Attached Newsletter is an attempt to cover monthly issues relevant in the context of transactions - covers SEBI, Companies Act, Income Tax, Stamp duty and other regulatory changes
The document provides a summary of the following:
1. Budget 2012 key proposals related to direct tax, transfer pricing, indirect tax, and FEMA.
2. Key corporate law updates from MCA including extension of deadline to file DIN-4 form and introduction of 'Pay Later' option on MCA portal.
3. SEBI circulars regarding exemptions from 100% promoter holding in demat form, settlement of CDs and CPs trades through clearing corporations, and international taxation updates.
4. Recent M&A transactions that made headlines including Reliance-Network18 deal, Bharti Airtel-Zain Africa deal, and Tata Power-Welspun deal
Checklist for Auditors certificate to NBFCAmit Kumar
The document outlines the reporting requirements for auditors of non-banking financial companies in India, specifying that auditors must report on matters such as the company's registration, classification, public deposit holdings, capital adequacy ratios, and compliance with RBI regulations; if any issues are identified, the auditor must provide reasoning; and exception reports on unfavorable statements or non-compliance must be submitted to the DNBS.
NBFCs are non-banking financial companies that are registered under the Companies Act and engage in financial activities such as lending, acquisition of shares/bonds, leasing, insurance, etc. but do not include institutions conducting agricultural/industrial activities or selling goods/services. NBFCs are regulated by the Reserve Bank of India and must register with RBI to operate. They are classified based on whether they accept public deposits and their asset size. Over time, various committees have shaped the regulatory framework for NBFCs in India to strengthen governance, disclosure, and supervision.
Attached Newsletter is an attempt to cover monthly issues relevant in the context of transactions - covers SEBI, Companies Act, Income Tax, Stamp duty and other regulatory changes
The Reserve Bank of India regulates and supervises Non-Banking Financial Companies. The objectives are to ensure healthy growth, ensure they function as part of the financial system within policy frameworks, and maintain high quality supervision. This document provides clarification on regulatory changes and operational matters for NBFCs, the public, and other stakeholders through a question and answer format. Key differences between banks and NBFCs are that NBFCs cannot accept demand deposits or issue cheques, and deposit insurance is not available for NBFC depositors. Registration with RBI is mandatory for NBFCs, and there are requirements around minimum net owned funds, application process, and classifications of different types of NBFCs.
This document outlines the checklist and compliance requirements for non-banking financial companies in India as per the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions. It defines key terms related to income recognition, classification of assets, and accounting standards. It also provides guidance on classifying investments as current or long-term and the process for inter-class transfers.
This document provides an overview of non-banking financial companies (NBFCs) in India. It defines what an NBFC is, compares them to banks, and outlines the various types of NBFCs such as equipment leasing companies, hire purchase companies, and investment companies. The document also summarizes regulations for NBFCs regarding accepting public deposits, prudential norms, eligibility criteria, books and records, and the importance of NBFCs in channeling financial resources. Overall, the document presents the key characteristics of NBFCs operating in India and the regulatory framework that governs them.
NBFCs are non-banking financial institutions that are registered under the Companies Act and engage in financial activities like lending but do not hold bank accounts. They differ from banks in that they cannot accept demand deposits or issue checks. This document discusses the role of NBFCs, their regulation by the RBI, types of NBFCs, requirements for accepting public deposits, and recourse for depositors if an NBFC defaults. It provides definitions of key terms like "deposit" and explains rules around NBFC ratings, interest rates, and downgrading of credit ratings.
The document provides a summary of the following:
1. Budget 2012 key proposals related to direct tax, transfer pricing, indirect tax, and FEMA.
2. Key corporate law updates from MCA including extension of deadline to file DIN-4 form and introduction of 'Pay Later' option on MCA portal.
3. SEBI circulars regarding exemptions from 100% promoter holding in demat form, settlement of CDs and CPs trades through clearing corporations, and international taxation updates.
4. Recent M&A transactions that made headlines including Reliance-Network18 deal, Bharti Airtel-Zain Africa deal, and Tata Power-Welspun deal
Checklist for Auditors certificate to NBFCAmit Kumar
The document outlines the reporting requirements for auditors of non-banking financial companies in India, specifying that auditors must report on matters such as the company's registration, classification, public deposit holdings, capital adequacy ratios, and compliance with RBI regulations; if any issues are identified, the auditor must provide reasoning; and exception reports on unfavorable statements or non-compliance must be submitted to the DNBS.
NBFCs are non-banking financial companies that are registered under the Companies Act and engage in financial activities such as lending, acquisition of shares/bonds, leasing, insurance, etc. but do not include institutions conducting agricultural/industrial activities or selling goods/services. NBFCs are regulated by the Reserve Bank of India and must register with RBI to operate. They are classified based on whether they accept public deposits and their asset size. Over time, various committees have shaped the regulatory framework for NBFCs in India to strengthen governance, disclosure, and supervision.
Attached Newsletter is an attempt to cover monthly issues relevant in the context of transactions - covers SEBI, Companies Act, Income Tax, Stamp duty and other regulatory changes
The Reserve Bank of India regulates and supervises Non-Banking Financial Companies. The objectives are to ensure healthy growth, ensure they function as part of the financial system within policy frameworks, and maintain high quality supervision. This document provides clarification on regulatory changes and operational matters for NBFCs, the public, and other stakeholders through a question and answer format. Key differences between banks and NBFCs are that NBFCs cannot accept demand deposits or issue cheques, and deposit insurance is not available for NBFC depositors. Registration with RBI is mandatory for NBFCs, and there are requirements around minimum net owned funds, application process, and classifications of different types of NBFCs.
This document outlines the checklist and compliance requirements for non-banking financial companies in India as per the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions. It defines key terms related to income recognition, classification of assets, and accounting standards. It also provides guidance on classifying investments as current or long-term and the process for inter-class transfers.
This document provides an overview of non-banking financial companies (NBFCs) in India. It defines what an NBFC is, compares them to banks, and outlines the various types of NBFCs such as equipment leasing companies, hire purchase companies, and investment companies. The document also summarizes regulations for NBFCs regarding accepting public deposits, prudential norms, eligibility criteria, books and records, and the importance of NBFCs in channeling financial resources. Overall, the document presents the key characteristics of NBFCs operating in India and the regulatory framework that governs them.
NBFCs are non-banking financial institutions that are registered under the Companies Act and engage in financial activities like lending but do not hold bank accounts. They differ from banks in that they cannot accept demand deposits or issue checks. This document discusses the role of NBFCs, their regulation by the RBI, types of NBFCs, requirements for accepting public deposits, and recourse for depositors if an NBFC defaults. It provides definitions of key terms like "deposit" and explains rules around NBFC ratings, interest rates, and downgrading of credit ratings.
The document provides an overview of the legal and regulatory framework for non-banking financial companies (NBFCs) in India. Some key points:
- NBFCs must be registered with the Reserve Bank of India and have a minimum net owned fund of Rs. 200 lakhs to commence business.
- They are classified as deposit-taking or non-deposit taking and systemically important NBFCs must meet additional regulatory requirements.
- NBFCs are subject to prudential norms on capital adequacy, income recognition, asset classification, provisioning, concentration of credit, and reporting.
- A core investment company is an NBFC that holds at least 90% of its assets as
The document defines and provides details about non-banking financial companies (NBFCs) in India according to regulations set by the Reserve Bank of India. Key points include:
- NBFCs are defined as non-banking institutions that conduct activities such as lending, acquisition of shares/securities, leasing, etc. but do not include businesses related to agriculture, industry or real estate.
- There are different types of NBFCs including loan companies, investment companies, asset finance companies, and residuary non-banking companies.
- NBFCs must register with the RBI and comply with various prudential regulations regarding public deposits, capital adequacy, exposure norms, and
This document provides a summary of Non-Banking Financial Companies (NBFCs) in India. It defines what an NBFC is, outlines the key types of NBFCs such as asset finance companies, loan companies, investment companies, and microfinance institutions. It also describes important NBFC concepts like capital adequacy requirements, classification of assets, and the regulations applicable to different categories of NBFCs. The document is intended to serve as a quick guide to NBFCs in India.
Enterslice help you to Incorporate NBFC Company in india.we also provide software to manage NBFC Business like NBFC Software,NBFC-ND Compilance,Money Changer Compilance,funding in NBFC and takeover of NBFC.
