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Thursday, December 20, 2007

24% investment cap on SSIs removed - FDI

Dear All,

24% investment cap on SSIs removed - FDI

As per existing provisions, FDI is allowed upto 24% of capital in SSI units, if SSI units wants to take additional FDI over and above 24%, then it needs to sacrifice SSI status and can go to upto the sectoral cap as specified under FEMA Regulations for that particular business/industry.

As per recent announcement by Commerce Ministry, 24% of Investment cap is removed for SSI. So that now SSI can go upto sectoral cap as specified under FEMA regulation under automatic route without losing their status as SSI..

Extract from BS – 19-12-2007

In a development, which is likely to increase participation of foreign players and big companies in small-scale industries (SSIs), the government has formally announced doing away with the 24 per cent investment cap in the sector.

However, industry sources remained sceptical about the move as cheap imports from countries like China has made production of many goods exclusively reserved for the sector unviable.

To make this move effective, the government has taken a decision to repeal a restrictive clause, which limits equity participation in SSIs to 24 per cent.

Announcing the development, Commerce Minister Kamal Nath said: "This will lead to technology infusion in the sector as more and more foreign players and large companies set up their own SSI units."

The government notification will enable big industrial houses, both from the country and abroad, to set up SSI units in the sector, which has been restricted because of a limit of 24 per cent equity participation by other companies.

An industrial unit is classified as an SSI when the investments is within Rs 5 crore. At present, there are 114 goods that are exclusively reserved for the sector.

"The doing away of the investment limit means that the de-reservation process of SSIs, which started in 1967, is complete. Thus large corporate houses will be able to set up SSI units in both reserved and unreserved products," said Anil Bhardwaj, secretary general of Federation of Indian Micro and Small and Medium Enterprises.

But he also added that this move is inconsequential in terms of effective benefits for the SSI sector: "Cheap imports have made production of many reserved items unviable. Indian SSIs are not able to compete with international companies in the domestic market."

Reserved items in the sector include electric tea and coffee maker as well as pens, which are being imported in large quantities.
Thanks & Regards
Alagar
Karvy
Moble: 919884731993

Wednesday, December 19, 2007

Interesting Judgement..Whether CLB is a court under Contempt of Courts Act ?

Important Jugement by High court answering following queries..

Whether CLB is a court under Contempt of Courts Act ?
Whether CLB is subordinate court to High Court under Contempt of Courts Act?
Whether High Court can take suo-moto cognizance of contempt of CLB without any reference made to it?

Read more it ....http://www.taxmann.net/DispCitation/ShowPages.aspx?fn=http://www.taxmann.net/WhatnewNews/[2007]080SCL0405(AP).htm&ctid=-333

Saturday, December 15, 2007

FEMA- FDI - Refund of Advance Remittances

Dear All,


Foreign Direct Investments (FDI) – Issue of shares under FDI and refund of advance remittances

The RBI vide AP DIR Circular No 20 dated 14th December 2007 has made the following changes in the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 in connection of refund of consideration from a person resident outside India towards investment in equity shares / compulsorily convertible preference shares and compulsorily convertible debentures (equity instruments).

As per existing provisions of FEM (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 a person resident outside India can purchase equity shares / compulsorily convertible preference shares and compulsorily convertible debentures (equity instruments) issued by an Indian company under the FDI policy and the Indian company is allowed to receive the amount of consideration in advance towards issue of such equity instruments, subject to the terms and conditions laid down therein. The Indian company is required to report the receipt of the amount of consideration within thirty days of receipt of the inward remittance or the date of debit of the NRE / FCNR (B) account of the foreign investor with a AD category – I bank in India, to the Regional Office concerned of the Reserve Bank, in accordance with the prescribed procedure. The money received from foreign Investor can be kept as share application pending for allotment and allotment of shares can be done at any point of time before 7 years of receipt so as avoid transfer such money to IEPF.

The matter has been reviewed in consultation with the Government of India and it has been decided that, with effect from November 29, 2007, the equity instruments should be issued within 180 days of the receipt of the inward remittance. In case, the equity instruments are not issued within 180 days from the date of receipt of the inward remittance or date of debit to the NRE/FCNR (B) account, the amount of consideration so received should be refunded immediately to the non-resident investor by outward remittance through normal banking channels or by credit to the NRE/FCNR (B) account, as the case may be. The AD Category – I banks may allow such outward remittances after satisfying themselves with the bonafides of the transactions and that no part of the remittance represents interest on the funds received as advance. Non-compliance with the above provision would be reckoned as a contravention under FEMA and could attract penal provisions.

