and WOS abroad does not exceed 400 percent of its net worth as on the date of

And wos abroad does not exceed 400 percent of its net

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and WOS abroad does not exceed 400 percent of its net worth as on the date of its last audited balance sheet. If an Indian company proposes to directly invest more than 400 percent of its net worth in an offshore JV or WOS, the RBI may consider such proposal under the approval route. However, any financial commitment exceeding USD 1 billion (or its equivalent) in a financial year by an Indian party would require prior approval of the RBI even when 5. Legal and Regulatory Considerations 68. , last accessed on June 24, 2014 69. RBI/2011-12/296 A. P. (DIR Series) Circular No.56 dated December 09, 2011 70. A greenfield investment is a type of venture where finances are employed to create a new physical facility for a business in a location where no existing facilities are currently present, whereas a brownfield investment implies investment into an existing production facility, typically for the purpose of a new product release.
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15 © Nishith Desai Associates 2014 A Panacea for Ranbaxy’s ills? Sun Pharma – Ranbaxy the total financial commitment of the Indian party is within the limit of 400% of its net worth as per the last audited balance sheet. II. What is the procedure under the Companies Act, 1956 for merger/ amalgamation of companies? Even though most provisions of CA 2013 have been notified by the Ministry of Corporate Affairs, the provisions relating to M&A have not been notified as of April 1, 2014. Therefore, the scheme of merger/ amalgamation would have to be executed under the provisions of CA 1956. Sections 391 to 394 of the CA 1956 lay down the procedure for mergers and amalgamations. Following approval of the scheme by the boards of the merging and surviving companies, the companies are required to file the scheme with the High Court situated in the jurisdiction of their respective registered offices. Prior to the scheme being presented before the court, listed companies are also required to file the proposed scheme with the stock exchanges where the equity shares of such companies are listed, for approval. On receiving the scheme, the High Court shall give directions fixing the date, time and venue and quorum for the members’ meeting and appoint a Chairman to preside over the meeting and submit a report to the Court. The scheme should be approved by a majority of the shareholders representing at least three-fourths in value of the shareholders of each of the companies, present and voting. The resolution of the shareholders approving the scheme should be filed with the Registrar of Companies within 30 days of passing the resolution. Within 7 days from the date of the meeting of shareholders, the chairman of the general meeting is required to submit a report to the High Court, setting out the number of persons who attended personally or by proxy and the percentage of shareholders who voted in favor of the scheme as well as the resolution passed by the meeting.
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