The Velocity of Risk
In a time of instant crises, internal auditors and their stakeholders need a sense of urgency to identify and manage risk.
RNM ALERT
A MONTHLY R N MARWAH & NEWSLETTER CO. LLP www.rnm.in PUBLICATION VOL NO 123 RNM MONTHLY, APRIL 2019
EDITORIAL TEAM R N MARWAH & CO. LLP
RNM ALERT R N MARWAH & CO LLP W: www.rnm.in E: [email protected] T: 011 - 43192000
AUDIT & ASSURANCE
TAX & REGULATORYNkdckjksj k j vcjjvjasvjjjjavjvn
CORPORATE & Welcome Readers, LEGAL Dear Readers,
CORPORATE The month of April 2019 saw voting in India in large parts with widespread voter participation in a FINANCE true strength of India‘s democratic fabric. Team RNM urges all of you to exercise your franchise by voting. On a separate note, Team RNM offers its condolences to the victims of Cyclone storm ‗Fani‘ which has hit the eastern coast of India and left large devastation in its wake.
The new GST changes in Real Estate sector which have kicked in from April 1, 2019 have far reaching Content: impact in trying to incentivize the flagging fortunes of this important sector of the economy. 1.5% rate is now applicable on Affordable Residential Apartments and 7.5% rate is applicable to Other than WELCOME Affordable Residential Apartments and Commercial Apartment. The said rates come with certain Message by our safeguards and existing projects as on 31.3.2019 have the option of going with old rates of 8% or 12% with input tax credits or new rates without input tax credit. Managing partner
03 DIRECT TAX Corporate Legal Department has been busy this past month with the new changes introduced. A Direct tax case laws training workshop was also organized on the ‗New Compliances under Companies Act, 2013 for FY
2019-20‘ which was well received. The ICSI has also issued a new Guidance Note on Related party 08 INDIRECT TAX Goods & Services tax Transactions which shall go a long way in maintaining good corporate governance standards. cases The Tax Department has been busy analyzing the CBDT proposal for amendment of rules for profit 13 CORPORATE attribution to Permanent Establishments (PE). In cases where business connection or PE is established, LEGAL Law updates profits of the entity in India are taxable to the extent the same are attributable to the operations carried out in India. Quantification of the attribution under Rule 10 has always led to discretion and a lack of 20 CORPORATE uniformity of approach. Team RNM is of the view that such rules would reduce litigation and FINANCE improve ease of Doing Business in India and is therefore a welcome step. Transactions
33 INTERNAL AUDIT We would like to take this opportunity of wishing all our esteemed readers a very Happy Budhha Purnima on May 12, 2019! On this day may we take inspirations from the words of Lord Budhha ―Do 37 TAX DIARY not dwell in the past , do not dream of the future, concentrate the mind in the present moment”. Mark Calendar
For RNM Alert Editorial Team
U.N. Marwah
Managing Partner
Page 3
DIRECT TAX
R N MARWAH & CO LLP W: www.rnm.in E: [email protected] T: 011 - 43192000
2. Section 4: Where in order to set up a joint venture in insurance sector, a foreign company gave capital subsidy to assessee in order to enable it to contribute its share in share capital of joint venture company, amount of subsidy so received was to be regarded as capital receipt not liable to tax. Sundaram Finance Ltd. vs. ACIT (High Court of Madras)
(Image credits freepik.com) Trust Taxation DIRECT TAX CASE LAWS 3. Section 11: Exemption u/s 11 allowed for providing plots to EWS category at Judicial Precedents under various affordable rates being a 'charitable sections of Income Tax Act, 1961 (Act) activity' within meaning of section 2(15). Charge of Income Tax Bangalore Development Authority vs. 1. Section 4: Whether where incentives by ACIT(ITAT Bangalore Bench 'B') way of excise duty refund and sales tax incentives were given to assessee to Profits and gains of business and encourage setting up of new industrial profession
unit in area which was devastated by 4. Section 40a(ia): Disallowance of earthquake, impugned Central excise expense for TDS default shall be made benefit and sales tax incentive received even if payment is made by other by assessee were capital receipts not person on behalf of assessee. exigible to tax. ACIT vs. Hiravati Marine Products (P.) Ltd. (ITAT Rajkot Bench) Welspun India Ltd. v. DCIT (ITAT
Mumbai Bench 'G') 5. Section 40a(ia)/194H: Where assessee, which was selling travel products, paid
fees to banks for providing payment the entire purchase amount cannot be gateway facility, same could not be added. The addition has to be restricted treated as commission or brokerage; to the extent of the Gross Profit rate on hence, not liable to tax under section purchases at the same rate of other 194H. genuine purchases. PCIT vs. Make My Trip India (P.) Ltd. PCIT vs. Mohommad Haji Adam (High Court of Delhi) (Bombay High Court)
Income from other sources Transfer Pricing 6. Section 56(2)(viib)/Rule 11UA: Where 8. Section 92C: No addition could be made The fact that the company is loss- to assessee's ALP on basis of internal making does not mean that shares CUP method where intra AE cannot be allotted at premium. The DCF transactions were fundamentally method is a recognized method though different in character and same could it is not an exact science & can never be not be compared with independent done with arithmetic precision. The fact transactions. that future projections of various factors Gulbrandsen Chemicals (P.) Ltd. vs. made by applying hindsight view DCIT (Ahmedabad - Trib.) cannot be matched with actual performance does not mean that the 9. Section 92C: Company providing DCF method is not correct. The fact that support services to its Associated future projections of various factors Enterprise couldn't be compared with a cannot be matched with actual company doing World Bank sponsored performance does not mean that the projects. DCF method is not correct. DCIT vs. Terex India (P.) Ltd. (ITAT India Today Online Pvt. Ltd vs. ITO Delhi Bench 'I-2') (ITAT Delhi) Determination of tax in certain special Cash Credits cases 7. Section 68/69: Where revenue 10. Section 115BBE: Amendment made to authorities had not disputed the section 115BBE w.e.f. 1-4-2017 denying assessee's sales & there was no set off of losses is prospectively discrepancy between purchases and applicable; assessee could claim set off sales, the purchases cannot be rejected of losses, both current and brought without disturbing the sales in case of a forward, against its business income as trader. Even if the purchases are bogus, well as deemed income under sections
68 to 69C in assessment year‘s prior to Income Escaping Assessment 1.4.2017. 13. Section 148: Where Assessing Officer Famina Knit Fabs vs. ACIT (ITAT did not furnish reasons for issuing Chandigarh Bench 'A') reassessment notice so as to enable assessee to file objections and passed Minimum Alternate Tax reassessment order without hearing 11. Section 115JB: Where, on assessee, it would be a breach of amalgamation, assessee acquired shares principles of natural justice against held by amalgamating company and which writ petition could be filed before same were revalued on basis of fair High Court. market value (FMV), since such North Eastern Electric Power revaluation was mandated by order of Corporation vs. PCIT (High Court of High Court approving amalgamation Meghalaya)
scheme, difference arising between book Rectification of mistake value of shares shown in books of 14. Section 154: Where Assessing Officer amalgamating company and FMV of failed to apply binding precedent that shares which formed capital reserve of blending of tea leaves was not assessee, could not be added while manufacturing or production activity computing book profit under section and had wrongly allowed deduction 115JB. under section 80-I, same being an error Priapus Developers (P.) Ltd. vs. ACIT apparent on face of record, assessment (ITAT Delhi Bench 'F') order was to be rectified under section
