'Dr. S.A.Dave Committee (Interim) Report on Collective Investment Schemes'

Dec 31, 1998
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Reports : Committee Reports
December 31, 1998

REPORT OF THE COMMITTEE ON
COLLECTIVE INVESTMENT SCHEMES

CHAPTER 1

INTRODUCTION AND BACKGROUND

The last few years have witnessed initiative by private entrepreneurs to undertake plantation activities on a commercial scale. The effort per se is commendable as it supplements the Governments efforts to prevent erosion of forest base and also channelises private investments towards agro plantation activities. However, it was noticed that the promoters themselves invested a minimal amount in such ventures and sourced a majority of the funds from ordinary investors. The high returns promised by these schemes coupled with questionable claims of fiscal incentives and effective rural marketing helped many of these companies to mobilise large amounts over a period of time. The initial success in mobilising funds by some of these companies lead to a mushrooming of such schemes throughout the country.

The Government, after detailed consultations with the regulatory bodies, decided that an appropriate regulatory framework for regulating entities which issue instruments like Agro Bonds, Plantation Bonds etc. has to be put in place. A press release was issued by the Government on November 18, 1997, conveying that such schemes should be treated as Collective Investment Schemes coming under the SEBI Act, 1992. In order to regulate such collective investment schemes, both from the point of view of investor protection as well as promotion of legitimate investment activity, SEBI was asked to formulate the draft regulations for them. These draft regulations were to be made available for public discussion. The investors who have invested in these schemes as well as entities running such schemes will be requested to give their comments on pertinent matters to SEBI for enabling it to formulate appropriate regulations for the collective investment schemes. The press release further states that once these regulations come into force, it is expected that they will promote legitimate investment activity in plantation and other agriculture based business, while at the same time giving investors an adequate degree of protection for their investments.

In order to examine and finalize the draft regulations for Collective Investment schemes, SEBI appointed this committee under the Chairmanship of Dr. S. A. Dave. The committee contains representation from the Government Ministries, Regulatory Bodies, Consumer forum, Professional Bodies and Plantation Industry.

The committee held its first meeting on January 28, 1998 and began its task by reviewing the information submitted by the existing schemes to gather an insight into the structuring of the offerings by some of the larger Collective Investment Schemes. The data submitted by the existing schemes and its analysis provided by SEBI helped the committee in analysing the aspects relating to scheme features, disclosures, background of promoters etc. The members also conducted site visits of some of the plantations.

As per the data available, it was noticed that large sums of monies had been collected by entities which did not necessarily have sufficient experience in agro based activities. The schemes were typically open ended and the disclosures made to the investors were not adequate to enable informed decisions. There were high risks associated with these ventures due to the long gestation period involved coupled with crop risks. The committee members felt that some interim measures of investors protection must be notified pending finalisation of regulations.

Accordingly, the committee made a recommendation for mandatory credit rating for existing schemes desiring to mobilise further funds. This provision was expected to provide a degree of risk assessment associated with the future cash flows by independent and accredited agencies.

INVESTMENT FEATURES

The plantation schemes were able to attract a considerable degree of investor interest over the last few years. It may be pertinent to examine the features in these schemes which made these investments attractive from the point of view of investors.

High Returns Assured

Invariably, all the schemes have assured or indicated high yields (in the region of 18% to 30%) per annum on the investments. These yields have been worked out on the basis of projected growth and estimate price of the plantations. These estimates vary from company to company and scheme to scheme. The projected yield estimates have been disputed by forestry experts. An independent study into the Economics of Growth of Teak Plantations conducted by the Ministry of Forestry (Gangopadhyaya Committee) concluded that the yields promised by many of these schemes were optimistic and not achievable. The Industry representatives, however, feel that the study had relied more on the experience and data available with various Forest Departments and that Privately managed commercial plantations provide for scientific and technology inputs which facilitate higher growth and quality superior to rained forestry situation. In the opinion of the Industry representatives, the yields projected by the Gangopadhya Committee are conservative. The committee is not in a position to comment on these studies as they involve technical simulations by Forestry experts, and are not yet proven.

Quite often the schemes come up with Novel Products for which there is no ready market to compare the forecasts. The promise of returns higher than any conventional debt instrument was a major attraction for the investors investing in these schemes.

