PGC NEWSLETTER 14th, April, 2014


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PGC NEWSLETTER 14th, April, 2014

  1. 1. PGC NEWSLETTER14th, April 2014 1 PGC NEWSLETTER 14th, April 2014 THOUGHT OF THE DAY “If you don’t build your dream, someone else will hire you to help them build theirs” ECONOMICS NEWS  The country’s pharmaceutical industry expects to be back on a strong growth path in 2014- 15, after a tough year battling price control and trade issues. On the whole, it expects growth of 12- 14 per cent.  Ranbaxy Laboratories, set to be merged with Sun Pharmaceutical Industries, might again have to pay a hefty penalty to the US authorities for alleged violations at its Toansa factory in Punjab.  To help it better regulate the marketplace and strengthen its surveillance system, the Securities and Exchange Board of India (Sebi) plans to set up a mechanism for “risk profiling” of listed companies and various market intermediaries, including brokers. CORPORATE LAW UPDATES  The new Companies Act rules have given a lot of powers to minority shareholders, but the one creating ripples in the corporate sector is that promoters, who are majority shareholders, cannot vote in special resolutions in cases of related-party transactions.  The SEBI budget is projected to have a deficit of Rs 76.6 crore in the current financial year. An increase in intermediary fees will help turn this into a surplus of Rs 105.7 crore, according to estimates based on the regulator’s board meeting minutes.  The National Stock Exchange on Friday came out with new guidelines for the futures and options segment as part of strengthening risk management measures to ensure orderly trading on the bourse.(Effective from May 5) RBI / TAX LAW UPDATE  RBI: The Reserve Bank of India (RBI) has liberalised the procedure for facilitating the import of rough diamonds.  The Revised DTC-2013 does not contain provisions relating to the merger of Limited Liability Partnerships (LLP).  RBI not to allow Promoters to become CEOs of Private Banks.( The firms that promotes the Bank should be wholly owned by the promoter group and 50% of the Directors of the NOFHC should be Independent Directors.) MARKET UPDATES SENSEX 22,628.96 -86.37 CNX NIFTY 6,776.30 -20.10 DOLLAR/ RUPEE 60.16 0.07 MCX SILVER 43294.0 -0.47 MCX GOLD 28,790.0 9.0 MCX CRUDE OIL 6244.0 -0.03 Dow Jones Industrial Average 16,026.75 -143.47 Nasdaq Composite 3999.73 -54.38
  2. 2. PGC NEWSLETTER14th, April 2014 2 COMPANIES ACT 2013 The new rules under Section 188 say any related-party transaction that is not done in the ordinary course of business and is not at an arm’s length will need approval of minority shareholders by way of a special resolution. But, shareholders who are related or interested parties in the transaction will not be able to vote in resolutions relating to payment of brand fees or management fees to majority shareholders. What are related-party transactions?  Sale, purchase or supply of goods, or materials dealing in properties  Availing or rendering of any services  Appointment of any agent for dealing in property, goods and services  Appointment to any office of profit in the company, its subsidiary or associate company  Underwriting the subscription of securities or derivatives of a company How is ‘related party’ defined?  A holding, subsidiary, sister or associate company  Directors, key management personnel (including relatives)  Firms/companies where directors/relatives have interests  Appointments of senior management-level and functional heads What’s the threshold to qualify as related-party transaction?  If paid-up share capital of a company equals or exceeds Rs 1 crore  If related-party transactions exceed 5% of annual turnover, or 20% of net worth whichever is higher What is an office of profit in related-party deals?  Remuneration exceeding Rs 10 lakh