In exceptional cases, refund of the amount of consideration outstanding beyond a period of 180 days from the date of receipt may be considered by the Reserve Bank on the merits of the case. Accordingly, AD Category – I banks may apply to the Regional Office concerned of Foreign Exchange Department of the Reserve Bank for refund of such advance.

In all cases where, as on November 28, 2007, 180 days have elapsed since receipt of funds and the equity instruments have not been issued, the companies are required to approach the Foreign Exchange Department of the Regional Office concerned of the Reserve Bank through their AD Category - I bank with a definite action plan either for allotment of equity instruments or for refund of the advance, with full details, for specific approval.

It is clarified that the advances against equity instruments may be received only where the FDI is allowed under the automatic route.

For more info http://rbidocs.rbi.org.in/rdocs/Notification/PDFs/82142.pdf

Thanks & Regards

Alagar
Karvy Investor Services Limited
Moble: 919884731993
for more information about cschennai visit to
http://groups.google.com/group/cschennai

Friday, December 14, 2007

CRLP last minute Guide, full procedure on Mergers & Amalgamations

The heat is on for Company Secretary Exams.

Yes, Thanks to CAClubindia for this, very exhaustive procedure of Mergers, Amalgamation, Demerger, etc....as Companies Act, 1956 doesn't differentiate all these terms, the procedures for all are same.

Find in http://thisisvj.googlepages.com/TooExhaustiveMergersAmalgamationsPro.doc

This may help you to write CRLP exams.

Nice Presentation of Amalgamation Procedure by Mr. Sunil. This is the standard answer that you can write for most of the Corporate Restructuring including Mergers, Demergers, Amalgamations, Slump Sale, etc... as the Companies Act considers all as same. http://thisisvj.googlepages.com/AMALGAMATIONProcedure.pdf

Supreme Court on Takeover Valuation may be one of the most expected CS Final Question this time, Credits to the Author http://thisisvj.googlepages.com/SCTakeoverValuation.pdf

Enjoy Passin.... Keep Communicatin the joyous Results.

Enjoy with CS.

Monday, December 10, 2007

SEBI - CM & WTM - ICSI also asked to recommend

It seems to be raining in great news folks...

Institute of Company Secretaries of India (ICSI) has been asked by Ministry of Finance (Dept. of Eco. Affairs,Capital market Division ),to recommend name of its members who will be considered for the post of Chairman and Whole time members of SEBI..

Read more at....
http://www.thehindubusinessline.com/2007/12/08/stories/2007120852991000.htm

Saturday, December 8, 2007

IDRA-Monthly Production Returns to DIPP

Credits to Dr. KS Ravichandran, PCS, Coimbatore

The industrial units covered under the Industries (Development & Regulation) Act, 1951, are hereby informed that the Centre for Monitoring Indian Economy (CMIE) had been collecting monthly production data on behalf of the Department of Industrial Policy and Promotion (DIPP) as per the agreement signed between DIPP and CMIE. The term of this agreement has come to an end in November, 2007. Therefore, the concerned industrial units are requested to henceforth, send the Monthly Production Return directly to the Director, Industrial Statistics Unit, DIPP, Udyog Bhawan, New Delhi-110 107 by the 10th of every month by post /Fax (No.011-23063564)/e-mail (ipp_dir-stat@nic.in). The performa of the Monthly Production Return (MPR) can be downloaded from the hyperlink “Formsavailable in the main page of the website: www.dipp.nic.in.

Also refer http://dipp.nic.in/isu/NoticeMonthlyProduction_Report.doc

FEMA - Transfer of Shares (A Compendium)

Note on Provisions of Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations, 2000 regarding transfer of shares of an Indian Company

Ready hand Referencer & Compendium in http://thisisvj.googlepages.com/TransferofSharesFEMA.doc

  1. Automatic route means there is no approval required for transfer of shares of an Indian Company.
  2. Automatic route with FC-TRS means where the transfer of shares from resident to non resident and vice versa, before effecting the such transfer in the Company books, the transferee / transferor shall file form FC –TRS with concerned AD and get approval from them.

Thanks & Regards

Alagar

Karvy Investor Services Limited
09884731993

Friday, December 7, 2007

Great news Buddies..CS Pay Skyrockets...

We present the News-makers here... Influencing the history of ICSI. Yes, Company Secretaries can compete with the best pays too. Yes, the Base Price for Fresh Company Secretaries has been set now.

Scanned Copy http://thisisvj.googlepages.com/CSScan.pdf

Its a great news & it can be the greatest if you view it here...

As per the article published in "Business Standard" the company secretaries pay package has been raised upto 60% comparing to last year.

"So student members complete the course as soon as possible and continue your pursuits further to achieve professional excellence ( the motto of our institute)..."

