Indo Japan Trade & Investment Bulletine - January-2013


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Highlights of Bulletine : Uniqlo to Partner Arvind Brands & Retail to Set Shop in India , National Stock Exchange (NSE) and Japan Exchange Group (JPX) Plan Nifty Futures on Osaka Stock Exchange (OSE), MicroAd of Japan Sets up India Office, Isuzu Motors Finalises India Plant Location, Mahindra Satyam and Techmatrix Join Hands to Explore Opportunities in Healthcare Market

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Indo Japan Trade & Investment Bulletine - January-2013

  1. 1. Indo-Japan Trade & InvestmentBulletinJanuary IssueJapan Desk, Corporate Professionals 2013
  2. 2. INDEXIndo-Japan Trade & Investment Highlights Uniqlo to Partner Arvind Brands & Retail to Set Shop in India National Stock Exchange (NSE) and Japan Exchange Group (JPX) Plan Nifty Futures on Osaka Stock Exchange (OSE) MicroAd of Japan Sets up India Office Isuzu Motors Finalises India Plant Location Hitachi Consulting Drives into Expansion Mode Tata Steel may Buy Coke from Mitsubishi Chemicals Panasonic to Improve River Sal’s Water Quality Sony’s India Revenues Grow Despite Decrease in Global Revenues Mahindra Satyam and Techmatrix Join Hands to Explore Opportunities in Healthcare Market Anritsu Corporation Makes India EntryKnowledge Centre The Companies Act 2012 – An Overview
  3. 3. Indo-Japan Trade & Investment HighlightsUniqlo to Partner Arvind Brands & Retail to Set Shop in IndiaThe Japanese apparel retailing giant Uniqlo may have found a suitable partner in Arvind Brands& Retail to expand their retail operations into India. Uniqlo reportedly decided to partner withArvind after considering other suitable partners in India including Bharti Enterprises, MaduraFashion & Lifestyle, and Reliance Brands. The Uniqlo Joint Venture could be the deal thatArvind, one of the largest denim makers in the world, has been looking for in order to boost itsrevenues. The combination of unusual for Japanese companies aggressive approach of Uniqloand the solid supply chain and expertise in Indian market of Arvind is what should make this JVa successful venture.National Stock Exchange (NSE) and Japan Exchange Group (JPX) Plan Nifty Futures onOsaka Stock Exchange (OSE)In what could be one of the most aggressive steps by NSE to overtake its rival Bombay StockExchange (BSE), the oldest stock exchange in Asia, NSE and JPX are planning to launch futuresbased on Nifty index of Indian stocks. The futures, denominated in Yen, will be launched onOSE by next year. NSE already offers futures trading based on Nifty index of Indian stocks atChicago Mercantile Exchange and Singapore Exchange (SGX).MicroAd of Japan Sets up India OfficeOnline ad platform company, MicroAd of Japan has set up a subsidiary in India to launch its adplatform business in the country. The company is looking to launch "MicroAd BLADE" service,an integrated management platform for display advertisements in order to achieve the target ofhaving 250 subscriber companies by September, 2013. Online advertisement market in India issaid to be around $480 million currently and is predicted to grow between 33% to 40% per year.Isuzu Motors Finalises India Plant LocationJapanese commercial and utility vehicles manufacturing company Isuzu Motors has finalised SriCity in Andhra Pradesh to set up its manufacturing plant in India. Isuzu plans to invest Rs. 1,000
  4. 4. Crore (Rs. 10 billion) to build a Greenfield plant with a capacity of 50,000 vehicles a year. Thecompany expects the plant to be ready for production by 2015 and will use Hindustan Motors’Chennai plant and General Motors’ facilities for production of their vehicles till then.Hitachi Consulting Drives into Expansion ModeFollowing the footsteps of other group companies, Hitachi Consulting is expanding its presencein India aggressively. The company plans to increase headcount from current 2,000 to 4,500 tocompliment its $25 million plans to strengthen the physical infrastructure of the company inIndia. With the recent acquisition of Celerant Consulting, the company has been able tostrengthen its presence in Europe and US. The India expansion plans of the company will resultin India becoming the biggest development and support base with more than 50 per cent ofassociates based in India.Tata Steel may Buy Coke from Mitsubishi ChemicalsMitsubishi Chemical Holdings Corporation is said to be in final negotiations with Tata Steel tosupply coking-coal on a long term basis. The deal with India’s largest steel manufacturer maycome at a time when Mitsubishi has been looking for new supply contracts as their contract withKokura Steelworks will be terminated. After the merger of Nippon Steel and Sumitomo MetalCorporation, Kokura Steelworks is ending the four decade old relationship with Mitsubishi as itplans to procure coke from Nippon Coke & Engineering Company.Panasonic to Improve River Sal’s Water QualityFive member delegation of experts from Panasonic excel international company limited visitedSalcete, Goa to conduct study on water of the third largest river in Goa. The Japanese team willconduct analysis of water and will recommend remedial measures to improve the water qualityof River Sal.Sony’s India Revenues Grow Despite Decrease in Global RevenuesSony is expecting increase in revenues from its operations in India by 30-40 per cent to makeIndia its fourth biggest market in the world after US, China and Japan. Relying on the solidgrowth of revenues and launch of India specific products, the company is optimistic abouttouching revenue target of Rs. 20,000 Crores (Rs. 200 billion) by 2015. Sony is also looking to