This document discusses non-banking financial companies (NBFCs) in India. It defines NBFCs as financial institutions that provide banking services without a banking license. It classifies NBFCs based on their business activities and lists their major products. It then summarizes the financial performance of the NBFC sector from 2009-2010, noting growth in various areas. Finally, it discusses the future prospects of NBFCs and their importance in the Indian financial system.
Introduction to Non-Banking Financial Companies(NBFCs) Role and ClassificationAmit Shinde
Non-banking financial companies (NBFCs) provide financial services like banks but are not subject to the Banking Regulation Act of 1949. NBFCs engage in activities like equipment leasing, hire purchase, housing finance, and investment/loans but have some limitations compared to banks. The document discusses the roles and various classifications of NBFCs such as leasing companies, housing finance companies, investment companies, loan companies, mutual benefit companies, chit fund companies, and residuary non-banking companies. NBFCs generally charge higher interest rates than banks and have regulatory oversight from bodies like SEBI and RBI rather than just the Banking Regulation Act.
Idfc mutual fund common application form with kimPrajna Capital
The document is a Key Information Memorandum for an offering of units by a mutual fund. It sets forth important information that prospective investors should know, including details on the scheme, risks, penalties and how to access additional documents. The units being offered have been prepared in accordance with applicable regulations but have not been approved by SEBI.
The document describes the investment objectives of seeking stable returns with low risk by investing in good quality fixed income and money market securities for some funds, while other funds aim to generate optimal returns with high liquidity through active management of debt portfolios. All funds note there is no assurance the objectives will be realized.
An NBFC is a non-banking institution that provides banking services like loans, acquiring stocks/bonds. It must register with RBI and have a minimum net worth of Rs. 2 crore. There are two types - Type I does not accept public deposits while Type II does. NBFCs have different rules than banks regarding deposits, payments, and insurance. Registration requires documents showing company formation and purpose. Ongoing compliance includes financial reporting and prudential norms. Our services can help with the registration and compliance process.
This document discusses the regulations for Non-Banking Financial Companies (NBFCs) in India. It defines NBFCs, outlines the registration requirements with the Reserve Bank of India, and classifies NBFCs into different categories based on their activities. It also describes the various compliance requirements for NBFCs, including capital adequacy, credit concentration limits, returns to be filed, and the responsibilities of auditors. Finally, it notes some problem areas like unregistered NBFCs operating without approval.
This document provides information on non-banking finance companies (NBFCs) in India, including their classification and types. It discusses how NBFCs are classified into different categories based on whether they accept public deposits and their principal business activities. Some key NBFC categories mentioned include asset finance companies, investment companies, loan companies, infrastructure finance companies, and microfinance institutions. The document also briefly outlines the regulations for mutual benefit finance companies and the leasing and hire purchase services that can be provided by NBFCs.
L&T Finance Holdings Ltd is a large NBFC operating in finance sector in India. It provides various financial services including loans, insurance, factoring etc. The company follows frameworks like GRI, NVG, UNGC to report on economic, environmental and social performances. It ensures ethics and transparency in business operations and incorporates social/environmental factors. The company focuses on talent acquisition and development, transparency, learning and good governance in its HR policy.
This document provides an overview of non-banking financial institutions (NBFCs) in India. It defines what an NBFC is, compares them to banks, describes the different types of NBFCs and their regulations. Key points include that NBFCs cannot accept demand deposits, do not have deposit insurance, and are regulated differently than banks. The document also summarizes the requirements for NBFCs to accept public deposits, their permitted interest rates and deposit periods.
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 2013 or 1956 carrying on the business listed under Section 45 I (c ) of the RBI Act, 1934, i.e.
This document provides an overview of non-banking financial companies (NBFCs) in India. It defines NBFCs and distinguishes them from banks. It outlines the registration process for NBFCs and classifications of NBFCs. The document also discusses why NBFCs are important for the Indian financial system, highlights of the NBFC sector, compliance requirements, and recent regulatory changes aimed to bring parity between NBFCs and banks. Suggestions are provided such as opening new avenues of fund raising to reduce NBFCs' reliance on deposits and giving systemically important NBFCs coverage under the SARFAESI Act. In conclusion, the document states that the challenge is for NBFCs to grow pr
The document summarizes the Securities and Exchange Board of India (SEBI) and Investor Education and Protection Fund (IEPF). It describes how SEBI was established in 1988 as a statutory body to regulate the securities market and protect investors. It outlines SEBI's objectives, organizational structure, powers, and functions like regulatory, protective, and developmental. It then explains that IEPF was set up under the Companies Act to collect unclaimed dividends and deposit amounts unpaid for 7 years, and is overseen by a committee chaired by the Ministry of Corporate Affairs Secretary. The fund is used for investor education and awareness activities.
This document provides an overview of non-banking financial companies (NBFCs) in India. It defines NBFCs and outlines their role in the Indian financial system. It also describes the different types of NBFCs according to the Reserve Bank of India's classification system and summarizes the eligibility criteria, differences between NBFCs and banks, and the role of the RBI in regulating NBFCs. The document is intended to educate a group of students on the topic of NBFCs in India.
This document provides an analysis of India's non-banking financial company (NBFC) sector. It discusses the industry structure, nature of business, and differences between NBFCs and banks. NBFCs complement the banking system and account for 12.7% of the financial system's total assets. The document also analyzes NBFCs' sources and uses of funds, financial performance metrics like return on assets and non-performing assets, and recent regulatory changes affecting the sector. Overall, it presents an overview of the NBFC industry in India.
Non-banking financial companies (NBFCs) provide financial services like loans and investing in stocks without taking deposits. Mahindra and Mahindra Financial Services is a leading NBFC in India that provides financing for vehicles and farm equipment, especially in rural areas. It has over 450 branches and aims to be the preferred financial services provider in rural India. The company focuses on inclusive growth and currently employs over 6,200 people locally. It offers a variety of loan and insurance products and has strong relationships with dealers and customers after over 70 years of operations.
Non-banking financial companies (NBFCs) are financial institutions that are registered under the Companies Act and provide financial services like loans and advances. The key differences between NBFCs and banks are that NBFCs cannot accept demand deposits and do not have checking facilities. There are different types of NBFCs including asset finance companies, investment companies, and loan companies. NBFCs play an important role in financing sectors like transportation and providing credit to those not served by banks. However, NBFCs also have higher costs and non-performing assets compared to banks.
This document summarizes frequently asked questions about dividend distribution policies for listed companies in India. Key points include:
- The policy requirement applies to the top 500 listed companies by market capitalization.
- The purpose is to provide guidance for boards in declaring dividends and transparency to investors.
- The policy is not mandatory for debt listed companies or a replacement for the board's decision, but rather a reference point.
- Companies must tailor the policy to their specific circumstances and disclose any changes made.
Geometry Friends Game AI Competition - 2013 ResultsRui Prada
The document describes the Geometry Friends game, an AI competition held using the game, and the results of the competition. The Geometry Friends game was developed in 2008 to study collaborative gameplay between humans and agents. It involves two players cooperating to collect diamonds within time limits on platforms. In 2013, an AI competition was held using the game, with tracks for cooperation, single-player rectangle, and single-player circle agents. The only submission was CIBot from Sejong University, which completed levels with varying success in collecting diamonds within time limits.
The document provides a summary of regulatory updates from various bodies such as SEBI, MCA, RBI, and ITAT. Some key points from the document include: 1) SEBI raised the threshold for mandatory open offers from 15% to 25% stake in a company. 2) MCA allowed for online incorporation of companies within 24 hours. 3) RBI allowed refinancing of FCCBs and revised share issue norms for FDI. 4) International taxation cases related to royalty, capital expenditures, and taxability of foreign companies were summarized. The document covered a range of regulatory changes across corporate law, FEMA, and taxation.
The document provides an overview of the legal and regulatory framework for non-banking financial companies (NBFCs) in India. Some key points:
- NBFCs must be registered with the Reserve Bank of India and have a minimum net owned fund of Rs. 200 lakhs to commence business.
- They are classified as deposit-taking or non-deposit taking and systemically important NBFCs must meet additional regulatory requirements.
- NBFCs are subject to prudential norms on capital adequacy, income recognition, asset classification, provisioning, concentration of credit, and reporting.
- A core investment company is an NBFC that holds at least 90% of its assets as
The document defines and provides details about non-banking financial companies (NBFCs) in India according to regulations set by the Reserve Bank of India. Key points include:
- NBFCs are defined as non-banking institutions that conduct activities such as lending, acquisition of shares/securities, leasing, etc. but do not include businesses related to agriculture, industry or real estate.
