Economic Survey 2013-14: Govt to come out with simplified norms for DRs
Last Updated: Wednesday, July 9, 2014, 19:49
New Delhi: The government Wednesday said it will come out with simplified norms for Depository Receipts after making necessary amendments in tax regulations.
Depository Receipts (DRs) are used by companies to raise capital from overseas investors.
The Centre has accepted the Sahoo panel report which reviewed the Depository Receipts schemes framed in 1993.
"The government has accepted the report and the new scheme suggested by the Committee would be notified at later stage after the necessary tax related amendments are made," says the Economic Survey for 2013-14.
The committee suggested that companies (listed or unlisted) should be allowed to issue Depository Receipts against any underlying securities, which may be equity or debt.
It also recommended that DRs should be counted as "public shareholding if they have attached voting rights for the holders".
It had further suggested that DRs can be issued for raising funds by issuing new shares or against the existing equity.
Depository Receipts are receipts denominated in foreign currency created by a depository in the country of listing.
There are two types of DRs - Global Depository Receipts (GDR) and American Depository Receipts (ADR).
The Finance Ministry had in September 2013 set up a committee under the chairmanship of M S Sahoo, Secretary, Institute of Company Secretaries of India, to review the rules governing foreign currency convertible bonds and depository receipt mechanism scheme.
First Published: Wednesday, July 9, 2014, 19:49