Regards

Manager
Corporation Finance Department
Division of Issues and Listing
Securities and Exchange Board of India
(: +91-22 26449343
7: +91-22 26449016
Email: anandr@sebi.gov.in;anandracs@yahoo.co.in;
Mobile: +91 -99206 55285.

Read more at .....http://www.business-standard.com/common/storypage.php?autono=306801&leftnm=6&subLeft=0&chkFlg

Thursday, December 6, 2007

The Government Securities Act, 2006 will come into force W.e.f. 01-12-07

The Government of India has notified December 1, 2007 as the appointed date on which the Government Securities Act, 2006 will come into force. Government Securities Regulations, 2007 will also come into effect from the same date, i.e., December 1, 2007.

It may be recalled that with a view to consolidating and amending the law relating to Government securities and its management by the Reserve Bank of India, the Parliament had enacted the Government Securities Act, 2006 (the Act). The Act received the assent of President of India on August 30, 2006 and was published in the Gazette of India, Extraordinary, Part II – Section I on August 31, 2006 for general information.

The Act applies to Government securities created and issued, whether before or after the commencement of the Act, by the Central or a State Government. Accordingly, the Public Debt Act, 1944 will cease to apply to the Government securities. The Indian Securities Act, 1920 has been repealed.

The new Act and Regulations would facilitate widening and deepening of the Government securities market and its more effective regulation by the Reserve Bank in various ways, such as:

(i) Stripping or reconstitution of Government securities;

(ii) Legal recognition of beneficial ownership of the investors in Government securities through the Constituents' Subsidiary General Ledger (CSGL);

(iii) Statutory backing for the Reserve Bank's power to debar Subsidiary General Ledger (SGL) account holders from trading, either temporarily or permanently, for misuse of SGL account facility;

(iv) Facility of pledge or hypothecation or lien of Government securities for availing of loan;

(v) Extension of nomination facility to hold the securities or receive the amount thereof in the event of death of the holder;

(vi) Recognition of title to Government security of the deceased holder on the basis of documents other than succession certificate such as will executed by the deceased holder, registered deed of family settlement, gift deed, deed of partition, etc., as prescribed by the Reserve Bank of India.

(vii) Recognition of mother as the guardian of the minor for the purpose of holding Government Securities; and

(viii) Statutory powers to the Reserve Bank to call for information, cause inspection and issue directions in relation to Government securities


For relevant Act please go to http://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=17582

Thanks & Regards
Alagar
Karvy Investor Services Limited
Chennai - 09884731993

Tuesday, December 4, 2007

SEBI amends DIP Guidelines : Rating requirements for Corporate Bonds simplified

In order to reduce the cost of of issuance of debt securities and for developing the debt market by affording the issuer with the desired flexibility of structuring of Debt Issues, SEBI has amended provisions of DIP guidelines relating to Debt instruments. Now,rating of only one CRA is required and bonds below investment grade can also be issued..

read more at ...http://www.sebi.gov.in/Index.jsp?contentDisp=WhatsNewScroll&FilePath=/press/2007/2007312.html

Friday, November 30, 2007

Amendments in SEBI DIP Guidelines

Dear All,

The SEBI has made certain amendments in SEBI (Disclosure and Investor Protection) Guidelines, 2000 vide Circular No. SEBI/CFD/DIL/DIP/28/2007/29/11 dated 29 th November 2007 (Today). The gist of amendments is;

1. Introduction of Fast Track Issues (FTIs).

As per existing SEBI (DIP) Guidelines, if existing listed Company wants raise funds from the public either through rights issue or follow on public issue, it needs to comply with procedural formalities as in the case of Initial Public Offering (IPO). The SEBI has come out with Press Release relating FTIs, as it is felt that there is a need to enable well established and compliant listed companies to access Indian primary market in a time effective manner through follow-on public offerings and rights issues. Accordingly, it has been decided to enable listed companies satisfying certain specified requirements to make Fast Track Issues (FTIs).

The amendments made vide this circular to enable well established listed Companies to proceed with follow-on public offering / rights issue by filing a copy of the Red Herring Prospectus (in case of book built issue) / Prospectus (in case of fixed price issue) registered with the Registrar of Companies or the letter of offer filed with Designated Stock Exchange, as the case may be, with SEBI and stock exchanges. Such companies are not required to file draft offer document with SEBI and stock exchanges.

2. Amendments regarding Issue of Indian Depository receipts (IDRs).

As per existing provisions only QIP can apply in an IPO of IDRs. Now, vide this amendment it has been decided to allow all categories of investors to apply in IDR issues, subject to the condition that;

  • at least 50% of the issue being subscribed by QIBs, and
  • the balance being made available for subscription to other categories of investors at the discretion of the issuer, which shall be disclosed in the prospectus. Further, it has been decided to reduce the minimum application value in IDR from Rs. 2,00,000/- to Rs. 20,000/- and to carry out certain consequential amendments to SEBI (DIP) Guidelines pursuant to amendments to IDR rules by the Ministry of Corporate Affairs.