Distribution Channels

The schemes were aggressively marketed in the rural and semi urban areas directly and through a network of Agents who were offered attractive commissions to sell these products. The commissions offered were at times as high as 10 to 15% of the amount mobilised.

Advertising and Marketing

The companies used focused media campaigns to advertise their schemes. Colorful brochures, newspaper insertions and Television Campaigns were used by some of them to attract investments. By and Large, these advertisements did not indicate the risk factors associated with these schemes.

Tax Implications

The Income tax act exempts income from agriculture activities from taxable income of the assesses. The scheme operators have interpreted the provisions of the Income Tax Act to be applicable to the incomes received by the investors in these plantation schemes. It was observed that the scheme operators were not deducting any tax at source from the returns paid to the investors regardless of the fact whether these returns accrued from genuine investment activity in agriculture or whether these were infact being paid from other sources including fresh collections.

Promises of tax free returns were a major attraction for investors investing in plantation schemes. These tax free returns were conspicuously advertised by the scheme operators.

Land Ownership

Many schemes have been structured in a way which offers ownership of a piece of land or property to the investors. In a way, this feature was used to create a sense of security which arises from owning a real asset. A comfort level was sought to be created in the minds of the investors notwithstanding the fact that most of the times the piece of land allocated to each investor was not distinctly identifiable.

CHAPTER 2 - RECOMMENDATIONS OF THE COMMITTEE

I. DEFINITION OF COLLECTIVE INVESTMENT SCHEMES

As per the mandate given by the Government of India, the entities which issue agro bonds, plantation bonds etc. were to be treated as "Collective Investment Schemes" coming under the purview of the SEBI Act.

The committee has defined a Collective Investment Schemes by identifying 3 important characteristics, namely Pooling of Investments, Management by a separate entity and Absence of day to day control of the investors. While finalising the definition, the committee recognizes that it may be possible that some arrangements of this nature like time shares, club memberships etc. would also get covered in the definition. It is suggested that SEBI may be given appropriate powers to grant exemptions to any class of arrangements which are not desired to be regulated as Collective Investment Schemes. It has been also observed that many of the existing collective investment schemes resort to entering into multiple agreements with the investors whereby the investor is given the ownership of land and the company is given the right to develop this land. The amounts collected are treated as license fee by the company thereby trying to limit the liability of the scheme. The committee wishes to make it clear that the substance of such arrangements should be relied upon to determine whether the scheme is a collective investment scheme or not. The principle of no day to day control of the investor in management of the property should be the prime criterion in determining the status of such schemes.

II. COLLECTIVE INVESTMENT SCHEMES-STRUCTURE AND CONSTITUTION

The committee reviewed the information filed with SEBI by the existing collective investment schemes. It was noted that most of the schemes are being operated by companies registered under the provisions of the Companies Act, 1956. Some of the schemes were also launched by non corporate entities like Association of Persons. Though all of the existing schemes have been managing investors funds, there is no distinction between the management and trustee function. In most of the cases there is an intermingling of the schemes accounts with those of the company’s accounts. Consequently, it has become difficult to ensure adequate investor protection measures in this structure of operations. Due to the inherent nature of collective investment schemes, where assets are managed for and on behalf of the investors, these schemes must declare a trust in favour of the members over the scheme properties.

The committee feels that a sound structuring of these schemes is of prime importance toward investor protection. To review the existing practices in other regulatory regimes, a team of SEBI officials was sent on a study tour to Australia and New Zealand. Australia has recently amended its regulations under the Management Investment Act, 1998. Prior to notification of this act, the managed investment schemes were operating in a trust structure whereby a trustee company was required to monitor the interest of the investors. During the late 1980’s and the early 90’s, there were instances of scheme failures in Australia. There was a significant difference in the perceived responsibility of the trustees viz a viz the actual responsibility assumed by these institutions. The trustees refused to be responsible for the poor investment decisions of the managers to the schemes and contended that investment function is the prerogative of the scheme managers and the trustees could not be held responsible for scheme failures on account of these decisions. A review commission was set up to examine these issues and it was decided to combine the role of the trustee and the manager in a Single Responsible Entity. The activities of this entity are monitored by a compliance committee which consists of at least 50% external representatives. New Zealand, on the other hand, has been following the trustee structure in its regulations.

