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Attention of Authorised Dealer Category – I (AD Category – I) banks is invited to the A.P. (DIR Series) Circular No. 44 dated March 29, 2010 in terms of which Indian companies were allowed to buyback their Foreign Currency Convertible Bonds (FCCBs) under the approval route, up to June 30, 2010, subject to the issuers complying with all the terms and conditions of buyback/ prepayment of FCCBs.
Praxair Pacific Limited (PPL ), a company incorporated in Mauritius, proposes to transfer its 74% equity stake in Jindal Praxair Oxygen Company Private Limited (JPOCPL) to its wholly owned subsidiary in India, Praxair India Private Limited (Praxair India). The consideration for the proposed transfer is stated to be determined on the basis of cost, unless a higher consideration is required under the pricing guidelines prescribed by the Reserve Bank of India as applicable for transfer of shares.
Reliance Communications Infrastructure Ltd. (“RCom”) transferred shares of Reliance Infocomm Ltd. (RIL) worth INR. 50 crores at face value (INR.1) to one of the promoters (market value of shares being INR. 53.7).As per the promoter, the shares were not transferred but were pledged against a loan of INR 50 crores advanced to RCom.
The National Company Law Tribunal (NCLT) was expected to take over the role of the High Court (in dealing with company law matters such as sanctioning of schemes of arrangement, ordering winding up of companies, dealing with petitions for oppression and mismanagement and the like), the Company Law Board (CLB) and the Board of Industrial and Financial Reconstruction (BIFR) for speedy disposal of aforesaid matters and avoid multiplicity of litigation before various fora.
Attention of Authorised Dealer Category – I banks is invited to paragraph 5 (i) of A.P. (DIR Series) Circular No.24 dated December 30, 2009 wherein it was stipulated that the Annual Activity Certificates (AACs) as at the end of March 31, shall be submitted by the Branch Office / Liaison Office (BO/ LO), on or before April 30 every year, to the designated AD Category-I bank and a copy to the Directorate General of Income Tax (International Taxation), New Delhi.
The Finance Bill 2010, introduced provisions for conversion of private companies / unlisted companies into LLP along with conditions for tax neutrality of such conversions. One of the conditions for tax neutrality is that the total sales, turnover or gross receipts in any of the three years preceding the conversion does not exceed INR 6 mn. Consequential amendments were also made to various sections in the Income-tax Act 1961 (ITA).
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has recently pronounced its ruling on an appeal originating from a transfer pricing adjustment imposed on 3 Global Services Private Limited (“assessee”). The assessee operates in the voice based customer care segment within the IT-enabled services (ITeS) industry. During financial year 2003-04, the assessee rendered services to its associated enterprises (“AEs”).
This judgment emphasizes the fact that total amount of transfer pricing adjustment cannot exceed the absolute amount of revenue realized by the associated enterprise from third parties and idle capacity adjustment should be allowed to the taxpayer to improve the comparability analysis.
Please refer to our Circular DBOD.Dir.(Exp).BC.No.94/04.02.001/2009-10 dated April 23, 2010 extending the scheme of interest subvention of 2 percentage points from April 1, 2010 to March 31, 2011 on pre and post-shipment rupee export credit for four employment oriented export sectors viz. Handicrafts, Carpets, Handlooms and Small & Medium Enterprises (SME). Banks were further advised vide our circular DBOD.Dir.(Exp).BC.No.115/04.02.01/2009-10 dated June 29, 2010 that with the change over to the Base Rate System, the interest rates applicable for all tenors of rupee export credit advances with effect from July 1, 2010 will be at or above Base Rate in respect of all fresh / renewed advances. Accordingly, banks may reduce the interest rate chargeable to the exporters as per Base Rate system in the above mentioned sectors eligible for export credit subvention by the amount of subvention available subject to a floor rate of 7%.
The Ministry of Corporate Affairs, Government of India released CORPORATE GOVERNANCE VOLUNTARY GUIDELINES 2009 on December 21, 2009. The preamble to Guidelines states that These guidelines provide for a set of good practices which may be voluntarily adopted by the Public companies. Private companies, particularly the bigger ones, may also like to adopt these guidelines.
