(CSchennai) Re: [CS_yahoogroups) FCGPR(A), URGENT????

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R V SECKAR

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Apr 29, 2010, 3:45:29 AM4/29/10
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Dear Gunjan Singh,

Thanks for valuable information.

The Reserve Bank of India (RBI) has issued Notification no. FEMA 205/2010-RB dated 7 April 2010 (Notification), which has amended the regulation in connection with pricing norms for issue of shares by an Indian company to a person resident outside India. This Notification comes into force from 21 April 2010 (i.e. the date of its publication in the Official Gazette). Given below are the amended pricing norms for rights issue and issue of shares (other than rights issue).

Type of Indian Company

Pricing Norms

Company not listed on a recognized stock exchange in India

At a price not less than the price at which the shares are issued to resident shareholders

Company listed on a recognized stock exchange in India

At a price not less than the price determined in accordance with Securities Exchange Board of India

(SEBI) guidelines

Company (public or private) not listed on a recognized stock exchange in India

At a price not be less than the fair valuation of shares done by

  • a SEBI registered Category-I Merchant Banker; or
  • a Chartered Accountant

The above valuation will be done as per the Discounted Free Cash Flow Method

Preferential allotment of shares by a company

At a price not less than the price determined as per the RBI pricing guidelines

Comments
  • The Notification does not clarify whether the new guidelines would apply to share application monies received, pending the allotment of shares on 21 April 2010.
  • It is unclear whether the SEBI or the RBI pricing guidelines will apply in case of preferential allotment by a listed public company

The above issues could be clarified by an RBI circular.


This Notification comes into force from 21 April 2010 for allotment made after 21 April 2010.

Regards,

R.V.Seckar



On 29 April 2010 10:55, gunjan singh <gunjan_...@yahoo.com> wrote:
 

Hello All,
 
For the valuation of shares, RBI has issued a recent notification in April 2010 for " Foreign Investment in India- change in valuation guidlines for issue of shares" having Notification no FEMA 205/2010 dated 7th April 2010.
 
It will help you for the valuation.
For the format of CA Certificate, you can get it from RBI Site.
 
With Regards
Gunjan
CS, LL.B, B.Com
9999049105

 

From: R V SECKAR <rvsek...@gmail.com>
Sent: Wed, April 28, 2010 3:10:59 PM

Subject: Re: [CS_yahoogroups) FCGPR(A), URGENT????

 

Hello,

Though , CCI guidelines are not applicable now , it is still applicable for the RBI valuation purpose.

You have to value the shares according to the erstwhile CCI guidelines only.

Compounding of Contravention under FEMA (Foreign Exchange Management Act)


Persons who have flouted the Foreign Exchange Management Act (FEMA) will be allowed to settle the offense by paying monetary penalty and will not have to go for litigation if such a person acknowledges contravention. This, however, will not apply to Hawala transactions.

The government has reviewed the procedures for compounding of contravention under the FEMA and the responsibility of administering compounding of contravention cases under FEMA has been vested with the RBI, with the exception of Hawala transactions, which will be dealt with by the Directorate of Enforcement.

As per the new norms announced on 1st February 2005, the RBI will be required to conclude case proceedings within 180 days from the receipt for application for compounding and the sum worked out after compounding has to be paid within 15 days from the order of compounding.

The order passed by RBI will be applicable for a period of three years. If a second offense is committed after the expiry of three years, it will be deemed as a fresh contravention and not a repetition of the earlier one.

The application may be made to The Compounding Authority, [Cell for Effective implementation of
FEMA (CEFA)],
Reserve Bank of India,
 Foreign Exchange Department,
11th Floor, Central Office Building,
S. B. Singh Road, Fort, Mumbai- 400 001.


With a copy to your regional RBI office.


It is dependent on the nature of offense . Men Rea will be the main source to determine the same. If you able to substantiate that Non-filing was out of ignorance and not intentional , you may be left with warning or little fine.

 


1.FIRC Certificate  2. An auditor's certificate on the valuation of shares .3. Certificate from the Company Secretary for the compliance have been made for the allotment of shares to foreign company or NRI.

 

 R..V.Seckar





On 28 April 2010 14:11, Shallu Suryavanshi <shallusuryavanshi@ yahoo.com> wrote:
 

Sir,
 
CCI guidelines are not applicable right now. so which procedure should we follow for fair valuation of shares by CA.
 