As the new laws in Australia were made applicable from July 1, 1998, the experience with the single entity concept is insufficient and it is difficult at this juncture to conceive a similar structure for the Indian conditions. Moreover, the Australian regulator, unlike the Indian Regulator, monitors and implements the company law which gives it far reaching powers in regulating the single responsible entity. A significant point to note is that the concept of the trust has not been done away with and only the functions of trust and management have been realigned in a Single Responsible Entity. The committee feels that it would be imperative to specify a trust structure under which these schemes would have to operate. Apart from the aforementioned reasons in favour of this structure, the trustee structure has been in operation for the Mutual Funds in India and SEBI has sufficient experience in handling the complexities involved in such a structure.

The committee recommends that a collective investment scheme shall be constituted in the form of a trust and the instrument of the trust shall be in the form of a deed duly approved by SEBI and registered under the provisions of the Indian Registration Act, 1908 and executed by the Collective Investment Management Company (CIMA) in favour of the trustees named in such an instrument.
 

III. COLLECTIVE INVESTMENT MANAGEMENT COMPANIES- REGISTRATION, CONSTITUTION AND OBLIGATIONS.

As the Collective Investment schemes, in general, accept monies from ordinary investors, the committee feels that these investments would be better protected if they are managed by persons who have the capability to ensure that the desired activities are carried out efficiently, honestly and fairly. Keeping in mind this underlying principle, the committee recommends that any entity seeking registration with SEBI, to operate collective investment schemes, must possess adequate organisational capacity to meet the current and future operational demands in addition to necessary skill and experience required to operate such schemes.

The following conditions must be satisfied before an entity is licensed to carry out the activities of a collective investment management company:

(A) Adequate Management structure

The Board of Directors of the CIMA should possess adequate professional experience in related fields. They should have high integrity and must not have been found guilty of moral turpitude or convicted of any economic offense or violation of any security laws. The composition of the Board should be such that at least 50% of the directors must be independent persons, who are either directly or indirectly not associated with the persons who are in control of the collective investment management company. At least one of the directors would be representative of the trustee. The management team of the CIMA must also comprise of responsible officers who have not been found guilty of moral turpitude or convicted of any economic offense or violation of any securities laws.

(B) Financial Requirements

The committee recommends that the CIMA must have a minimum net worth of not less than Rs. 10 Crores. This is to ensure that the Collective Investment Management company has sufficient financial resources to ensure ongoing scheme related cash requirements. The minimum net worth requirement has also been specified in the mutual funds regulations and it acts as a filter and allows only the serious and committed players to enter the markets.

CONDITIONS UPON WHICH THE REGISTRATION WOULD BE GRANTED

Upon satisfying the basic requirements, the CIMA would be granted a licence/registration to operate collective investment schemes. The registration would be subject to the following conditions:
 

  1. Any non independent director in the registered CIMA shall not hold the office of the director in another CIMA. This provision is to ensure avoidance of conflict of interest in business activities of separate entities.  
  2. The CIMA must inform SEBI about any material change in the information or particulars which may have a bearing on the approval granted it.   
  3. The CIMA would undertake to comply with the regulations notified by SEBI from time to time. 
  4. Any change in the controlling interest of the CIMA shall be subject to prior approval of the trustee, the Board and the unit holders.  
  5. The CIMA shall furnish such information and documents to the Trustee as and when required.  
  6. The payment of prescribed fee shall have to be made to the Board.


RESTRICTION ON BUSINESS ACTIVITIES

As per the information available with SEBI on the existing collective investment schemes, many instances of diversion of funds to unrelated activities by persons operating collective investment schemes have been noticed. To prevent such undesirable practices, the committee feels it would be prudent to restrict the activities of CIMA. The registered CIMA would be permitted to undertake only the business of managing collective investment schemes. CIMA would also not be permitted to invest in any of the schemes floated by it unless a disclosure of its intention to do so has been made up front in the offer document.

OBLIGATIONS OF CIMA

As has been mentioned earlier, CIMA would be responsible for managing the investors funds. The CIMA should ensure:
 

  1. The interest of the CIMA or its related parties are not placed above the interest of the scheme investors. Towards this end, the CIMA should ensure meticulous compliance with regulations governing related party transactions.
  2. There is strict adherence to the scheme’s investment policy, offer document and the trust deed.
  3. Participants are given regular feedback and told of all the information pertinent to their investments.
  4. Participants do not suffer losses because the CIMA or it employees do not act with reasonable care and diligence or otherwise fail in their duties to the scheme.  
  5. Regular reporting to the trustees on the activities of the schemes and the compliance with the regulations.
  6. Compliance with the code of conduct prescribed in the regulations.
  7. It should be ensured that the CIMA and its officers and employees, do not benefit from unfair use of information.

