Business NewsNews

Competition Commission of India (CCI) approves the acquisition by NV Investment Holdings LLC (“Acquirer”) in Future Coupons (Private) Limited (“FCL/Target”), under Section 31(1) of the Competition Act, 2002, today.

The proposed combination pertains to the acquisition by the Acquirer of approximately 49% of the voting and non-voting equity shares of the Target (“Proposed Combination”). The Proposed Combination consists of certain other constituent steps involving FCL, Future Corporate Resources Private Limited (“FCRPL”), and Future Retail Limited (“FRL”).

The Acquirer is globally engaged in the business of making investments in other companies. It is a direct subsidiary of, Inc. (“ACI”) and belongs to the Amazon group. ACI is the ultimate parent entity of the Amazon group.

FCRPL is engaged in the business of management consultancy services and trading in goods and services and also has investments in various Future Group of companies. FCL is principally engaged in marketing and distribution of corporate gift cards, loyalty cards and reward cards to corporate customers. FRL (and its subsidiaries) are active in the Indian retail market and currently operate multiple retail formats in hypermarkets, supermarkets and convenience stores under various brand names.

Ministry of Corporate Affairs

[Press Release dt. 28-11-2019]

[Source: PIB]

Hot Off The PressNews

Central Board of Indirect Taxes and Customs has launched a revamped and streamlined programme to attract investments into India and strengthen Make in India through manufacture and other operations under the bond scheme, under Customs Act, 1962.

Section 65 of the Customs Act, 1962 enables the conduct of manufacture and other operations in a customs bonded warehouse.

            The scheme has been modernized with clear and transparent procedures, simplified compliance requirements ICT-based documentation and account keeping, by the issue of Manufacture and Other Operations in Warehouse (No. 2) Regulations, 2019 and Circular 34/2019 both dated 01 October 2019.

The main features of the scheme are as below –

  1. A single application cum approval form prescribed for uniformity of practice. The jurisdictional Commissioner of Customs will function as a single point of approval to set up and oversee the operations of such units.
  2. No geographical limitation on where such units can be set up.
  3. The unit can import goods (both inputs and capital goods) under a customs duty deferment program. The duties are fully remitted if the processed goods are exported.
  4. There will be no interest liability and units will benefit through improved liquidity.
  5. GST compliant goods can be procured from the domestic market for use in the manufacture and other operations in a section 65 unit.
  6. A single digital account has been prescribed for ease of doing business and easy compliance.
  7.  The scheme would also enable efficient capacity utilization, as there is no limit on the quantum of clearances that can be exported or cleared to the domestic market.

CBIC has collaborated with Invest India to launch a dedicated microsite for providing information and promoting the scheme and for the facilitation of investors. The site can be accessed at

            The scheme is expected to play a critical role in promoting investments in India and in enhancing ease of doing business. It can enable the ‘Make in India’ programme, encourage exports, create hubs for electronics assembly, repair & refurbishment operations, inward and outward processing, facilitate global e-commerce hubs, etc.

[Press Release dt. 15-10-2019]

Ministry of Finance

Experts CornerGaurav Pingle and Associates

Section 186 of the Companies Act, 2013 (“the Act”) relates to “loan and investment by company”. It provides for monetary threshold, approval matrix, recordkeeping, exemption from compliances, restrictions for giving loan, guarantee, security or making investment in another entity. The other relevant provisions are Rules made under Section 186 of the Act, Section 179 (relating to “powers of the Board of Directors”), Section 185 (relating to “loans to Directors”), Section 187 (relating to “investments of company to be held in its own name”). This article is a compilation and analysis of the relevant provisions relating to giving loan, guarantee or security or making investment under Section 186 of the Act. The article also contains the checklist for maintenance of documents, records and register under Section 186 of the Act. The company shall ensure compliance of the following provisions:

(1) Monetary threshold for approval of the Board of Directors— A company (i.e. private company or public company) with the approval of the Board of the Directors can directly or indirectly: (i) give any loan to any person or other body corporate; (ii) give any guarantee or provide security in connection with a loan to any other body corporate or person; and (iii) acquire by way of subscription, purchase or otherwise, the securities of any other body corporate, up to 60% of its paid-up share capital, free reserves and securities premium account or 100% of its free reserves and securities premium account. In a company, the Accounts Department or Finance Committee or Chief Financial Officer (CFO) or Company Secretary (CS) shall monitor such limits on a regular basis.

(2) Exclusion from the said monetary limit—The word “person” does not include any individual who is in the employment of the company i.e. loan, guarantee or security provided by the company to its employees shall not be counted in the said limits. Therefore, loans, guarantee or security given by the company to its employees shall not be considered in the prescribed monetary limits.

(3) Monetary threshold for approval of the shareholders—Company shall not make any further investment, loan, guarantee or security unless it is previously authorised by a special resolution passed in a general meeting, if the aggregate of such investment, loan, guarantee or security made or given by the Board of Directors, exceed the prescribed limits (as discussed above). The special resolution passed at a general meeting shall specify the total amount up to which the Board of Directors is authorised to give such loan or guarantee, to provide such security or make such acquisition. The company shall obtain the prior approval of shareholders and the resolution shall specify further monetary limit i.e. the resolution cannot be an open-ended resolution.