- There are different types of NBFCs including loan companies, investment companies, asset finance companies, and residuary non-banking companies.
- NBFCs must register with the RBI and comply with various prudential regulations regarding public deposits, capital adequacy, exposure norms, and
This document provides a summary of Non-Banking Financial Companies (NBFCs) in India. It defines what an NBFC is, outlines the key types of NBFCs such as asset finance companies, loan companies, investment companies, and microfinance institutions. It also describes important NBFC concepts like capital adequacy requirements, classification of assets, and the regulations applicable to different categories of NBFCs. The document is intended to serve as a quick guide to NBFCs in India.
Enterslice help you to Incorporate NBFC Company in india.we also provide software to manage NBFC Business like NBFC Software,NBFC-ND Compilance,Money Changer Compilance,funding in NBFC and takeover of NBFC.
This document discusses non-banking financial companies (NBFCs) in India. It defines NBFCs as financial institutions that provide banking services without a banking license. It classifies NBFCs based on their business activities and lists their major products. It then summarizes the financial performance of the NBFC sector from 2009-2010, noting growth in various areas. Finally, it discusses the future prospects of NBFCs and their importance in the Indian financial system.
Introduction to Non-Banking Financial Companies(NBFCs) Role and ClassificationAmit Shinde
Non-banking financial companies (NBFCs) provide financial services like banks but are not subject to the Banking Regulation Act of 1949. NBFCs engage in activities like equipment leasing, hire purchase, housing finance, and investment/loans but have some limitations compared to banks. The document discusses the roles and various classifications of NBFCs such as leasing companies, housing finance companies, investment companies, loan companies, mutual benefit companies, chit fund companies, and residuary non-banking companies. NBFCs generally charge higher interest rates than banks and have regulatory oversight from bodies like SEBI and RBI rather than just the Banking Regulation Act.
Idfc mutual fund common application form with kimPrajna Capital
The document is a Key Information Memorandum for an offering of units by a mutual fund. It sets forth important information that prospective investors should know, including details on the scheme, risks, penalties and how to access additional documents. The units being offered have been prepared in accordance with applicable regulations but have not been approved by SEBI.
The document describes the investment objectives of seeking stable returns with low risk by investing in good quality fixed income and money market securities for some funds, while other funds aim to generate optimal returns with high liquidity through active management of debt portfolios. All funds note there is no assurance the objectives will be realized.
An NBFC is a non-banking institution that provides banking services like loans, acquiring stocks/bonds. It must register with RBI and have a minimum net worth of Rs. 2 crore. There are two types - Type I does not accept public deposits while Type II does. NBFCs have different rules than banks regarding deposits, payments, and insurance. Registration requires documents showing company formation and purpose. Ongoing compliance includes financial reporting and prudential norms. Our services can help with the registration and compliance process.
This document discusses the regulations for Non-Banking Financial Companies (NBFCs) in India. It defines NBFCs, outlines the registration requirements with the Reserve Bank of India, and classifies NBFCs into different categories based on their activities. It also describes the various compliance requirements for NBFCs, including capital adequacy, credit concentration limits, returns to be filed, and the responsibilities of auditors. Finally, it notes some problem areas like unregistered NBFCs operating without approval.
This document provides information on non-banking finance companies (NBFCs) in India, including their classification and types. It discusses how NBFCs are classified into different categories based on whether they accept public deposits and their principal business activities. Some key NBFC categories mentioned include asset finance companies, investment companies, loan companies, infrastructure finance companies, and microfinance institutions. The document also briefly outlines the regulations for mutual benefit finance companies and the leasing and hire purchase services that can be provided by NBFCs.
L&T Finance Holdings Ltd is a large NBFC operating in finance sector in India. It provides various financial services including loans, insurance, factoring etc. The company follows frameworks like GRI, NVG, UNGC to report on economic, environmental and social performances. It ensures ethics and transparency in business operations and incorporates social/environmental factors. The company focuses on talent acquisition and development, transparency, learning and good governance in its HR policy.
This document provides an overview of non-banking financial institutions (NBFCs) in India. It defines what an NBFC is, compares them to banks, describes the different types of NBFCs and their regulations. Key points include that NBFCs cannot accept demand deposits, do not have deposit insurance, and are regulated differently than banks. The document also summarizes the requirements for NBFCs to accept public deposits, their permitted interest rates and deposit periods.
A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 2013 or 1956 carrying on the business listed under Section 45 I (c ) of the RBI Act, 1934, i.e.
This document provides an overview of non-banking financial companies (NBFCs) in India. It defines NBFCs and distinguishes them from banks. It outlines the registration process for NBFCs and classifications of NBFCs. The document also discusses why NBFCs are important for the Indian financial system, highlights of the NBFC sector, compliance requirements, and recent regulatory changes aimed to bring parity between NBFCs and banks. Suggestions are provided such as opening new avenues of fund raising to reduce NBFCs' reliance on deposits and giving systemically important NBFCs coverage under the SARFAESI Act. In conclusion, the document states that the challenge is for NBFCs to grow pr
The document summarizes the Securities and Exchange Board of India (SEBI) and Investor Education and Protection Fund (IEPF). It describes how SEBI was established in 1988 as a statutory body to regulate the securities market and protect investors. It outlines SEBI's objectives, organizational structure, powers, and functions like regulatory, protective, and developmental. It then explains that IEPF was set up under the Companies Act to collect unclaimed dividends and deposit amounts unpaid for 7 years, and is overseen by a committee chaired by the Ministry of Corporate Affairs Secretary. The fund is used for investor education and awareness activities.
This document provides an overview of non-banking financial companies (NBFCs) in India. It defines NBFCs and outlines their role in the Indian financial system. It also describes the different types of NBFCs according to the Reserve Bank of India's classification system and summarizes the eligibility criteria, differences between NBFCs and banks, and the role of the RBI in regulating NBFCs. The document is intended to educate a group of students on the topic of NBFCs in India.
This document provides an analysis of India's non-banking financial company (NBFC) sector. It discusses the industry structure, nature of business, and differences between NBFCs and banks. NBFCs complement the banking system and account for 12.7% of the financial system's total assets. The document also analyzes NBFCs' sources and uses of funds, financial performance metrics like return on assets and non-performing assets, and recent regulatory changes affecting the sector. Overall, it presents an overview of the NBFC industry in India.
Non-banking financial companies (NBFCs) provide financial services like loans and investing in stocks without taking deposits. Mahindra and Mahindra Financial Services is a leading NBFC in India that provides financing for vehicles and farm equipment, especially in rural areas. It has over 450 branches and aims to be the preferred financial services provider in rural India. The company focuses on inclusive growth and currently employs over 6,200 people locally. It offers a variety of loan and insurance products and has strong relationships with dealers and customers after over 70 years of operations.
Non-banking financial companies (NBFCs) are financial institutions that are registered under the Companies Act and provide financial services like loans and advances. The key differences between NBFCs and banks are that NBFCs cannot accept demand deposits and do not have checking facilities. There are different types of NBFCs including asset finance companies, investment companies, and loan companies. NBFCs play an important role in financing sectors like transportation and providing credit to those not served by banks. However, NBFCs also have higher costs and non-performing assets compared to banks.
This document summarizes frequently asked questions about dividend distribution policies for listed companies in India. Key points include:
- The policy requirement applies to the top 500 listed companies by market capitalization.
- The purpose is to provide guidance for boards in declaring dividends and transparency to investors.
- The policy is not mandatory for debt listed companies or a replacement for the board's decision, but rather a reference point.
- Companies must tailor the policy to their specific circumstances and disclose any changes made.
Geometry Friends Game AI Competition - 2013 ResultsRui Prada
The document describes the Geometry Friends game, an AI competition held using the game, and the results of the competition. The Geometry Friends game was developed in 2008 to study collaborative gameplay between humans and agents. It involves two players cooperating to collect diamonds within time limits on platforms. In 2013, an AI competition was held using the game, with tracks for cooperation, single-player rectangle, and single-player circle agents. The only submission was CIBot from Sejong University, which completed levels with varying success in collecting diamonds within time limits.
The document provides a summary of regulatory updates from various bodies such as SEBI, MCA, RBI, and ITAT. Some key points from the document include: 1) SEBI raised the threshold for mandatory open offers from 15% to 25% stake in a company. 2) MCA allowed for online incorporation of companies within 24 hours. 3) RBI allowed refinancing of FCCBs and revised share issue norms for FDI. 4) International taxation cases related to royalty, capital expenditures, and taxability of foreign companies were summarized. The document covered a range of regulatory changes across corporate law, FEMA, and taxation.
