Companies & Sectors
Maruti Suzuki minority shareholders' nod to deal with Suzuki Motor Gujarat
Minority shareholders of Maruti Suzuki India Ltd.'s (MSIL) have cleared the company's proposal to source cars to be made by sister company Suzuki Motor Gujarat Pvt. Ltd. (SMG), a wholly-owned subsidiary of Suzuki Motor Corporation, Japan.
 
According to MSIL, 89.75 percent of the minority shareholders voted in favour of the related party transaction and 10.25 percent voted against.
 
The voting on the ordinary resolution sought MSIL's minority shareholders' approval for: contract manufacturing agreement to set up the requisite manufacturing facilities in Gujarat; lease deed in relation of land; deed of assignment; and any other agreement or documentation needed.
 
The Indian car maker also sought the minority shareholder's approval for recovery of all sums on arm's length basis from SMG. Originally it was MSIL that proposed to invest in Gujarat.
 
Proxy advisory firms like InGovern had advised minority shareholders to vote against the proposal as there is no business logic for MSIL to opt for this arrangement.
 
The MSIL scrip closed at Rs.4,666 at the BSE as against the closing price of Rs.4,618.95 on Wednesday.
 
Taking the investors and others by surprise, Suzuki Motor Corporation decided to
take over MSIL's project in Gujarat and invest in it directly. 
 
The decision raised concerns amongst institutional shareholders.
 
According to the contract manufacturing agreement between the two uploaded on MSIL's website, SMG, the price of vehicles will be determined on mutual consent on such a basis that the latter does not have any profits or losses at the end of any financial year.
 
In the event of SMG having either profits or losses at the end of the immediately preceding financial year, the operation of the aforementioned principle shall be dealt with in the following manner: If at the end of a financial year, SMG retains profits, as per the audited financial statements for such financial year, such profits as well as any interest earned thereon, shall be utilised by SMG for reducing the vehicle price for the immediately following financial year; and If at the end of a financial year, SMG retains losses, as per the audited financial statements for such financial year, the vehicle price for the immediately following
 
financial year shall be correspondingly increased to offset such losses. 
 
Any non-operating income accrued to SMG, arising out of any surplus funds shall be solely utilised for the purposes of its capex. 
 
According to the agreement, SMG shall reduce the vehicle cost to the extent of fiscal incentive received from the Gujarat government in the relevant year or, to the extent such incentive not being set off, in the subsequent year, and the same shall be adjusted for computation of the vehicle price.
 
The capital expenditure needs of the SMG would be met by the depreciation amount available with the subsidiary and by Suzuki Motor Corporation infusing fresh equity, to the extent necessary.
 
The Gujarat subsidiary would determine its capital expenditure needs jointly with
MSIL consistent with the production needs of the latter.
 
According to MSIL, the Gujarat based sister outfit SMG will have an ultimate capacity of 1,500,000 units involving an outlay of Rs.18,500 crore.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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American varsity starts A.P.J. Abdul Kalam Fellowship
An American university has started doctoral grants for Indian students to honour late former president of India A.P.J. Abdul Kalam who visited the institution in 2012.
 
University of South Florida (USF) launched the Kalam Fellowship worth $156,000 (Rs.1,03,71,660) for students who wish to pursue Ph.D. in specified fields of science and engineering at the institution. 
 
"Dr. Kalam left an indelible mark on the academic community, one that will now sustain over time through this most prestigious Kalam Fellowship," Ralph Wilcox, the head of USF, said here on Wednesday at the global higher education summit of the Confederation of Indian Industry (CII).
 
Fellowship holders would receive a tuition fee waiver amounting to $84,500 (Rs.5,621,528) in four years, plus a stipend of $18,000 (Rs.1,197,511) per year, he said.
 
USF already has 800 Indian students enrolled for this year and expects the fellowship, which takes effect in 2016-2017, to attract more.
 
"Dr. Kalam was an honoured visitor to the University of South Florida, and he spoke at great lengths about the importance of green energy and sustainability," Wilcox recalled.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Make in India Week in Mumbai from February 13
A Make in India Week 2016 will be organised in Mumbai from February 13 to give further momentum to the initiative, which has seen the country trump the US and China by attracting FDI worth $31 billion in 2015's first half, a top official said on Thursday.
 
Secretary, Industrial Policy and Promotion, Amitabh Kant said the event, aimed at promoting India as a big investment destination and increasing its share in global foreign investment, would be inaugurated by Prime Minister Narendra Modi.
 
"Make in India Week will be the biggest such promotional effort so far in India. Over a 1,000 companies are expected to showcase their achievements, while 70 countries will be participating," he said, adding that the theme of the event, to be held at the Bandra-Kurla Complex, would be "Innovation, Design and Sustainability".
 
In the first half of 2015, while China attracted overseas capital of $28 billion, for the US the figure was $27 billion, Kant said. Foreign direct investment (FDI) into India has witnessed a 35 percent increase during the last 17 months, compared to the same period earlier, he said.
 
The Mumbai event will also have various states and sectors making a pitch for investments through specially organised seminars.
 
America's Time magazine will for the first time give away their Time India Awards selected under the three separate categories of innovation, entreprenaurship and intelligent manufacturing, Kant added.
 
He said his department plans to hold more road shows across India to push domestic manufacturing. The department will hold a series of meetings over the next two months with corporate chiefs in each state to take stock of issues holding up projects.
 
Beiginning with Maharashtra, roadshows will follow in Gujarat, Tamil Nadu, Karnataka, Haryana and Rajasthan.
 
"Despite global slowdown, India's FDI should grow at around 30 percent," Kant said.
 
"Our overall objective is that the share of manufacturing in India's economy should go up to 25 percent. India is the only country where growth has been driven by services, but these don't create jobs in dimensions we need," he said, adding that the Boston Consulting Group had said in a report that manufacturing in India had become one of the most competitive in the world.
 
US-based Forbes magazine in their latest annual list of the best countries for doing business in 2015 has ranked India 97th out of 144 nations, behind Kazakhstan and Ghana, scoring poorly on categories like trade and monetary freedom and tackling challenges like corruption and violence.
 
Forbes said that while the country is developing into an open-market economy, traces of its "past autarkic policies" remain.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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