And I talked Reginal RBI, they are not entertaining properly, and the concern person is out of station now, I was given to understand this by RBI people??
 
Plz advise what is to be done?
 
Plz provide me the procedure for Condonation of delay. It is to be made through AD or directly and for compounding also.
Regards
 
CS Shallu Suryavanshi

--- On Wed, 28/4/10, R V SECKAR <rvsekar2007@ gmail.com> wrote:

From: R V SECKAR <rvsekar2007@ gmail.com>
Subject: Re: [CS_yahoogroups) FCGPR(A), URGENT????
To: "Shallu Suryavanshi" <shallusuryavanshi@ yahoo.com>
Date: Wednesday, 28 April, 2010, 6:51 AM


Hello,
 
I have filed FC-GPR in my previous company. Please note that I do not have copy of the same. Please ask your auditor to go through the Erstwhile CCI guidelines for share valuation for RBI purpose. I will give more idea about how to work out fair value of the shares.
 
R..V.Seckar

On 28 April 2010 11:48, Shallu Suryavanshi <shallusuryavanshi@ yahoo.com> wrote:
Can you please provide me the specimen copy of CA certification for FCGPR.

Regards
 
CS Shallu Suryavanshi
 
--- On Wed, 28/4/10, R V SECKAR <rvsekar2007@ gmail.com> wrote:

From: R V SECKAR <rvsekar2007@ gmail.com>
Subject: Re: [CS_yahoogroups) FCGPR(A), URGENT????
To: "Shallu Suryavanshi" <shallusuryavanshi@ yahoo.com>
Date: Wednesday, 28 April, 2010, 6:03 AM


Hello,

You may file the current allotment within its deadline. Each transaction is separate and you have to report separately. You have to file also Annual return FC-GPR Part II on annual basis,

Better ,you visit the Regional RBI , meet the ECD department officials and get it clarified personally .That will make more comfort.

You have to get auditor certificate for the fair valuation of shares allotted.

R.V.Seckar

On 28 April 2010 11:29, Shallu Suryavanshi <shallusuryavanshi@ yahoo.com> wrote:

Sir,
 
For the current allotment can we go ahead and for the earlier non compliance we will start the activity after executing the formality of current allotment atleast??
 
Should we visit personally at Regional RBI office or should execute the things through mail.
 
And in case we issue shares on Face value (Rs. 10/-) then certification from CA (as required to be annexed with FCGPR) is required or NOt???
 
Plz advise......
 
Regards
 
CS Shallu Suryavanshi

--- On Wed, 28/4/10, R V SECKAR <rvsekar2007@ gmail.com> wrote:

From: R V SECKAR <rvsekar2007@ gmail.com>
Subject: Re: [CS_yahoogroups) FCGPR(A), URGENT????
To: company_secretary@ yahoogroups. com
Cc: shallusuryavanshi@ yahoo.com
Date: Wednesday, 28 April, 2010, 5:48 AM


Hello,

Please write to your regional RBI stating the facts and request them the condemnation of delay in  not filing FC-GPR for the earlier allotment by giving valid reasons by citing reasons non-availability of qualified professionals , due to ignorance etc.

Regional RBI may condone the delay in case if it is not intentional and will levy some small fine or may ask you to go for compounding of offense at RBI , Mumbai.

Regards,

R.V.Seckar

On 28 April 2010 09:53, Shallu Suryavanshi <shallusuryavanshi@ yahoo.com> wrote:
 
Dear Members,
 
In case company has to file FCGPR (A) within 30 days after issue of shares to Non resident lets assume before 30th April, 2010.
 
However, say in 2006 also company issued shares to Non Resident but did not file said form what is the remedy available now to the Company??
 
Should company file aforementioned form of current allotment and ignore the earlier non- compliance, which I think should not be done.
 
OR
 
In what way should we rectify the mistake done earlier?

Plz arrange to revert at the earliest as company is running short of time and has to comply above said compliance in April, 2010 only.
 
Regards
 
CS Shallu Suryavanshi









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Jayashree Chandrasekaran

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Apr 29, 2010, 3:48:03 AM4/29/10
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Dear mr.Seckar,
Thanks for the updates.
Jayashree

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