The document describes the Geometry Friends game and AI competition. The competition involves AI agents controlling characters in a 2D puzzle game to collect items. It has cooperation, single-player circle, and single-player rectangle tracks. Approaches submitted have used techniques like Dijkstra's algorithm, A*, Q-learning, and rule-based systems. The competition aims to further research on collaborative gameplay between humans and AI.
It is all about the experience! Player experience in game designRui Prada
1. The document discusses player experience in game design from the perspective of Rui Prada, a professor and expert in games.
2. It emphasizes that games are designed to provide experiences for players through doing, feeling, and learning. A good game promotes a good experience.
3. Player experience is crafted through eliciting emotions like pleasure, satisfaction, and learning over the progression of gameplay. Proper challenge and novelty keep the experience engaging over time.
Presentation about the role of emotions in the player experience and the creation of believable interactive autonomous characters. Delivered at Instituto Superior Técnico and Faculdade de Ciências of University of Lisbon on December 2014.
The important concepts in CST Act like "inter-state sales, stock transfer, in the course of import or export", have always been surrounded by controversies. Eventhough there have been certain judicial precedents, tax authorities in different states have been taking different stands. The presentation is an attempt made to simplify these concepts, stressing on judicial precedents issued on the subject, precautions to be taken by dealers, etc.
The document discusses models for developing believable autonomous characters that can interact with people. It describes how characters need human-like qualities like intentionality, emotions, personality and theory of mind to become believable. Socio-emotional intelligence is particularly important for teaming agents with people. Serious games are discussed as an application that could motivate communication and change using autonomous characters.
Opportunities for Fiction and Fantasy in VideogamesRui Prada
Presentation at the Faculdade de Letras of Lisbon University discussing the definition of videogames and the role of fiction and fantasy in the player experience.
Attached Newsletter is an attempt to cover monthly issues relevant in the context of transactions - covers SEBI, Companies Act, Income Tax, Stamp duty and other regulatory changes
GST has been heralded as the next generation of reforms in the area of Indian Indirect taxes. The government intends to implement the new regime by April 1st, 2011. The attached PPT have tried to bring together some building blocks (whether it is the discussion paper, objective which the new framework intends to achieve, issues, concerns or challenges), which the stakeholders would find useful.
Attached Newsletter is an attempt to cover monthly issues relevant in the context of transactions - covers SEBI, Companies Act, Income Tax, Stamp duty and other regulatory changes
A lot of dealers have been maintaining branches to benefit from 'Nil' rate of tax as against CST rate applicable for inter-state sales. Supreme court has now put rest to the disputes by covering such kind of transactions under the ambit of Inter-state sales. Supreme court while indirectly relying on "substance over form" rule, placed its reliance on the intention of parties. The Author had tried to summarise the implication of decision with the attached presentation.
Transaction Advisors provides services related to mergers, acquisitions, valuations, due diligence, structuring, and funding. Their services help clients with acquisition/divestitures, tax optimization, regulatory compliance, and securing private equity/venture capital. They have expertise in areas like inbound/outbound investment structuring, financial/legal/tax due diligence, and pre-fund raising restructuring to improve valuations.
The document is a newsletter from Transaction Advisors providing updates on mergers and acquisitions, private equity deals, and regulatory changes in India. It includes summaries of recent private equity investments and M&A transactions in Indian companies. It also summarizes new policies, regulations and significant legal decisions related to areas such as foreign direct investment, taxation, and securities law in India. The newsletter is intended to keep clients and associates informed of important transactional and regulatory changes in India.
- There are no restrictions on the percentage of royalty payments for use of technology or trademarks under FEMA. Royalty payments are considered current account transactions.
- There are no restrictions on payment of commissions, except for commissions over USD 25,000 or 5% of inward remittance paid to agents abroad for sale of residential/commercial property in India.
- Payment for employee stock ownership plans (ESOPs) are considered capital account transactions governed by FEMA regulations.
- Under the Liberalized Remittance Scheme, residents can provide loans in foreign currency to non-resident Indian relatives.
- Profits from sale of property or shares by non-resident Indians are considered capital account transactions as the
The Reserve Bank of India issued directions regulating overseas investments by Core Investment Companies. The directions apply to all corporate investment companies seeking to invest abroad. Key points of the directions include eligibility criteria for overseas investments, conditions on such investments, reporting requirements, and penal actions for non-compliance. The objective is to regulate the credit system and monitor overseas investments by core investment companies.
Overseas investment by core investment companiesAritra Das
This newsletter discusses a recent notification issued by the Reserve Bank of India formulating the regulatory framework for overseas investment by Core Investment Companies
The document discusses amendments made to regulations regarding opening escrow accounts and pledging shares for foreign direct investment transactions in India. Key points:
1) Authorized dealers Category-I banks and SEBI-authorized depositories can now open non-interest bearing escrow accounts in India on behalf of residents and non-residents for FDI transactions without prior RBI approval.
2) Shares of an Indian company held by non-resident investors can now be pledged to secure loans from Indian or overseas banks for business purposes of the company, subject to certain conditions like loan use and compliance with FDI policy.
3) The amendments aim to provide operational flexibility and ease procedures for joint ventures,
The document discusses amendments made to regulations regarding opening escrow accounts and pledging shares for foreign direct investment transactions in India. Key points:
1) Authorized dealers and SEBI depository participants can now open non-interest bearing escrow accounts in India on behalf of residents and non-residents for FDI transactions, without prior RBI approval.
2) Shares of an Indian company held by non-residents can now be pledged in favor of Indian or overseas banks to secure business loans for the company or its affiliates, subject to certain conditions.
3) The changes aim to provide more operational flexibility and ease procedures for FDI transactions like joint ventures and private equity investments.
The document summarizes key changes made by the Indian government to policies affecting foreign investors. [1] It liberalizes rules around writing off capital and other receivables for listed and unlisted Indian companies with overseas investments. [2] It allows restructuring of overseas joint ventures and wholly owned subsidiaries' balance sheets to write off capital and receivables. [3] It modifies rules for automatic route disinvestment by listed Indian companies with net worth under Rs. 100 crore but overseas investment under $10 million.
Private equity involves investing in private companies not listed on a stock exchange. Firms invest in underperforming companies with high growth potential to develop new products/technologies or expand working capital.
Private equity has limited liquidity and follows a high risk, high return objective. Funds can sell company stakes after the minimum investment period to realize gains in the non-transparent private equity market. Venture capital, angel investors, leveraged buyouts, growth capital, and mezzanine capital are types of private equity. Regulations like SEBI AIF Regulations 2012 govern private equity in India. Setting up funds in tax havens like Mauritius, Singapore, Ireland etc. can help minimize double taxation.
Nangia Andersen HSBC Webinar on FEMA - Demystifying Business Challenges.pdfSandeep814482
The document provides an overview of key regulations and compliance requirements for corporates under FEMA including foreign direct investment, overseas direct investment, external commercial borrowings, liaison/branch/project offices, export/import of goods and services, and ESOPs issued by foreign companies. It discusses common issues that arise and regulatory guidelines. Non-compliance can result in penalties up to 3 times the amount involved or INR 2 lakhs if not quantifiable, and directors can be held liable if the contravention occurred with their consent or connivance.
The document compares different legal structures for microfinance institutions (MFIs) in India and their ability to accept foreign investment. It finds that while Section 25 companies allow foreign investment, they prohibit dividend distribution. Non-banking financial companies (NBFCs) allow greater foreign ownership but have high capitalization requirements. Overall, the different structures each have advantages and limitations for MFI operations and foreign investment.
The document provides a summary of recent regulatory changes and updates from the Ministry of Corporate Affairs, Reserve Bank of India, and Securities and Exchange Board of India. Key points include:
1) MCA will receive names of over 500 companies that violated CIS rules from SEBI and take necessary actions to prevent involvement in new companies.
2) Developers of National Manufacturing Investment Zones can now avail of external commercial borrowings under the "approval route" for infrastructure development.
3) RBI has delegated powers to banks to approve reductions in ECB amounts, costs, and drawdown schedules subject to conditions.
This document provides an overview of key concepts related to investors, including definitions of investment and an investor. It outlines different types of investors such as retail and institutional investors. The document also discusses investor rights and obligations, legislations governing capital markets in India and internationally, and various compliances and protections that are in place for investors in India, including grievance redressal mechanisms.
