Indo-Japan Trade and Investment Bulletine by Japan Desk of Corporate Professionals, Kose Corporation Enters into its First Overseas JV with Elder Pharma India’s Rollatainers Limited forms a 50:50 JV with Japan’s Toyo Machine L&T to exit from JV with Komatsu Japan’s Isuzu Motors Ltd to set up an LCV manufacturing plant in India India-Japanese Hospital in Bangalore to Start Functioning from July Kalyani Appointed Head of India-Japan Business Leader's Forum Mitsubishi Electric Planning for Elevator Production in India Japan's Kyosan Electric opens up in India Jamna Auto may Sell its Stake in the NHK Springs JV Pune Farmer and Japan’s NEC Corporation Join Hands to Produce High-Value Strawberry India’s Reliance Group enters the Top 2 Gaming Markets in the World Tata Metaliks Ends its Collaboration with Japanese Kubota and Metal One Mitsubishi Partners with Neuland Laboratories in an API Deal India and Japan Cooperate to Ensure Freedom of Navigation on the High Seas Japan Grants an Aid of USD 2.32 Billion to India Knowledge Centre : Impact of the Companies Bill, 2012 on the Foreign Companies having a Place of Business in India

1. Indo-Japan Trade & Investment
Bulletin
March Issue
Japan Desk, Corporate Professionals
2013

2. INDEX
Indo-Japan Trade & Investment Highlights
Kose Corporation Enters into its First Overseas JV with Elder Pharma
India’s Rollatainers Limited forms a 50:50 JV with Japan’s Toyo Machine
L&T to exit from JV with Komatsu
Japan’s Isuzu Motors Ltd to set up an LCV manufacturing plant in India
India-Japanese Hospital in Bangalore to Start Functioning from July
Kalyani Appointed Head of India-Japan Business Leader's Forum
Mitsubishi Electric Planning for Elevator Production in India
Japan's Kyosan Electric opens up in India
Jamna Auto may Sell its Stake in the NHK Springs JV
Pune Farmer and Japan’s NEC Corporation Join Hands to Produce High-Value
Strawberry
India’s Reliance Group enters the Top 2 Gaming Markets in the World
Tata Metaliks Ends its Collaboration with Japanese Kubota and Metal One
Mitsubishi Partners with Neuland Laboratories in an API Deal
India and Japan Cooperate to Ensure Freedom of Navigation on the High Seas
Japan Grants an Aid of USD 2.32 Billion to India
Knowledge Centre
Impact of the Companies Bill, 2012 on the Foreign Companies having a Place of
Business in India

3. Indo-Japan Trade & Investment Highlights
Kose Corporation Enters into its First Overseas JV with Elder Pharma
Mumbai based Elder Pharma and Kose Corporation of Japan have entered into a JV to
manufacture and sell cosmetics in India. Kose will hold 60% stake and rest of 40% will be held
by Elder in the JV Company provisionally named as Kose Elder (India) Private Limited.
While Elder has experience of running subsidiaries abroad, it is their first joint venture in India.
Kose, on the other hand, has entered new markets only through exports from Japan and the joint
venture with Elder is its first such venture abroad.
The new company is likely to be operational in 2014 is likely to sell entire range of Kose
products in India by relying on Elder’s knowledge of local markets and strong distribution and
supply chain.
Nomura Securities acted as the financial advisor to Elder on the deal with Kose.
India’s Rollatainers Limited forms a 50:50 JV with Japan’s Toyo Machine
Indian packaging solutions provider Rollatainers Limited has entered into a 50:50 JV with
Japan’s Toyo through which these companies shall develop, design, assemble and manufacture
packaging machinery and spare parts and engage in marketing, selling and servicing their
products. The JV which shall be retail food, agricultural processing and pharmaceutical
industries will have a management services agreement with Rollatainers and a Technical services
agreement with Toyo Machine.
L&T to exit from JV with Komatsu
In a decision to better focus on its engineering and construction business and reducing reliance
on its non-core activities, Larsen and Toubro is currently in negotiations with Japan’s Komatsu
to sell of its 50% stake in its JV L&T Komatsu manufacturing hydraulic equipment. The deal is
hoped to be valued at INR 600-700 Crores.

