7 days of the making of the

investment or loan, or the giving of the guarantee or the provision of security.

3. The Register of Investment records all investment , irrespective of any limit.

4.The investment done in mutual funds are out of section 372

5.Sec.372A is not applicable to:

1. Loan / Guarantee / Security / Investment made / given by:

a. A Banking Company, or

b. An Insurance Company, or In the ordinary course of its business.

c. A Housing Finance Company, yes as the section exempt the these transction, register to investment are not required.

Guest

Posted on 01 July 2010

Thanks a lot Neha

In case of mutual funds, I think they are recorded in the register if they are covered in definition of Securities under section 2(h) of SCRA.

As mutual funds are issued both by companies and by the trusts, and the funds issued by trust are not counted as securities. so do we exclude all the mutual fund from purview of 372A.

Thanks