This study focus on the non banking financial companies in India – a conceptual framework It should be noted that during the 36 month period fromApril1997 to March2000, Crisis downgraded 149 NBFCs due to their deteriorating business and financial risk profiles and credit fundamentals. The stringent regulations, refusals for registration and the notifications regarding the cancellation of the permissions to raise deposits have gradually reduced the fly by night operators. NBFCs are now struggling hard to find reasons for continued existence, strategies for such existence and business areas for growth and earnings. Dr. S. Mahalingam | B. Ashokkumar "Non-Banking Financial Companies in India – A Conceptual Framework" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-6 , October 2020, URL: https://www.ijtsrd.com/papers/ijtsrd33278.pdf Paper Url: https://www.ijtsrd.com/management/marketing-management/33278/nonbanking-financial-companies-in-india-–-a-conceptual-framework/dr-s-mahalingam
This document summarizes recent changes to regulations regarding foreign exchange and investments in India:
1) Exporters meeting certain revenue thresholds can now file software export statements in revised Excel sheets rather than existing forms.
2) The limit on external commercial borrowings for infrastructure finance companies has increased from 50% to 75% of owned funds under an automatic approval route.
3) Issuance of equity shares against import of second-hand machinery is no longer allowed under the government route for foreign direct investment.
4) Authorized dealers are directed to submit compliance documents from companies in a timely manner to avoid delays at the Reserve Bank of India.
5) Indian companies in the hotel sector with projects over 250
The document discusses management of non-performing assets (NPAs) in banks. It defines NPAs and categories them as substandard, doubtful or loss assets depending on the period for which they have remained unpaid. It outlines provisioning norms for different NPA categories. Factors contributing to NPAs include poor credit discipline, inadequate risk management, diversion of funds by promoters and funding non-viable projects. Methods for managing NPAs discussed include preventive measures, resolution through compromise settlements, restructuring, debt recovery tribunals and sale of NPAs.
The document discusses the Indian government's tax treatment of interest income from rupee denominated bonds issued outside of India by Indian companies. Specifically:
- The withholding tax rate on interest income from such bonds would be 5%, which is the same rate applicable to offshore dollar denominated bonds.
- Capital gains arising from appreciation of the rupee against the foreign currency from the date of issue to redemption would be exempt from capital gains tax.
- Legislative amendments to incorporate this tax treatment will be proposed through the Finance Bill of 2016.
In a move to further rationalize and liberalise the overseas investment central Government and Reserve Bank of India notified Foreign Exchange Management (Overseas Investment) Rules, 2022 and Foreign Exchange Management (Overseas Investment) Regulations, 2022 respectively on 22 Aug 2022.
The revised regulatory framework for overseas investment provides for simplification of the existing framework for overseas investment and has been aligned with the current business and economic dynamics. Immense clarity on Overseas Direct Investment and Overseas Portfolio Investment has been brought in and various overseas investment related transactions that were earlier under approval route are now under automatic route, significantly enhancing "Ease of Doing Business".
The document summarizes key changes brought about by India's new Overseas Direct Investment Guidelines. It introduces definitions for key terms like foreign entity, overseas direct investment, and overseas portfolio investment. It liberalizes regulations by removing restrictions on investment write-offs and allowing more entities like unlisted companies and individuals to undertake overseas investments. The guidelines also expand the scope of permitted overseas investments in sectors like financial services. Overall, the changes aim to simplify regulations and promote ease of doing business for overseas investments by Indian persons and entities.
This document provides information about non-banking financial companies (NBFCs) in India. It defines NBFCs as non-banking institutions that conduct lending, acquisition, and leasing activities but do not accept demand deposits. NBFCs are divided into categories including asset finance companies, investment companies, and loan companies. Key differences between NBFCs and banks are that NBFCs cannot accept demand deposits or issue checks. The Reserve Bank of India regulates NBFCs and places restrictions on their acceptance of public deposits.
How to make outbound investment from india financing & complianceRamanuj Mukherjee
There are several options and procedures for Indian companies to make outbound investments. Under the automatic route, investments of up to 400% of net worth are permitted without approval. Companies can also use proceeds from ADR/GDR issuances. For investments outside these routes, approval must be obtained from authorities including the RBI. The document outlines financing options, compliance procedures, and regulations according to the Companies Act, FEMA, and SEBI.
Similar to Mergers & Acquisitions Newsletter - June 2011 (20)
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
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In a tight labour market, job-seekers gain bargaining power and leverage it into greater job quality—at least, that’s the conventional wisdom.
Michael, LMIC Economist, presented findings that reveal a weakened relationship between labour market tightness and job quality indicators following the pandemic. Labour market tightness coincided with growth in real wages for only a portion of workers: those in low-wage jobs requiring little education. Several factors—including labour market composition, worker and employer behaviour, and labour market practices—have contributed to the absence of worker benefits. These will be investigated further in future work.
Abhay Bhutada, the Managing Director of Poonawalla Fincorp Limited, is an accomplished leader with over 15 years of experience in commercial and retail lending. A Qualified Chartered Accountant, he has been pivotal in leveraging technology to enhance financial services. Starting his career at Bank of India, he later founded TAB Capital Limited and co-founded Poonawalla Finance Private Limited, emphasizing digital lending. Under his leadership, Poonawalla Fincorp achieved a 'AAA' credit rating, integrating acquisitions and emphasizing corporate governance. Actively involved in industry forums and CSR initiatives, Abhay has been recognized with awards like "Young Entrepreneur of India 2017" and "40 under 40 Most Influential Leader for 2020-21." Personally, he values mindfulness, enjoys gardening, yoga, and sees every day as an opportunity for growth and improvement.
2. Topics Page No
Dear Patron FEMA 1
Corporate Law 4
Here we are again with the Third successive issue of our monthly ‘Missive’. Transfer Pricing 6
Competition Law 7
The month witnessed a slew of updates relevant from the transaction perspective SEBI 8
and it seems that both the RBI and the Ministry of Corporate Affairs literally went Direct Taxes 9
into an overdrive in issuing circulars. The next few pages speak for themselves. Other Regulatory Updates 10
Recent News in Transactions 12
Of all these updates, FDI in LLP, Rolling out of the combination regulations, Green that made headlines
initiatives in the corporate governance and enactment of Foreign Contribution
Regulation Act are the ones who have stolen the show. Besides, courts in India have
also been delivering certain key decisions. And with various discussion papers,
concept notes and draft regulations already in the public domain for discussions, the
next few months are going to witness some serious action. “If you don’t like something, change
We trust you will enjoy reading this Missive. We would very much appreciate your
it….. If you can’t change it, change
feedback which consistently helps us in improving and upgrading the contents.
the way you think about it…..”
Thanks and regards,
Akhil Bansal
Editor, Knowledge Management Team
3. Foreign Exchange Management Act - RBI complexities for companies which have global operations. Indian companies
will get more flexibility in managing international joint ventures (JVs) and
Liberalisation of Overseas Direct Investment – A.P. (DIR Series) Circular No. 69 wholly-owned subsidiaries.
Dated 27.05.2011
The move regarding write-offs seems to be aimed at converging existing rules
RBI has made certain changes to the prevailing ODI Regulations, in order to and regulations with IFRS. Under IFRS, all investments are subjected to the
provide operational flexibility to Indian Corporates having investment abroad. impairment test, i.e. whether the investments are fully realisable or whether
Some of the changes brought about are with respect to: there is erosion in value.
§ Performance Guarantees issued by the Indian Party - Only 50% (as
against 100% at present) of the amount of performance guarantee Opening of Escrow Accounts for FDI transactions [A.P. (DIR Series) Circular
provided by Indian companies to overseas ventures will be taken into No. 58 dated – May 02, 2011]
account while computing the overall exposure limit. Indian companies
are allowed financial commitments in overseas ventures up to 400% of RBI has permitted under automatic route,
their net worth. § ADs to open non-interest bearing Escrow accounts in India on behalf of
residents and / or non-residents, towards payment of share purchase
§ Restructuring of the balance sheet of the overseas entity involving consideration
write-off of capital and receivables - Existing regulations allow § SEBI authorized Depository Participants to open and maintain Escrow
restructuring of balance sheets only for winding-up of JVs (atleast 51% accounts for securities
holding) and wholly-owned subsidiaries abroad. Now, listed companies
will be allowed to write off 25% capital, loans and other receivables Other key conditions with respect to above liberalization of escrow accounts
such as royalty and management fee of their JVs and wholly-owned are as follows
subsidiaries through the automatic route. Unlisted companies can do § The terms of the Escrow account to be laid down in the Escrow
so after approval. agreement, Share purchase agreement, conditions of issue of shares
etc.
§ Disinvestment by the Indian Parties of their stake in an overseas § The underlying FDI transaction for which the Escrow account is opened
JV/WOS involving write-off – certain amendments have been made should be compliant with extant FEMA provisions.
§ The Escrow account shall remain operational for a maximum period of
§ Issue of guarantee by an Indian Party to step down subsidiary of JV 6 months only
/WOS have now also been covered under general permission § No fund or non-fund based facilities would be permitted against the
balances in the Escrow account.
Impact: These are indeed welcome steps to provide additional headroom for
overseas investments through the automatic route and ease procedural
1
4. § Balance in the Escrow account, if any, may be repatriated at the then § Pledge in favor of an overseas bank to secure the credit facilities being
prevailing exchange rate (i.e., the exchange rate risk will be borne by extended to the non-resident investor / non-resident promoter of the
the non-resident) Indian company or its overseas group company.
Impact: Prior to the issuance of the Circular, there was uncertainty as to Impact: Since there are a substantial amount of overseas funds being
whether RBI approval was required for opening of escrow accounts invested in Indian shares, non-residents require freedom to leverage their
pertaining to FDI transactions; therefore, as a market practice, escrows were Indian investments for raising debt, both at an overseas level or India level.
often maintained outside India to facilitate the commercials of the Due to dispensation of prior RBI approval, there would be a reduced time
transaction (commercials includes the structuring of transactions, closing of frame for mobilization of debt funds raised by pledge of shares of Indian
transactions, etc.). But the above Circular, has now made it possible to set up company. The liberalisation concerning this pledge is a welcome initiative
and maintain such escrow accounts for FDI-related transactions in India and enhances the business purpose borrowing ability of the Indian Investee
without any delay. Company as well as its Non-Resident Investors.
Also, the RBI has finally realised, that the time taken in the legal and due
diligence process is prolonged and to facilitate the operation smoothly for Government approved FDI in LLP [Press Note 1 (2011 Series)]
new issues of transfer of shares to or from the NRIs, the authorization process
needs to be amended. Permitting opening of Escrow accounts will ease out The Government has decided that FDI in LLPs will be permitted and
the M&A transactions in India and enable the investors to complete due implemented in the calibrated manner. The salient features of the policy are as
diligence and other formalities before the completion of the transaction. below.
§ FDI in LLPs are permitted only in sectors where 100% FDI is permitted
Pledge of shares for business purposes [A.P. (DIR Series) Circular No. 57 dated under the automatic route and where no conditions are prescribed.
May 2nd, 2011] § Indian companies having FDI will be permitted to make downstream
investment in LLPs only if both the Indian company and the LLP are
RBI has decided to delegate powers to AD Category–I banks to allow pledge of operating in sectors where 100% FDI is permitted under the automatic
shares of an Indian company held by non-resident investor/s in the following route without any conditions. LLPs with FDI will not be eligible to make
cases (subject to compliance of certain conditions): any downstream investments.
§ The Foreign investor will be permitted to participate in the capital
§ Pledge in favor of an Indian bank in India to secure the credit facilities structure of the LLP only by way of cash considerations.
being extended to the resident investee company for bonafide § FII /FVCI not permitted to invest in LLPs.
business purposes; § LLPs will not be permitted to avail External Commercial Borrowings.
§ Conversion of a company with FDI into an LLP will be permitted only
with prior approval of FIPB.
2
5. the guidelines public and may seek comments from all stakeholders
Impact: Permitting FDI in LLPs would give flexibility to foreign investors, again.
depending upon their nature and size of investment. Even foreign investors
with existing investments by means of joint ventures and wholly owned § RBI panel suggests tighter reporting norms for interest rates and forex
subsidiaries can now restructure and convert themselves to LLP, as long as derivatives. The report of the Working Group set up by RBI suggested
they meet the pre-requisites provided for in the said release. However, issues that Clearing Corporation of India (CCIL) should be made the repository
such as valuation norms, determination of ownership and control, non-cash of all interest rate and forex derivative transactions.
contributions still needs to be addressed by the Government.
§ The Government of India has decided to raise the overall limit for
external commercial borrowings to $30 billion from $20 billion before;
Other clippings so the corporates can borrow more
§ RBI is likely to make it mandatory for foreign banks in the country to § For IPO related transient capital flows under the Application Supported
operate as wholly-owned subsidiaries, in line with the international by Blocked Amount (ASBA) mechanism, foreign currency-rupee swaps
practice, so that the central bank can have better control over their have been permitted to the FIIs subject to certain conditions
working. At present, the foreign banks operate through their branches.
§ RBI in its proposed norms for holding companies has said that financial
groups can list both the holding company as well as the subsidiaries.
RBI had placed the Report of the Working Group on Introduction of
Financial Holding Company Structure in India on its website for inviting
comments from the public.
The proposed structure is similar to that prevailing in Western
countries where holding companies like Citigroup are listed and serve
as a vehicle for raising capital. The holding company in turn has
subsidiaries in banking, asset management, insurance, investment
banking and non-banking finance.
§ The Finance ministry has cleared the RBI’s draft guidelines on new
bank licences with a rider that the existing 74% cap on foreign direct
investment be retained. The central bank, which had proposed
capping FDI in new banks at 49% in the first 10 years, is likely to make
3
6. Corporate Law
Other improvements in process in MCA21 to help stakeholders / corporates
Green Initiatives in the Corporate Governance
§ Introduction of Refund Process (refund of fees wrongly paid by the
The Ministry of Corporate Affairs has taken a “Green Initiative in the Corporate stakeholder while availing various services at MCA 21)
Governance” by allowing paperless compliances by the companies under the
provisions of the Companies Act, 1956. § Automatic approval for Form 2, Form 3 regarding return of allotment
of shares, Form 18 for change of registered office and for 32 for
§ Allowing service of Documents including Balance Sheets and Auditors change in directors details to be processed under STP mode (i.e.
report, etc through e-mail addresses (General Circular No. 17/2011 Straight through processing)
dated 21.04.2011 & Circular No. 18/2011 dated 29.04.2011)
§ Delegation of power to issue section 25 license to a company from
§ Participation by Directors and shareholders in meetings through video Regional Director to ROC
conferencing (General Circular No. 27-28/2011 dated 20.05.2011)
§ Companies which had defaulted in filing their annual returns and
§ Voting in General Meeting of Companies through electronic mode - In balance sheets for a continuous period of three years have been
order to have a secured electronic platform for capturing accurate moved into a separate basket as "Dormant" companies. Form 8, 10 (for
electronic processes, CDSL and NSDL are being given approval (General registration of charges) and Form 17 (for satisfaction of charges) are
Circular No. 21/2011 dated 02.05.2011) not allowed to be filed by a dormant company.
§ Companies who have not filed their statutory Annual Reports (i.e.
§ All certificates and standard letters issued by ROC to be issued
Balance Sheets, Profit and Loss Accounts and Annual Reports) with
electronically under the Digital Signatures of the ROC (General Circular
ROC, are now not allowed to file their other Forms except certain
No. 29/2011 dated 20.05.2011)
Forms (viz. Form 32 for change in directors, Annual return, Form 23AC
for filing financials, Form 21 i.e. notice of the court or company law
Impact: The above initiatives will allow the Companies to curb huge costs,
board order, etc) till the companies has filed its updated Statutory
particularly in the case of companies with overseas shareholding, and
Annual Accounts/ Annual Report in MCA-21 system. (Circular [F.No.
directors wherein meetings have now been allowed to be conducted
17/146/2011-CL-V], dated 12-5-2011)
electronically
4
7. Marking a company as having management dispute by Registrar of said Rules have been amended wherein the clarifications have been
Companies under MCA-21 system in specific cases (General Circular 19/2011 made on composition of the committee. [vide Notification No. G.S.R.
dated May 2, 2011) 357(E), dated 02-05-2011]
This marking creates an alert and the documents are not approved and remain § MCA, in the conference of Official Liquidators, stresses to expedite the
in the registry as work in process till it is demarked by the Registrar. In order to Process of Liquidation Of Companies. This comes in view of the fact
ensure uniformity among ROCs, it has been clarified that the ROC shall use the that the time taken for liquidation of companies is one of the major
facility only in following specific cases factors responsible for India’s low rank in the global “doing business
survey” conducted by the World Bank. A series of measures have also
§ Where the court or CLB has directed to maintain the status-quo with been identified in the conference for expediting liquidation.
reference to any e-forms including the status of Directors in the
company or,
The Court or CLB has granted any injunction or stay in taking the Significant decisions
document on record and ROC is a party in such court cases, etc
§ In other cases, where ROC in not a party, it is for the parties to comply § The Supreme Court had set aside the judgment of the Gujarat high
to such orders and in case of non-compliances ,the law shall take its court and directed the sale of a wound-up company at a higher price
own course so that creditors will get their dues. The high court had confirmed the
sale at the earlier price on the ground that a confirmed auction sale
cannot be set aside merely because subsequently a higher price was
Other Updates offered by one of the bidders.
