Volume 4 Issue 2

President’s Message

March - April 2018IJCCI Bonsai Chapter Inauguration

Dear Friends ,It is a pleasure to reach out toall of you in the new Financial
Year ! I wish you all the very
best in this financial year, anew beginning all over again
and new resolves and newimpetus to do better.
We also have a new Consul
General at the Japanese
Consulate in Chennai. Mr. Kojiro Uchiyama andMadame Karen Janette Uchiyama have come toChennai. We called on the Consul-General at his office
and welcomed him on behalf of all of you. Mr.
Uchiyama is a senior diplomat, just arrived fromPortland and has already worked in Delhi earlier for
three years. IJCCI looks up to him for leadership and fora great partnership with his team. I am confident that hisexperience and expertise will be of immense value infurther strengthening our bilateral relations through ahost of planned activities.

Ms. Hirako Taniguchi, Acting Consul General lighting the lamp

Mr. N. Murali, Chairman IJCCI introducing the Office Bearers

Friends , I have in my earlier message mentioned about
IJCCI Industrial delegation visit to Japan. I am happy tomention that the dates have been finalised and a detailed
agenda has also been drawn up. Meetings with Japanesebusiness community and the dignitaries in the nodal
government organisations of Japan and India, would behighly beneficial to the delegation members.
We have many success stories of Small and Medium
companies forging great collaborations today because of
their participation in the delegation and we therefore
request members to consider signing on.

Mr. K. Sivaji, President of the Chapter making a presentation

As I conclude, I once again wish all of you a highly
successful financial year and also with a request to visit
our new refurbished Chamber office.
Regards,N. Kumar

Participants appreciating the Bonsai exhibits

Consul-General of Japan in Chennai Mr. Kojiro Uchiyama
Indo-Japan Chamber of Commerce and Industry has great pleasure in introducing
the Consul-General of Japan in Chennai Mr. Kojiro Uchiyama.
Mr. Uchiyama was born in Hokkaido in 1956, a graduate from Osaka University ofForeign Studies and a post graduate of Amherst College in USA, called as the'Knowledge Corridor', and joined the Ministry of Foreign Affairs of theGovernment of Japan.
Since 1982, he has held several positions around the world. Mr. Kojiro Uchiyama
assumed office as Consul-General of Japan in Chennai on 07th April 2018. He hasserved in the Consulate in Boston and Houston in 1982 and in 1990. Before hisarrival in Chennai he served as Consul-General, Portland , USA for two years ; prior
to that he was the Counsellor at the Embassy of Japan in Dublin, Ireland for fiveyears. He has also held the position of Counsellor at the Japanese Embassy in New
Delhi, India for three years. He has served as the First Secretary in the Embassy ofJapan in Australia for three years; in Ghana, West Africa for three years and also in Poland for three years. He has also
served in the North American Affairs Bureau of MOFA for six years and in Economic Affairs Bureau of MOFA for four
years in Tokyo.
Mr. Kojiro Uchiyama has joined us at a time when Japan-India relations is at its peak. IJCCI extends a hearty welcome
and wishes him an excellent tenure of office in Chennai.

IJCCI Bonsai Chapter

Mr. Sundhaar welcomes

Ms. Shabu Ali addressing the members

IJCCI Bonsai Chapter had the first orientation programme on 28th April 2018 at IJCCI premises.
Mr. V. Sundhaar, Secretary welcomed the members and introduced the Office Bearers. Ms. Shabu Ali, Vice-President
explained to the members the mission of IJCCI Bonsai Chapter, its uniqueness and the benefit of mastering this sacredart. Mr. K. Sivaji, President of the Chapter taught the basics of bonsai, how to grow and maintain the plant. A
presentation and a practical demonstration was made by Mr. Sivaji and the students learnt the art of pruning, wiring etc.
The members were given a sapling and asked to maintain it and bring it to the next class. Every month, last Saturday theChapter members will meet and get trained by the Bonsai experts at IJCCI.

Mr. K. Sivaji demonstrating the techniqueParticipants

New era for Cross Border Mergers
RBI's latest Notification
Section 234 of the Companies Act, 2013 (Companies Act) and Rule 25A of the Companies (Compromises,Arrangements and Amalgamations) Rules, 2016 (Companies Merger Rules) permit mergers and amalgamations
between Indian companies and companies incorporated in certain jurisdictions. These provisions mandate priorapproval of the Reserve Bank of India (RBI) for any such cross-border mergers.
After extensive public consultations, the RBI vide notification No. FEMA 389/2018-RB issued the Foreign ExchangeManagement (Cross Border Merger) Regulations, 2018 (FEMA Regulations) on 20 March 2018 to address various
issues that may arise in relation to cross border mergers from an exchange control perspective.
As per the Regulations merger transactions in compliance with these regulations
shall be deemed to have been approved by RBI, and hence, no separate approval isrequired. In other cases, merger transactions require the prior approval of the RBI.
Mergers and Acquisitions a Bird's eye view

DID YOU KNOW?
Maximum number of cross border
M&A deals took place between 1990
and 2005 predominantly in the Asia
Pacific Region as countries were just
opening up their economies to othercountries.