4. Japan’s Isuzu Motors Ltd to set up an LCV manufacturing plant in India
Japanese auto maker Isuzu Motors Ltd plans to set up a light commercial vehicle (LCV)
manufacturing plant in Andhra Pradesh through its Indian subsidiary Isuzu Motors India Pvt.
Ltd. The plant which is estimated to cost INR 1500 Crores (INR 15 billion) will be able to
produce 120,000 units at peak capacity annually. This plant shall be one of the only 2 overseas
LCV producing units that the Japanese company will have, currently the only one being in
Thailand.
India-Japanese Hospital in Bangalore to Start Functioning from July
In a Joint Venture, Kirloskar Systems, Secom Medical Systems Co Ltd and Japan’s Toyota
Tsusho shall be opening up the functioning of Sakra World hospital at Bellandur in July. The
hospital shall harmonize the Japanese medical systems and practices with Indian manpower, thus
bringing together the best of both worlds to bring quality healthcare. With primary focus on
neurosurgery, orthopedics and cardiology, the 300 bed hospital will emphasize on emergency
and shall also house 60 ICU beds. Coming up at a cost of INR 220 Crores, the management has
ensured compliance with the standards of the National Accreditation Board for Hospitals and
Healthcare Providers (NABH) and Joint Commission International (JCI) at the design levels
itself.
Kalyani appointed Head of India-Japan Business Leader's Forum
Bharat Forge Limited’s Chairman & MD Mr. Baba Kalyani has been appointed as the Chairman
of the India-Japan Business Leader’s Forum (IJBLF). The 15 member forum aims to steer the
business developments between the two countries and also to bring fore of the respective
governments any roadblocks are faced for doing businesses. It shall also aim at strengthening the
business processes and explore newer opportunities for both economies.
Mitsubishi Electric Planning for Elevator Production in India
Japan’s Mitsubishi Electric is contemplating to set up a production base in India which it shall do
through its joint venture Mitsubishi Elevator ETA India Pvt. Ltd. The plan which has been in
contemplation has been delaying because the Company was focusing itself on China. Through
the Joint Venture, Mitsubishi will be able to concentrate on the Indian elevator market which is
expected to grow at a rate of 8-10 percent.

5. Japan's Kyosan Electric Opens up in India
Japanese railway and road signaling system manufacturing company, Kyosan Electric
Manufacturing, has opened its first India office in Delhi to increase its presence in India’s
railway network.
The Company shall be a part of the country’s railway expansion plan by providing safety
signaling system for high speed railways and special corridors that have been proposed.
According to the Company, because of its products, Indians will be able to look forward to
improved traffic safety and reliability.
Jamna Auto may Sell its Stake in the NHK Springs JV
Jamna Auto, the largest manufacturer of Tapered Leaf and Parabolic Springs for CVs in India, is
planning to sell its stake in NHK Springs India Ltd. The Company is a Joint Venture between 3
entities; Jamna Auto (5.39%), NHK Springs Co. (95.3%) and Metal One Corporation (1.08%),
the latter two being Japanese entities. In this JV, which manufactures automotive suspension
components for passenger cars and utility vehicles, Jamna Auto shall sell its stake to NHK
Spring Co.
Pune Farmer and Japan’s NEC Corporation Join Hands to Produce High-Value
Strawberry
Farmers from Katar Khadak village in Mulshi Tehsil of Pune district and Japan’s NEC
Corporation have collaborated to produce high value strawberry which shall be marketed to
international travelers through luxury hotels. After the successful pilot project that was launched
in September 2012 to market strawberries in the local market, the initiative was officially
launched on 25th March 2013.
India’s Reliance Group enters the Top 2 Gaming Markets in the World
The Anil Ambani Group of Reliance Companies has fully acquired a Japanese mobile game
distribution company Funnel Japan and has acquired a majority stake in Bluesom Inc, a Korea
based gaming development and publishing company. This acquisition has taken place through a
specially incorporated Reliance Big Entertainment Japan Company and marks the foray of
Reliance in the world’s largest and second largest gaming markets. Through the Japanese
Company, Reliance shall soon target the Chinese and the Taiwan markets as well.
Tata Metaliks Ends its Collaboration with Japanese Kubota and Metal One
Tata Metaliks has terminated its JV agreement with Japan’s Kubota Corporation and Metal One
Corporation executed on July 20, 2007 in order to integrate its ductile pipe business with the
Company itself. The Joint Venture Company Tata Metaliks Kubota Pipes Limited was buying