§ LLPs have now been allowed to be appointed as auditor of companies § Increase in Authorised Capital is not liable to stamp duty under Indian
Stamp Act, 1899 as applicable in Delhi, as there is no express provision
§ MCA has excluded banking, insurance, power, NBFCs and overseas for charging stamp duty on the increase in authorized share capital in
subsidiaries of these companies from Phase I of the implementation of Schedule IA of the Delhi Stamp Act. With the ruling in place, Delhi
XBRL. government will soon amend the schedule so as to bring it in line with
other state stamp act schedules which expressly mention about the
§ The Director’s Relative (Office or Place of Profit) Rules, 2011 (which chargeability of stamp duty on increase in authorized share capital
came earlier this year) provided that in case of a public company, the [Delhi High court in the case of S.E. Investment Limited]
remuneration not exceeding Rs 250,000 per month can be made to a
relative of director, provided the appointment is approved by a
Selection Committee comprising of a majority of independent directors
and an expert in the respective field from outside the company. The
5
8. News Snippet Transfer Pricing
§ The Ministry is considering substituting Unlisted Public Companies Significant Decisions
(Preferential Allotment) Rules, 2003 by replacing it with new set of
Rules. The new rules have proposed that the securities should be § If loss making companies were excluded, a super profit earning
issued in Demat mode and imposed more disclosures on both the company should also be removed from the comparables [ITAT Delhi]
company and the buyer. It also requires the issuer to seek government
permission if the cumulative value of the allotment is over 5 crore. A § Arm’s length price under TNMM can be determined even with one
draft of such rules has been released for public comments. comparable company
§ As per MCA, the new company law will make it mandatory for
companies to disclose details of social sector initiatives, called CSR, in News Snippet
addition to money spent, to shareholders in their annual reports.
§ CAG may review transfer pricing case which has revenue implications
for the exchequer – Director General of Income Tax
§ CBDT had now instructed AOs and TPOs to look into technical evidence
involved in a tax or transfer pricing case by seeking assistance in the
form of opinion from technical experts in the relevant subject matter
for expeditious disposition of such cases especially where there are
substantial amounts of taxes at stake [Instruction No. 5/2011 dated 30
March, 2011]. This instruction follows from the directions provided by
Supreme Court in its ruling in the case of CIT v. Bharti Cellular Ltd.
[2010-TI1-05-SC-INTL].
6
9. Competition Law § Other cases like acquisition by underwriters, stock brokers, etc
The Competition Commission of India (Procedure in regard to the transaction This revised set of Combination Regulations addresses various concerns
of business relating to combination) Regulations, 2011 raised by industry forums on the draft regulations released earlier, and
provides some level of clarity on transactions, which would fall within the
A draft set of regulations for regulating combinations had been released for purview of Combination Regulations, or outside their purview.
public discussions (the brief provisions of which were covered in our April 2011
missive). After extensive discussions with various industry forums and
professionals, a revised set of Combination Regulations has been finalized. The Recent Orders by CCI
regulations would come into effect from June 1st, 2011, the same date when
the provisions relating to combinations would come into force. § CCI imposed a penalty of Rs 1 lakh each on 27 film producers on
charges of colluding through a cartel to exploit theatre owners. CCI
Initially, the draft regulations, sought to expand filing and approval imposed the fine on filmmakers after having found them guilty of
requirements to transactions, which would fall within the purview of a entering into anti-competitive agreement.
combination, but may not have had an Appreciable Adverse Effect (AAE) on
competition (such as a pro-rata bonus share issuance to shareholders). This § CCI pronounced the National Stock Exchange (NSE) guilty of abusing its
could have potentially resulted in unnecessary time delays in implementation dominant market position by adopting unfair trade practices in
of such “harmless” transactions. Keeping in line with the basic intention of connection with currency derivatives trading. The MCX-SX in its
Competition Law to regulate only those combinations, which could have an representation to CCI in November 2009 had alleged that NSE had
AAE in India, the Combination Regulations provide a schedule of transactions substantially reduced admission and trade related fees to eliminate
(otherwise qualifying as combinations), which may not have an AAE, and hence competition and discourage other entities from entering the market.
approval under Competition Law would not normally be required.
Broadly, the following transactions are covered under the schedule subject to News Snippet
certain conditions.
§ CCI ruled out any conflict with SEBI over the notified M&A norms,
§ Direct/ indirect acquisition of non-controlling stake (equal or less than saying the new regime would not clash with the market regulator’s
15%) or additional stake acquisition by an existing majority takeover code.
shareholder (already holding 50%)
§ Corporate action like bonus, stock split, rights issue, etc
§ Asset acquisitions
§ Intra-group combinations
§ Foreign combinations with “insignificant local nexus”
7
10. SEBI 3,000 retail applicants withdrew their applications & several others
were disqualified due to stop-payment of cheques.
Pre-agreed buyback of shares through put/call option in not valid under SCRA
- SEBI § SEBI has asked mutual funds to inform the investors on an urgent basis
about their support or opposition to various business decisions of the
SEBI in its recent informal guidance to Vulcan Engineers Limited (VEL) (dated 23 companies. It is of the view that the fear of a possible opposition by
May, 2011) has communicated to VEL that, the pre-agreed buyback of VEL institutional investors like mutual funds being made public would force
shares from SIMEST through put/call option is not valid under SCRA. [LETTER the companies to follow best corporate governance practices in their
NO. CFD/DCR/16403/11] businesses.
SEBI, after the opinion in open offer by Vedanta wherein it had sought § SEBI has proposed to put in place a business intelligence gathering
removal of clauses of “call / put options” from the agreement regarding sale mechanism with an aim to enhance its surveillance and protect
of shares in Cairn India, is asserting the view that all kinds of put/call options investors’ interest.
are in the nature of forward contract and are therefore not valid under the
securities laws in India. § Securities Appellate Tribunal (SAT) has ruled in a matter wherein there
was a change in the term of plan (by increasing the term thereof), that
Even early this year, a 3-member arbitration panel in the BALCO case of the same affects the fundamental attributes of the scheme and
Sterlite versus the Government of India held that any restriction on the free modifies the interests of the unit-holders and thus the same should
transferability of shares of a public company is violative of Section 111A of have been given effect to after notifying the unit-holders and providing
the Companies Act. Corporates are regularly inserting put/call option clauses an exit option to them as set out in Reg. 18(15A) of the SEBI (Mutual
in the SPA/SSA, the practice may need to be reviewed, especially for listed Funds) Regulations, 1996, in the absence of which, the investors are
cos in India. entitled to relief.
§ NSE & BSE has received an in-principle nod from SEBI for SME
News Snippets exchange
§ SEBI wants IPO bankers to disclose their past record in handling the § SEBI may soon frame a stringent set of rules for funds investing in art
public offers works, antiques, coins and stamps, with an aim to check black money
flow into these products and safeguard the interest of genuine
§ SEBI stops Vaswani Industries listing, suspecting dummy IPO investors.
subscriptions on fears that a majority of the applicants could be
dummy investors, acting on behalf of a few big operators as around
8
11. Direct Taxes § Foreign corporates with subsidiaries in the country not subject to
payment of withholding tax for financial services like discounting of
Significant updates bills provided to their Indian arms [AAR]
§ India had Signed Double Taxation Avoidance Agreement (DTAA) with § Consideration received under a composite contract for services which
Tanzania, Colombia and Ethopia are ancillary to the main objective of providing a software user license
(in the nature of field data collection/mathematical model studies)
§ Agreement between India and Isle of Man and Commonwealth of The held to be Royalty [AAR]
Bahamas for exchange of information with respect to taxes has been
entered § Tax Refund Interest Not ‘Effectively Connected’ With PE [ITAT Delhi]
§ A recent notification issued by the Ministry of Finance fixing the rate of § Transfer of shares of Indian company without consideration in the
interest as 9.5 per cent on the Employees' Provident Fund (“EPF”) course of group reorganization, is not liable to tax in India [AAR]
balances for the purpose of income-tax exemption. In view of this
notification, the anomaly between the interest earned on EPF balances § Deduction U/s. 10A available on conversion of existing Domestic Tariff
and the income-tax exemption enjoyed by the RPFs member stands Area unit into Software Technology Park unit [Karnataka High Court]
removed.
