Sunday, 30 March 2014

February 2014

Notification/Circular no. Date Subject Amendment comment/effect
A.P. (DIR Series) Circular No.107 Feb 20, 2014 FDI in MSE and in Industrial Undertaking manufacturing items reserved for SSI/MSE a. Companies falling under the definition of MSE as per MSMED Act, 2006 may accept FDI investment subject to extant FDI Policy and Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000. Type of instruments permitted is only equity shares and convertible debentures Scope of FDI in MSE expanded in light of provisions of MSMED Act, 2006
b. Companies which are not MSE and hold industrial license under the provisions of the Industries (Development & Regulation) Act, 1951 for manufacturing items reserved for manufacture in the MSE sector may issue shares in excess of 24 per cent of its paid up capital with prior approval of the FIPB.
A. P. (DIR Series) Circular No. 105 February 17, 2014 ECB reporting Format of ECB-2 Return amended Amendments to capture details of the financial hedges contracted by corporates, of their foreign currency exposure relating to ECB and their foreign currency earnings and expenditure
A.P. (DIR Series) Circular No.102 February 11, 2014 FDI Report Form FC-GPR revised Amendment brought in to capture the granular details of FDI as regards Brownfield/Greenfield investments and the date of incorporation of investee company

PN/Document no. Date Subject Amendment
PN 2 of 2014 4.2.2014 FDI in Insurance Sector a. extended to include investments by NRI's as well as FII.
b. extented to apply to insurance brokers, TPA's, Surveyors and loss assessors

circular/notificationno. Date Subject Amendment
(1) An issuer making an initial public offer may obtain grading for such offer from one or more credit rating agencies registered with the Board.                         (2) The format of Statement of Assets and Liabilities to be a part of disclosures in offer document has been changed to include elaborate details
CIR/IMD/FIIC/4/2014  14-Feb-14 FII/QFI investments in Commercial Papers FII/QFI shall be permitted to invest upto US$ 2 billion in Commercial
Papers and upto US$5 billion in Credit
Enhanced Bonds within the Corporate Debt limit of US$ 51 billion

Intellectual Property
Date Subject Amendment comment/effect
28.2.2014 Patent (Amendment) Rules, 2014 a. increase in filing fee of patent applications Increase of filing and other fee and recognition of small entity as a separate class of applicant. 
b. new category of applicant viz. 'small entity' added. Small entity means a medium enterprice as per MSMED Act, 2006 viz. where, in case of manufacturing sector, investment in plant and machinery is between Rs. 5-10 crores and in case of service sector, the investment in equipments is between Rs. 2-5 crores. 
c. 10% additional fee for physical filing. 
d. new form prescribed for small entities to be filed with patent applications
e. New form for Representation Opposing Grant Of

Notification/Circular  No. Date Particulars
1-15-35 27-Feb-14 Section 135 of the Companies Act, 2013 along with Schedule VII thereof i.e. Provisions pertaining to corporate social responsibility have been brought into effect. This section requires that every company having a net worth exceeding INR 500 crores or turnover exceeding INR 100 crores or net profit exceeding INR 5 crores shall constitute a corporate social responsibility committtee and formulate a corporate socila responsibility policy of the Company. The Board of every such company is required to ensure that the compsny spends at least 2% of its average profits in the last three years towards Corporate Social Responsibility (CSR) activities
27-Feb-14 Companies (Corporate Social Responsibility Policies) Rules, 2014 were brought into force. This reules prescribes the activities for which the expenditures under Section 135 of the Companies Act, 2013 can be made, the reporting requirements, the constitution of the CSR committee, complainces regarding the same etc.
3 of 2013 14-Feb-14 Clarification regarding section 185 of the Companies Act 2013 is issued. It is clarified that in respect of any guarantee given or security provided by a holding company in respect of loans made by banks or financial institution to its
subsidiary company, exemption as provided in clause (d) of sub-section (8) of section 372A of the Companies Act, 1956 shall be applicable till section 186 of ths Companies
Act, 2013 is notified. This clarification is however are applicable only for those cases where loans are obtained exclusively for subsidiary company's principal business activity.

Competition Commission of India 
Order No. Section Particulars
C-2013/12/144 5 CCI approved the proposed acquisition of 50.1% stake by Etihad Airways PJSC in Jet Privilege Private Limited (JPPL) prusuant to hiviing off of loyalty business of Jet Airways into JPPL. Ipertinently, the CCI opined that since Jet’s loyalty business would be transferred to JPPL as part of the transcation, even value of assets and turnover of Jet were attributed to JPPL for the purposes of determining the requirement of a merger control filing. However, as oppposed to the majority order, a minority order is also issued by one of the CCI members stating that the loyalty inducing programs are intended to keep passengers closed within the relevant network and integration of frequent flyer programs of different airlines is likely to create entry/expansion barriers. Accordingly, there is a prima facie opinion that the proposed combination is likely to raise appreciable adverse effect on competition in the international air passenger transportation market, more particularly in those routes between India and Abu Dhabi
96 of 2013 3 & 4 Certain doctors working at Dr. Batra's Positive Health Clinic Pvt Ltd. (Company) filed a case against the Company claiming that the Company had a dominant position in the homeopathy services market and that consultancy agreement restricting the doctors working with the Company from practicing in any city where a clinic of the Company is situated even after termination were anti-cmpetitive. The CCI observed and held that due to many other players existing in the relevant market like Baksons, SBL, Ayush and Schwabe who have various clinics accross India, the Company does not appear to be in a dominant position in relevant market of the provision of homeopathic services in India. Further, since the Company is not a dominant player in that market it cannot possibly be a dominant player in the market of hiring of the doctors for the provision of homeopathy services in India. On the basis of foregoing, the CCI took a view that the is prima facie not dominant in the relevant market within the meaning of section 4 of the Act and accordingly the question of abuse thereof does not arise. Further, a plain read of the Consultancy Agreement clarifies that any doctor who chooses to practice with the OP is restricted to practise elsewhere even after the termination of the arrangement. Such restriction may fall foul of the provisions of the Act under section 3(1) read with section 3(4) of the Act if they have an appreciable adverse effect on competition in India. Considering that the market for provision of homeopathy services and market of hiring of the doctors for the provision of homeopathy services in India appears to be quite competitive, the restrictive condition does  not seem to have appreciable adverse effect on the competition in the concerned markets in India. Further there is no dearth of doctors practising
homeopathy in India. Therefore, the CCI did not consider it
appropriate to proceed further with this matter.

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