6. the raw material at market price and its net realization had decreased by almost 20 percent due to
the industry conditions.
Mitsubishi Partners with Neuland Laboratories in an API Deal
The Japanese company Mitsubishi, continuing with its pharmaceutical business expansion spree,
has planned to partner with the Active Pharmaceutical Ingredient (API) production company
Neuland Laboratories in Hyderabad, India. The deal shall take place between the Indian
Company and Mitsubishi’s Tokyo based unit, API Corporation. The partnership will help the
Japanese entity to expand its API production base in India while allowing the Indian partner to
strengthen its presence in the Japanese market.
India and Japan Cooperate to Ensure Freedom of Navigation on the High Seas
During the Seventh Annual India Japan Strategic Dialogue co-chaired by Indian External Affairs
Minister Salman Khurshid and his Japanese counterpart Fumio Kishida, India assured Japan that
it stands by the country to ensure freedom of navigation on the high seas. This came with an
understanding that both the countries, being importers of large amounts of oil and gas, need to
cooperate to ensure the security of the global commons including freedom of navigation on the
high seas.
This is being achieved through regular meetings and decision making during detailed dialogues
held pursuant to the bilateral Joint Declaration on Security Cooperation and an Action Plan to
Advance Security Cooperation.
Japan Grants an Aid of USD 2.32 Billion to India
After the two countries have agreed to promote their bilateral strategic and global partnership
especially in economic and security areas, Japan has granted an aid of USD 2.32 Billion to India
to extend a hand in the nation’s infrastructure building. Apart from this the nation has also
granted India a loan of USD 753.17 Million for the subway project in Mumbai, India’s financial
capital. This came in the meeting of Japanese Foreign Minister with India’s External Affairs
Minister Salman Khurshid in which India and Japan also signed the notes for the Official
Development Assistance Loan Package for Financial year 2012.

7. Knowledge Center
IMPACT OF THE COMPANIES BILL, 2012 ON THE FOREIGN
COMPANIES HAVING A PLACE OF BUSINESS IN INDIA
The much awaited Companies Bill 2012 was passed by the Lok Sabha (Lower House of
Parliament) on December 18, 2012, proposing to replace the 56-year-old Companies Act, 1956
once the approval of Rajya Sabha (Upper House of Parliament). The economic scenario globally
has undergone major transformation and structural changes and promulgation of the new bill is a
step towards globalization and is a successful attempt to meet the changing environment and
liberalization. The proposed Act is progressive and futuristic duly envisaging the technological
and legal developments. The new law aims to:
To revise and modify the Companies Act, 1956 in consonance with the changes in the
national and international economy.
To bring about compactness by deleting the provisions that had become redundant over
time and by regrouping the scattered provisions relating to specific subjects
To re-write various provisions of the Act to enable easy interpretation; and
To delink the procedural aspects from the substantive law and provide greater flexibility
in rule making to enable adaptation to the changing economic and technical environment
To inculcate the culture of Corporate Governance in the Indian Inc.
With these objectives the new law will bring various changes for the Businesses, Promoters,
Stakeholders, Creditors, Directors, the Law enforcers and the Society at a large. Different
sections of the corporate world may have some effect in their own way with this proposed new
law. This Note will highlight the impact of the Companies Bill 2012 on Foreign Companies
having a place of business in India.
Entry strategy for Foreign Investors in India
Any Foreign Entity planning to set up business in India may
Establish itself as an Indian Company having a Separate Legal Identity

