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Showing posts from June, 2012

SEBI Board Meeting Decisions

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SEBI, at its Board Meeting held on June 26, 2012 has taken certain important decisions. The gist of the same is given herein below:
1. Platform for E-Voting by Shareholders of Listed Entities Ms. Anjali Aggrawal
Vice President
+919971673336
anjali@indiacp.com Top 500 listed companies at BSE and NSE based on market capitalization basis, have to now mandatorily provide for e-voting facilities in respect of those businesses to be transacted through postal ballot.
2. Manner of dealing with Audit Reports filed by listed entities In order to enhance the quality of financial reporting done by listed entities, it has been decided to put in place, a mechanism to process qualified annual audit reports filed by the listed entities It has been, inter-alia, decided that:

Open Offer Escrow Account under SEBI (SAST) Regulations, 2011

Meaning and Purpose: Escrow Account means a bank account which is required to be opened by an acquirer who proposes to make public announcement of offer in pursuance of regulation 3, 4, 5 and 6 of SEBI (SAST) Regulations, 2011. The Regulations have made detailed provisions regarding the Escrow Account. These provisions are contained in regulation 17 of SEBI (SAST) Regulations, 2011. Regulation 17(1) of SEBI (SAST) Regulations, 2011 provides that “Not later than two working days prior to the date of the detailed public statement of open offer for acquiring shares, the acquirer shall create an escrow account towards security for performance of his obligations under these regulations, and deposit in escrow account such aggregate amount as specified. The purpose of these provisions is to ensure that the acquirer has sufficient funds to pay the consideration under the offer and he has secured sufficient financial arrangement.
I. Timing of opening of Escrow Account: [Regulation 17(1)] The A…

Competing Offers under SEBI (SAST) Regulations, 2011

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The term Competing Offers refers to an offer given by any other person (Competitor Acquirer) after an offer has already been given by an acquirer to the shareholders of the Target Company to acquire the shares held by them. 
E.g. If ‘A’ (Acquirer) has already given an Open Offer in terms of SEBI (SAST) Regulations, 2011 to the shareholders of X Ltd. (Target Company) and subsequently during the relevant period, B (any other person) also gives the similar offer to the shareholders of the Target Company, then offer given by B shall be termed as ‘Competing Offer’ in terms of these regulations. Legal Provision Regulation 20 of SEBI (SAST) Regulations, 2011 deals with the concept of Competing Offer. As per regulation 20 (1), Upon a public announcement of an Open Offer for acquiring shares of a Target Company being made, any person, other than the acquirer who has made such public announcement, shall be entitled to make a public announcement of an Open Offer within fifteen working days of the d…

Start a Biz in India: Online Retailing

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Do you want to own an online Shop? If yes, then, go ahead with starting online business in India. These days’ people are so busy in their lives, that they don’t have time to go out for shopping daily needs. Online businesses have an advantage over businesses in the real world. They all have 13 inch monitors as our windows to the customer. The idea is to start an online daily needs store like online Big Bazaar including grocery products, bathing products, etc.

Advantages of doing Business Online in India Mr. Manoj Kumar
Vice President
+919910688433
manoj@indiacp.com Costs: One of the biggest advantages of doing business online is the savings that can be achieved by both consumers and businesses. Reducing gas consumption, paper use and employee time are just some of the cost-saving benefits e-commerce provides. Maintaining websites is getting less expensive with tools available that anyone with a computer can easily learn to use.

LEGAL UPDATES: SEBI Clarification in the matter of Ambattur Enterprises Limited

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Facts: Ambattur Enterprises Limited a company listed at Madras Stock Exchange filed an appeal with SAT against the SEBI order of rejecting the Exemption Application filed by the Company claiming exemption from provisions of Regulations 8(1)(b), 27(3)(d) of SEBI (Delisting of Equity Shares)  Regulations,  2009. Hon’ble SAT set aside the impugned order passed by the Board and remitted the case to the Board for passing a fresh order in accordance with law giving reasons in support of its conclusions.
Company filed Exemption Application on the following grounds: NIL trading activity since 1995 at MSE (the only Exchange where the Company is listed).Inability of the promoters to off load their shareholding to comply with the requirement of Clause 40A of the listing agreement.The public shareholders held 17.66% of the capital being only 32 in number.

PENALTIES IN LLP

No. Title Section Provision Penalty for Non - Compliances 1. No. of Designated Partners

7(1) Every Limited Liability Partnership shall have at least two designated partners who are individuals and at least one of them shall be a resident in India. Provided that in case of a Limited Liability Partnership in which all the partners are bodies corporate or in which one or more partners are individuals and bodies corporate, at least two individuals who are partners of such limited liability partnership or nominees of such bodies corporate shall act as designated partners. Explanation.—For the purposes of this section, the term “resident in India” means a person who has stayed in India for a period of not less than one hundred and eighty-two days during the immediately preceding one year. The Limited Liability Partnership and its every partner shall be punishable with fine which shall not be less than Rs 10000 but which may extend to Rs 5,00,000. 2. Consent of Designated P…

Voluntary Open Offer

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The Concept of Voluntary Open Offer was not unknown and in the past there are number of Voluntary Open Offers, but there were no separate provisions governing the Voluntary Open Offers in SEBI (SAST) Regulations, 1997. However the New SEBI Takeover Regulations i.e. SEBI (SAST) Regulations, 2011 specifically deals with the Voluntary Open Offer
Voluntary Open Offer” means Open Offer given by the acquirer voluntarily without triggering the mandatory Open Offer obligations as envisaged under SEBI (SAST) Regulations, 2011. Generally, the purpose of giving Voluntary Open Offer is to consolidate the shareholding.

