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THOUGHT OF THE DAY

“Success is to be measured not so much by the position that one has

reached in life as by the obstacles which he has overcome.”

Law Updates:

RBI relaxes norms to buy immovable property abroad-Encouraged by an

improvement in the forex market, the Reserve Bank had raised annual

overseas investment ceiling for individuals to $125,000 from $75,000.

Reserve Bank said individuals can also use funds under Liberalised

Remittances Scheme (LRS) to buy immovable property abroad.(RBI/2014-

15/132 A.P. (DIR Series) Circular No.5)

RBI/2014-15/130 DGBA.CDD. No. 293/15.02.001/2014-15Public

Provident Fund Scheme, 1968 and Senior Citizen Savings Scheme, 2004 -

Amendments in Rules

The Reserve Bank of India (RBI) has set a minimum paid-up capital of

Rs.100 crore for those who wish to set up payments and small banks.

Releasing the draft guidelines for licensing of these banks, the RBI has

said that the promoters will have to have an initial minimum capital of at

least 40 per cent. It has prescribed a lock-in period of five years for

promoters’ holding.

RBI/214-15/131 DBOD.AML.BC.No.26/14.01.001/2014-15-Obligation of

banks under Prevention of Money Laundering Act (PMLA), 2002

Obligation of banks – Amendment to Prevention of Money-laundering

(Maintenance of Records) Rules 2013.

General Circular No. 30/2014 No. 1/32/2013- CL-V (Pt) GOVERNMENT

OF INDIA MINISTRY OF CORPORATE AFFAIRS-Clarifications on

matters relating to Related Party Transactions.

PROFESSIONALS INPUTS:

SEBI issues draft norms for setting up infrastructure investment trusts to

gain more investments-SEBI has proposed that infrastructure investment

trusts would be able to invest in infrastructure projects, either directly or

through an SPV. In the case of PPP projects, such investments would only

be through SPV.

MARKET WATCH:

SENSEX: 25,510.35 50.81 GOLD (MCX): 28149.00 50.00 NIFTY: 7,621.80 18.65 USD/INR: 60.34 -0.16 SILVER: 45480.00 .24 CRUDE OIL: 6260.00 0.61

CS Rajiv Bajaj

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Date: 18th July 2014

www.csrajivbajaj.com

COMPANIES ACT, 2013

General Circular No. 30/2014 No. 1/32/2013- CL-V (Pt) GOVERNMENT OF INDIA MINISTRY OF CORPORATE

AFFAIRS

Clarifications on matters relating to Related Party Transactions.

1. Second proviso to sub- section (1) of section 188 requires that no member of the company

shall vote on a special resolution to approve the contract or arrangement (referred to in the

first proviso), if such a member is a related party. It is clarified that ‘related party’ referred to

in the second proviso has to be construed with reference only to the contract or arrangement

for which the said special resolution is being passed. Thus, the term ‘related party' in the above

context refers only to such related party as may be a related party in the context of the

contract or arrangement for which the said special resolution is being passed.

2. It is clarified that transactions arising out of Compromises, Arrangements and Amalgamations

dealt with under specific provisions of the Companies Act, 1956/ Companies Act, 2013, will not

attract the requirements of section 188 of the Companies Act, 2013.

3. Contracts entered into by companies, after making necessary compliances under Section 297

of the Companies Act, 1956, which already came into effect before the commencement of

Section 188 of the Companies Act, 2013, will not require fresh approval under the said Section

188 till the expiry of the original term of such contracts. Thus, if any modification in such

contract is made on or after 1st April, 2014, the requirements under section 188 will have to

be complied with.