According to Investopedia, the terms “merger and acquisitions' are general terms
used to indicate consolidation of two or more companies. In a merger the Boards ofthe companies merge and the 'acquired' company ceases to exist after being mergedwith the 'acquiring' company. In contrast, in an acquisition, the acquiring company obtains majority of shares / stakeholding. There is no change in the name and the 'acquired' very much continues to function under law.
When mergers and acquisitions cross borders
In a nutshell, cross border mergers / acquisitions are:• When a company in one country is acquired by a company from another country(s)• Assets and liabilities of companies operating in two countries are combined into an altogether new legal entity.
• The acquiring company is called the “Home” country and the acquired company is called the “host” company.
• The registered office or headquarters can be situated in either of the two countries.
• The main motive is to increase FDI, revenue share in markets, cross selling, economies of scale and establishing apresence in other countries.

The FEMA (Cross Border Merger) Regulations, 2018 Key features
PhraseDefinitions

Indian company

A company incorporated under the Companies Act, 1956 / 2013

Foreign company

Any company or body corporate incorporated outside India whether having a placeof business in India or not.

Resultant company

An Indian company or a foreign company which takes over the assets and liabilitiesof the other companies involved in the cross border merger.

The FEMA Regulations provide that any transaction undertaken in relation to a cross-border merger in accordance withthe FEMA Regulations shall be deemed to be approved by the RBI (as required in terms of Rule 25A of the Companies
Merger Rules). The FEMA Regulations also require the managing director/whole time director and company secretaryof the company involved in such cross-border merger to furnish a certificate undertaking to ensure compliance with theFEMA Regulations along with the application made to the relevant National Company Law Tribunal (NCLT) inrelation to such merger.
The terms “Inbound Mergers” and “Outbound mergers” have been expressly defined in the Regulations as: However,
The Regulations have expressly omitted defining the term “Demergers”.
OUTBOUND MERGERS:INBOUND MERGERS:

A domestic company merges
with a foreign company

A foreign company merges with adomestic company

The Regulations provide for different compliances for Inbound and Outbound Mergers, the same is highlighted below:
Specification

Inbound merger

Outbound merger

Foreign Exchange Management(Transfer and issue of Security by aperson Resident outside India)
Regulations, 2017

When securities are issued ortransferred to a person who is a nonresident outside India

Foreign Exchange Management(Transfer or issue of any foreignsecurity) Regulations, 2004

Where the foreign company is a joint
venture or a wholly owned subsidiary of
the Indian company.
Regulation 6 & 7 to be complied with if
the merger with the joint venture or thewholly owned subsidiary results into anacquisition

Regulations relating to investment inJoint Venture or wholly owned
subsidiary

When the securities of a foreigncompany are acquired by a resident ofIndia

Office(s)Any office of the foreign company
situated outside India shall be deemed a
Branch office of the resultant Indiancompany

Any office in India shall be deemed a
Branch office of the resultant foreigncompany.

Borrowings

Any borrowings of the foreign company
made before the inbound merger, will
become the borrowings of the resultant
Indian company. This will amount toExternal commercial borrowings(ECB). Therefore ECB rules must becomplied with.

Any borrowings o the Indian company
made before the outbound merger will
become the borrowings of the resultant
foreign company. They will have to berepaid in accordance with the scheme
sanctioned by the NCLT.

Acquisition of Assets

Assets can be acquired outside India by
the resultant Indian company
consequent to inbound merger, subject
to RBI rules & regulations

Assets can be acquired in India by theresultant foreign company consequent
to outbound merger, subject to RBI rules& regulations

Transfer of assets and or sale ofsecurities

Indian company transfer within 2 years
from date of sanction of the scheme

Foreign company can transfer within 2years from date of sanction of thescheme

Opening of Bank accountResultant Indian company can open abank account in the foreign country for amaximum period of2 years fromsanction of scheme

Resultant foreign company can open abank account in India for a maximum
period of2 years from sanction ofscheme. It has to be Special Nonresident rupee account

Valuation

Done at arm's length based oninternational pricing methodology andto be certified by a CA / merchantbanker in either jurisdiction

Done at arm's length based oninternational pricing methodology andto be certified by a CA / merchantbanker in either jurisdiction

Welcome move
The new regime has been widely welcomed as a positive move to boost Foreign Direct Investment in India. The procedure topursue restructuring exercises has been made clearer. Indian Companies seeking a global platform are most likely to benefit. And
most importantly, among the various benefits these Regulations bring to the corporate table; it provides the opportunity to Indiancompanies that have been declared as insolvent to be bailed out by foreign companies with ease and clarity of procedure.
P.S. Suman, Partner A.K. Mylsamy & Associates LLP
Editor : Suguna Ramamoorthy Secretary-General, IJCCI.; Publisher : IJCCI; Designing & Printing : J.G.S. Johnson - 93845 93262
For Private Circulation only.
Indo-Japan Chamber of Commerce & Industry (IJCCI), No. 21, Kavignar Barathidasan Road, Teynempet, Chennai - 600 018, Tamilnadu, India.
Phone : 044-2435 2010 / 2435 4779 / 4855 6150 Email : indo-Japan@ijcci.com Web :www. ijcci.com