India, UK strike 3.2 bn pound deal on energy, climate change

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The package encompasses 3.2 billion pounds of commercial agreements and initiatives to share technical, scientific, and financial and policy expertise.

Ahead of the Paris climate summit, India and Britain have agreed on a comprehensive package of collaboration on energy and climate change which includes commercial deals worth 3.2 billion pounds.

During Prime Minister Narendra Modi’s ongoing UK visit, the two countries reaffirmed the importance of addressing climate change and promoting secure, affordable and sustainable supplies of energy that will support economic growth, energy security and energy access.

“The UK and India’s partnership on energy is going from strength to strength. We share world-class expertise in research and innovation. The UK’s experience in green finance and technology in particular makes us well-placed to work together to promote secure, affordable and sustainable supplies of energy and address climate change,” said UK energy and climate change secretary Amber Rudd.

“The upcoming talks in Paris will be a crucial moment in the fight against climate change and I am pleased to be able to work closely with India to ensure that the deal we secure helps to keep the below 2 degree limit on global warming within reach,” she added.

The package encompasses 3.2 billion pounds of commercial agreements, joint research programmes and initiatives to share technical, scientific, and financial and policy expertise.

This is aimed at encouraging the research, development and eventual deployment of clean technology, renewables, gas and nuclear.

As part of the package, Britain also announced the UK Climate Investments joint venture with the Green Investment Bank. This will invest up to 200 million pounds in renewable energy and energy efficiency in India and Africa.

The two countries also agreed on the need for an ambitious and comprehensive global agreement to tackle climate change in Paris later this month and that the agreement should signal to investors and innovators the long term commitment of governments to clean and more sustainable economies.

Modi and his UK counterpart David Cameron also welcomed the completion of negotiations for a Nuclear Cooperation Agreement and the signing of a Memorandum of Understanding (MoU) related to closer civil nuclear collaboration between the UK and India.

 

Source: http://economictimes.indiatimes.com/articleshow/49768488.cms

 

Commerce ministry firming up Africa-focused export strategy

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The commerce department is firming up an export strategy focused on Africa, giving a new dimension to the government’s strategic push for ties with the continent that could offer a large market for Indian goods at a time of slowing global demand.

While India has offered a $10 billion credit line to Africa, the department has extended the benefits under the Merchandise Exports from India (MEIS) scheme to many goods headed for Africa to make the most of this credit. Senior government officials led by commerce minister Nirmala Sitharaman will next week apprise Parliament’s consultative committee on plans to address India’s continuously falling exports, with a focus on Africa and the country’s neighbours. The meeting is to be in held in Goa on November 6-7.

“Since the situation is not good globally, we have decided to focus on exports to Africa and our neighbouring countries. We can use our competitiveness in these markets to increase exports. We are working on an export strategy for next week’s meeting,” said a commerce department official, who did not wish to be named.
At the meeting the committee will also discuss Foreign Trade Policy (FTP) 2015-20 and its implications on exports, the official said. The steady decline in exports has triggered apprehensions that India may even miss last year’s exports figure of $310.5 billion. Merchandise exports fell nearly a quarter in September, the tenth straight month of decline, raising worries that shipments may fall short of last year’s levels.
The Directorate General of Foreign Trade (DGFT) has included exports of textiles and ready-made garments including cotton fabrics, both woven and knitted, and made-ups to the African countries under the MEIS. The industry, which has been grappling with falling exports, has approved of this strategy.

Following the revision, exports of value-added and labour intensive products such cotton dyed and printed fabrics, and made-ups, to African countries such as Mauritania, Mali, Niger, Benin, Angola, Senegal, Togo, Ghana, Kenya and Tanzania are expected to receive a huge boost. “This is a very positive step taken by the government and has come as a huge relief to the exporters of cotton textiles who are faced with declining exports,”Texprocil chairman RK Dalmia said in a statement.

SEBI cuts IPO paperwork drastically

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From December 1, companies filing for a public issue of securities (IPO/FPO and the like) have to come out with abridged prospectus containing all material and appropriate information on the issue to enable informed decision-making by investors.

Amending its public issue regulations, equities and commodities market regulator SEBI said the abridged prospectus should consist of five sheets of paper printed on both sides in A4 size booklet form.