Method of Accounting 154. 12. Section 145: In case of hire purchase Hindustan Lever Ltd. vs. JCIT (High Court of Calcutta) transactions, assessee was justified in
adopting EMI method for taxability of Penalties interest income in its return even 15. Section 158BFA: In course of block though assessee had adopted sum of assessment proceedings, only when digit method used for accounting in its final determination of income is in books of account on basis of guidelines excess of that returned by assessee issued by ICAI. under section 158BC, there can be a levy Sundaram Finance Ltd. vs. ACIT (High of penalty under section 158BFA. Court of Madras) CIT vs. C. Najeeb [2019] 104
taxmann.com 250 (Kerala High Court)
Other Important Direct Tax Updates Commission‖ for exemption under section 10(46). 16. CBDT Press Release Dated 22-4-2019
The Delhi unit of the Directorate 18. Circular No. 7/2019 General of Income-tax (investigation) [F.NO.370142/17/2018-TPL], dated 8-4- had carried out search and seizure 2019 operation in NCR on 07/04/2019 on a The due date for furnishing of report leading Solar Power group based upon under Section 286(4), in respect of credible information. The said search transactions between constituent action has led to detection of large scale subsidiaries of US parent co., has been tax evasion of more than Rs. 1350 Crore. extended by the CBDT for reporting
accounting years ending up to April 29, 17. Notification No. So 1537(E) 2018, to April 30, 2019. [No.33/2019 (F.No.300196/63/2018-Ita-I)]
dated 9-4-2019 19. CBDT Press Release, Dated 8-4-2019 The Central Government has notified The Income-tax Department has carried ―Mysore Palace board‖, ―Kerala out searches at about 52 locations in 4 Headload Workers Welfare Board‖ and states i.e. NCR, Bhopal, Indore and Goa ―Telangana State Electricity Regulatory seizing a total of Rs. 767.60 crores. Several benami properties, 252 bottles of liquor, few every person except super senior citizen arms and hide skins of tiger found at the filing return in ITR-1 or ITR-4. searched locations have been seized. 21. Notification No. 31/2019 20. Notification No. GSR 279(E) [F.NO.225/75/2019-ITA.II], DATED 31- [No.32/2019 (F.No.370142/1/2019-Tpl)], 3-2019 Dated 1-4-2019 Due date for linking PAN and Aadhaar CBDT has notified the new Income-tax has been extended from 31.03.2019 to return (ITR) forms for Assessment Year 30.09.2019. It has also been clarified that 2019-20. Various changes have been with effect from 01.04.2019, it is incorporated in the new forms. Now a mandatory to quote Adhaar number person being director in any company while filing the return of Income, unless cannot file his return in ITR-1. Further, assessee has specifically been exempted. NR person opted for presumptive taxation scheme cannot file return in ITR-4. Now e-filing is mandatory for
22. Notification dated 25th April 2019 25. Notification F. No. 5(2)-B(PD)/2019 CBDT notified all the provisions of the dated 3rd April 2019 agreement entered into between India Ministry of Finance has notified the and United State of America on the deposits made under the Special exchange of Country-By-Country Deposit Scheme for non-government reports. The agreement was signed on Provident, Superannuation and gratuity 27-03-2019. funds, w.e.f 01-04-2019 to 31-03-2019, shall bear interest at 8% rate. 23. Gold and Silver rates as on March 31, 2019
The rates of Gold and Silver as on March 31 are required for valuation of the inventories [As per the ICDS-II (Inventories), inventories shall be valued at lower of cost or net realizable value whichever is lower]. The rate of Gold 995 is Rs. 31,640 per 10 grams and rate of Silver 999 is Rs. 37,245 per 1 KG as on March 29, 2019. The same shall be applicable for March 31, 2019 due to closure of market on Saturday & Sunday.
24. CBDT amends Form 16& Form 24Q CBDT has notified changes in Form 16
(TDS Certificate for Salary Income) and Form 24Q (TDS return in respect of salary). The changes have been made to bring TDS certificate in sync with new ITR forms issued for AY 2019-20. The new forms seek more details related to salary paid or credited during the year. Now, furnishing of PAN of lender is
mandatory in case the housing loan is taken from a person other than a Financial Institution/employer.
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INDIRECT TAX
R N MARWAH & CO LLP W: www.rnm.in E: [email protected] T: 011 - 43192000
Findings: NFC is central government company and is managed by Department of Atomic Energy (under Prime Minister Office and Atomic Energy Commission) As per clause 119 of Sect. 2 of CGST Act 2017, ―works contract‖ means a contract for building, construction, fabrication, completion, erection, installation, fitting out, (Image credits freepik.com) improvement, modification, repair, maintenance, renovation, alteration Advance Ruling 1: or commissioning of any immovable
property wherein transfer of TATA Projects Limited The applicant entered into contract with property in goods (whether as goods Nuclear Fuel Complex (NFC) (Deputy or in some other form) is involved in Chief Engineer-Govt. of India) to render the execution of such contract. ―Contract for Civil, Structural and PH Since, all civil work will give rise to works for plant and non-plant buildings immovable property hence covered along with allied services. under definition of works contract. The scope of work included Further, the activity may fall under architectural work, structural work, the definition of business being general civil work, electrical work and engaged in manufacture and ITS. enrichment of fuel to be ultimately used for production of electricity. Issue: The GST rate applicable on above Thus supply of works contract service mentioned services rendered to falling under Serial No 3(xii) of government authorities.
amended Notification 11/2017 Central relation to such supply but which Tax (Rate) will attract GST at 18%. has been incurred by the recipient of the supply and not included in the price actually paid or payable for the Advance Ruling 2: goods or services or both is includible in value. This cannot Mr. Navodit Agarwal cover free inputs or services The Applicant, Shri Navodit is a supplied by recipient as only transporter in a few cement companies 'amount' paid by recipient on behalf engaged in transporting Cement of supplier is includible. This would /Clinkers. be so only where there was
contractual liability on supplier to Facts of the case: make those supplies. Applicant providing transportation services and the receiver of services In the instant case, the service supply the diesel required by the recipient i.e. M/s Shree Raipur transporter. Cement, is providing diesel to the Issue: vehicles used by the applicant to Whether supply of service of diesel transport cement/clinker in the provided by the recipient is to be added course of business of cement by the in the value of freight or not and on the cement company. Diesel so provided amount eligible to GST (Inclusive of by the service recipient to the diesel or exclusive diesel cost). applicant for use in truck/ vehicles of the applicant forms an important Findings: and integral component of this business process, without which the As per section 7(1) of CGST Act 2017: process of supply of cement can Supply includes - All forms of never get materialized. supply of goods or services or both Thus from the above legal such as sale, transfer barter, provisions, any amount that the exchange, /license, rental, lease or supplier is liable to pay in relation to disposal made or agreed to be mode such supply but which has been for consideration by a person in the incurred by the recipient of the course or furtherance of business; supply and not included in the price Section 15 (2)(b) of CGST Act,2017 actually paid or payable for the stipulates as under:- Any amount goods or services or both is that the supplier is liable to pay in includible in value.