  5. 5. replicate the working style of Sony India in their European entities to achieve better efficiencyand growth.Mahindra Satyam and Techmatrix Join Hands to Explore Opportunities in HealthcareMarketIndian IT major Mahindra Satyam has announced partnership with TechMatrix of Japan to tappotentially strategic growth areas in healthcare market by providing cloud-based healthcaresolutions in ASEAN region. The partnership will focus on providing quality healthcare solutionsto hospitals and image scanning centres to reduce healthcare costs and to improve the quality ofservices.TechMatrix, through its subsidiaries Ichigo and Nobori, will provide Teleradiology networkinfrastructure product line and Cloud-based services for Healthcare information. MahindraSatyam will provide cloud and mobile-based services in Malaysia and Singapore along withdirect sales and IT services in ASEAN region.Anritsu Corporation Makes India EntryJapanese communications test and measurement solutions provider Anritsu Corporation hasmade India entry by setting up a wholly owned subsidiary in Bangalore. The company isoptimistic about growing at the rate of 20% by relying on providing marketing, sales,engineering, services and support as the new telecom policy is likely to refuel growth in thetelecom industry. Anritsu is not new to India as the company has been present in the countrysince 1980 through its liaison offices in New Delhi and Bangalore.
  6. 6. Knowledge Center The Companies Act 2012 – An OverviewIntroduction:For decades, India Inc. has been regulated and chartered under the Companies Act, 1956 whichis now set to be replaced by a new legislation, now a Bill- Companies Bill, 2012. The LowerHouse of the Parliament of India has passed the Bill on 18th December 2012 and only the UpperHouse’s approval and the Presidential assent remain pending before the Bill becomes an Act.Corporate India has undergone revolutionary changes in terms of economic growth anddevelopment and has witnessed much of legal and technological advancements since theenactment of the Act of 1956 and the need for the new legislation has since been felt. The newBill comes as a welcome change for investors and other stakeholders, promises to bring reformsin the enforcement measures, mandates for increased transparency and accountability,endeavours to strengthen corporate governance and provides for provisions to ensure ethical andvigilant activities of the Directors and other professionals in the Company.Corporate Governance:In the Bill, much emphasis has been made towards good governance practices and betterdisclosures. It has kept in mind the necessity of transparency in corporate functioning and hasprovided for provisions for better disclosure like statement of compliances of all laws in boardreports, more disclosures in financial statements and includes associated accompanies and jointventures in ambit of consolidated accounts, mandated the applicability of Postal Ballot to PrivateCompanies, introduces auditing and secretarial standards, provides for mandatory appointment ofindependent directors and further mandate the requirement of quorum of general meeting basedupon number of members in public company.India, in the past decade, has witnessed some major corporate scams sending jitters to theeconomy and shaking investors’ confidence. The new law proposes to bring in a paradigm shiftin the corporate world by providing for more stringent norms and increased penalty provisions.The law has addressed the concerns raised by some of the scams like Vanishing companies, IPOand Satyam case and has taken initiatives to prevent such reoccurrences. The provisions likemandatory internal audit for specific companies, provision for rotation of auditors, increased role
