New Delhi, April 26, 2017
Corporate India will have to furnish the geo-location data of tangible assets appearing on the balance-sheets, with the government seeking to establish stringent norms for verifying the details of properties recorded with the registrar as 'charges' for a company.
Simply put, a charge is the interest created on a company’s assets that have been put up as security or are mortgaged.
Revising disclosure standards, the Ministry of Corporate Affairs has told companies that supplying the latitude and longitude of their tangible assets is now mandatory. Company Secretaries and asset teams in the accounts divisions might now be engaged with Google Maps, with the ministry revising Forms CHG 1 and 9 to include a column on the latitude and longitude of the asset.
Both forms pertain to applications for the creation and modification of charges on a company and were modified through a gazette notification this month.
"If the ‘Type of Charge’ is ‘immovable property or any interest therein’, the location parameters (Latitude and Longitude) shall be mandatory," according to a notification on the ministry’s website.
"It is a unique move," said Shyam Agrawal, president of the Institute of Company Secretaries of India (ICSI).
"There were instances wherein the property entered in to the charge registration form is not identifiable and it takes years to take the correct position and location of the property. It will also be helpful for lending institutions, and the data would be verifiable on line with the latitude and longitude."
To be sure, no other agency presently requires geolocation data for property in any form and this, some experts say, might make the move a mere data gathering exercise.
"Properties should be geo-tagged at the registration stage itself. Once this requirement is applied across all government documents, there will be higher accountability. But until then, we still have to see", said a Delhi-based tax professional, who declined to be named.
Agarwal said that "if the latitude and longitude is made a part of the agreement(s) itself,” the verification process would be more accurate, and help all categories of professionals.
The latest move follows the requirement to authenticate the Aadhaar on the ministry’s e-governance platform. Mandatory geo-location data should ensure stricter documentation and verification of companies and their liabilities.
Highlighting the difficulties that arise when creditors want to review charges, Agarwal said: "There are instances where the address details have been changed. Further, if a property is located in a remote area, it can only be identified by the revenue records, and it is very difficult to get the location of the property."
[The Economic Times]