(Governed by S. 45S of the Reserve Bank of India Act, 1934)

The position applicable from 01.04.1997 is as follows:

1. Who can borrow	Circumstances	From whom?
Individual & Firm	1. a) If his/its business wholly/partly includes any activities specified in S. 45I(c) OR b) If his/its principal business is receiving deposits under any scheme/arrangement/manner or lending in any manner.	Only from his relatives or relatives of any partner but not from partner(s).
	2. In any other case.	Any person.
Unincorporated association of individuals	1. If engaged in business specified above.	No one.
	2. In any other case.	Any person.

2. Deposit is defined to include any receipt of money by way of deposit or loan or in any other form, but excludes amounts :

Received as	Received from	Received by way of
a) Share Capital b) Partners Capital c) Security/Earnest Money/Advance against orders d) Credits in the account on Sale of property	a) Any banking co. including Scheduled/ Co-operative Bank b) IDBI/SFC/Specified financial institution under IDBI Act/RBI Act c) Individual/firm/AOP not being a body corporate registered under any money lending enactment	Subscription to a client’s fund

3. Deposits held as on 1.4.1997 not in accordance with (1) above, shall be repaid immediately when due or within 3 years from 1.4.1997 whichever is earlier. RBI, on application may extend this period by not more than 1 year, specifying any conditions.

4. On and from 1.4.1997, no person referred to in (1) shall issue or cause to be issued any advertisement in any form for soliciting deposit.

5. Activities contained in S. 45I(c) are Financing (Loans etc.); Investment (Shares, debentures, etc.); Hire Purchase; Insurance, Chit-fund or Kuries; Collecting and disbursing moneys in any manner under any scheme/arrangement.

But does not include if principal business is that of agricultural operations, industrial activities, purchase/sale of goods (not securities) or providing services, purchase, construction/sale of immovable property.

6. For the above purpose, a person shall be deemed to be a relative of another, if they are :

a) Members of an HUF;

b) Husband and wife;

c) Related in the manner indicated in section 6(c) of the Companies Act, 1956 as under :

This Act came into force from 23rd September, 92. It provides for payment of interest by buyers to suppliers of goods or services, (who are small-scale or ancillary industrial undertakings) in respect of delayed payments for supply of goods and services.

Appointed Day (S. 2(b)) Appointed day (due date) for making payments for goods or services is the day following 30 days from date of delivery of goods or rendering of services. In case objection is made in writing by buyer regarding acceptance of goods, appointed day is computed with reference to date of removal of objection by supplier.

Liability to make Payments (S. 3) Buyer has to make payment for goods or services on or before date agreed upon in writing with supplier. Such agreed period should not exceed 120 days from day of acceptance. In absence of any agreement, such payment has to be made before appointed day.

Period and Rate of Interest Payable (Ss. 4, 5) Interest shall be paid by buyer to supplier from appointed day or the day following date agreed upon for payment, as the case may be.

Rate of interest is one and a half times the prime lending rate (PLR) charged by SBI.

Recovery and Appeal (Ss. 6, 7, 7A) Principal and interest shall be recovered by way of a suit or other legal proceeding. If the buyer desires to go in appeal against any decree/award/other order, he has to first deposit 75% of amount of decree/award/order with court. Alternatively, a reference can be made to the Industry facilitation council.

Disclosure in Accounts (S. 8) A buyer, whose accounts are audited under any law, has to disclose in his accounts the amount of principal and interest outstanding to any small-scale/ancillary industrial undertaking supplier as at end of accounting year. Sch. VI to the Companies Act also requires a specific disclosure.

Interest not Allowable (S. 9) Interest paid or payable by a buyer under this Act is not deductible for the purposes of Income-tax.

Overriding Effect (S. 10) The provisions of this Act override all other laws.

1. The Company is in the process of identifying suppliers concerned under the "Interest on Delayed Payments to Small-Scale and Ancillary Undertaking Act, 1993", and is yet to ascertain and account for liability if any, in this regard which is however not expected to be material.

2. Unpaid overdue amount due as on 31-3-2008 to small-scale and/or ancillary industrial suppliers on account of principal amount together with interest aggregated to Rs......... This disclosure is based on the information available with the company regarding the status of the suppliers as defined under the "Interest on Delayed Payments to Small-Scale and Ancillary Undertaking Act, 1993".