(4) Exemption from the approval of shareholders—The previous approval of the shareholders by special resolution shall not be required where a loan or guarantee is given or where a security has been provided by a company to its wholly-owned subsidiary company or a joint venture company, or acquisition is made by a holding company, by way of subscription, purchase or otherwise of the securities of its wholly-owned subsidiary company. However, the company shall disclose the details of such loans or guarantee or security or acquisition in the financial statement.

(5) Disclosure in the financial statement—The company shall disclose to the members in the financial statement the full particulars of the loans given, investment made or guarantee given or security provided and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security. Such disclosure can be part of Board’s report [Section 134(3)(g) of the Act] and notes to accounts.

(6) Mode of obtaining the approval of the Board of Directors—Investment, loan, guarantee or security shall be given by the company after the resolution sanctioning it is passed at a meeting of the Board with the consent of all the directors present at the meeting i.e. not by circular resolution. Pursuant to Section 179(3) of the Act, the Board of Directors of a company shall exercise the power to invest the funds of the company by means of resolutions passed at meetings of the Board of Directors. Such power can be delegated by the Board of Directors to any committee of directors, managing director, manager or any principal officer of the company or in the case of a branch office of the company, the principal officer of the branch office. Such delegation shall be made by passing a resolution at its meeting i.e. not by circular resolution.

(7) Prior approval of the public financial institution, in certain cases—The prior approval of the public financial institution is required where any term loan is subsisting and there is default in repayment of loan installments or payment of interest thereon as per the terms and conditions of such loan to the public financial institution. The prior approval of public financial institution is required when there is default in payment of loan or interest and not when the payment is made regular basis.

(8) Rate of interest of the loan—The loan shall not be given under Section 186 of the Act at a rate of interest lower than the prevailing yield of 1-year, 3-year, 5-year or 10-year government security closest to the tenor of the loan.

(9) Restriction on giving loan, guarantee or security—A company which has defaulted in the repayment of any deposits accepted or in payment of interest thereon, shall not give any loan or give any guarantee or provide any security or make an acquisition till such default is subsisting. Such prohibition is applicable company makes a default in payment of loan or interest on deposits.

(10) Loan, guarantee or security to directors or relatives of directors—Section 185 of the Act relates to “loans to directors”. A company (whether private company or public company) shall not advance any loan (including any loan represented by a book debt to) or give any guarantee or provide any security in connection with any loan taken by: (i) any director of company, or director of a company which is its holding company or any partner or relative of any such director; and (ii) any firm in which any such director or relative is a partner. Therefore, the company shall confirm the party and its relation with the directors before advancing any loan or giving any guarantee or providing any security in connection with any loan. In certain cases, the company shall ensure compliance of Sections 185 and 186 of the Act.

(11)?Maintenance of register— Every company giving loan or giving a guarantee or providing security or making an acquisition shall keep a register which shall contain such particulars and shall be maintained in such manner as may be prescribed. Following are some important points relating to maintenance of the register :

(i) The company shall, from the date of its incorporation, maintain a register in Form MBP 2 and enter therein separately, the particulars of loans and guarantees given, securities provided and acquisitions made.

(ii) The entries in the register shall be made chronologically in respect of each such transaction within 7 days of making such loan or giving guarantee or providing security or making acquisition.

(iii) The register shall be kept in the custody of the Company Secretary of the company or any other person authorised by the Board for the purpose.

(iv) The register can be maintained either manually or in electronic mode.

(v) The entries in the register (either manual or electronic) shall be authenticated by the Company Secretary of the company or by any other person authorised by the Board of Directors for the purpose.

(12) Inspection and extracts of the register—The register maintained under Section 186 of the Act shall be kept at the registered office of the company. Such register shall be open to inspection at such office. The extracts of the register may be taken therefrom by any member, and copies thereof may be furnished to any member of the company on payment of such fees.

(13) Non-applicability of the provisions—The provisions of Section 186 of the Act (except the provisions relating to layers of investment companies) shall not apply: (i) to any loan made, any guarantee given or any security provided or any investment made by a banking company, or an insurance company, or a housing finance company in the ordinary course of its business, or a company established with the object of and engaged in the business of financing industrial enterprises, or of providing infrastructural facilities; (ii) to any investment made by an investment company, investment made in shares allotted in pursuance of rights issues; and  (iii) to any investment made in respect of investment or lending activities, by Non-Banking Finance Company (NBFC) registered the Reserve Bank of India (RBI) Act and whose principal business is acquisition of securities.

Gaurav N Pingle, Practising Company Secretary, Pune. He can be reached at

Case BriefsSupreme Court

Supreme Court: The Bench comprising of CJ Dipak Misra and AM Khanwilkar and Dr DY Chandrachud JJ., in an order gave huge relief after a long wait to the 135 homebuyers in Supertech’s controversial Emerald Court housing complex in Noida by directing the refund of their investments.

Supreme Court ordered Supertech to deposit the balance amount of Rs 15 crore with an additional Rs 1 crore as interest in two tranches. Supertech had earlier deposited Rs 20 crore.

Gaurav Agrawal amicus curiae informed that he held extensive discussions with homebuyers and 111 of them submitted affidavits agreeing to receive invested amounts with 12% simple interest per annum.

The Supreme Court Bench has directed to deposit the amount by 30-11-2018. The matter is to be listed in the second week of October 2018. [Supertech Limited v. Emerald Court Owner Resident Welfare Association, Special Leave to Appeal (C) No. 11959 of 2014, order dated 30-07-2018]