Foreign currency convertible bonds (FCCBs)

Primarily FCCBs have a fixed tenure, they are convertible on the
option of the issuer or investor, as the case may be and are either
interest-bearing or in case they are interest-free or low rate, a
premium on redemption is payable if not converted. Its a debatable issue whether the FCCBs are to classified as Debentures or not.

SEZ - Income Tax Benefit

In order to get 100% exemption of Income tax for SEZ unit the company should have generated entire profit from SEZ unit. Sec 10AA(7) of the Income Tax Act allows the tax exemption in the ratio of profit from SEZ operations and profit from other operations. Therefore its advisable to create a separate company for SEZ operations. A company with SEZ operations might be a Subsidieary of an existing company with non SEZ operations.

Draft resolution u/s 293(1)(a)

“RESOLVED THAT pursuant to the provisions of Section 293(1)(a), section 192A(2) read with the Companies (Passing of the Resolution by Postal Ballot) Rules 2001 and other applicable provisions, if any of the Companies Act 1956, Memorandum and Articles of Association of the Company and subject to such other approvals and permissions as may be required for the purpose, consent of the Company be and is hereby accorded, including confirmation of actions taken hiterto, to the Board of Directors of the Company (“the Board” which expression shall also include a committee of Directors constituted for this purpose) to transfer, sell and / or otherwise dispose off the ____ plant of the Company situated at _____________ including its leasehold land and all other assets at such price, not less than the net book value of the assets, and on such terms and conditions as may be decided by the Board and with full power given to the Board of Directors to finalise and execute necessary documents including agreements, deeds of assignment / conveyance, any other documents and to do all such acts, deeds, matters and things or delegate any of such powers to persons as may be deemed necessary or expedient in their discretion for
completion of transfer, sale and / or disposal of the said plant

RESOLVED FURTHER THAT the Board is hereby authorised to delegate all or any of the powers herein conferred in such manner as deemed fit and at their discretion to utilise the sale proceeds for the purpose of the business of the Company.”

Transfer Pricing

Methods to determine Arms length price

1. Comparable Uncontrolled Price method
2. Resale Price method
3. Cost Plus method
4. Profit Split method
5. Transactional net margin method