8. Retain the status of a Foreign Company by opening:
o Liaison Office/Representative Office
o Project Office
o Branch Office
Set up as an Indian Company
A foreign company can commence operations in India by incorporating a company under the
Companies Act, 1956 through
Joint Ventures
Wholly Owned Subsidiaries
Foreign Investment in Joint Ventures can be made up to 100% depending on the requirements
of the investor, subject to equity caps in respect of the area of activities under the Foreign Direct
Investment (FDI) policy.
A joint venture may be incorporated in the form of a Private Company or a Public Company.
However, in case of forming a joint venture in India as per the Companies Act, 1956, if the status
of the foreign equity partner which if incorporated in India would be a Public Company and he/it
is holding less than 100% of paid up capital of the new joint venture company, such company
shall be deemed as Public Company even if it is registered as a Private Company in India.
Modification as Compared to Companies Act, 1956: Under the Companies Bill no such
restriction has been provided; which means whatever be the status or structure of the Foreign
Equity Partner, if being incorporated in India, is, the new incorporated joint venture company
may maintain its status as Private or Public Company depending on the form of registration in
India.
Secondly foreign companies can set up wholly-owned subsidiary companies in sectors where
100% foreign direct investment is permitted under the FDI policy.
In both the cases, whether a joint venture entity or as a wholly owned subsidiary, the
incorporated company would be registered as an Indian company and have to comply with all the
provisions of the Indian Company Law.
Set up as a Foreign Company
The Foreign Companies can also set up their operations in India through

9. Liaison Office/Representative Office
Project Office
Branch Office
In such cases, the Foreign Company does not have to comply with all the provisions of the
Indian Company Law and, instead, the law has specified separate provisions which are
applicable to such Foreign Company.
Definition of Foreign Company:
New Ambit of Foreign Companies: The Bill has redefined the term Foreign Company.
Foreign Company under Companies Act Foreign Company as per Companies Bill
1956 – Section 591 2012 – Clause 2(42)
Company Incorporated outside India and Company or body Corporate incorporate
having a place of Business in India outside India having a place of business in
India whether by itself or through an agent,
physically or through electronic mode.
Conducts any business in India in any
manner
Modification as Compared to Companies Act 1956: The ambit of Foreign Companies has been
proposed to extend in order to cover all companies or body corporates that have place of business
in India by itself or through an agent, operating physically in India or through electronic mode.
To enlarge the scope further the Ministry has proposed to cover the companies/body-corporate
conducting any business in India in any manner. The definition has been broadened to include
every Company having business in India through any mode.
From the onset, proposed Clause 2 (42) in the Companies Bill, 2012 has the potential to affect a
large number of Foreign Companies that may be present through electronic mode. The proposed
clause is likely to have a special effect on the websites that are accessible from India and such
companies may be required to establish a permanent place of work in India, in order to continue
to operate in the country. Currently, there are a number of foreign based websites that operate
directly or indirectly in India and may be said to have a place of business in India through
electronic mode such as Amazon.com, Rakuten.com etc., where customers located in India can
purchase products and get the shipment in India. Moreover, ebooks, softwares, or subscription to
e-magazines, dailies or other members only websites could be purchased online at many websites
that need no physical shipment to India. Further, by some stretch of imagination, one could also
foresee transactions conducted through debit and credit cards of foreign banks may also be
subject to the applicability of the provisions of the new Companies Bill, 2012.