Notifications CGST Tax Notification No. 21/2019 - Central Tax The registered persons paying tax under Notification No. 20/2019 - Central Tax the provisions of section 10 of the said The registered person shall furnish Act (i.e. Person Taxable under all the returns of period from the Composition Scheme) shall furnish a date of effectiveness of the order of quarterly statement with payment cancellation of registration till the details of self-assessed tax in FORM GST date of order of revocation of CMP-08 and a return for every financial cancellation of registration within 30 year in FORM GSTR-4 shall be deemed days from the date of order of to have complied with the provisions of revocation of cancellation of section 37 and section 39 of the said Act. registration. Subsequent to Notification No Notification No. 03/2019 - Central 02/2019 Central Tax (Rate) dated Tax(Rate) March 07, 2019, the service provider New rate of GST applicable for (with turnover not exceeding Rs. 50 construction activity carried out after Lakh in preceding Financial Year) April 01, 2019 and for ongoing projects opting for composition scheme (GST where promoters have opted leviable @ 6%) shall furnish: concessional rate. Quarterly statement on first Particulars Projects Residential Real Existing (including Real Estate Estate Tax supplies of goods or services or on-going Project Project Rate both upto an aggregate turnover projects Effective Tax Rate of fifty lakh rupees made on or Residential Affordable 1% 1% 8% Apartment Residential after the 1st day of April in any Apartment financial year in Form GST CMP- Others 5% 5% Commercial Commercial 5% 12% 12% 08 with details of self-assessed Appartments Appartments tax, till eighteenth of succeeding such quarter Circulars A return for every financial year or as the case may be, part Circular No. 98/17/2019-CGST thereof in Form GSTR-4, till Clarification in respect of utilization of thirtieth day of April following input tax credit under GST: the end of each financial year. CBEC clarify Section 49 A and Section 49B read with Rule 88A of CGST Rules, 2017 which provides the restriction of utilization of input tax credit (ITC) of
CGST, SGST, UTGST before utilizing Option 2 ITC of IGST. ITC on Discharge Discharge Discharge Balance account on output on output on output of IGST of liability liability liability As per the Circular it is being clarified on on on account account account that utilization of Input tax credit of of IGST of CGST of SGST Integrated tax towards the payment of IGST 1000 100 200 0 CGST 0 200 0 0 Central tax and State tax, or as the case SGST 0 0 100 100 may be, Union territory tax, in any order Total 1000 300 300 0 subject to the condition that the entire Circular No. 99/18/2019-GST input tax credit on account of Integrated It is clarified, as per Removal of tax is completely exhausted first before Difficulty Order (RoD) number 05/2019- the input tax credit on account of Central Tax dated the 23rd April, 2019 Central tax or State / Union territory tax registered persons whose registrations can be utilized. have been cancelled after notice being
served and who could not reply to the Illustration: said notice and for whom cancellation Amount of Input tax Credit available order has been passed up to 31st March, and output liability under different tax 2019, have been given one time heads: opportunity to apply for revocation of cancellation of registration on or before Head Output Liability Input Tax Credit the 22nd July, 2019. Integrated Tax 1000 1300
Central Tax 300 200 Circular No. 101/20/2019-GST State Tax/ Union 300 200 It is hereby clarified that GST exemption Tax Total 1600 1700 on the upfront amount (called as premium, salami, cost, price, Option 1 development charges or by any other ITC on Discharge Discharge Discharge Balance name) payable for long term lease (of account on on on thirty years, or more) of industrial plots of output output output liability liability liability or plots for development of on on on infrastructure for financial business account account account of IGST of CGST of SGST under Entry No. 41 of Exemption IGST 1000 200 100 0 Notification 12/2017 – Central Tax (R) CGST 0 100 0 100 dated 28.06.2017 is admissible SGST 0 0 200 0 Total 1000 300 300 0 irrespective of whether such upfront amount is payable or paid in one or
more installments, provided the amount is determined upfront.
GST Calendar – April’2019 Due Date Due Date relates to Who needs to do the compliance Relevant provision May 10, 2019 Due date for filing GST TCS Every electronic commerce operator As per Section 52 of CGST (“operator”), not being an agent. Act, 2017 May 10, 2019 Due date to file Form at Taxpayers providing construction Notification 03/2019 Central Annexure- 4 to Notification services (for ongoing construction Tax (Rate) 03/2019 Central Tax (Rate) services) may exercise one time option to pay taxes at existing rates (8%/12% on residential apartments) for invoices raised after April 01, 2019. May 11, 2019 GSTR-1 for the month of April Taxpayers having turnover of more Notification No. 12/2019 – 2019 than 1.5 crore Central Tax
May 20, 2019 Due date of GSTR-3B for the All registered Tax Payers Notification No. 13/2019 – month of April 2019 Central Tax May 20, 2019 Due date of GSTR-5 for the Non-resident Taxable Person Section 39 of CGST Act, 2017 month of April 2019
Page 13 CORPORATE LEGAL
R N MARWAH & CO LLP W: www.rnm.in E: [email protected] T: 011 - 43192000
Employees‘ State Insurance Corporation (ESIC) registration PLUS Employees‘
Provident Fund Organisation (EPFO) registration) with effect from 31st March 2019. The application for incorporation of a company under Rule 38 shall be accompanied by e-form AGILE (lNC 35) containing an application for registration of the GSTIN with effect
(Image credits freepik.com) from 31st March, 2019, EPFO with effect from 8th April, 2019 and ESIC with
effect from 15th April, 2019. COMPANY LAW UPDATES [Source: MCA notification dated 29.03.2019]
Companies Indian Accounting Companies (Incorporation) Third Standards (Ind AS) First and Second Amendment Rules, 2019 Amendment Rules, 2019 MCA has notified the Companies MCA has notified the Companies Indian (Incorporation) Third Amendment Accounting Standards (Ind AS) First Rules, 2019 which shall come into force and Second Amendment Rules, 2019, on the date of publication in the official applicable w.e.f. 1 April, 2019, to amend gazette i.e 29-03-2019. MCA has inserted the ‗Annexure B on Indian Accounting new Rule 38A and has mandated that Standards (Ind AS)‘ to the Companies the application (SPICe) for incorporation (Ind AS) Rules, 2015 (the principal of a company shall be accompanied by a rules), by way of inserting/ substituting linked e-form AGILE (Application for various paragraphs, annexures, etc. in registration of the Goods and Services different Ind AS. In short, Ind AS 1, 2, 7, Tax Identification Number (GSTIN), 12, 16, 17, 19, 21, 23, 28, 32, 37, 38, 40, 41,
101, 103, 104, 107, 109, 111, etc. have
been amended. Further, The Ministry of Dispensation of filing of affidavits in Corporate Affairs has notified the new INC-9 Ind AS 116, Leases. It shall replace MCA has clarified that Filing of existing Ind AS 17 and be effective from affidavits has been dispensed with vide financial years beginning on or after the Companies (Amendment) Act, 2017 April 1, 2019. The new Standard will effective from 27th July 2018. Only impact accounting of leases in the books declaration by first subscriber(s) and of lessees. director(s) in INC-9 is mandatory and [Source: MCA notification dated 30.03.2019] affidavit is NOT required to be filed. Stakeholders are requested to Relaxation of additional fees and please note that Filing of extension of last date of filing e-form affidavits (from each of the subscribers CRA-2 to the memorandum and from persons MCA has issued a circular for named as the first directors, if any, in Relaxation of additional fees and the articles that he is not convicted of extension of last date of filing e-form any offence in connection with the CRA-2 (Form of intimation of promotion, formation or management of appointment of cost auditor by the any company, or that he has not been company to Central Government) in found guilty of any fraud or certain cases under the Companies Act' misfeasance or of any breach of duty to 2013. The Ministry has received several any company under this Act or any representations about extension of last previous company law during the date for filing e-form cRA-2 without preceding five years and that all the additional fees where the company has documents filed with the Registrar for been mandated to get its cost records registration of the company contain audited for the first time under information that is correct and complete Companies Act, 2013 on account of and true to the best of his knowledge Companies (Cost Records and Audit) and belief) as per Section 7(1)(c) of the Amendment Rules, 2018. It has been Companies Act, 2013 read with rule 15 decided by MCA to extend the last date of the Companies (Incorporation) Third for filing of e-form cRA-2 in the Amendment Rules has been dispensed abovementioned cases without payment with vide the Companies (Amendment) of additional fees upto 31.O5.2O19. Act, 2017- from 27th July 2018. Only [Source: MCA Circular dated 04.04.2019] declaration by first subscriber(s) and
director(s) in INC-9 is mandatory and
affidavit is NOT required to be with the said provisions may kindly filed. Stakeholders may kindly note the await the deployment of the modified above provisions while filing SPICe form for fulfilling their compliance forms for incorporation of Companies. requirements. [Source: MCA website] [Source: MCA website]
Clarification on DIR-3KYC Extension of date of filing of form MCA has clarified that the provisions of DPT-3 Rule 12A of the Companies MCA has extended the date of filing of (Appointment and Qualification of form DPT-3 due to non -deployment of Directors) Rules 2014, w.r.t submission Form on MCA 21 portal and the of e-form DIR-3-KYC is an annual additional fee, shall be levied after 30 compliance and required to be filed by days from the date of deployment of the every director, every year. It has also DPT- 3 form on MCA 21 portal. As per been clarified that the e-form DIR-3 Rule 16A(3) of the Companies KYC, presently available on the portal (Acceptance of deposit) Rules, 2014 does not cater the requirement of Filing "every company other than Government on annual basis, and Filing in respect of company shall file a onetime return of DINs allotted post 31 March 2018. It outstanding receipt of money or loan by presently caters only to those a company but not considered as individuals who were allotted DINs as deposits, in terms of clause (c) of sub- on 31st March 2018 and whose DINs rule 1 of rule 2 from the 01 April, 2014 to have been marked as ‗Deactivated due the date of publication of the to non-filing of DIR-3 KYC‘. With the notification in the Official Gazette, as objective of making the form more user specified in Form DPT-3 within ninety friendly, the form is presently being days from the date of said publication of modified to enable pre-filling of data & this notification i.e 22-01-2019 along information so that annual filings can be with the fee. It is also clarified that data done by DIN holders in a simple and on deposits should be filed upto 31st user friendly manner. The revised form, March, 2019 (as opposed to 22nd which will be shortly deployed, can be January, 2019 which was originally filed without any fee within a period of indicated in the said Rule). Rule change 30 days from the date of deployment. is being issued separately. Accordingly, DIN holders who had filed [Source: MCA Circular dated 12.04.2019] DIR-3 KYC form earlier and complied
Clarification of manufacturing The MCA has notified the Companies activities of LLP (Registration Offices and Fees) Second MCA has clarified that Manufacturing & Amendment Rules, 2019 for allied activities for LLP are no longer in applicability of fee after 15-06-2019 and the restrictive domain and can now be parallel amendment through the allowed at the time of incorporation and Companies (Incorporation) Fourth for conversion of existing companies Amendment Rules, 2019 also notified. into LLP having such objects. MCA has [Source: MCA notification dated 25/04/2019] withdrawn their internal OM No. CRC/LLP/e-Forms dated 06.03.2019, MCA advisory on w.r.t various Charge related e-Forms, RD-1, GNL-5 invoking the restriction regarding MCA has issued Advisory on the MCA Manufacturing activities for LLP. ICSI portal w.r.t various Charge related e- has made a comprehensive Forms, RD – 1, GNL – 5 and the change representation on the said issue vide its which have been made and which are letter dated 08-04-2019 to MCA and under progress after the notification of requested for the said clarification. the Companies (Amendment) [Source: MCA website] Ordinance 2019. It has been clarified
Extension of date of filing of INC – that form CHG-1 & Form CHG - 9 22A (Form ACTIVE) containing changes of the Companies The MCA has issued the much awaited (Amendment) Ordinance 2019 is under notification for extension of due date for progress. However, the existing form filing of eForm INC – 22A (Form CHG-1 & CHG 9 has been restricted for ACTIVE) from 25-04-2019 to 15-06-2019. registering charges created or modified The disclosure requirement, which came on or after 02.11.2018 if the form is filed into effect from February, make it after 120 days of the date of such mandatory for registered companies to creation or modification. Stakeholders upload pictures of their business may kindly note that in case charge is premises and at least one director. created or modified after 02.11.2018 and Ministry of Corporate Affairs have 120 days have expired therefrom, the received many representations from form CHG-1 & CHG-9 cannot be filed to industry associations for Extension of register such charges and there is no the Due date with many companies yet option for condonation of delay. It is to comply thereafter Ministry of further clarified that Changes to CHG-4 Corporate Affairs decided to Extend the based on the Companies (Amendment) Due date of form INC 22A (ACTIVE). Act,2017 have been made in the form
CHG-4 since December 25, 2018. (FPI) and a Foreign Venture Capital However, the forms filed between Investor (FVCI), registered with the 05.07.2018 to 24.12.2018 where Securities and Exchange Board of India condonation is asked for, stakeholders (SEBI) to open and maintain a non- may contact the jurisdictional ROCs to interest bearing foreign currency request for an additional resubmission account for the purpose of making chance. On resubmitting the revised investment in accordance with the form, there shall be no requirement of Foreign Exchange Management condonation to be filed if form is filed (Transfer or Issue of Security by a after 30 days and within 300 days of Person Resident Outside India) satisfaction of charge. Further, Form Regulations, 2017, as amended from CHG-8 & Form GNL – 5 containing time to time. Authorized Dealers may changes of the Companies open only one Non-Resident Ordinary (Amendment) Ordinance 2019 are under (NRO) Account for a citizen of progress. Bangladesh or Pakistan, belonging to [Source: MCA website] minority communities in those countries, namely Hindus, Sikhs, FEMA Updates Buddhists, Jains, Parsis and Christians, residing in India and who has been Opening of NRO Accounts by Long granted a Long Term Visa (LTV) by the Term Visa (LTV) holders, changes Central Government. The account will related to Special Non-Resident Rupee be converted to a resident account once (SNRR) Account and Escrow Account such a person becomes a citizen of India RBI has made amendments to Foreign within the meaning of the Citizenship Exchange Management (Deposit) Act, 1955. Regulations, 2016 w.r.t Opening of NRO [Source: RBI Circular dated 28.03.2019] Accounts by Long Term Visa (LTV) holders, changes related to Special Non- Investment by Foreign Portfolio Resident Rupee (SNRR) Account and Investors (FPI) in Debt – Review Escrow Account. The FEM (Deposit) RBI has amended the Schedule 5 to the (Amendment) Regulations 2018 i.e Foreign Exchange Management FEMA 5(R)(1) have since been notified, (Transfer or Issue of Security by a necessitating following changes to the Person Resident outside India) extant instructions. Authorized Dealers Regulations, 2017 w.r.t Investment by may allow a Foreign Portfolio Investor Foreign Portfolio Investors (FPI) in
Debt. As a measure to broaden access of Scheme will continue to be administered non–resident investors to debt from the offices of the Non-Banking instruments in India, Foreign Portfolio Financial Companies Ombudsman in Investors (FPI) are now permitted to four metro centers viz. Chennai, invest in municipal bonds. FPI Kolkata, Mumbai and New Delhi for investment in municipal bonds shall be handling complaints from the respective reckoned within the limits set for FPI zones, so as to cover the entire country. investment in State Development Loans The extension of the Scheme to eligible (SDLs). All other existing conditions for Non-Deposit Accepting Non-Banking investment by FPIs in the debt market Financial Companies shall come into remain unchanged. effect and force from April 26, 2019. [Source: RBI Circular dated 25.04.2019] [Source: RBI Circular dated 26.04.2019]
Ombudsman Scheme for Non-Banking Miscellaneous Financial Companies, 2018
The Reserve Bank Extends Ombudsman One time opportunity to update their Scheme for Non-Banking Financial e-mail addresses Companies to eligible Non-Deposit The Trademarks Registry has issued a Taking Non-Banking Financial Public Notice providing an one time Companies having asset size of Rupees opportunity to all applicants to update 100 crore or above with customer their e-mail addresses with registry who interface. The Non-Banking Financial are having email address with domain Company-Infrastructure Finance name @vsnl.net. It has also been Company (NBFC-IFC), Core Investment observed that substantial number of Company (CIC), Infrastructure Debt applicants have registered their e-mail Fund-Non-banking Financial Company addresses with domain name @vsnl.net. (IDF-NBFC) and an NBFC under In this regard, the applicants may liquidation, are excluded from the ambit submit their request of the Scheme. The Non-Banking to [email protected] containing Financial Company - Infrastructure following relevant information namely Finance Company (NBFC-IFC), Core application number, existing vsnl e-mail Investment Company (CIC), id and the new e-mail id immediately Infrastructure Debt Fund-Non-Banking but not later than 10.05.2019. TM Agent Financial Company (IDF-NBFC) and an / Attorney registered with this office are NBFC under liquidation, are excluded also requested to provide additional from the ambit of the Scheme. The
working email address if their email Mark Registry because of a failure on addresses happen to be registered at the part of agent / applicant to amend domain @vsnl.net. Further it has been their email address within stipulated clarified that the TM office will not be time. responsible for non-delivery of any of [Source: TM Public Notice dated 23/04/2019] the office communication by the trade
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The company will match IFC‘s investment with $300 million from other sources to create a $400 million pool for financing commercial vehicle purchases by small and medium enterprises (SMEs) in low-income states of India. Last month, IFC said it planned to offer $35 million to DCM Shriram Ltd to help the agribusiness company expand a sugar factory and install a power plant. Apart from lending to companies, IFC actively backs private equity and PRIVATE EQUITY venture capital funds in India. It also has an active direct private equity-style investment practice in the country. Tata Motors Finance to raise $100 mn [Source: VC Circle, 29 April, 2019] in debt funding from IFC International Finance Corporation plans DEG adds another Indian mid-market to offer up to $100 million (Rs 700 crore) PE firm to LP portfolio in debt funding to Tata Motors Finance German development finance institution Ltd, the World Bank's private-sector Deutsche Investitions- und investment arm said. Entwicklungsgesellschaft (DEG) is The proposed investment comprises a placing another bet on India. senior, secured funding of up to five DEG has come in as a limited partner years either through external (LP) for a fund floated by homegrown commercial borrowings or by mid-market private equity firm Ascent subscribing to non-convertible Capital, a person familiar with the debentures issued by the non-bank development told VCCircle. lender, IFC said in a disclosure.
DEG has committed €15 million ($16.7 According to its website, Ascent has million or Rs 117 crore) to Ascent assets under management of $600 Capital‘s fourth fund, the above- million across multiple funds. mentioned person said on the condition The mid-market PE firm invests across of anonymity. sectors such as technology, healthcare, VCCircle reported late last year that financial services, consumer brands and Ascent had kicked off the process of infrastructure. Its typical ticket size raising capital for a new fund nearly a ranges between $10 million and $30 decade after its previous outing. million. The investment firm is said to be Ascent has been making fresh bets from targeting a corpus of $350 million its $350-million third fund and exiting (around Rs 2,450 crore). previous investments as well. The new investment vehicle would In 2017, the fund made a three-fold mark Ascent Capital‘s first since the return on its investment in Kerala current management headed by Raja Institute of Medical Sciences (KIMS) Kumar acquired sole control from UTI after exiting the multi-specialty hospital Asset Management Company Ltd more chain. than two years ago. Besides, it partially or fully exited two Kumar had initiated the process of other firms the same year — Strand Life gaining management control of Ascent Sciences Pvt. Ltd and Shriram EPC Ltd. Capital eight years ago after the PE firm In addition, the firm exited RBL Bank was spun out from UTI Venture Funds via the lender‘s IPO in 2016. Management Company Ltd, which in Ascent also clocked an exit when online turn is a part of UTI Asset Management payments firm Citrus Payments Company. Solutions Pvt. Ltd was acquired by According to VCCEdge, the research South African media and internet arm of News Corp Mosaic Digital, conglomerate Naspers Ltd in a cash deal Ascent is managing the two funds in one of the largest M&As in the raised under UTI Ventures. The first segment. fund was raised in 2000 with a corpus of [Source: VC Circle, 29 April, 2019] $35 million while the second one was raised in 2004 with a corpus of $153 Haldiram Prabhuji acquires PE-owned million. restaurant chain operator Haldiram Prabhuji, a faction of the Haldiram group which caters to eastern
India, has made an acquisition that SoftBank invests $125 mn in signals a shift in strategy for the maker Alphabet's Loon internet balloons of ethnic sweets and snacks. A SoftBank Corp business seeking to Kolkata-headquartered Haldiram find a way to fly cellphone antennas Bhujiawala Pvt. Ltd has snapped up Pan high in the atmosphere to provide India Food Solutions Pvt. Ltd, two internet in underserved areas said on people familiar with the development Wednesday it was investing $125 told VCCircle. The deal size could not million in an Alphabet Inc spinoff be ascertained. working on the same problem. Pan India Food Solutions, which SoftBank‘s year-old HAPSMobile and operates under the brand Blue Foods, is Alphabet‘s Loon, which spun out last controlled by private equity firm July from the research incubator of the Everstone Capital. It is a franchisee for Google parent, separately have been beverage chain The Coffee Bean & Tea trying to fly networking equipment at Leaf and ice cream parlour Gelato high altitudes to provide high-speed Italiano. internet where ground-based towers are Haldiram Prabhuji‘s finance head unreachable. Anand Bardia confirmed the deal, but Loon carries the gear with a large declined to divulge details about the balloon, while HAPSMobile uses a large transaction size and other specifics. drone. Everstone Capital did not immediately Despite internet coverage gaps in rural respond to a request for comment. areas or during natural disasters, mobile On paper, Haldiram has acquired all the network operators, governments and associated brands under the Pan India other potential customers have yet to Food Solutions umbrella such as demonstrate much enthusiasm for Spaghetti Kitchen, Spoon, Food Talk, buying skyborne technologies. and Noodle Bar. Also in the competition to fill the However, VCCircle has learnt that it coverage gaps are several billionaire plans to focus only on The Coffee Bean entrepreneurs, including Elon Musk, & Tea Leaf and Gelato Italiano -- the Richard Branson and Jeff Bezos. Each is only operational brands at present after backing separate early-stage ventures Pan India previously said it had that want to beam internet from shuttered loss-making units. satellites in near-Earth orbit. [Source: VC Circle, 26 April, 2019] Loon and HAPSMobile said on Wednesday that collaboration could be
the key to adoption. They are discussing Blackstone to buy majority stake in the possibility of using each other‘s‘ Essel Propack for up to $460 mn technology, standardizing their airborne Blackstone Group LP, the world‘s and ground networking gear and biggest private equity firm, has agreed joining forces in regulatory discussions, to acquire a majority stake in Indian they said in a statement. packaging company Essel Propack Ltd The companies described their for as much as Rs 3,211 crore ($460 partnership as a ―long-term‖ tie-up of million). one of Japan‘s top three wireless carriers The PE firm will buy a 51% stake from and one of the world‘s biggest tech Essel‘s promoters for Rs 2,157 crore and companies. make an open offer to purchase an ―I‘m confident we can accelerate the additional 26% from the public path toward the realization of utilizing shareholders, the Mumbai-based the stratosphere for global networks by company said in a stock-exchange filing. pooling our technologies, insights and Chairman Ashok Goel-led promoters experience,‖ Junichi Miyakawa, held a 57.03% stake in Essel Propack as SoftBank‘s chief technology officer and on 31 March and will retain about 6%. HAPSMobile‘s chief executive, said in Goel will move into an advisory role the statement. and will get Rs 80 crore over a five-year ―Even in this current era of coming 5G period. services, we cannot ignore the reality Blackstone will pay Rs 134 per share to that roughly half of the world‘s Essel Propack‘s promoters and Rs 139.19 population is without internet access,‖ per share to the public shareholders. Miyakawa added. Shares of Essel Propack gained 0.9% to Loon has tested balloons for nearly a close at Rs 132.65 apiece on Monday on decade and expects to hold its first the BSE, where the benchmark Sensex commercial trial in Kenya this year. fell 1.3%. HAPSMobile emerged from technology According to media reports in February, developed by dronemaker French packaging company Albéa, AeroVironment Inc, which owns 10 Indorama and US-based private equity percent of the SoftBank subsidiary. giant The Carlyle Group were also in Loon said it has the option to later the fray for Essel Propack. invest $125 million in HAPSMobile. Amit Dixit, senior managing director [Source: VC Circle, 25 April, 2019] and head of private equity in India at Blackstone, said that the PE firm aims to
leverage the ongoing industry shift to agreement with the sovereign wealth laminated tubes and Essel Propack‘s fund of Abu Dhabi and NIIF for the leadership position in oral care to stake sale. accelerate growth in fast-growing The transaction is subject to conclusion categories such as beauty, cosmetics and of confirmatory due diligence by ADIA pharmaceuticals. and NIIF, agreement on definitive Dixit said the deal doesn't include any documents and satisfaction of fresh capital commitment to the customary closing conditions including company. However, it may consider regulatory and third-party approvals selective acquisition opportunities to and lender consents. strengthen research and development GVK didn't disclose financial details of capabilities and for market expansion. the deal but said all proceeds from the Essel Propack chairman Goel said that proposed transaction will be used to he would use the proceeds from the sale repay its debt. in his group companies such as Essel The company said the move comes after World, Water Kingdom and Fun it initiated a process to select investors Kingdom. Another Goel-owned to raise capital to reduce or refinance company that changed hands was debt obligations of up to Rs 5,750 crore. ItzCash Card Ltd, which was sold to "The funds brought in through this US-based software firm Ebix Inc. in proposed transaction will help us 2017. deleverage as we continue with our [Source: VC Circle, 22 April, 2019] endeavours to create the infrastructure for a strong aviation hub in India that ADIA, NIIF ink pact to invest in GVK's airport business will provide the impetus for growth and Abu Dhabi Investment Authority development for the entire country," (ADIA) and India's National Investment said GVK Reddy, founder and chairman & Infrastructure Fund (NIIF) have of GVK. signed an initial pact to acquire a 49% "Our future focus will be on delivering stake in the airports holding company of Navi Mumbai International Airport, GVK Power & Infrastructure Ltd. successfully monetising Mumbai GVK Power said in a stock-exchange airport‘s real estate and building a filing on Thursday that the company strong airports business at GVK,‖ and units GVK Airport Developers Ltd Reddy said. and GVK Airport Holdings Ltd have signed a term sheet and exclusivity
Citigroup Global Markets India Pvt Ltd Unilever Ventures, Lenovo and Blume is acting as the exclusive financial Ventures. adviser to GVK for the transaction. [Source: VC Circle, 29 April, 2019] [Source: VC Circle, 18 April, 2019] TVS Motor unit leads Series A funding in industrial IoT startup Altizon Altizon Systems Pvt. Ltd, which VENTURE CAPITAL operates a platform to develop solutions based on industrial Internet of Things Sachin Bansal's BAC Acquisitions bets (IIoT), said it has raised $7 million on grocery startup Milkbasket (around Rs 49 crore) in its Series A Gurugram-based micro-delivery round of funding. grocery startup Milkbasket on Monday TVS Motor Co. (Singapore) Pte Ltd, a said it has raised Rs 20 crore ($2.8 wholly owned subsidiary of motorcycle million) from BAC Acquisitions, the company TVS Motor Company Ltd, led personal investment vehicle of Flipkart the round, Altizon said in a statement. co-founder Sachin Bansal. Existing investors The Hive Fund, The company, which is operated by Wipro Ventures and Lumis Partners Aaidea Solutions Pvt. Ltd, will use the also participated in the funding round, money to meet its capital expenditure it added. needs and drive research and The Pune-based company intends to use development, said Milkbasket in a the fresh capital to strengthen its statement. international presence and develop "Milkbasket is now working on the next intellectual property (IP). set of innovations to further consolidate ―We have a strong roster of global its market leader position across its industrial majors as our customers and fresh fruit and vegetable offering, they can now gain further benefit from automating the daily delivery supply our global footprints and enhanced chain and reducing go-to-market time technology offerings," said Vinay for multi-city expansion," said Anant Nathan, CEO, Altizon. Goel, co-founder and chief of Altizon had first raised external funding Milkbasket. in 2014 from The Hive Fund and other With the latest funding from BAC investors. Wipro Ventures and Pi Acquisitions, Milkbasket has raised Ventures had come in as new investors close to $16 million, it said. Other in 2016. This was followed by a more investors in the firm are Beenext,
funding from existing investors last Crosswords or Brick Breaker and then year, TechCircle had reported. pick a tournament which suits their [Source: VC Circle, 29 April, 2019] wallet. Each tournament runs for a certain duration and has a specific Sequoia leads $35.5 mn funding round in gaming startup Mobile Premier number of users who can play it. League Once the results are announced for a Digital gaming startup Mobile Premier tournament, winners can cash out League (MPL) has raised $35.5 million immediately with Paytm, Unified (about Rs 250 crore) in a Series A round Payments Interface or bank transfer, of funding led by venture capital and according to the company‘s website. [Source: VC Circle, 24 April, 2019] growth-equity investment firm Sequoia Capital. Nexus Venture Partners, Omidyar Times Internet, GoVentures, RTP Network India invest in ed-tech Global, BeeNext, Base Growth and startup WhiteHat Jr Venture Highway also invested in this Mumbai-based ed-tech firm WhiteHat Jr round, MPL said in a statement. The has raised Rs 9 crore ($1.3 million) in a startup will use the funds to invest in its seed funding round from venture product and to acquire users in India. capital firm Nexus Venture Partners and ―Competitive gaming in India will be early-stage investment firm Omidyar mobile-first and MPL wants to be the Network India Advisors, the startup platform of choice for the user,‖ said Sai said in a statement. Srinivas Karan, CEO of MPL. The startup will use the money to Operated by Galactus Funware develop its technology and to build its Technology Pvt. Ltd, MPL runs a team, the statement added. gaming platform where users compete The startup teaches coding to students in live tournaments for skill-based between the ages of 6 and 14 via a live mobile games to win money. online one-to-one platform. Children are "With their industry-leading growth taught the principles of coding— and engagement metrics, MPL has the sequence, structure, logic, commands potential to become a major mobile and algorithmic thinking. internet company in India," said [Source: VC Circle, 16 April, 2019] Shailendra Singh, MD at Sequoia Capital. Eight Roads writes $4.5 mn cheque to MPL allows users to choose a game of digital investment platform Kuvera their choice such as Sudoku,
Digital investment advisory startup The global team was set up eight Kuvera has raised $4.5 million (Rs 31 months ago to invest in fintech crore) in a Series A round of funding businesses that can be a strategic fit for from Eight Roads, the proprietary Fidelity. It recently invested in UK- investment arm of Fidelity International based savings and investment platform Ltd. Moneybox. Kuvera is the team's first Kuvera, run by Bengaluru-based investment in India. Arevuk Advisory Services Pvt. Ltd, said Eight Roads Ventures has separately in a statement it will use the funds to invested in a number of Indian startups build its team and expand its product across sectors. The firm has made at portfolio. least four other India-related bets this ―With Eight Roads as an investor, we year alone. will continue to innovate and expand The investment firm led the Series A our advisory offering across financial round of animal pharmaceuticals products,‖ said Gaurav Rastogi, CEO company Ashish Life Science Pvt. and co-founder of Kuvera. Ltd and the Series B round of software The startup said it is increasing its use of engagement firm Whatfix. artificial intelligence to help its Eight Roads Ventures and its US-based customers earn better returns on their sister fund F-Prime Capital also invested investments while enhancing its Rs 218 crore in the injectables unit of product and service offerings to reduce Caplin Point Laboratories Ltd. the cost of accessing multiple financial Besides, the firm invested more money products through a single digital in US-based MineralTree Inc, which platform. offers payment automation solutions Kuvera, which also users to switch from and is led by its Indian-origin founder. regular mutual funds to direct mutual [Source: VC Circle, 16 April, 2019] funds, manages more than Rs 3,000 Women’s wellness startup co-founded crore in mutual fund investments. by former Ola employee raises seed funding Eight Roads Azah Personal Care Pvt. Ltd, a premium The investment in Kuvera was made by organic wellness startup for women, on Eight Roads‘ new Fintech Strategic Thursday, said it has raised $200,000 Investments team. The team is led by (about Rs 1.4 crore at current exchange former Goldman Sachs executive Alokik rates) in a seed round of funding from a Advani, who will join Kuvera‘s board. group of individual investors.
Four investors put in money, of which Hospitality firm V Resorts raises Series two are high-net-worth individuals A capital from HNIs, existing investors (HNIs) and two are executives of New Delhi-based Bliss Inns Pvt. Ltd, venture capital-funded consumer which runs an asset-light resort internet companies, Shashwat Diesh, co- management company under the brand founder at Azah, told VCCircle without name V Resorts, has raised $10 million disclosing the identities of the investors. (Rs 69.5 crore) in its Series A round of In a separate statement, Diesh said that funding from a clutch of wealthy the company will use the money to individuals. drive its research and development, The company‘s existing investors optimise the supply chain and improve venture capital firms Bedrock Ventures customer experience through its and RB Capital also participated in the platform. round, it said in a statement. Azah, which was founded by Diesh and The company will use the capital to Aqib Mohammed in November last expand its footprint in India and enter year, aims to become a one-stop solution new markets across South Asia and the for high-quality hygiene products for Middle East. It intends to reach over women in India. The company's first 1,000 properties and 15,000 rooms in the product is an organic cotton sanitary next three years. pad that is super absorbent, free of [Source: VC Circle, 08 April, 2019] harmful synthetics and has regulatory approval. The company has crossed 7,500 M&A customers and has sold more than 200,000 pads across India in the past five Wipro’s consumer arm acquires months. Filipino personal care firm Splash "We are looking to achieve 10 times Wipro Consumer Care & Lighting growth with respect to order volumes (WCCL), part of the billionaire Azim within 12 months," said Diesh. Venture Premji-led Wipro Group, has struck a capital firms have also approached the fresh bet in the consumer goods company to fund its next investment category after a hiatus of almost three round, he added without disclosing the years. details. The company, as per a press statement, [Source: VC Circle, 11 April, 2019] has acquired Splash Corporation, known to be the largest personal care
company in the Philippines, for an carve out a different structure as both undisclosed sum. The acquisition will firms continue their professional enable WCCL to build its own brands in relationships. the Philippines by leveraging Splash‘s DLS Law's founder and managing distribution strength across market partner Dipti Lavya Swain will be a segments. partner at the merged entity, according The company has built iconic brands, to a statement. Swain has more than 13 namely SkinWhite (body lotions), Maxi- years of industry experience and has peel (exfoliant) and Vitress (hair worked with top law firm L&L conditioner). (formerly Luthra & Luthra) as a partner WCCL has made a number of overseas before starting his independent practice acquisitions in the past. It last sealed an in 2018. He also worked with renewable inorganic bet in 2016 when it energy firm Azure Power as general bought Chinese fast-moving consumer counsel. goods (FMCG) company Zhongshan Ma HSA‘s Haripad Mohanty in Odisha and Er Daily Products Ltd, in an all-cash Anish Desai in Mumbai will not be part deal. of the new structure. Its first acquisition was in 2003, when it This is the second merger for HSA in bought Glucovita, a glucose brand, from two years, after it combined practices Hindustan Unilever. In subsequent with Atman Law Partners last years, it added Chandrika (2004), Unza September to strengthen its south India (2007), Yardley - Middle East, North practice. Africa and Australasia (2009), Yardley Rising competition has prompted law UK (2012), and LD Waxsons Group firms to join hands in recent years. The (2012) to its portfolio. year 2017 saw many law firms merge [Source: VC Circle, 29 April, 2019] with each other. For instance, in October 2017, Delhi-based Arthe Law had DLS Law Offices founder to become partner at HSA Advocates as law firms merged with Mumbai-headquartered merge Bharucha & Partners. DLS Law offices, the Delhi-based law In September 2017, Mumbai-based IC firm which specialises in advisory Legal Advocates & Solicitors had services for private equity transactions, merged with Bengaluru-headquartered mergers & acquisitions and insolvency Universal Legal Attorneys at Law. law among others, has merged its In June, Delhi-headquartered practice with HSA Advocates and will intellectual property firm Anand &
Anand had decided to merge its regulators. Mumbai office with Priyanka Khemani- Separately, Tata Group's power arm promoted boutique media and said it is selling 32 megawatt of entertainment law firm Khimani & operating wind assets located in Satara Associates. Also in June, full-service law district of Maharashtra. firm Hammurabi & Solomon had taken Tata Power Co. said its wholly owned over Brahmand Lexis. unit Tata Power Renewable Energy Ltd In January that year, two mid-sized law has signed a binding agreement for the firms, Link Legal India Law Services sale. It didn't identify the buyer. and DH Law Associates, merged to [Source: VC Circle, 23 April, 2019] create a national-level firm with around IL&FS set to sell wind energy assets to 160 lawyers. GAIL for $689 mn [Source: VC Circle, 25 April, 2019] State-run GAIL (India) Ltd has emerged Tata Global Beverages to acquire as the highest bidder to buy seven Dhunseri Tea's Kalaghoda, Lalghoda operating wind energy assets of the brands financially struggling Infrastructure Tata Global Beverages Ltd said on Leasing & Financial Services Ltd Tuesday it has signed a non-binding (IL&FS). term sheet to acquire the branded tea The gas distributor offered about Rs business of Dhunseri Tea & Industries 4,800 crore ($689 million) for the assets, Ltd. IL&FS said in a statement. This means The deal value is up to Rs 101 crore lenders to the special purpose vehicles ($14.5 million), the Tata Group company that operate the wind energy assets will said in a stock-exchange filing. not have to take any haircut on their The branded tea business of Dhunseri debt of about Rs 3,700 crore. Tea is carried out under the brands The Committee of Creditors of IL&FS ―Lalghoda‖ and ―Kalaghoda‖. The two Wind Energy Ltd, the majority owner of brands are among the leading local the SPVs, approved GAIL‘s offer brands in Rajasthan, a market which is unanimously. The lenders are in talks dominated by local players, Tata Global with Japan‘s ORIX Corp, the other said. shareholder in the SPVs, with regards to The proposed acquisition is subject to the proposal. The deal is likely to close due diligence, signing of definitive in three weeks‘ time subject to binding agreements and applicable mandatory approvals, IL&FS said. approvals from shareholders and
The infrastructure financier and growth opportunities in line areas such developer is selling assets as part of a as warehousing. restructuring after the company and its Stellar is making the acquisition through units started defaulting on their debts wholly owned unit Innovative Logistics last year. The defaults triggered Service Pvt. Ltd. It concerns about risk in the country‘s had acquired Innovative Logistics last financial system and led to the Indian year. Previously, Stellar government taking control of IL&FS in had bought Kelvin Cold Chain Logistics October. IL&FS and units owed Rs in 2017. 99,354 crore at the end of September While the acquisition of Innovative had 2018. helped Stellar enter the express-logistics [Source: VC Circle, 22 April, 2019] segment, the purchase of Kevin Cold Chain enabled it to establish a presence Warburg Pincus-backed Stellar Value Chain to buy Patel Roadways in the cold-chain transportation Stellar Value Chain Solutions Pvt. Ltd, a segment. logistics company backed by private Through Innovative Logistics and equity firm Warburg Pincus, has signed Kelvin Cold Chain, Stellar runs a fleet of a pact to buy the surface transport more than 1,000 trucks in express and business of Patel Integrated Logistics temperature-controlled transportation, Ltd in its third acquisition since starting according to its website. [Source: VC Circle, 19 April, 2019] operations less than three years ago. Mumbai-based Stellar will buy Patel Saudi Aramco may ink one of India’s Roadways for Rs 38.50 crore ($5.5 biggest inbound deals with Reliance million), subject to customary closing refining stake adjustments, Patel Integrated said in a State oil giant Saudi Aramco, the stock-exchange filing. The transaction is world's biggest oil producer, is in talks likely to close by the end of June. to buy a minority stake in the refining Patel Roadways' revenue for 2017-18 and petrochemicals businesses of India's was Rs 153.53 crore, 36% of the total Reliance Industries Ltd, sources familiar consolidated revenue of Patel with the matter said on Wednesday. Integrated. The Times of India reported earlier that Patel Integrated also said the sale will Aramco was in talks to buy a stake of up help it repay its loans, reduce overhead to 25 percent, which could be worth costs, improve profitability and pursue around $10-15 billion, valuing the Indian company's refining and
petrochemicals businesses at some $55- California-based Wibmo will operate as 60 billion. a wholly-owned subsidiary of PayU, Aramco's discussions with Reliance said the latter in a statement. were "serious", one source said. Another PayU provides financial solutions for source said talks with Reliance were so local and cross-border merchants in far for a 25 percent stake. emerging markets as well as point-of- [Source: VC Circle, 17 April, 2019] sale credit and alternative payment methods. PayU acquires Accel-backed digital payments firm Wibmo for $70 mn The deal takes PayU‘s India fintech Online payment company PayU, a investment total past the $500 million subsidiary of South African media and mark. The firm‘s largest investment in e-commerce group Naspers, said on the country was Citrus Pay, which it Friday it has acquired digital payments acquired for $130 million in 2016. [Source: VC Circle, 12 April, 2019 firm Wibmo Inc. for $70 million (Rs 483 crore at current exchange rate).
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thoughtful responses. Additionally, organizations carefully calculated their transparency with stakeholders regarding the event to manage its impact on the organization.
Fast forward to today, and the pace of information is almost instantaneous. For example, when a popular U.S. fast food restaurant chain experienced an outbreak of E. coli-infected lettuce, its (Image credits freepik.com) stock price decreased 44 percent within 90 days amid intensive social media and The Velocity Of Risk news exposure. Recent privacy concerns directed at various social media
companies caused stock valuations to In a time of instant crises, internal auditors and their stakeholders need a drop within minutes and led to sense of urgency to identify and immediate calls for government manage risk. investigations. Disclosure of inappropriate sales arrangements by a Sridhar Ramamoorti, James Wanserski, and Richard Stover | April 30, 2019 | Internal Auditor Magazine of IIA large U.S. financial institution caused a significant upheaval, including Only a few decades ago, the onset of important personnel changes. problematic risk events often was slow, In today's environment, the timing and organizations handled the between a catastrophic risk-driven crisis corresponding aftermath over a and the financial and reputational manageable time frame. Organizations decline for an organization can be armed with extensive public relations practically simultaneous. This new resources responded to most post-event reality has forced senior executives and crises after planning and analyzing internal auditors to consider a new
aspect of risk management — the Internal auditors contribute in myriad velocity of risk. ways to enterprise risk management (ERM) goals by: The velocity of risk is the speed or . Helping management manage risk. ferocity with which events occur in . Assessing and auditing risk today's business environment. Auditing assessment methods and within this "new normal" means approaches. changing, adapting, and understanding . Creating a responsive, nimble, and the imperative to respond to the speed agile audit plan. of change with a strong sense of . Evaluating whether ERM programs urgency. Supplemented by awareness of are using the right metrics. the velocity of risk, internal auditors can . Assessing whether management is identify and address areas where prioritizing risk appropriately. organizations must take preemptive . Supporting and educating the board actions to reduce the possibility of a and senior management on recent crisis caused by a catastrophic risk advances in risk management event. thinking.
Velocity and ERM Often, internal audit will review how The International Standards for the the organization is addressing the chief Professional Practice of Internal Auditing risk officer's enterprise – wide risk frames the execution, conduct, assessment, providing assurance about principles, and practices that also serve the prioritization and adequacy of as "guardrails" for the profession. The response strategies. These assessments standards relevant to the velocity of risk will include internal audit's perspective logically connect with internal audit of all the organization's operations competencies such as demonstrating directed toward risk considerations. competence and due professional care; That perspective should include risk aligning with the organization's areas that potentially are detrimental to strategies, objectives, and risks; the organization, as anticipated by providing risk-based assurance; being assessments of probability, size, and insightful, proactive, and future- speed of impact. Internal audit should focused; and promoting organizational target the corresponding areas within improvement. the scope of its work program.
In performing these duties, internal must be aware of risk's current and auditors should ensure the ongoing impacts on the business in organization's ERM program matrix designing and executing audits, highlights how velocity of risk can compiling results, documenting impact the organization. Auditors historical trends, and communicating should recommend making it one of the how management, business processes, risk program's key metrics. and embedded technology are addressing risk. Moreover, auditors Auditing the velocity of risk can ensure should assist and influence management risks are more appropriately prioritized teams to better calibrate, anticipate and management is able to more needs, and frame the impact of velocity effectively prevent, manage, and on risk-event preventive actions. respond to risks. Internal auditors can help management and the board In performing their work, internal measure and address catastrophic risk auditors must become familiar with the by understanding the specific risks that phrase "auditing at the speed of risk." could impact the business, measuring Post-catastrophic risk event reactions risk in an organized and systematic tend to be much costlier and more way, and documenting and detrimental to an organization. Auditors communicating those quantitatively and should anticipate risk-related events by qualitatively assessed risk perspectives. using continuous monitoring tools and auditing through the systems via Planning and Execution queries, specialized exception reporting, Internal auditors must consider the and similar techniques. These methods velocity of risk when prioritizing and teamed with including "velocity of risk" creating their annual audit plans. The as a parameter in risk-matrix audit plan should include a risk velocity discussions can highlight at-risk measure that reflects the magnitude and business processes and transactions, speed of reaction internally and increase coverage, and add speed. For externally should a catastrophic risk example, internal auditors can equip event occur. The department should themselves with tools and techniques adjust its perspective on risk such as trended historical transaction management by recognizing and reviews within supply chain operations. addressing velocity's influence on likely events and impacts. Internal auditors
These methods - supplemented by Identifying these areas can inspire a vendor-by-vendor analytics, internal more robust dialogue with management control reviews, and interviewing and the board about how to remedy techniques - can lead to earlier detection potential issues. Moreover, addressing of fraudulent transactions, timing the velocity of risk can enable internal discrepancies, wasteful or non-optimal audit to help management and the spending, and product defects. board anticipate and prevent these crisis Integrating velocity of risk into internal events from occurring. audit's environment, along with a sense of urgency, can add to overall effectiveness, improve organizational agility and resilience, and contribute value to management.
The Third Dimension Risk The velocity of risk is pushing the internal audit profession to grow and support its own and management's awareness of risk's speed of impact by accelerating and enhancing risk-based auditing. Connectedness to business risks and strategies now is even more imperative for internal audit to maintain its relevance. To keep pace, businesses need to embrace a three-dimensional risk management approach: probability, impact size, but most importantly, velocity — that sense of timing, speed, and mean-time-to-event mentality.
By adding the dimension of velocity, internal audit can facilitate deep-dive assessments of certain risk areas that could become catastrophic risk events.
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MAY 2019 NEW DELHI T: +91-11-43192000 7 May 2019 - Due date for deposit of Tax deducted/collected for the month of April, 2019. However, all sum deducted/collected by an office of the government shall be paid to the credit of the Central Government on the same day where tax is paid without production of an Income-tax Challan BANGALORE 15 May 2019 - Due date for issue of TDS Certificate for tax deducted under section 194-IA in the month T: +91-9880647825 of March, 2019 15 May 2019 - Due date for issue of TDS Certificate for tax deducted under section 194-IB in the month MAURITIUS of March, 2019 T: + 230 4542110 15 May 2019 - Due date for furnishing of Form 24G by an office of the Government where TDS/TCS for the month of April, 2019 has been paid without the production of a challan 15 May 2019 - Quarterly statement of TCS deposited for the quarter ending March 31, 2019 HONG KONG T: +852 2115 9878 15 May 2019 - Due date for furnishing statement in Form no. 3BB by a stock exchange in respect of transactions in which client codes been modified after registering in the system for the month of April, 2019 30 May 2019 - Submission of a statement (in Form No. 49C) by non-resident having a liaison office in India for the financial year 2018-19 30 May 2019 - Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IA in the month of April, 2019 30 May 2019 - Due date for furnishing of challan-cum-statement in respect of tax deducted under section 194-IB in the month of April, 2019 31 May 2019 - Quarterly statement of TDS deposited for the quarter ending March 31, 2019 31 May 2019 - Return of tax deduction from contributions paid by the trustees of an approved superannuation fund 31 May 2019 - Due date for furnishing of statement of financial transaction (in Form No. 61A) as required to be furnished under sub-section (1) of section 285BA of the Act respect of a financial year 2018-19. 31 May 2019 - Due date for e-filing of annual statement of reportable accounts as required to be furnished under section 285BA(1)(k) (in Form No. 61B) for calendar year 2018 by reporting financial FOLLOW US ON: institutions. 31 May 2019 - Application for allotment of PAN in case of non-individual resident person, which enters into a financial transaction of Rs. 2,50,000 or more during FY 2018-19 and hasn't been allotted any PAN. /rnmindia 31 May 2019 - Application for allotment of PAN in case of person being managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office bearer of the /rnmindia person referred to in Rule 114(3)(v) or any person competent to act on behalf of the person referred to in Rule 114(3)(v) and who hasn't allotted any PAN. /company/rnmindia
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