  7. 7. of audit committee, restriction on providing of certain specified services by Auditors, restrictingFinancial year to April to March without provision of extension, power of re-opening of accountsby courts and tribunals, and establishment of Serious Fraud Investigation Office (SFIO) as maininvestigating agency for frauds relating to companies etc. are few examples of steps takentowards ensuring the protection of investors’ interest and placing more responsibilities andaccountability on Company’s management.Class Action:There are some noteworthy and welcome provisions in the Bill to protect the interest ofstakeholders.For instance, class action. Class action or class suit is a lawsuit that allows a large number ofpeople with a common interest in a matter to sue or be sued as a group. The Bill provides thatsuch suits may be filed by members or depositors or any class of them, if they are of the opinionthat the management or the affairs of the company are being conducted in a manner prejudicial tothe interest of the company, its members or depositors.Varying the terms of contract or objects in prospectus will be subject to stringent procedure.Dissenting shareholders will have to be given an exit opportunity by the promoters.Internal Audit is to be conducted in certain companies and all listed companies and certain classof companies, as prescribed, will have to compulsorily rotate their auditors. Further, where anauditor is party to a fraud, the individual as well as the audit firm will be subject to punishment.Also noteworthy is the provision prohibiting forward dealings in securities of a company by keymanagerial personnel. The Bill provides that no director of a company or any of its keymanagerial personnel shall buy - in the company, or in its holding, subsidiary or associatecompany - a right to call for delivery or make delivery at a specified price and within a specifiedtime, of a specified number of relevant shares or a specified amount of relevant debentures; or aright, as he may elect, to call for delivery, or to make delivery at a specified price and within aspecified time, of a specified number of relevant shares or a specified amount of relevantdebentures.One Person Company:The Bill introduces several new concepts. One such being, one person company (OPC) thatprovides Indian entrepreneurs who run proprietorships an opportunity to corporatize withoutadding any family member just to have a minimum number of members. OPC is a company withjust one person as a member. Such a company may be formed for any lawful purpose as a
  8. 8. private company. It is formed by subscribing the name of such one person to a memorandum andcomplying with the requirements of the law in respect of the registration. China, the USA andSingapore are among countries that have legal provisions relating to or concept similar to OPC.Another positive is the prescription of more stringent penalties for contraventions. In manyinstances, the monetary punishment has been increased and grave defaults have been made non-compoundable.National Company Law Tribunal:The Bill also provides for the establishment of the National Company Law Tribunal (NCLT).This Tribunal will deal with all issues or disputes under the Companies Act and also to expeditedisposal of company-related cases. Existing powers of the Company Law Board (CLB) will betransferred to the NCLT, as well as those exercised by high courts in respect of winding up ofcompanies, amalgamation and merger, rehabilitation and revival of sick industrial companies,reduction of share capital, etc.Concluding Remarks:Though in its initial phases the Bill may witness some interpretational confusions, the same willbe remedied in due course with time and with the notification of the Rules with respect to theAct. Efforts have been made to avoid regulatory overlaps. However, the Bill still promises to bea welcome change to plug the ambiguities, increase disclosures, encourage compliances, promotebetter governance and responsibility and provides safeguards for all stakeholders.
  9. 9. CONTACT USPANKAJ SINGLA MUMBAI:Japan Desk, Corporate Professionals 403-404, Churchgate Chambers, 5 New Marine Lines, Mumbai-400020DELHI (Head Office)D-28, South Extension Part - I, New Tel: +91 22 22624671Delhi – 110049 Fax: +91 22 22655712 Email: info@indiacp.comTel: +91-11-40622200Dir: +91-11-40622293 FARIDABAD (DELHI NCR):Fax: +91-11-40622201 565, Sector-7B, Faridabad, Haryana-121006Mob:+91-99715-08320Email: Tel: +91 129 4061130 Fax: +91 129 2241017 Email: Bedford (UK) 2-4 Mill Street, Bedford MK40 3HD U.K. Tel: +44 (0) 2030063240 Fax: +44 (0) 2030063241 Email: info@indiacp.comDISCLAIMER: The entire contents of this document have been developed on the basis of relevant statutory provisions and as per theinformation available at the time of the preparation. Though the author has made utmost efforts to provide authentic information however, thematerial contained in this document does not constitute/substitute professional advice that may be required before acting on any matter. Thedocument has been produced only for the informational purposes; the author and the firm expressly disclaim all and any liability to any personwho has read this document, or otherwise, in respect of anything, and of consequences of anything done, or omitted to be done by any suchperson in reliance upon the contents of this document.