IV. APPOINTEMENT AS TRUSTEES

To ensure that the interest of the investors are looked after by trustees of high repute and track record, the committee has laid down eligibility criterion for appointment of trustees for collective investment schemes. The following persons, registered with SEBI under the SEBI (Debenture Trustee) Regulations, shall be eligible to be appointed as trustees:-
 

  1. A scheduled bank carrying on commercial activity: or
  2. A public financial institution within the meaning of section 4A of the Companies Act, 1956: or
  3. An insurance company; or
  4. Any other company which may be approved by the Board for this purpose.

It would have to be ensured that no person shall become eligible to be appointed as trustee of a collective investment scheme if he is directly or indirectly associated with the persons who have control over the collective investment management company.

RIGHTS AND OBLIGATIONS OF THE TRUSTEE

The Trustees have been vested with a great deal of fiduciary responsibility in ensuring that the managers of the schemes exercise due diligence while managing the investors funds in the interest of investors. The committee has specified the rights and obligations of the trustees which inter alia would include the following:
 

  1. The trustees have been given the responsibility to ensure that before launching any scheme the CIMA has taken steps to comply with the pre launch requirements specified in the regulations including existence of necessary office infrastructure, appointment of key managerial personnel, auditors to audit the accounts of the schemes, a compliance officer to comply with the regulatory requirements and to redress investor grievances etc.
  2. The trustees shall ensure that the contracts entered into and the activities carried out by the CIMA are in accordance with the provisions of the regulations and the offer document of the schemes.  
  3. The trustees shall be accountable for, and be custodian of, the funds and property of the respective schemes and shall hold the same in trust for the benefit of the unit holders in accordance with these regulations and the provisions of the trust deed.  
  4. The trustees shall act as a link between the unit holders and the scheme operators. They would have the responsibility of convening a meeting of the unit holders whenever required to do so in terms of the regulations.
  5. The trustee shall monitor and review, on a quarterly basis, all activities carried out by the CIMA on behalf of the scheme.  
  6. The trustee shall monitor and review the net worth of the CIMA and in case of any shortfall ensure that the same is made up within a period of 6 months, by the CIMA.
  7. The trustees shall periodically review all service contracts related to the scheme.  
  8. The trustees shall also ensure that there is no conflict of interest between the manner of deployment of networth by CIMA and the interest of the unit holders. 
  9. A quarterly report to SEBI should be submitted by the trustees to report on the activities of the scheme and also for other purposes specified in the regulations. 
  10. The trustees shall cause the accounts of the scheme to be audited at the end of each financial year. Further, they would also have to ensure that the scheme is appraised at the end of each financial year.


V. SCHEMES AND DISCLOSURES

The committee has recommended the procedure for launching of collective investment schemes and the disclosures which are required to be made in the offer documents. The registered CIMA would be eligible to launch a scheme subject to the following requirements:
 

  1. The scheme must be approved by the trustee and a copy of the offer document shall be filed with the Board.
  2. All schemes must be rated by an approved credit rating agency.
  3. No scheme shall be launched without appraisal by an empanelled appraising agency.
  4. The schemes would have to be close ended and must have a minimum duration of 3 years.
  5. No scheme shall be open for subscription for more than 180 days.
  6. The units of Collective Investment Schemes shall be listed on the recognised stock exchanges.
  7. No guaranteed returns shall be provided in the scheme. Indicative returns, if assessed by the appraising agency, may be indicated in the offer document in monetary terms only.
  8. Adequate insurance covers for protection of scheme assets against loss or damage must be taken.

The offer document for the schemes must contain complete and adequate disclosures and more specifically shall confirm with schedule six of the regulations. The offer document must also specify the minimum and maximum subscription amount which is sought to be raised. The regulations have also specified the procedure with regard to allotment and refunds of moneys to the investors, listing on stock exchanges, utilisation of funds, winding up of schemes etc.
 

IX. ACCOUNTING AND VALUATION NORMS
 

The Committee had suggested SEBI to undertake inspection of the existing companies who had collected funds for Collective Investment Schemes. It was noticed that the accounting practices followed by many of these companies did not disclose the financial statements in a proper manner.

