A SEBI panel has suggested tax parity be introduced for shareholders who tender their shares in open offer and those who sell through the stock market.

According to the Sebi Takeover Advisory Committee, the open offer only provides an opportunity to investors to exit the company and hence need not be treated as off-market transaction.

“The Committee is of the view that there is a need to bring parity in the tax treatment given to the shareholders who tender their shares in an open offer and those who are selling the same in the open market,” the report said.

According to the present regulation, open offers are classified as off market deals– entered into between private individuals and are largely unregulated and a non-transparent.

The Committee noted that the present tax regime in India is more favorable towards the open market transactions as against open offer transactions. “For taxation purposes, an open offer transaction is considered akin to an off-market deal, which in the view of the Committee is not desirable,” the report said.

The panel recommended that the basic objective of an open offer is to benefit investors at large by granting them a just and fair exit opportunity. “It would perhaps not be correct to club a regulated and investor friendly activity like open offers in the same bracket as an off-market deal,” it said.

Source: ddinews.gov.in

Indian IT giant Infosys Technologies, reported a dip of over 7 per cent in its quarterly profit compared to the previous quarter.

While the net addition of employees stood at 1,026, the gross addition for the quarter was 8,859. As on June 30, 2010, Infosys and its subsidiaries had 1,14,822 employees.

Despite the surprise drop in quarterly profit, Infosys raised its full-year revenue forecast on hopes of strong outsourcing demand from overseas clients.

The company, which counts Goldman Sachs, BT Group and BP among its more than 550 customers, forecast its 2010/11 dollar revenue to rise 19 per cent to 21 per cent, higher than 16-18 per cent projected in April.

“While the global economic environment remains uncertain, we continue to see greater demand for services from our clients,” said chief executive S. Gopalakrishnan. “The challenge for the industry is to enhance the investment to grow the business, given the uncertainty in the environment.”

Infosys, known for its conservative outlook, has raised its full-year revenue growth forecast in dollar terms in the last three consecutive quarters.

The company expects earnings per American depositary share to rise 5.2 percent to 9.6 percent for the year, up from its previous forecast of 4.3 percent to 8.6 percent.

Infosys and local rivals Tata Consultancy Services and Wipro are boosting hiring and have raised salaries by 10 to 20 percent on average to keep staff from being poached by global rivals in a strong market.

Indian Companies may not get any tax sops for spending more as part of their corporate social responsibility (CSR) initiatives, an official in the government said on Thursday. The ministry of corporate affairs is unlikely to recommend any tax concessions for adoption of CSR initiatives for India Inc. This will be made amply clear when the ministry reviews existing corporate governance guidelines in next few months, said an Assocham release quoting R Bandyopadhyay, secretary in the ministry of corporate affairs. Interestingly, corporate affairs minister Salman Khurshid had earlier said that companies may be provided ‘fiscal incentives’ for their greater participation in CSR related work.

Mr Bandyopadhyay said his ministry would like corporates to adopt CSR as a part of their corporate culture and that such a culture could not be developed with reward of incentives.

The government would monitor the CSR initiatives of the industry, which has to voluntarily adopt CSR, for a year, said Mr Bandyopadhyay. He added that in case companies failed to take voluntary initiatives, the government in consultation with the Planning Commission will consider making CSR spending a ‘mandatory exercise’.

The review of existing CSR guidelines would happen in consultation with all concerned. The ministry would invite suggestions and criticism in the new guidelines, likely to be unveiled in next few months, said Mr Bandyopadhyay.

He, however, said that the guidelines will not be harsher and the government will do its best to make them enlightened to ensure their wider acceptance by the industry.

Planning Commission member Arun Maira said industry associations like Assocham ought to discipline its member and constituents for adoption of CSR initiatives as intended by government. The industry associations should thereafter, suspend the membership of their members in case they fail to implement the CSR guidelines as desired and directed by the government, said Mr Maira.

Source: taxguru.in

Recommending sweeping changes in the Takeover Code, a SEBI panel suggested hiking open offer trigger to 25 pc from the current 15 pc and raising the offer size to 100 pc of the equity in the target company. As of now, an open offer for a minimum of 20 percent in the target company is required to be made by [Read More...]

The IMF said that policymakers in Asia need to be prepared for possible shocks arising out of increased downside risks to global growth. However, rapid growth has made the Asian region a “global economic powerhouse,” the International Monetary Fund (IMF) added. IMF Managing Director Dominique Strauss-Kahn said that many Asian economies are already unwinding stimulus measures. “Increase in downside risks [Read More...]