Small Enterprises Exemption – Pursuant to its notification dated March 4, 2011, the MCA had exempted the acquisition of enterprises whose turnover is less than INR 7.5 billion (approx. USD 167 million) or whose assets value is less than Rs. 250 Crore from the definition of combination as defined under Section 5 of the Act. However, there was no clarity on whether the asset value / turnover threshold should be calculated on a consolidated world-wide basis, or on a standalone basis for the target, or be limited to asset value / turnover in India .
The MCA has now clarified that for the purpose of availing of the aforesaid exemption, the asset value / turnover of the target in India should be considered. Therefore, in the event the turnover or the value of the assets of the target in India is less than the above prescribed threshold, the transactions involving the acquisition of such target would not fall under the definition of ‘combination’ and therefore, no filing would have to be made with the CCI in that regard.
[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY
PART II, SECTION 3, SUB-SECTION (ii),I
GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS
New Delhi, the 27th May, 2011
S.O. In the notification of the Government of India in the Ministry of Corporate Affairs vide GSR No.482 (E) , dated the 4th March, 2011, published at page 2 of the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii), dated the 4th March, 2011, namely:-