1. Project Special Purpose Vehicle Company (SPV) - An Option

2. Structure of SPV SPV State Govt. / State agencies Government IL&FS
of India
IL&FS
State Support
Agreement/ Approvals/
Project Management Consultant
Support for Infrastructure
Development under IIUS
Shareholders
SPV
Banks/ Lenders
Shareholders
Agreements
Financing
Agreements
Contracts for
Technical studies/ services
Service /Supply Agreements
Construction/ O&M
Contract
Construction
agencies
Consultants
Tanneries

3. Main Objects of the SPV
To develop and implement project for establishing CFC at Jalandhar for the hand tools industry
Mobilise Industry contribution for the project Capex
Leveraging Grant assistance available under IIUS and from the State Govt
If required, securing bank loans over and above equity and grant funding
Engaging consultants for project management and implementation
Provide services to the industry for a user charge

4. About Section 25 (not for profit)
The company by its articles shall prohibit distribution of its profit in the form of dividend, bonus etc. to its members;
The profit/income earned by the company shall be applied by the company for the promotion of its objects;
The licence issued by the Regional Directors normally contains the prohibition regarding amendment of any clause of Memorandum of Association without their previous permission;
That the company shall not pay remuneration or other benefit to any of its members.
Permission required from Registrar of Companies for various procedural matters like increase of authorized share capital, etc
One Board Meeting in every 6 calendar months is required.
There can be any number of directors
Can avail income tax exemption

5. …….SPV
Incorporated by the shareholders known as subscribers to memorandum
Shareholders decide the objects and bye-laws of the company
They may agree to pass any resolution by special majority (75%) even if same is required to be ordinary resolution under companies act
They may agree to pass any resolution by 100% majority even if same is required to be special / ordinary resolution under companies act
They may agreee to have a BoD meeting at any periodicity (even 15days)
They may agree that the events / transactions of particular nature can only be done after approval of board members
All the above decisions can also be agreed to be taken in the AGM / EOGM (all shareholders)
The company is managed by the Board of Directors (BoD) who are chosen / removed by the shareholders of the company
Most of the important decisions are taken by a special resolution (75%) passed by shareholders e.g. appointment of directors
All persons who subscribe to the shares are shareholders and have voting rights
Compulsory meetings:
Annual general Meeting – once every year
Board of Directors – every quarter

6. Few Instances where Shareholders Approval is a must:
Such reorganization, which is unrelated to the original business, as set forth in the Memorandum of Association, combination or merger of the Company
Sale, mortgage, lease, license, charge, lien, pledge or encumbrance of any of its assets including any intellectual property rights other than for the purpose of securing borrowing made by the Company in the ordinary course of its business.
Acquisition, formation or promotion of a new subsidiary or a new venture company or the making of any investments in the form of equity and/or loan in any other entity or business.
Any change of the authorised share capital of the Company, capital structure and changes in debt-equity ratio, including issuance of additional capital except those specificially required as per the proposed financing plan including any proposal of buy back of shares by the Company.
The future appointment or replacement of Statutory Auditors
Any change in the Company’s accounting year

7. Some Instances where Shareholders Approval can be made a must:
Appointment / Removal of Directors
Purchase / sale of equipment (to specify type)
Appointment / removal of Auditors
Appointment of important staff (e.g. GM and above)
Can set a limit beyond which only Shareholders will approve the expense
Appointment / removal of contractors (to specify)
Fixing of user charges for the services
Commercial discounts, other business related issues.
For all the above the shareholders may agree to have special majority resolutions

8. THANK YOU