The Committee, therefore, decided to lay down the accounting/ valuation norms for such Collective Investment Schemes including the disclosure requirements for such schemes. The Committee has broadly suggested the following:-
 

  1. The nature of activities which can be undertaken in Collective Investment Schemes are so varied in nature that it is not considered practicable to outline norms for each type of Collective Investment Scheme separately at this stage. The Committee, therefore, recommends that a Standing Committee of Chartered Accountants be formed by SEBI to lay down accounting/ valuation norms for new type of schemes or situations that may arise in future.
  2. The basic accounting principals and the various standards and statements issued by the Institute of Chartered Accountants of India which were considered as the basis of information of accounting practices for Collective Investment Scheme were summarised in brief. These would form the basis of which the accounting practices and disclosure requirements have been laid down.
  3. The amounts collected from investors were to be shown as unit capital and no part of such amount was to be apportioned as income.
  4. In case of Collective Investment Scheme undertaking plantation activities the expenditure on crop development are to be accumulated in a separate account called Crop Development Expense account and carried forward to the subsequent years. The net realisable value of such crops at the year end was to be ascertained and disclosed and accounted for.
  5. The investments as well as the inventory was to be valued at cost or net realisable value whichever is lower. 
  6. The interim returns to investors can be paid only out of the distributable surplus of the Collective Investment Scheme. 
  7. The financial statements of Collective Investment Scheme were to be prepared according to the format given in the report.

VII OTHER MATTERS

  1. General obligations

The committee has specified certain general obligations which are required to be followed by every Collective Investment Management Company.
 

  1. Every CIMA must maintain proper books of accounts, records and documents. These documents should explain the transactions and disclose the financial position of the scheme at any point of time. The intention is to ensure that the true and fair position of the state of affairs of the scheme is disclosed. 

    Every CIS shall have its annual statement of accounts audited by an auditor chosen from the list of auditors approved by SEBI. It should be ensured that the auditor of the scheme is not in any way associated with the auditor of the CIMA. The auditor shall be appointed by the trustee and shall forward its report to the trustees and such report shall form part of the Annual Report of the collective investment scheme. The auditors report (or an abridged summary thereof) shall be published through an advertisement.
     

  2. CIMA on behalf of the scheme shall have to follow the regime of continuous disclosures on a quarterly basis.
  1. Inspection and audit

The committee has recommended powers for SEBI to appoint one or more persons as inspecting officers to undertake the inspection of the books of accounts, records, documents and infrastructure, systems and procedures or to investigate the affairs of the trustee and collective investment management company of a collective investment scheme. This inspection can be undertaken by SEBI to ascertain necessary compliances by the CIMA and to investigate complaints received from the investors or any other persons on any matter having a bearing on the activities of the trustee and CIMA.
 

  1. Procedure for action in case of default

In the event of contravention of any of the provisions of these regulations, failure to submit any information or submission of wrong

information relating to its activities or for any other matters specified in the regulations, SEBI may suspend a certificate granted to any CIMA. Further the board would be empowered to cancel the certificate of registration granted to a CIMA if it is found guilty of fraud or has been convicted of an economic offense, has been guilty of repeated defaults or if its financial position deteriorates to an extent that the Board is of the opinion that its continuance is not in the interest of the unit holders.

RECOMMENDATIONS FOR PROMOTING AGRO BASED COLLECTIVE INVESTMENT SCHEMES

As per the mandate given by the Government, the objective of the regulations would be to protect the interest of the investors and to ensure that legitimate investment activity in plantation and other agriculture based business is promoted.

It is expected that the regulations which have been recommended by the committee would go a long way in addressing the issues of investor protection and at the same time a framework has been created to promote genuine agro based investments to take place on commercial and industry scale. The committee feels that certain legislative and fiscal changes may be considered by the government to further encourage investments in these areas. The recommendations of the committee in this regard are:

  1. Relaxation of land ceiling laws. 
     

    The Collective Investment Schemes mainly involve plantation activities which are carried out on large areas of agriculture land. As per the various state laws of land holdings, there are restrictions on the aggregate holdings which a person can have. Consequently, many of the schemes resort to practices which, while they satisfy the letter of the law, do not provide adequate and clear security to investors. In order to channelise resources towards agro plantation activities as a matter of priority, the government may like to consider exempting these activities from the purview of land ceiling acts. This would also ensure that the properties created out of these schemes are identifiable and a trust can be created in the favour of the investors. Alternatively, Government may like to declare all plantation schemes registered with SEBI as industry so that land related issues can be sorted at for better investor protection.
     
