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Showing posts from May, 2014

Prior Written Permission Of RBI Mandatory In Cases Of Acquisition/ Merger/ Amalgamation/ Transfer Of Control Of All NBFC’s

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Reserve Bank of India (“RBI”) vide its notification dated May 26th 2014, has provided that, all NBFC’s has to obtain prior approval of RBI in case of acquisition / merger/ amalgamation/ transfer of control of NBFC’s.
In this connection, RBI vide notification DNBS (PD) C.C. No. 160/03.10.001./2009 – 10 dated September 17th, 2009, mandated the requirement of prior approval only in such cases, wherein the acquisition / transfer of control of deposit taking NBFC’s were involved.

Taxation Aspect Under Employees Stock Option Plans (ESOPs)

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Another important aspect that have a direct bearing on the issuance of Stock Options by the Companies is the taxability in the hands of Employees.Tax implications are different, both at the time of allotment of the shares pursuant to exercise of options and at the time of sale of such shares by the employees.

Ms. Mohini Varshney
Assistant Vice President
+919971673332
mohini@indiacp.com A. At the time of allotment of shares under ESOPs, the benefit which accrue are taxed as perquisite in the hands of Employees.The value of benefit is the difference between the FMV on the date of exercise and Exercise price paid by the Employees.

Venture Capital Fund & Angel Fund Under SEBI (Alternate Investment Fund) Regulations 2012 Explained

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As per SEBI (Alternative Investment Funds) Regulations, 2012, 3 broad categories of funds have been classified to be registered under said regulations namely Category I, II, and III. Under Category I, there are further classification namely: Ms. Deepika Vijay Sawhney
Partner
++919818316936
deepika@indiacp.com (a) Venture Capital Fund(b) SME Fund(c) Social Venture Fund(d) Angel Fund

SEBI’s Directive for migration of Companies exclusively listed on Non-operational Stock Exchanges

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The Capital Market Regulator, SEBI with the intent to refurbish the regime of Indian Capital Market has decided to proceed with the compulsory de-recognition and exit of those Stock Exchanges that have not achieved the minimum turnover of Rs.1,000 crore (as directed by SEBI vide its Circular dated 30th May, 2012) at the end of the stipulated period, i.e. by 30th May,2014.
Ms. Anjali Aggarwal
Vice President
+919971673336
anjali@indiacp.com Accordingly, to redress the concerns of how to deal with the Companies exclusively listed on non-operational stock exchanges and with the primary intent to safeguard the interest of the public shareholders, SEBI vide its circular dated 22nd May, 2014 have given following options to such listed entities:

Jet and Etihad deal is finally ready to take off …..

Jet-Etihad deal which was announced a year back after the government allowed 49% Foreign Direct Investment (FDI) in Indian aviation companies has finally cleared all the regulatory hurdles in India and is ready to take off. The deal was announced last year in April when Abu Dhabi-basedEtihad Airways (hereinafter referred to as “Etihad”)entered into an Investment Agreement (IA) with Jet and its existing promoters to subscribe to 24% equity shares in Jet for USD 379 million (price per share of INR 754.74). Apart from the Investment Agreement, the following documents were also executed/drawn:-  Shareholders Agreement (SHA) between Jet, Etihad and existing promoters; Commercial Cooperation Agreement (CCA) between Jet and Etihad; Corporate Governance Code (Code).

Provisions relating to creation of Debenture Redemption Reserve stand changed

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In theCompanies (Share Capital and Debentures) Rules 2014, which was made available on the website of the official gazette on 3rd May 2014, MCA has changed the requirement of creating Debenture Redemption Reserves as opposed to what was mentioned in the final rules issued by it initially.

The text of relevant portion under both the rules are mentioned below:

Notified Rule:“18 (7) The company shall create a Debenture Redemption Reserve for the purpose of redemption of debentures, in accordance with the conditions given below-

Companies Act, 2013: Important Judgement of Hon'ble Bombay High Court

The Hon'ble Bombay High Court has made several important and interesting observations with respect to the Companies Act, 2013, recently on 8th May 2014, in the matter of Godrej Industries Limited.

The issue for consideration before the court was whether in view of the provisions of Section 110 of the Companies Act, 2013 and SEBI Circular dated 21st May 2013, a resolution for approval of a Scheme of Amalgamation can be passed by a majority of the equity shareholders casting their votes by postal ballot, which includes voting by electronic means, in complete substitution of an actual meeting. In other words, the issue considered by the Court was whether the 2013 Act, read with various circulars and notifications, has the effect of altogether eliminating the need for an actual meeting being convened. Along with this issue, the Hon’ble High Court also discussed several other matters such as the issue of effectiveness of the rules prescribed by the Ministry of Corporate Affairs (“MCA”…

Applicability of Companies Act, 2013 on Indian Subsidiary of Companies Incorporated Outside India

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The much awaited Companies Act, 2013 ('New Act') and Rules thereunder have finally been notified by the Ministry of Corporate Affairs, Government of India, to replace major parts of the Companies Act, 1956 ('Old  Act'). With the enactment of the New Act, the corporate legal environment in India has acquired a more stringent face. It demands few cumbersome compliances and creates ambiguity in certain areas but its virtues outweigh the problems it brings. As for foreign investors, the New Act has brought immense relief.

Mr. Pankaj Singla
Sr. Associate
+919971508320
pankaj@indiacp.com If a company incorporated outside India intends to carry on its business in India by incorporating a subsidiary company in the country, then naturally its subsidiary company will have to comply with the Indian company law in addition to other local laws. As per the Old as well as New Act, a private subsidiary of a public company is deemed as a public company and is therefore required to comply wi…

Brand Valuation of a Business

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Brand has come a long way from the time when it was first thought that the brand was just another word for Logo. It is widely appreciated that brand is one of the most valuable assets an organization owns. This is because of the economic impact that brands have. Brand influence the choices of customers, employees, investors and government authorities. Mr. Chander Sawhney
Vice President
+919810557353
chander@indiacp.com NEED OF BRAND VALUATION A brand can be valued anytime and for many reasons, that includes- Brand strategy, Financial Reporting, Mergers and Acquisitions, value reporting, licensing, legal transaction, accounting, strategic planning, management information, taxation planning and compliance, liquidation.

Consolidated FDI Policy, 2014

The Department of Industrial Policy and Promotion (“DIPP”), Government of India has unveiled the much awaited policy on Foreign Direct Investment on 17.04.2014 (“Consolidated FDI Policy”). This policy supersedes all earlierpolicies, circulars, press notes issued on FDI by DIPP and will remain in force until superseded.
The Consolidate FDI policy is more of a compilation of circulars issued by Reserve Bank of India and press notes issued by DIPP during the last year. The key changes brought by new FDI policy are as follow: