Making Outbound Investment – A Primer

January 2, 2011

An Indian company which intends to expand operations through international presence may want to know the compliances required for the process and the legal mechanisms of raising finance.

Broadly speaking, a company can have a Representative Office for liaisoning purposes, which does not engage in any business of its own, or a business undertaking abroad.

It can make an outbound investment under the Automatic Route, or the Approval Route for the necessary permission from Indian authorities.

It may use finance through Indian sources, that is, its own assets and reserves from Indian operations, Indian borrowings or issuance of shares in India, or it can use export proceeds, or it can use foreign borrowings, or raise money by way of equity abroad.

This presentation covers the available routes of raising finance and making investment abroad and the compliances required under Indian law (RBI, SEBI, FEMA, Companies Act) in detail.

How to make outbound investment from india financing & compliance

View more presentations from iPleaders and Legal Risk Management LLP.

Is your technology startup safe from patent trolls? Deciphering Paul Allen’s Patent World War.

Ramanuj

December 30, 2010

He is co-founder of Microsoft. He has expensive test for yatches. But is Paul Allen a Patent Troll? Google “Paul Allen Patent Troll” and you shall find —- entries on the subject. Thousands of websites, blogs and forums debating whether Paul Allen after his recent decision to sue Ebay, Apple, Google and and a dozen other technology giants for intringement of patents taken more than 10 years back on currently day-to-day features of the web by a research laboratory funded by Mr. Allen that has shut shop 10 years back. The case was thrown out in early December by a district judge for failure to identify specific products in the plaint, but Allen’s company has relaunched the suit now with specific allegations against products of the companies, which include google android and iPhone.

A pack of wise owls — How do you recognize patent trolls?

The Biggest Patent Suit: big enough to affect the startups?

This is definitely one of the biggest patent suits over software ever, especially because for big software companies this is a very unusual move. Speculations are abound on whether this is going to inspire some dramatic changes in the software patenting regime, as more and more people are now up in arms against software patents as these patents have ended up giving broad protection over some of the simpler and very common features of the web as we know it today. In words of Ed Every “Never in my lifetime was innovation and invention held in such low regard. Eventually laws will reflect this short-sightedness. Of course the consequences are predictable.”

Richard Gibbs commented on Wall Street Journal that “Bringing a patent infringement suit doesn’t usually affect a large company that is doing well. It tends to destroy the smaller companies in the field, because when they go to raise money, and they have to tell prospective investors that they may be infringing patents based on lawsuits currently in the mill, the investors head for the hills, or the nearest bar, whichever is closest.”

Startups are usually safe from Patent Trolls: what happened now?

In reality, startup companies are seldom sued by a big company – simply because there is not enough incentive. To start with, there is the stigma of steamrolling smaller companies, then there is little chance of recovering any big amount from a startup which is yet to find major financial success. Therefore, startup owners rarely bother about patent issues such as this, unless they are planning to patent some of their own innovation.

However, it seems the table has turned with Allen’s move. He is suing erstwhile startups when they have grown really big, and it will certainly be extremely profitable should he succeed, and it could be a really trying situation for some of the startups at the receiving end.

The takeaway simply is that even if you are building a startup, if you are into the tech business, you need to look out for patents you are ending up infirnging, even if the patent holders are yet to put the technology to use. Otherwise, you are safe until you grow big enough to be noticeable by the patent trolls.

What does it mean for day-to-day business on the Web?

If these patents are enforced, some of the business models of day to day internet services we use, such as GMail, blogger, eBay could fail or become costlier (may not remain free or viable if huge license fee have to be paid) and many features of WordPress and millions of freewares and widgets that you are so used to seeing on various websites and perhaps use yourself may not remain available.

The other concern is that this may trigger a huge patent war – which seems sort of inevitable. If important features of the web that are widely used by big and small corporations and individuals alike are under attack of patent hoarders, the natural reaction will be to challenge validity of these patents – and foreseeably many of these patents would not stand the challenge. This may bring more technology to the public domain and make them available for exploitation by anyone out there.

It has been observed that most of the internet giants have ‘patent arsenals’ but they use restraint as any sort of patent war would lead to “mutually assured destruction” – that is, their product and services offerings through the internet will suffer either by loss of ability to offer certain products due to enforcement of patents, or their own patents may be lost due to post-grant oppositions which may reduce attractiveness or valuation of a company to investors.

From a patent law perspective this also is indicative of the non-suitability of a patent regime to the web. The web is a fast developing medium where new features and innovations spread through overnight, and newer and better technology is developed by thousands of developers. The ease with which softwares are patented may seriously affect the growth of technology on the web.

Introducing iPleaders – Legal Risk Management

Ramanuj

December 8, 2010

We made a really simple and short presentation to explain how legal risk management can help a business. To view it in full screen, click on more, and then click on fullscreen. Use the left and right arrow keys to navigate through the presentation, just like any power-point presentation.

and definitely leave us your feedback!

Legal Liability Management on Prezi

The 3 Step Strategy to Minimize Legal Risk: Drafting Tips Included

Ramanuj

October 15, 2010

After our last post on the benefits of risk mitigation and liability management for you and your organization, we now discuss the steps involved in the minimisation of risk.

In a business enterprise risks may arise from uncertainty in financial markets, possibility of project failures, accidents, natural causes and disasters, legal liabilities, danger to creditworthiness of borrowers as well as deliberate attacks from an adversary.

Systematic minimisation of such risks involves a three-step process. The first step requires the identification and analysis of all risks that may be applicable to an organization or a particular project. The second step involves the allocation of those risks among the parties. The principle that the person who is most capable to sustain the consequences of the risk can bear the same at the least cost, may be useful in allocating the risk. The third, and the final step involves the creation of mechanisms to manage the risks.

1. Recognition of Risks

Recognition or identification of all risks is the first step in risk management. For example, some of the risks relevant to an organisation could be financial risk (implying possibility of a fall in values of the investments it has), business risk (the risk specifically applicable to your company), country risk, exchange rate risk (which is relevant if you are concerned about forex rates, (say, if you are in export or import business). Organizations should regularly undertake comprehensive, focused assessment of potential risks. There are several categories of risk. Further, risk may have to be looked at from a project-to-project basis. At the first stage, risk has to be identified at two levels:

Specifying the nature and cause of the risk-. Risk may be arising directly from an activity, or it may be consequential. An example of a direct risk is when a vendor may not meet his deadlines. However, risk arises consequentially when a raw material supplier may not supply materials on time, as a result of which the organization may fail to meet its commitments to its clients on time.

The estimated impact of materialization of risk. The probability of the risky event occurring and the amount of loss that would be caused by it needs to be factored in by your organization. For example, the amount of budget overruns, profit leakage, or missed and delayed milestones; the possibility of lawsuits from clients for damages arising out of delayed delivery of goods should be measured.

2. Risk Allocation

Once the risks are identified, an attempt should diligently be made to minimize them. This could be done in various ways:

Avoid the risk – this could be done by replacing the source of risk, that is, if the risk is from the vendor, try replacing the vendor. Maybe go for a different type of contract that will do away with the risk at the first place.
Transfer the risk – If the risk cannot be outrightly avoided, steps should be taken to mitigate the same. At the same time other avenues should be identified through which the risks could be shed off completely (such as subcontracting where it is warranted). This could also be possible by allocating the risk to someone else who is more capable of bearing it (such as an insurer). Legally, such solutions are achieved largely through deploying contractual mechanisms.
Acceptance of Risk – the third way is to accept the risk and plan the other processes of business within the organization to prevent it from materializing at all; and then to accommodate it if it arises despite precautions. Being caught by surprise is the worst that can happen to a business. For instance, you realize that a situation might arise where you might have to pay damages. Then could plan your finances in such a way that you can pay the damages if required without having a crippling effect on your vision and plans for your organization.

3. Risk Management

Risks must be also managed in order to minimise the possibility of its occurrence, and to minimize its consequences if the event does occur.
Organizations should ensure that they are better informed about riskier events, and that they have greater control on the situation, in the form of preventive or backup measures.

For risks created out of human activities (that is, not forces of nature) between parties, or prospective parties to a transaction (not third parties), creating in-house policies is key to managing a risk that has to be absorbed. Defining the role of employees at various levels (junior, intermediate and senior) and specifying their duties in different kinds of possible circumstances can ensure a few simple things toward minimizing risk:

1. If there is a lawsuit filed by a client, customer or business or a third party, existence of the policy can indicate that the organisation has exercised due care and shield it from certain kinds of legal liability.

2. By authorising specific people to communicate the possibility of miscommunication by different employees of the organisation and its other business parties is minimized. If there is still a miscommunication, it also helps in pinning responsibility on the defaulting employee, minimizing contractual risks.

The manner in which such policies are drafted goes a long way towards addressing concerns about various risks. They should ideally specify two things:

1. The acts the employees are authorised to do, the way in which they should deal with sensitive information (sensitive for the client or the employer). Anything that they are not authorised to do may be forbidden, and

2. What employees should do in the event that they come to know of something untoward that is happening in the organization. It should specify what measures employees can take to bring the event to the notice of the appropriate concerned authorities, so that the occurrence of something your organisation does not want is not gone unreported merely because the employee who knew about it had no compelling reason or duty to inform you about it. The policy should oblige (and if possible, even incentivize) employees to report unexpected and undesirable outcomes to concerned management.

Should you protect your business from legal risks? 5 solid reasons to do it right now

Abhyudaya

October 14, 2010

Should you protect your business from legal risks? 5 solid reasons to do it right now.

walking legal tightrope — Legal Liability Management

If you call the shots in any sort of business, you must have had known this feeling. You get a very important contract, or is about the start a new business division, and while everything is going quite good – there is that little bit of worry somewhere in your mind – what if something is screwing up without your knowledge within the complex processes, of the many activities being undertaken in name of your business?

While you are probably reviewing your risk profile from time to time, are you aware of the various legal risks that arise ot of your business operations? Legal risks are usually definite and identifiable, and once they materialise, they can be disastrous in many ways.

Legals risks threaten you with a range of unwanted consequences – heavy fines, loss of good will, bad publicity to even closure of business, loss of licenses or jail for those who are liable for non-compliance with various laws.

Experience says as far as legal risks are concerned, the most serious ones are easily identifiable right from the beginning – from the moment you even contemplate the activity or processes that gives rise to the risks – and the cost of eliminating or minimizing risks at that stage is always the least as compared to any other point of time.

Has your business just bagged the a very important order? Is your organization gearing up for that big moment that will propel it into the big league? Then this is the time you need to get your processes in order – that will control how things get done within the company. For instance, if someone is making potato chips in a factory, it is a great idea to build processes that ensure that all safety and health regulations are complied to and also that if an allegation of negligence (think tort or product liability cases) is brought against the manufacturer, it should be easy to establish that the company has taken due care by designing elaborate policies and framework to ensure that required standards are met.

Many businesses tend to assume good fortune as far as legal risks are concerned until they learn bitter lessons of long lasting disputes, bad publicity or blacklisting by institutional clients. Are you prepared to deal with uncertain and risky events which can turn your business upside down? What would happen if some of the people you depend on fail to deliver? Would you be able to live up to your commitment? Have you factored in the impact of the Service Level Agreement into your processes? Does your business have the required cushion for you to live up to your commitment?

Irrespective of your risk-appetite, it makes no sense to expose yourself to unnecessary legal risk unless you are willingly breaking some law for higher margins or some other strategic reason. And that is why you should consider legal liability management.

Here are 5 reasons why you want very strong legal liability and legal risk management:

Raising money: Every business, not matter at what stage – starting from a startup company to a company which has already gone public – needs to raise money! It can be from lenders, through private placement or from a public offer. When you try to raise money, you must show that you have a viable business and that your business have been in compliance will all relevant laws. If you have huge unmitigated risks, or if they have materialized, it may become impossible to raise money.
Stock price: Legal risks depress stock price big time. Every company’s stock has some price – be it a private or public company. Private companies always keep in mind the possibility of a sell out – and the price they can get if the current owners cash out. Almost every decision in a public company is usually driven by stock prices – and if the market gets a hint of unmitigated risks or any risk about to materialise, that is going to bring the price of the stock crashing down. Even in case of acquisition of a private company, the buyer is going to ask for huge discounts over the value of the company due to legal risks.
Regulatory action: Regulatory bodies are dreaded in India. India has very strong regulatory regimes as far as companies are concerned. Bad corporate governance or non-compliance of laws may go unnoticed for years – but when they are discovered, regulatory action is stern and steep penalty and harsh punishments are meted out.
Customer backlash: Having a great legal liability management ensures good policies that protects the customers from goof ups within the company. It also ensures that there are verifiable documentations of the good practices and policies of the company. This adds value to the experience of the client/customer and also makes them feel safe. Imagine you subscribe to services of a company which is often pulled up for legal violations. Even if there is no direct repercussion of the same on the service or product YOU are buying, you’d still not feel too safe about the company. No one wants to continue to work with a company or a brand that runs huge legal risks.
Creating law compliant processes ensure that there are good processes: Many profitable businesses do not have concrete, well developed processes. That is nothing but bad management. Corporate Law and other laws are designed in such a way so that minimum good governance is ensured. If you start designing your processes and policies around legal obligations, you would always end up with a lot of well organized sound processes.

Rules of Playing with Debt: Why to get into business debt and how to get out when things go wrong

Abhyudaya

September 18, 2010

Rules of Playing with Debt. Why to get into business debt and how to get out when things go wrong?

People across various geographical locations differ from one another in their tendency to save and borrow. Some never take loans at all, while others are indebted to almost obscene levels. Given that there is always a possibility of not being able to repay debt in case your business plan doesn’t work out, does it make sense borrow to expand your business? Have you considered that you can borrow against your business to take it to the next level? A very large number of successful businesses in the world have expanded on debt. From Goldman Sachs to probably your local transport tycoon, many businesses thrive on debt. Debt is not necessarily the last resort of an entrepreneur, there are some strong reasons for which a company must prefer debt even when it has other sources of capital available. On the other hand, aggressive debt backed expansions often land otherwise sound businesses in grave trouble. Here are the rules of playing with debt along with a case study of Vishal Retail.

An introduction to debt capital basics

A company needs capital to expand. Capital is broadly available from two sources – debt and equity. Every corporation finances its activities using various proportions of debt and equity to raise capital for its operations. The proportion it will choose to raise will depend on its cost of capital – which depends on how difficult or costly it is to tap one source compared to another depending on factors such as rate of interest required to be paid to the source and tax treatment of the interest on that capital.

Using these factors, a business will be able to arrive at a rationalized and optimal mix of debt and equity for itself. In corporate finance, the theory presented by Modgliani and Miller states that in the absence of any taxation, the source of capital, be it equity or debt, is immaterial to the company. In reality, however, due to the presence of taxation, bankruptcy costs, and an imperfect market, a company needs to pay attention to its capital structure.

Two Reasons why you should raise debt for your company

For publicly traded companies, Earnings per Share (EPS) is a very important determinant of their stock price. It is always lingering in the mind of a CEO or CFO while making a decision. Hence, for the same amount of capital, a company would prefer to have a higher proportion of debt than equity as the Earnings Per Share in such a case is higher.

Interest paid on debt and loans on the other hand, can be deducted from income as cost and no tax is payable on the same. In case of equity capital, amount paid out as dividend is not allowed to be deducted from the income of the company while deducting tax liability. Hence, the amount spent as dividend is included in the income of the company, on which tax is levied. Next, tax is to be paid a second time when the dividend is paid, either by the company in the form of a dividend distribution tax, or by a shareholder as part of his income, depending on the tax law of the country.

What you can do when you are unable to pay debt

In the retail sector, the chain ‘Subhiksha’ decided to shut down its 1600 retail stores in 2009 because of a credit crunch and financial slowdown. Its inability to meet its debt obligations occurred in the midst of the financial slowdown, so it could not keep itself afloat and had to follow the conventional route of closing down. Another company in the same sector facing very similar problems has managed to tackle its debt problem and turned around this year. Before we go into the lessons to be learnt from the success of ‘Vishal Retail’ let us be clear with some basics.

I am comfortable with debt. When and why do I need to restructure?

There can be situations where the companies face declining profits or a temporary cash crunch. When a company has insufficient money to make payments in respect of its debt, because of losses and/or due to poor management of cash flow, it runs the risk of being declared insolvent by a Court. If that happens the assets of the Company will be sold off and the proceeds distributed amongst its creditors. The business of the company will be wound up. The Company, in such a case, has an option – it can try negotiating with its creditors so that it does not have to make the desired interest payment. In return, it may have to offer the creditors an incentive, possibly a long-term one, as the company does not have enough resources in the short term. This process is known as debt restructuring.

Why would a creditor agree to a compromise?

The incentive usually offered to lenders to agree to a restructuring proposal is by way of a convertible instrument – either a convertible preference share or a convertible debenture. The convertible instrument gives the lenders an option to convert their debt into equity at a certain price. Till the option is exercised the money is treated as debt and fixed payments are made on it, normally at a reduced rate, since the company is not able to make the full interest payment. Of course, it is important to win over the confidence of the lenders in giving the business a second chance. Sometimes, their consent may need to be taken if changes are made subsequently to core business policy.

The lenders agree to accept less payment, possibly a lower rate of interest in the immediate short term. This is a better option for them, compared to theirs not getting the full value of money owed to them, if they opt for a full-fledged Court insolvency route.

The lenders enjoy two kinds of upside. In the short term, if they have been issued convertible preference shares which are of a ‘participating’ nature, they would get the right to enjoy a percentage share of the company’s profits. In the medium to long term, they would look at the option to convert their preference shares or debentures into equity, and sell them off at a huge profit. For conversion, it is important to note the price at which the lenders will be allowed to convert in future. This price is mentioned in the restructuring proposal. A lesser price implies that the investor will be able to get a large number of shares for his initial commitment. Depending on the performance of the company, if the market price of the share at the time of exercise of the option is higher than that stipulated in the contract, the profit made by the investor is greater. Hence, a lower price stipulation in the contract means that there is greater chance of the market price being higher, if the company does well.

If the company does not do well, the lenders may choose not to exercise the option to convert and will subsequently redeem the preference shares or debt, that is, they would be repaid the principal amount with interest, as long as the company is solvent. They would have also received periodic interest payments until the time of redemption. Although this circumstance would not yield superprofits for a lender as the interest rate in the restructuring plan is likely to be less than the interest rate of the original loan, it would be better than a situation where no restructuring had been attempted, as in the latter case, the investor ran the risk of losing all his money in the event of the company’s insolvency.

Negotiation strategy to get a favourable deal

Companies may note here that it is important to make a study of the outstanding loan amounts payable in advance before they go for restructuring, so that they are aware of what options can be beneficial for lenders as well as themselves in the short term. As there are chances that the company may still not be solvent it is important to convince the investors or creditors of the future plans and how the company will now be able to succeed where it once failed in the past.

Operational aspects of the framework in India

In India, the Corporate Debt Restructuring (CDR) scheme has been framed by the RBI. It can be resorted to by a bank or a corporate creditor (if supported by a bank), having 20 percent or more share in working capital or term-finance of the borrower company which is facing default or looking to restructure. Under this mechanism, the parties can approach the CDR Cell, headed by a bunch of leading Indian banks, to study the viability of a restructuring plan and assist in framing one. A debt restructuring scheme has to be approved by 75% of the creditors (in terms of value) and is then binding on all the creditors associated with the transaction. The remaining 25% would have the option to exit by selling their share to existing or fresh lenders. It is executed by drafting a fresh Debtor-Creditor Agreement (DCA) and an Inter-Creditor Agreement (ICA). Hence, the entire transaction is done on the basis of contractual agreements.

The case of Vishal Retail

Vishal Retail is a Delhi based multi-brand retailer with stores in north and central India. Looking into the company’s growth trajectory it seems that the company took up a lot of short-term debt on its books to finance its aggressive growth but was unable to service this debt because of the market slump and owed around Rs. 730 crores to its creditors. This forced the company to approach the CDR cell in November 2009 for a restructuring plan.

Vishal Retail’s Restructuring plan had a minor tweak in comparison to the plan elaborated above. It involved external investors (such as a private equity group) as well, in addition to the company and the lenders. The investors would be issued new instruments and the money infused into the company pursuant to their entry would enable the company to pay off its commitments to the existing lenders.

Introducing an external investor may have its own advantages. Lenders may have a rigid policy, because of which they may not be amenable to giving up their short term interest for a possible long term gain. In such a case, an external investor can be approached, so that the commitments made to the existing lenders are met from the funds infused by the new investors, who agree to take a small risk for a chance of profits in the medium to long term.

The CDR cell was approached by two investors, (1) The Texas Pacific Group (TPG), a Private Equity Investor; and (2) Future Group. Let us analyse these two offers.

Offer #1: TPG’s 500 crore plan with Convertible Debentures

TPG offered to convert Rs. 176 Crores of debt into Convertible Debentures carrying a 0.5% interest rate, to be converted into equity at the rate of Rs. 108/share in 2015. To comply with regulatory norms (restriction on foreign investment in the retail sector) it was decided to hive off the wholesale/warehousing business of the company into a separate entity which would be acquired by TPG. The retail end of the business was to be handled by a domestic investor. TPG offered to invest Rs. 200 crore up-front in the business and also set aside another 300 crore as additional investment.

Offer #2: Future Group’s 432 crores with redeemable preference shares

On the other hand, the offer made by the Future Group included a proposal to issue redeemable preference shares worth Rs. 176 Crores. These shares would carry an interest component and could later be converted into equity at the prevalent market rate. Future Group also offered to transfer 256 crores of debt into the accounts of various future group subsidiaries to reduce the debt burden of the creditors.

Comparing the Offers

The major difference between the two offers was in the way the business was to be structured. TPG could not acquire a majority stake in the company because of regulatory hurdles as it was involved in multi-brand retail. It therefore proposed to acquire the wholesale business of the company and bring in a domestic partner to acquire the front-end assets of Vishal Retail. TPG committed to invest heavily in the business and make it profitable.

The Future Group, as it was already an established player in the retail space, proposed to transfer all the assets of Vishal into a separate company (known as a shell company in business law terminology) and transfer some part of the debt into books of other companies within the Future group. It did not commit to any equity investments into the operations of Vishal. Integration of the operations between the two retail chains could accrue cost and efficiency benefits and make the transaction financially viable for the creditors.

The winning stroke

The CDR cell, comprising the leading creditors of Vishal Retail have selected TPG’s offer over the Future Group. This was done despite the regulatory hurdles faced by foreign investors when it comes to investing in multi-brand retail. The Texas Pacific Group sweetened its offer by reducing the interest repayment moratorium by a year and also increasing the cash component of the deal. This offer was selected by the creditors over the offer made by the Future Group which did not include any substantial equity investments into Vishal Retail.

The CDR mechanism was set up to pre-empt the insolvency of the debtor company and take measures so that such a situation could be avoided and the creditors could get their money back without getting into long drawn tribunal or court proceedings. In the present case, the TPG offer included substantial investments in the operations of the company and an interest repayment moratorium of two years, as compared to a moratorium of three years as demanded by the Future Group offer. This was appreciated by the CDR cell and therefore the TPG offer was accepted.

Conclusion

Chances are that your business is probably not as big as Vishal’s but the fundamental lesson will apply to your business as well irrespective of scale. The rule is that you should always look for financing through debt, and then keep the possibility of restructuring the debt open. Is there something you can offer to a creditor in the long run for which he may be willing to forego some short term profits? Is there a possibility of roping in a fund to share some of the risk? In most cases, if you have a sound business plan, none of this should be difficult. Good businesses that have good growth potential are difficult to find. Please note that I am not saying they are rare, but they are incredibly difficult to find as far as investors and creditors are concerned. So much so that they are ready to pay millions to research firms and consultants and stock brokers to find them good deals.

That is why, if you have a good business model, a positive cash flow or potential for the same and a market to be captured, finding capital should be more than possible. However, you shall commit a mistake if you are not reviewing the capital structure of your company, not considering the possibilities that can be thrown open by taking on some more debt or by issuing some equity to your debtors.

CLAT 2010: Analysis And Expected Cut-off

Guest Post

August 14, 2010

CLAT 2010: Analysis And Expected Cut-off

CLAT 2010 paper was mostly predictable (some recent observations can be read here), a little unpredictable on some counts too. Like I have maintained all along, English and Maths sections were really easy. Logical reasoning was mostly easy, except for the critical reasoning questions (strong/weak arguments, premises-inferences and so on) which are always tricky, and Legal Aptitude had GK type questions which tested knowledge of law. The majority of my students rated GK and Legal Aptitude (which we can call legal GK, mostly concepts) as tough. Before a detailed analysis of each section, here are the general aspects of the paper:

There was no time constraint as there were 90 GK or GK type questions (including legal aptitude) out of total 200 questions

Legal Reasoning was shifted to logical reasoning, only 5 questions for 1 mark each.
Most people could finish the paper at leisure, so what mattered is whether you knew the right answer or not.
Unlike last years paper, questions were original. So no one studying a particular book or at a particular coaching will benefit in an unfair manner.
Overall, a paper was easy. Tested knowledge more than an aptitude for reasoning.Those who prepared for a long time and worked hard will benefit from this paper. Nevertheless, those who prepared for a month also have a decent chance as GK and Legal GK did not give the huge lead to those who prepared for these topics for a long time as they had expected.
Out of those who prepared well and found the paper mostly easy, those who made lesser mistakes will go to the top-ranked law schools.
Don’t worry about the off-beat GK questions. All students were caught unprepared, and I can understand why. Even quiz masters don’t ask about the birth year of Gautam Buddha anymore. What would matter is how you fared in the rest of the paper.

You can see some of the questions here, posted by Dipti. Add any other questions that you can remember so that we have a better idea about the complete paper and maybe I’d be able to predict the cut-offs more specifically than.

English: No tough vocabulary, as predicted. Spelling, grammar-based fill in the blanks, idioms, para jumbles, even direct identification of parts of speech. There were 10 questions on comprehension. Most basic preparation would suffice for this section. Even students from vernacular mediums will have a fair chance if they prepare over the long term for this paper. A good score would be 35. Scoring 40 was possible as time was not an issue. Not much different from CLAT 2009 that way.
Maths: Most basic. Continued the trend since last year. Some students said it was easier than last year, (I don’t know how that can be possible!) and I am afraid the majority will score 20 out of 20. Just pray that you didn’t make silly mistakes.
Logical Reasoning: I expected a bit tougher logical questions, especially from analytical reasoning, puzzles type questions. While these questions turned up, they were simple. The standard was raised in the critical reasoning questions, and the general impression is that this was an easy section. Legal reasoning was also asked, but these questions were a bit on the tougher side. Criminal law (theft/ abatement), Torts, Family law principles turned up. 30 will keep you in the competition, 40 will be a very good score.
GK: This section was difficult to score in, but that is how GK section is supposed to be. If you are getting 30 correct here, that’s awesome. Current affairs were neglected in favour of static GK. Those who read Pearson or similar books would have benefited. I also hope you kept an eye on the GK section that comes in Pratiyogita Kiran or Pratiyogita Darpan which I have been advising from the beginning of the year.
Legal Aptitude: This surprised most students. Most questions were conceptual questions, needed knowledge of the law. Basic Reading Materials/Modules certainly helped – and this is where those who went to coachings will clearly benefit. Questions came from a range of legal subjects, including the obvious ones like torts, contracts, criminal law, family law to more unusual subjects, like intellectual property law, environmental law, taxation, forensic sciences. If you read those last minute supplements I wrote for IMS (was available on a myIMS section of the website), you must have been thanking me. Same for those who read this article here on CLAThacker. Trivia on the law was not asked. No case law was asked, which is welcome and in line with what I have been telling my readers. With a good preparation, scoring 30 was possible, and with good guessing it can go up to 37-38 for some people.

Expected Cut-off:
This was a paper in which the highest score is easier to guess than the cut -off for the top three colleges. I am expecting the highest score in the range of 160-165. However, You can hope for getting top three law schools with any score slightly above 140. To feel absolutely safe about getting NLS Bangalore, I would want to score 150 on this paper.

NLU Delhi Entrance Test: Quick Analysis and Expected Cut-off Marks

Guest Post

August 14, 2010

NLU Delhi Entrance Test: Quick Analysis and Expected Cut-off Marks

Reasoning heavy. That is how one can describe today’s NLU Delhi paper. Student reaction has been mixed – and this is a paper in which cut off will be difficult to guess. It was not as lengthy as last years, but most students faced a time crunch. All over difficulty level was rationalised compared to last year, clearly NLU-D is experimenting in search of a better mix of questions that test reasoning ability and aptitude of students.

I would advise those who wrote the test today to treat it as a warm up for CLAT. A bigger arena awaits you next week. If your exam went perfect, as you planned, nothing like it. Identify the mistakes and deficiency that led you astray otherwise. Know what needs to be done, do it, and feel confident about CLAT.
Here is a quick analysis of the paper (and my views on CLAT in comparison to this paper).

Legal Aptitude: As I had warned in the CLAT booster workshop, Legal Aptitude contained only legal reasoning. Some legal GK was found in the 20 marks GK section, but many were surprised by the relative disappearance of legal GK. If you listened to me, you would not be.
I am Not expecting CLAT to be full of legal GK either. GK is crucial given the CLAT structure, but the bedrock is reasoning. Legal reasoning should make a comeback, and be prepared to see new types of legal reasoning questions. The usual Principle-Fact-Options pattern is strongly expected, but a 2008 style introduction of new type reasoning is not out of the question. This has three important implications:
a. you must not panic if you see new types of questions in legal aptitude. It’s just like another logical reasoning section, based on legal principles. For instance, in 2008 some simple syllogism questions with legal principles were asked in Legal Aptitude. A lot of people didn’t even attempt these questions in fear, but those who solved them in the cool head found it very easy and scored 10 out of 10.
b. Go easy on legal GK. Stop reading cases and mugging up sections from statutes. I freak out when a student asks me what cases should they read. You are not expected to read cases. At best, know a little about the famous constitutional law cases like Keshavananda Bharati v. State of Kerala, Maneka Gandhi v Union of India etc – but then all you need to know is a one line description, not details. More important is to know some very basic information about the cases which have been in the news. Like the Best Bakery Case. Or a very famous case like Shah Bano or Unnikrishnan (introduced the right to education). Even this is too much to expect from a law aspirant – but many times these questions have come under GK so it makes sense to prepare a little for these cases. But from now on, stop trying to mug up more and more legal GK. You have done the basics, you are covered.
c. Focus on reasoning. Try to give more time to the reasoning section in the paper. If you are unclear about basics of legal reasoning, go back and read your BRMs/modules etc. You must not miss legal reasoning questions; with a little effort you can score full marks in that section. More reasoning also means lengthier paper, so watch out. Time management will be a huge factor again, unlike last year.
GK: GK section was simple. Relatively easy questions, mostly from current affairs. Typical questions like who won the Nobel peace prize, current president of South Africa didn’t leave many people stumped. I expect a similar GK portion for CLAT as well. If you have been preparing for GK systematically, reading newspaper and magazines regularly, there is little you need to worry about. You should focus on books like Pearson at this stage. If you have not started with it, or clueless about which part to start with check this out for a solution.
English: relatively easy. Reading comprehension had 5 questions. Reading speed could have made a difference, even generally in the paper, as a lot of reading and data assimilation was required. One of the more scoring sections in the paper.
Logical reasoning: this was the most important part in the paper. Clearly those who will do well here will make the final cut. However, this would be a little uncertain section as it was full of critical reasoning questions. Many interesting variations of the same were put into the paper. Even the brightest students generally cannot be very sure about critical reasoning questions, and I think this is going to bring the cut-off down a bit.
Maths: Easy. Those who managed to keep their head cool in face of the time crunch did well in these 10 questions as well. I expect an easy maths section in CLAT too, those who are scared of maths, please solve the easy questions at least. And don’t leave Maths or logical reasoning for the end! That’s a perfect recipe for disaster.

EXPECTED CUT- OFF: With easy English, Maths and GK section, the Cutoff should definitely be higher than last year’s which was around 80. However due to the presence of a lot of critical reasoning and tricky legal reasoning questions, I don’t see the cut off going much above 100. If you have scored in excess of 105, you can feel confident.

Interview: Srishti Aishwarya, With Focus On Outsourcing

Guest Post

August 5, 2009

Interview: Srishti Aishwarya, With Focus On Outsourcing

Outsourced Issue #33

This week I caught up with Srishti, another regular author of this blog, to find out how she got around to write the cover story of the well-known industry magazine Outsourcing. Questions are mine, and answers, obviously, of Srishti.

Your article about data protection laws around the world was recently made the cover story of the Outsourcing magazine. How does it feel?
I know it sounds cliche but it feels great when your article comes as a cover story along with top authors of the industry, there is a feeling of being on Cloud 9. Apart from that it propels and puts pressure to do better.

How was this made possible? Why did they invite you to write in the first place?
I wrote a piece on Malaysian Data Protection Law for them earlier which was very much appreciated. They asked me to write again but I was not getting time (read procrastinating). Then one day randomly I started working on Data Protection Law all throughout the world (given that I like reading on Privacy Laws) and once it got finished, it stayed on my laptop for some time before I thought I should send it somewhere for publishing. Given that Outsourcing Magazine asked me previously so I sent it over to them and it got published as a cover story.

How did you get started on writing about such a niche area like outsourcing law?
Once upon a time, when I was in tadpole years of law school (read 1st and 2nd Year), a senior of mine (read Ramanuj Mukherjee), seeing my high level of enthusiasm to do “something” advised that I should start writing on some relevant issue and suggested outsourcing, given its booming market. Pointing out the fact that I can reach directly to the industry people by explaining the law relevant to them in layman terms via a blog. And I took it up. The rest is history.

Tell us about your blogs. Why so many?
The simple answer is I like to write. I write on outsourcing, then self-development stuff, law school stuff, stories, poems. In short, I just write. But if I have to find a beginning point, it was the end of 1st year when I was doing my first internship, and I wrote a guest post for this blog on my internship experience. After few guest posts, I founded my own blog called Law Schools Terrace, while I also started writing as a co- author on 1st Taste. Sometime around this, I started writing on OutsourcingLaw as advised by my senior. Given the unique range of topics I covered, I got calls from various places to write, so I wrote for Money Control, Outsource Portfolio, Outsourcing Magazine.

How often do you write?
I try to write daily, but I have a degree or two in procrastinating, so sometimes I spend a day just sauntering on the periphery without actually writing. Otherwise, I write bits and pieces on one thing or other daily.

You were consulted by the Bangladeshi experts on India data protection law. Tell us more about it.

I write on Guidelines issued by RBI on Outsourcing of Financial Services by Bank after which I got a mail from Bangladesh Association of Call Center and Outsourcing (BACCO) asking for an opinion on how should they approach Bangladesh Bank. Honestly, that was one of the best experience so far, getting a mail from a top organization of another country, especially when you are a 3rd-year law school student, it gives you every reason to have a ball.

Share with us your top 5 writing secrets.
This is a tricky question and I’m no Einstein or Shakespeare. But then thinking of it, I believe if you are genuinely interested in something, you tend to it well. So well, when you write, be genuine. Second, read a lot, it helps in knowing new idea and picking styles. Adding to it, write more than you read. Third, don’t shy away from criticism. When I wrote my first post, I nearly cried over the subtle way in which I was told that it’s shit. Later on, I realized embracing criticism takes you one step up on the ladder of learning as a torch is flashed on your mistakes. Last but not the least, don’t write for others, but for yourself.

How do you go about researching?

A lot of people research so much that they never get to writing and sending the article (I being one of them). What will be your advice to them?
Researching a lot without writing really doesn’t help (apologies for pointing out the obvious!) but then I go on researching as I write. Instead of making it two separate processes, and that makes writing easier and helps a procrastinator like me who would otherwise keep on researching without writing a single letter.

1...1,850 1,8511,852Page 1,852 of 1,852

iPleaders

Making Outbound Investment – A Primer

Is your technology startup safe from patent trolls? Deciphering Paul Allen’s Patent World War.

Introducing iPleaders – Legal Risk Management

The 3 Step Strategy to Minimize Legal Risk: Drafting Tips Included

Should you protect your business from legal risks? 5 solid reasons to do it right now

Rules of Playing with Debt: Why to get into business debt and how to get out when things go wrong

CLAT 2010: Analysis And Expected Cut-off

NLU Delhi Entrance Test: Quick Analysis and Expected Cut-off Marks

Interview: Srishti Aishwarya, With Focus On Outsourcing

Allow notifications

If the modal does not open automatically, then follow these steps.

How Can Experienced Professionals Become Independent Directors

Register now

Thank You for registering with us, you made the right choice!