3. Quoting of PAN mandatory:

Presently, as per SEBI (DIP) Guidelines, all applicants in public and rights issues are required to disclose their PAN/GIR in the application form if they are making an application for a value exceeding Rs. 50,000/-. It has been decided to extend the requirement of quoting PAN in application forms to all applicants, irrespective of the application value.

4. Discount in issue price for retail investors / retail shareholders:

Presently, SEBI (DIP) Guidelines do not provide for issuance of shares at differential price to investors within the net public offer category. SEBI has been receiving requests to permit issuance of shares to retail individual investors / retail individual shareholders at a price lower than that being offered to other categories. It has now been decided to introduce a provision in SEBI (DIP) Guidelines, permitting companies making public issues to issue securities to retail individual investors / retail individual shareholders at a discounted price, provided that such discount does not exceed 10% of the price at which securities are issued to other categories of public.

5. Definition of "Retail individual shareholder" for listed companies:

Presently, listed companies making public issues can make reservation on competitive basis for its existing shareholders who, as on the record date, are holding shares worth up to Rs. 50,000/-. However, no limit has been set on the value of the application that can be made by such shareholders. It has now been decided to define the term "Retail Individual Shareholder" to mean a shareholder whose shareholding is of value not exceeding Rs. 1,00,000/- as on the day immediately preceding the record date, and who makes application or bids in a public issue for value not exceeding Rs 1,00,000/-.

6. Clarification on the term CEO / CFO:

SEBI (DIP) Guidelines requires all directors, CEO and CFO of the issuer company to certify that disclosures made in the offer document are true and correct. It is now clarified that the terms "CEO" and "CFO" in SEBI (DIP) Guidelines shall have the same meaning as assigned to them in clause 49 of the Equity Listing Agreement.

7. Deletion of the chapter on "Guidelines for Issue of Capital by Designated Financial Institutions (DFIs)":

SEBI had introduced separate guidelines in 1992 for primary issuances by DFIs, to place companies / corporations / institutions engaged mainly in financing of developmental activities and playing a catalytic role in the infrastructure development of the country on a different footing. compete on equal footing with private entities and it is felt that DFIs, as a concept, may have outlived its utility. It has therefore been decided to remove the special dispensations given to DFIs by deleting the chapter on "Guidelines for Issue of Capital by DFIs" from SEBI (DIP) Guidelines.

8. Monitoring of issue proceeds:

Presently, as per SEBI (DIP) Guidelines, every issuer making an issue of more than Rs. 500 crores is required to appoint a monitoring agency, which is required to file a monitoring report with SEBI for record purpose. It has been decided that this provision shall not apply to (i) issues by banks and public financial institutions and (ii) offers for sale. Further, it has been decided that the

monitoring agency shall henceforth be required to file the monitoring report with the issuer company and not with SEBI, so as to enable the company to place the report before its Audit committee.

9. Amendments to Guidelines for Preferential Issues:

It has been decided that listed companies intending to make preferential allotment shall be required to obtain PAN of each of the applicants of the preferential issue before making the preferential allotment.

10. Miscellaneous amendments:

· SEBI issues standard observations as a supplement to issue-specific observations on each and every draft offer document filed with SEBI. These standard observations are being rationalised / reviewed. Accordingly, it has been decided to amend SEBI (DIP) Guidelines to incorporate certain clauses from the standard observations, essentially those pertaining to confirmations, undertakings, documents, information, etc., to be submitted by the Lead Manager/s to the Issue while filing an offer document with SEBI. Lead Managers shall also be required to file as an annexure to the due diligence certificate, a detailed check list indicating compliance of each of the clauses of the relevant chapters of SEBI (DIP) Guidelines.

· SEBI (DIP) Guidelines contain certain provisions, which have become redundant or need to be aligned with other provisions of SEBI (DIP) Guidelines / the Companies Act, 1956 or in respect of which, there have been requests for exemption on regular basis. Consequently, it has been decided to fine-tune the guidelines by modifying such clauses.

Thanks & Regards
Alagar
Karvy Investor Services Limited

Wednesday, November 28, 2007

Corporate Governance Award (ICSI)

Yes,

The Corporate Governance Award 2007 by the Institute of Company Secretaries of India (ICSI) to Tata Consultancy Services (TCS), Kansai Nerolac Paints & Shri N Voghul of ICICI Bank.

Get the details in http://thisisvj.googlepages.com/CGAwardees2007AD.jpg

Thank you

CS Updatin...

See Yes -> Yes, ACS

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