§ Charges for data processing not ‘royalty’ [Mumbai ITAT]
§ It is mandatory for Companies and Banks to issue Form 16A from TIN
to their deductees for deductions made from April 1, 2011 (F.Y. 2011- News Snippet
12 onwards). [CBDT circular no. 03/2011 dated May 13, 2011]
§ The Government has constituted a Committee under Chairman of
Significant Decisions CBDT to examine ways to strengthen laws to curb the generation of
black money in the country, its illegal transfer abroad and its recovery.
§ High court upheld deduction claimed in respect of
remuneration/royalty paid to subsidiaries and holding companies on § Desperate to curb the flow of blackmoney into the country’s economy,
the contention that revenue authorities have not specified as to how the Income Tax department has now begun to track all fliers and
much ordinary profit was supposed to be and the basis of its visitors who travel to tax havens like Switzerland, Virgin Islands and
determination, before treating royalty payment as excessive and Bahamas for personal or business purposes secretly. India is also
unreasonable. [Delhi HC] seeking pressure on tax havens to share information. Mauritius has for
the first time provided banking information about a person being
investigated by the Income Tax Department (ITD) for tax evasion and
money laundering
9
12. Other Regulatory Updates
§ Government of India has issued updates to the FAQ on Provident Fund
Foreign Contribution (Regulation) Act, 2010 [PF] for international workers [IWs] on 6 May 2011 with a view to
provide greater clarity on the applicability of PF regulations.
FCRA, 2010 has come into effect from May 1, 2011. While the provisions of the
repealed FCRA, 1976 have generally been retained, the FCRA, 2010 is an § AS-11 provides for immediate recognition of exchange differences
improvement over the repealed Act as more stringent provisions have been arising on long-term foreign currency monetary items. However, in
made in order to prevent mis-utilisation of the foreign contribution received by order to prevent immediate burden on the companies, alternatives
the associations. Some new features of the legislation are were proposed in earlier years wherein such differences (in case of
depreciable capital assets) can either be added or reduced from the
§ No person who receives foreign contribution as per provisions of this cost of assets and depreciation over the life of such assets, or be
Act shall transfer to another person, unless that person is also accumulated in the “Foreign Currency Monetary Item Translation
authorized to receive foreign contribution. Difference Account” and amortized over the life of the monetary item
§ Foreign contribution shall be utilized for the purpose for which it has but not after March 31, 2011. The government had now again
been received and such contribution can be used for administrative extended the sunset date in the transitional provisions thereto by one
expenses up to 50% of such contribution received in a financial year. more year.
§ New provisions have been made for suspension as well as cancellation
of registration granted for violation of the provisions of the Act,
management of foreign contribution and assets created out of such Significant Decisions
contribution of persons whose certificates have been cancelled,
§ The Delhi HC has dismissed the appeal of Champagne, Moet &
limiting the validity of registration certificate granted for a period of
five years (with option for renewal thereof), imprisonment on violation Chandon (manufacturer of wines) in a Trade Mark Case against a Delhi
firm selling meat products under the same name by upholding that
of the provisions, etc
though the marks were identical, the products were different.
Other Updates § Indian court has no jurisdiction in an international arbitration petition
as the agreement provided that law governing the arbitration will be
§ A Bank cannot Loan for subscription of Indian Depository Receipts English law [Supreme Court in the case of Videocon Industries Ltd vs
(IDRs) or against security/collateral of IDRs - [RBI/2010-11/543 DBOD. Union of India]
Dir.BC. 96 /13.03.00/2010-11 dated May 25, 2011]
§ No case made out under the Negotiable Instrument Act if cheque was
§ Splitting of Minimum Wages for the purpose of PF contribution not issued for Security Deposit and not towards the discharge of any debt
permissible - Ministry of Labour & Employment or loan [Bombay HC]
10
13. § The HC can only interpret a notification, it cannot alter the same – § SKS Microfinance have challenged the special act passed by the Andhra
[Supreme Court in case involving Central Excise Act] Pradesh government to regulate micro finance institutions in the state
before the Supreme Court on the ground that micro finance sector falls
§ If an Act excludes a service from service tax then same cannot be under the central list and is not a state subject
imposed by virtue of any circular [Madras high court]
§ The Centre plans to introduce bill on Land Acquisition in the next
§ Mortgage suit cannot be referred for settlement through arbitration. session of Parliament
According to Apex court, all disputes are not capable of settlement
through arbitration; some by nature have to be adjudicated by courts § International Accounting Standards Board (IASB) wants full IFRS
[Supreme Court in the case of Booz Allen and Hamilton Inc. Vs. SBI adoption in India. Large companies may have to adopt IFRS from next
Home Finance Ltd. & Ors] financial year when new tax regime comes into effect.
§ A firm of architects or engineers is obliged to contribute to the § The government plans an umbrella law to tighten financial scrutiny and
Employees State Insurance Fund. The court held that it is not only a regulation of religious trusts and non-profit organisations.
place where “goods” are sold which comes within the meaning of the
word “shop”. A place where “services” are sold has also been legally § An inter-ministerial group on inflation has recommended allowing FDI
interpreted to be a “shop” [Delhi high court in the case of Consulting in multi-product retail as one of the two steps to tame rising prices
Engineering Services (India) Ltd vs ESI Corporation].
§ DIPP has issued a Discussion Paper on Utility Models wherein it
§ The application praying for withdrawal of the withdrawal application in
examines the viability of introducing the same in IPR regime. Utility
a court is maintainable [Supreme court]
models are a framework for providing limited protection to those
innovations which may not meet the standards of the Patents Act and
§ Unless a different intention appears from the terms of contract, in case yet are commercially exploitable and socially relevant.
of the imposition or increase in the tax after the making of a contract,
the party shall be entitled to be paid such tax or such increase. The § Housing ministry has prepared the Model Residential Tenancy Act,
decision was rendered in the context of service tax on rent [Delhi High 2011 that is intended to replace archaic rent control legislations that
court] capped rentals, resulting in landlords getting a pittance for properties
in prime localities in metros.
News Snippet
§ DEPB scheme may not get extension – Commerce Ministry
11
14. Recent News in Transactions that made Headlines § Aditya Birla Group bought Swedish pulp maker Domsjo Fabriker for
$340 million signalling intent to grow the fibre business globally
§ Adani Buys Coal Port in Australia for $2 b
§ The Finance Ministry and regulators will change the rules to give
§ Bombay High Court had asked Jet Airways to pay 478 crore to Sahara Sovereign wealth funds floated by governments of rich countries more
India within two weeks as dues for the takeover of Air Sahara headroom, when they buy shares in listed Indian companies. It is
proposed that SWFs belonging to countries that have signed treaties or
§ Facebook and Google Inc are separately considering a tie-up with agreements with India should be allowed to buy up to 20% shares of a
Skype after the web video conferencing service delayed its IPO listed company, without making an open offer to existing shareholders.
§ UK-based Serco Group is in talks with Blackstone to acquire a
controlling stake in India’s largest unlisted BPO, Intelenet Global
Services
§ Oracle Corp, the world’s second biggest software maker, is in early-
stage discussions with potential bidders and investors about a possible
sale of its software services unit
§ Morgan Stanley, Isolux Corsan to invest $400 mn in India JV
§ Global investment fund T. Rowe Price, which acquired a strategic 26%
stake in UTI Asset Management Company (UTI AMC) last year, has
threatened to exit the venture, complaining of government
interference in the appointment of its chairman
Errata - Please ignore the impact of our first update in the ‘May’ missive
§ Pension Fund Regulatory and Development Authority (PFRDA) had wherein we have stated that even foreign directors would need to obtain
staked a claim to the pension schemes of insurance companies, setting PAN in view of General Circular 11/2011 dated April 7th, 2011. The correct
the stage for a turf war with IRDA, the insurance regulator. The matter interpretation is that only Indian nationals are supposed to mention the
has been referred to the Financial Stability and Development Council, PAN and Foreign Directors have to register their passport number instead
the regulatory dispute settlement body. of PAN. We sincerely regret the error and inconvenience caused to you
12