     

  2. Clarification on Taxation Issues involving incomes earned by Collective Investment Schemes.

There has been a great deal of debate on the matters relating to treatment of Incomes earned by the investors investing in collective investment schemes and conflicting opinions have been expressed on the taxability of such income. Many of the schemes have claimed that the income would be exempt from tax under Section 10(1) of the Income tax act since it is income earned from agriculture sources. However, the individuals investing in these schemes may not be genuine agriculturists, and therefore, it would be better if appropriate clarifications in this regard are issued by the government especially since tax exemption is an important feature guiding investment decisions of the investors in these schemes.

The committee has also observed that the Governments in Australia and New Zealand offer tax exemptions to encourage these schemes. A proportion of the amount invested by the investors in these countries is eligible for deduction from their taxable incomes.

It is recommended that in order to encourage investments in these areas, particularly, long duration plantation schemes, government may like to consider suitable tax deductions for investors investing in these schemes on similar lines as those given to infrastructure projects.

CHAPTER 3

EXISTING COLLECTIVE INVESTMENT SCHEMES AND TRANSITORY PROVISIONS

Upon being mandated to regulate collective investment schemes, SEBI had directed all the existing entities which were operating such schemes, to file information about their schemes with SEBI. In response to these directions, 643 entities filed the information with SEBI. The amount mobilised, as declared by these entities, was approximately Rs. 2,500 Crores. An analysis of the information received reveals that the top 50 entities account for approximately 80% of the total amount raised. A substantially large number (over 50%) of these entities have mobilised less than Rs. 1 Crore from the public.

The schemes which are in existence on the date of notification of the SEBI regulations would be treated as Existing Collective Investment Schemes. These schemes would have to seek registration with SEBI within a period of six months from the date of notification of these regulations. The schemes can continue to operate their existing businesses until a certificate of registration is granted to it or rejection of application is communicated.

As per information filed with SEBI, a substantially large number of schemes are operating on a small level and it is possible that they would not be in a position to comply with the regulatory requirement and restructure their operations in accordance with these regulation. Moreover, they are unlikely to have reached minimum economic levels required to carry out commercial plantations. These schemes should therefore be given the option of winding up and repaying the investors, or merge with some other schemes so that they satisfy the regulations. They would be given reasonable time to restructure themselves, grow larger or wind up.

These schemes thus would be given adequate time to restructure their operations and capitalise to the required extent. The committee has recommended that a period of 3 years should be allowed for these schemes for transition to the new regulations. However, during the transitory period, issues of investor protection need to be addressed. In this regard, it is recommended that these schemes should be asked to form a compliance committee with a minimum of 60% representation of outside persons including representatives of the investors. The role of this compliance committee would be to identify and separate the scheme assets and appoint third party custodians to take charge of the assets of the scheme. The compliance committee would also be responsible to ensure implementation of adequate controls and maintenance of statutory records and books of accounts. The committee should take steps to communicate with the investors who have invested in these schemes and ensure adequate disclosures and reporting to them about the progress of the scheme. The compliance committee would also cause the accounts of the scheme to be audited and a technical appraisal to be undertaken every year.

In case the compliance committee is of the opinion that it is not possible to continue the scheme on a viable basis, it would take steps to wind up the scheme and repay the investors from the realisation of the proceeds of the assets.

CONCLUSION:

In accordance with the press release issued by the Central Government on 18th November, 1997, the committee requests SEBI to make these draft regulations available for public discussion. The investors who have invested in such schemes as well as entities running such schemes should be requested to give their comments on the regulations to SEBI. The report will be finalised in light of the comments received from public.
 
 

(S.A. DAVE)

 
JAYALAKSHMI JAYARAMAN           MANUBHAI SHAH

A.P. KURIEN                                          V.S.N. MURTHY

M.M. CHITALE                                     VIVEK N PAI

I.C. JAIN                                                ATUL CHADHA

S.B. MATHUR                                        MOHAN KANDA

D.N. RAVAL                                             VIJAY RANJAN
 

MUMBAI,
DECEMBER 31, 1998