SEBI has mandated that information given in tabular format should not be repeated in text format in the abridged prospectus. The abridged prospectus would also contain the application form in a manner by which tearing off the application form would not mutilate the prospectus, SEBI said.

Generic information not specific to the issuer shall be brought out in the form of a General Information Document, said SEBI.

Relaxed tax residency rules to help MNCs

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While Indian-incorporated firms (Indian companies) are taxed at 30% plus dividend distribution tax (DDT), non-resident (foreign) companies are taxed at 40% on Indian income without DDT.

Foreign companies with Indian shareholders won’t have to pay taxes here for their worldwide income unless they are managed from India on an everyday basis. If these foreign companies are managed from outside India, whether or not they are promoted by resident Indians, they will have to pay taxes in India only for the income they earn in the country.

This major relaxation is being built into the place of effective management (POEM) rules being finalised by the finance ministry, government sources told FE. The POEM concept that was included in the I-T Act early this fiscal had raised fears among many multinational companies with Indian promoters or major shareholders that New Delhi would lay claim to taxes on their incomes attributable to other geographies.

While Indian-incorporated firms (Indian companies) are taxed at 30% plus dividend distribution tax (DDT), non-resident (foreign) companies are taxed at 40% on Indian income without DDT. Although the tax rates on foreign companies are higher, the prospect of subjecting the worldwide income to taxation here could have potentially hit many MNCs with Indian stakeholders.

The proposed lenient POEM rule, analysts said, would give the likes of UK’s Jaguar Land Rover (which has the Indian parent Tata Motors) a chance to convince the Indian tax authorities that the UK firm’s commercial decisions are taken by the local management there and avoid paying taxes for the income in the UK and elsewhere in India.

Similarly, foreign subsidiaries of state-owned oil companies such as ONGC Videsh’s Imperial Energy incorporated in Cyprus and ONGC Nile Ganga doing oil exploration in Sudan, Syria and Venezuela can potentially show that their managerial and commercial decisions are ‘in substance’ made at the local level although OVL, the Indian holding company, is under the direct administrative control of the government of India. The same is true for HPCL’s Singapore subsidiary Prize Petroleum International.

“Putting a management in place is a shareholder decision, not a management decision. Promoters getting into any other role would amount to overstepping shareholder rights, going by the strict interpretation of law. The POEM as a principle must cover only management decisions,” said Rahul Garg, leader, direct tax, PwC India.

According to experts, seeking permission from an Indian parent on a decision taken by an overseas subsidiary to see if it is in line with the global policy of the parent may not ordinarily amount to the parent exercising management control, unlike the parent passing on a centrally taken decision to the foreign associate. However, where the senior management of foreign associates of Indian firms are based in India or have common board members based in India, the overseas entity may find it hard to prove that management decisions are taken from outside India. Also, foreign associates of Indian companies lacking skilled managerial personnel or do not assume business risks on its own, could have a tough time convincing the taxman in India that they are not Indian residents.

Prior to the Finance Act, 2015, a company was considered an Indian resident if its control and management were wholly in India throughout the financial year. Since some Indian companies sought to avoid resident status and taxes on their worldwide income by holding one or two board meetings outside India, the government changed the residence definition saying that any company, the ‘place of effective management’ of which is in India, would also be a resident company. Tax residence is a place from where key management and commercial decisions necessary for running the company are, in substance, made. According to experts, this OECD definition of tax residence relies on the substance of the organisation’s structure than its legal form. The government is bringing out clarifications as there is not much global guidance on the concept.

Points to note:

* Mere shareholder rights with Indians won’t result in resident status
* Only managerial decisions taken here will make foreign firms Indian residents and liable to pay tax for entire global income here
* Foreign firm has to prove management independence to avoid tax residence if board members are common with that of Indian ones.

Source: http://www.financialexpress.com/article/economy/relaxed-tax-residency-rules-to-help-mncs/156692/

 

Ease of doing business in India – Related Party Transactions

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Related party Transactions.

As part of its ongoing efforts to improve ease of doing business in the country, the Corporate Affairs Ministry has notified changes that further relax compliance requirements.

As another major step, the Companies Amendment Act, 2015 addresses “problems faced by large stakeholders who are related parties”.

In this new amendment, it replaces “special resolution with ordinary resolution for approval of related party transactions [Section 188] by non-related shareholders”.

Besides, related party transactions between holding companies and wholly owned subsidiaries have been exempted from the requirement of approval of non-related shareholders.

As per the amendment, the requirement of passing special resolution for approving certain related party transactions has been done away with. With this, certain related party transactions can now be approved through ‘ordinary resolution’ instead of ‘special resolution’.

Further, it has also been provided that for related party transactions between a holding company and its wholly owned subsidiary, no resolutions are required to be passed if the accounts of the holding and subsidiary company are consolidated and placed before the shareholders in a general meeting for approval.

ECB boost for India, world markets

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http://bsmedia.business-standard.com/_media/bs/img/article/2015-08/20/full/1440058499-7556.jpgThe Indian markets on Friday climbed to a two-month high after a rally in global equity markets in the wake of the European Central Bank (ECB) hinting at fresh stimulus measures. Most Asian markets ended up a little over one per cent, while Europe gained around two per cent.

The BSE exchange’s benchmark Sensex rose 183 points or 0.7 per cent to 27,470.8, the highest since August 20. This was its fourth straight weekly advance. The National Stock Exchange’s Nifty rose 0.5 per cent or 43.75 points to 8,295.45.

Experts said the markets could continue the upward trajectory as the Chinese central bank cut interest rates and the reserve ratio to give a boost to its economy. The announcement by People’s Bank of China, after the close of Indian markets, further buoyed the European and US futures markets.

“Both the ECB and China stimulus announcements are positive for the market, at least in the short term,” said U R Bhat, managing director, Dalton Capital Advisors. “However, these are artificial doses and when the central banks withdraw the stimulus there could be a lot of pain.”

The latest round of monetary easing, the sixth since November last year, comes as China’s growth rate for the September quarter dipped below seven per cent for the first time since the 2008 global financial crisis.

“The move by China might have a positive impact on the market in the near term. But, it indicates the extent of problem in the Chinese economy. On the margin, it is negative. One cannot rule out an increase in volatility, going ahead,” said Tirthankar Patnaik, India strategist, Mizuho Bank.

The stimulus packages by central banks in China and Europe might support stocks in the immediate term but the market remains vulnerable to correction, following the sharp gains made over recent weeks, say experts.

So far in October, the Sensex has gained five per cent, on the back of foreign flows of nearly $900 million. The index had declined nearly six per cent and one per cent in August and September, respectively.

“The next sets of (companies’) results are expected to be weak. The market could react negatively if there is earnings disappointment,” said Bhat.

ITC, which gained 2.8 per cent, was the best performing Sensex stock on Friday. Other major gainers were Axis Bank and GAIL. Bharti Airtel fell 3.4 per cent, the most among Sensex companies. Vedanta, Larsen & Toubro and Maruti Suzuki fell a little over two per cent each.

Foreign investors net-bought shares worth Rs 230 crore, while domestic institutions were net sellers by Rs 156 crore on Friday, provisional data showed.

The Indian markets on Friday climbed to a two-month high after a rally in global equity markets in the wake of the European Central Bank (ECB) hinting at fresh stimulus measures. Most Asian markets ended up a little over one per cent, while Europe gained around two per cent.

The BSE exchange’s benchmark Sensex rose 183 points or 0.7 per cent to 27,470.8, the highest since August 20. This was its fourth straight weekly advance. The National Stock Exchange’s Nifty rose 0.5 per cent or 43.75 points to 8,295.45.

Experts said the markets could continue the upward trajectory as the Chinese central bank cut interest rates and the reserve ratio to give a boost to its economy. The announcement by People’s Bank of China, after the close of Indian markets, further buoyed the European and US futures markets.

“Both the ECB and China stimulus announcements are positive for the market, at least in the short term,” said U R Bhat, managing director, Dalton Capital Advisors. “However, these are artificial doses and when the central banks withdraw the stimulus there could be a lot of pain.”

The latest round of monetary easing, the sixth since November last year, comes as China’s growth rate for the September quarter dipped below seven per cent for the first time since the 2008 global financial crisis.

“The move by China might have a positive impact on the market in the near term. But, it indicates the extent of problem in the Chinese economy. On the margin, it is negative. One cannot rule out an increase in volatility, going ahead,” said Tirthankar Patnaik, India strategist, Mizuho Bank.

The stimulus packages by central banks in China and Europe might support stocks in the immediate term but the market remains vulnerable to correction, following the sharp gains made over recent weeks, say experts.

So far in October, the Sensex has gained five per cent, on the back of foreign flows of nearly $900 million. The index had declined nearly six per cent and one per cent in August and September, respectively.

“The next sets of (companies’) results are expected to be weak. The market could react negatively if there is earnings disappointment,” said Bhat.

ITC, which gained 2.8 per cent, was the best performing Sensex stock on Friday. Other major gainers were Axis Bank and GAIL. Bharti Airtel fell 3.4 per cent, the most among Sensex companies. Vedanta, Larsen & Toubro and Maruti Suzuki fell a little over two per cent each.

Foreign investors net-bought shares worth Rs 230 crore, while domestic institutions were net sellers by Rs 156 crore on Friday, provisional data showed.

SEBI introduces uniform format of Listing Agreement for listed companies

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SEBI introduces uniform format of Listing Agreement for listed companies

Markets regulator SEBI today issued uniform listing agreement format incorporating the revised disclosure and regulatory requirements applicable for all listed entities.

The new listing regulations allow listed companies to seek shareholders’ approval for related party deals through ordinary resolutions.

Besides, SEBI’s provisions for listed entities have been aligned with those of the Companies Act, 2013.

CIRCULAR Note: The Securities and Exchange Board of India has issued a circular no. CIR/CFD/CMD/6/2015 dated 13th October, 2015 to provide a uniform format of the listing agreement for the listed companies. A listing agreement is the agreement which is required to be executed with the stock exchange where the securities of the company are listed.

CIRCULAR

CIR/CFD/CMD/6/2015                                                        October 13, 2015

To

All Listed Entities
All the Recognised Stock Exchanges

Dear Sir/Madam,

Sub: Format of uniform Listing Agreement

  1. The requirement of executing a listing agreement with the Stock Exchange is specified under different regulations related with initial issuance of capital, the details of which are as under:

Type of Securities, Regulation, Regulation No.

  1. Specified Securities (Equity & Convertible Securities on Main Board or SME or ITP) or Indian Depository Receipts, Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (“ICDR”), Regulation 109
  2. Non-Convertible Debt Securities Securities, and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 (“ILDS”), Regulation 19A
  3. Non-Convertible Redeemable Preference Shares, Securities and Exchange Board of India(Issue and Listing of NonConvertible Redeemable Preference Shares) Regulations, 2013 (“NCRPS”), Regulation 16A
  4. Securitised Debt Instruments, Securities and Exchange Board of India (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008 (“SDI”), Regulation 35A
  5. Mutual Funds, Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 (“MF”), Regulation 31B
  1. In order to give effect to the requirements of Regulations mentioned at para 1 above, a simplified listing agreement which is uniform across all types of securities/listed entities is being specified under Annexure I.
  2. A listed entity which has previously entered into agreement(s) with a recognised Stock Exchange(s) to list its securities shall execute a fresh listing agreement with such Stock Exchange within six months of the date of notification of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) i.e. September 2, 2015.

Notwithstanding such novation, any action taken or purported to have been done or taken by the Stock Exchanges or SEBI, any enquiry or investigation commenced or showcause notice issued in respect of the existing listing agreement shall be deemed to have been done or taken under the corresponding provisions of the Listing Regulations in force.

  1. This circular is issued in exercise of the powers conferred under sections 11(1) and 11A of the Securities and Exchange Board of India Act 1992.
  2. This circular is available on SEBI website at www.sebi.gov.in under the categories “Legal Framework” and “Issues and listing”, “Mutual Funds”, “Corporate Debt Market” “Continuous Disclosure Requirements”.

Yours faithfully,

Harini Balaji
General Manager
+91-22-26449372
harinib@sebi.gov.in