10. The proposed provision under Clause 2 (42) of the Companies Bill, 2012 leaves many questions
unanswered. It is vague and has the potential to cover a number of Foreign Companies that do
not have a permanent place of business in India, at least until the rules under the Companies Bill,
2012 are notified. It would be interesting to see how and what effect this contentious provision
has on the foreign companies, once the rules are notified.
Application of Companies Bill, 2012 to Foreign Companies: Clause 379
Every foreign company (as per the definition above) having a place of business in India has to
comply with the provisions specified for these companies (mentioned below in this article).
Besides this a foreign company having a place of business in India and also where 50% or more
of the paid-up capital (whether equity or preference) of a foreign company is held by one or
more citizens of India or/and one or more companies or bodies corporates incorporated in India
whether singly or in aggregate, such company in addition to compliance of the provisions
specified herewith, such other provisions of the Companies Bill 2012 as may be prescribed by
way of rules.
Modification as Compared to Companies Act 1956: No modification, the same provision of the
Companies Act, 1956 has been continued under the Companies Bill 2012.
Compliances for Foreign Company
Documents etc., to be delivered to Registrar by foreign companies: Clause 380
Every foreign company is required to submit these documents to the Registrar for registration,
within 30 days of the establishment of its place of business in India:
 Certified copy of the charter, statutes or memorandum and articles, of the company or
other instrument constituting or defining the constitution of the company and, if the
instrument is not in the English language, a certified translation thereof in the English
language;
 Full address of the registered or principal office of the company
 List of the directors and secretary of the company containing such particulars as may be
prescribed
 Name and address or the names and addresses of one or more persons resident in India
authorised to accept on behalf of the company service of process and any notices or other
documents required to be served on the company
 Full address of the office of the company in India which is deemed to be its principal
place of business in India

11.  Particulars of opening and closing of a place of business in India on earlier occasion
or occasions
 Declaration that none of the directors of the company or the authorized
representative in India has ever been convicted or debarred from formation of
companies and management in India or abroad.
 Other Documents as may be prescribed later on.
In case of any alteration in the aforesaid documents the foreign company is require to submit a
return containing the particulars of alteration as per the prescribed format with the Registrar of
Companies, within 30 days of any such alteration.
Accounts of Foreign Companies:
The foreign companies in each calendar year are required to make out a balance sheet and profit
& loss account as per the prescribed format and shall also annex the documents as may be
prescribed by way of rules with the balance sheet and profit & loss account. All these documents
shall be filed with Registrar of Companies along with a copy of list of all the places where
business has been established in India as on the date of the balance Sheet.
If any of such documents is not in English language, a certified translation of these documents in
English language shall be attached.
Display of Name of Foreign Companies:
Every foreign company is required to exhibit outside its every office or place of business in
India, and in all business letters, bill heads and letter paper, and in all notices, and other official
publications, the name of the company and the country where it is incorporated. The name
shall be in legible letters of English language and also in the local language of the state where
such office is situated.
Besides the name and the country of incorporation the company is also required to mention the
fact that the liability of the company is limited if it is so.
Service on Foreign Company
Any process, notice, or other document required to be served on a foreign company shall be
addressed to the person whose name and address have been delivered to the Registrar and sent by
post or by electronic mode. The documents on foreign company as per the Companies Bill 2012
may now also be served by electronic mode.

12. Punishment for Contravention:
In case if foreign company has contravened any of these provisions it shall be punishable with
minimum fine of Rs. 1 lakh (100,000) but which may extend to Rs. 3 lakh (300,000) and in case
of a continuing offence with an additional fine which may extend to Rs. 50,000 for every day
during which the default continues.
Besides this every officer of the Company who is in default shall be punishable with
imprisonment of maximum 6 months or fine which shall not be less than Rs. 25,000 but which
may extend to Rs. 1 lakh or with both.
Modification as Compared to Companies Act 1956: Currently under the Companies Act 1956
where in case of default the company and every officer or agent of the company who is in default
shall be punishable with fine which may extend to Rs. 10,000 and in case of continuing offence,
with an additional fine which may extend to Rs. 1,000 for every day during the default continues.

13. CONTACT US
PANKAJ SINGLA MUMBAI:
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Goregaon East, Mumbai -400065
DELHI (Head Office)
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DISCLAIMER: The entire contents of this document have been developed on the basis of relevant statutory provisions and as
per the information available at the time of the preparation. Though the author has made utmost efforts to provide authentic
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