Location Based Incentives: Doing Business in Rajasthan

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A. The Rajasthan Investment Promotion Scheme 2010 Applicability: The Scheme offered by the state government, except for ineligible enterprises, is applicable to New Enterprises, Existing Enterprise making investments for Modernization /Expansion/ Diversification, Sick industrial enterprise for its revival and Enterprise which has set up Project for Common Social Good as defined under the Scheme; however subject to the condition that the Enterprise shall commence commercial production or operation during the operative period of the Scheme and meet conditions of minimum investment and minimum direct employment. Validity: The Scheme has come into effect from 25.08.2010 and shall remain in force up to 31st March, 2018.
Highlights of the Incentive: Mr. Manoj Kumar
Vice President
+919910688433
manoj@indiacp.com 1. Investment Subsidy Employment Generation Subsidy: Under the scheme, Subsidy consisting of Investment Subsidy and Employment Generation Subsidy shall be allowed for a period of seven
yea…

ZOOM LENS: SAT order in the matter of Nikhil Mansukhani (MAN Industries (India) Limited)

Case Details:               ZOOM LENS of SAT order in the matter of Nikhil Mansukhani (MAN Industries (India) Limited)
Target Company:         MAN Industries (India) Limited Acquirers:                   Mr. Nikhil Mansukhani Industry:                      Steel –Tubes and Pipes Merchant Banker:        N.A Case Abstract: Target Company:       MAN Industries (India) Limited (MIIL) was incorporated on May 19, 1988 with a project to manufacture Aluminum Extrusions. The main business line of the Company includes manufacturing & coating of Large Diameter Carbon steel pipes, Infrastructure, Realty & Trading. The Company is listed on National Stock Exchange of India.(NSE)

ESOP Valuation

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Mr. Chander Sawhney
Vice President
+9810557353
chander@indiacp.com ESOP (Employee Stock Option Plan) is a plan through which a company awards Stock Options to the employees based on their performance. An employee stock option is a call option meaning that under an ESOP, the employees have the right and not an obligation to buy the shares of the company on a predetermined date at a predetermined price. The objective of ESOP is to motivate the employees to perform better and improve shareholders' value. Apart from giving financial gains to the employees, ESOP also creates a sense of belonging and ownership amongst theemployees. The Accounting Valuation is needed for working out the Employee Compensation Cost at the time of ESOP Grants itself which is apportioned over the vesting period of ESOP.

Introduction to Delisting.in

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SEBI in the year 2002 constituted a committee on delisting of shares to inter-alia examine and review the conditions for delisting of securities of companies listed on recognized stock exchanges and suggest norms and procedures in connection therewith. The Report of the Committee was considered and accepted by SEBI Board. Pursuant to the same, SEBI vide Circular SMD/Policy/CIR – 7/ 2003 dated February 17, 2003 issued the SEBI (Delisting of Securities) Guidelines, 2003. Later in the year 2006 SEBI circulated the concept paper on new regulations which were finally published on 10th June, 2009 as SEBI (Delisting of Equity Shares) Regulations, 2009.
Ms. Mohini Varshney
Assistant Vice President
+919971673332
mohini@indiacp.com The salient features of the said new Regulations are: Public Shareholders to be given an exit option if the company or its promoters propose to delist its securities from all the stock exchanges on which they were listed. However, no exit opportunity was required to be…

FDI In Real Estate Sector

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FDI in India is prohibited in Real Estate Business. However for Construction Development, FDI is 100% permitted under automatic route without any approval. Construction Development includes townships, housing, built up Infrastructure and other construction development projects (which would include, but not be restricted to, housing commercial premises, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level Infrastructure).

Mr. Manoj Kumar
Vice President
+919910688433
manoj@indiacp.com The aforesaid investment for construction development is subject to the following conditions:
1. Minimum area to be developed under each project would be as under In case of development of serviced housing plots, a minimum land area of 10 hectaresIn case of construction-development projects, a minimum built-up area of 50,000 sq. mtsIn case of a combination project, any one of the above two conditions would suffice

Foreign investment in a company

As the world turned to a global village, India leaped ahead of its Peer Countries due to its several investment opportunities, huge growth potential and favorable business environment and became a hub of Foreign Investment. The steady growth of foreign investment in the Country since the past few years has become one of the pivotal factors in determining the pace of growth of Indian Economy. The foreign Investment in India is not only a growth driver for India Inc. but it also plays a vital role in granting confidence and trustworthiness to the present as well as potential stakeholders of the organization besides earning International repute and recognition for the country. Infusion of foreign funds in the veins of Indian Economy has largely stimulated the growth of Indian Economy and with the government further liberalizing and streamlining the Foreign Investment policies and procedures, is hopefully supposed to play a crucial role even for the times to come.
DO READ OUR ARTICLE:
Vent…

CONTRIBUTION IN LLP

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Contribution as per the lexicon interpretation means “Part or Share”. In reference to LLP, contribution can be termed as, what a partner is contributing towards the Limited Liability Partnership for running of his business. For ease of understanding, what Share Capital is in case of Company, is Contribution in case Limited Liability Partnership. Therefore, in case of LLP, the ownership will be judged on the basis of contribution by the partners in the LLP.

Mr. Manoj Kumar
Vice President
+919910688433
manoj@indiacp.com Is it necessary to contribute for a Partner?
No, as per LLP Act 2008 Contribution is not a pre requisite for formation of a Limited Liability Partnership or for being a Partner in any Limited Liability Partnership. Under the Act, organizational flexibility has been offered to the Partners through LLP Agreement wherein the Partners can decide the amount and form of Contribution as per their suitability. The LLP Agreement must specify the contribution intended to be paid by a…