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Our experts frequently publish in depth articles to provide a wealth of information on a wide range of subjects.

Blockchain

The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value. By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. Information held on a blockchain exists as a shared and continually reconciled database.

Darkness In The Shadow Banks

The resemblance between India’s current NBFC rout and 2008 Lehman crisis is undeniably uncanny, given the similarities in sub-prime loans boom and domestic NBFC surge. Operating income of NBFC industry grew from around 2 lakh crores in 2011 to over 10 lakh crores in 2017. These shadow banks have been witnessing spur in the growth in consumer lending space much faster than banks, particularly after demonetization.

Marching Madness

The rupee has lost close to 13 per cent this year. Experts have attributed India's currency depreciation to rising oil prices and a widening current account deficit. India is one of the largest consumers of crude oil, meeting close to 80 per cent of its needs from overseas. India’s current account deficit is expected to widen to 2.8 per cent of the GDP this financial year, up from 1.9 per cent last year.

Flip(ping) The Wal(l)

In May this year, Walmart confirmed its plan to acquire a 77 percent stake in India’s Flipkart for $16 billion. And there is a whole bunch of data in Walmart’s corner that supports the risk it is taking. At a very high level, it starts with the size of India — it’s the second-most-populous country in the world.

Auditor's Resignation: The Perils Of The Profession

What is the way ahead for CAs in the context of auditors' resignations in 2018 and the upheaval in the profession after the major scams and frauds in the banking industry. A moral dilemma is present as to what should be done. A lot of compliance requirements have been made by SEBI, MCA, RBI, creation of NFRA, etc.

The Companies (Amendments) Act, 2017: Directors and Key Managerial Personnel:

On 3 January 2018, the Companies Amendment Act 2017 got its approval from the President of India and thus making significant changes in the Companies Amendment Act, 2013. The aim of making these changes is to simplify the procedures of doing business, strengthen corporate governance standards, and facilitate foreign companies to launch their business projects in India with ease.

Karnataka Election : Indian Economy

Introduction
Karnataka, popularly known as ‘the silicon valley of India, is the third most developing states of the country after Maharashtra and Gujarat with its GDP growing at an average rate of 7.68%. So, the recent elections of Karnataka, scheduled on 12 May 2018 hold a very crucial place in the scenario of Indian politics. The three main players in the fight are Congress, BJP, and JDS (Janta Dal-Secular). The three parties are expected to be locked in a triangular contest in the Karnataka polls. It will be a prelude to the general elections in 2019. The most sought-after event Karnataka election has reached its climax now.

The Companies (Amendments) Act, 2017 : Group Companies & Share Holding

The Companies Amendment Act, 2017 introduces several changes to the Companies Act, 2013 to realign the provisions to improve corporate governance and ease of doing business in India in order to help achieve better harmonization with other statutes like the Reserve Bank of India. The bill got assent from the Honorable President of India on 3 January 2018 and has been notified as the Amendment Act, 2017.

US CHINA TRADE WAR : IMPACT ON INDIAN ECONOMY

Last week, US President Trump announced tariffs up to USD 60 billion on major Chinese products. That means imports of such products will be heavily taxed making them expensive and discouraging their entry in US. President of the United States (POT US) also pledged that there’s more action coming and threatened that the country is considering restrictions on the investments from China. Beijing announced higher tariffs on USD 3 billion worth of American imports, but mind that that was in response to the steel and aluminium tariffs announced by US two weeks ago.

BANKING FRAUD : UNDERLINE & FIXES

On 19 January 2018, International Monetary Fund (IMF) published a report on India’s Financial Sector Assessment Program, commending RBI’s remarkable progress in implementing risk-based supervision. The report said, “A system-wide Asset Quality Review (AQR) and the strengthening of prudential regulation testify to the authorities’ commitment to transparency and a more accurate recognition of banking risks.” And exactly 10 days later, on 29 January, Punjab National Bank (PNB) submitted a report to RBI stating that PNB has discovered a fraud.

Highlights of Union Budget 2018

  • No change in rate of income tax for individual or Hindu Undivided Family or Firms or Association of persons or Body of individuals, whether incorporated or not, or Artificial juridical person. Surcharge, in case applicable also remains the same.
  • In case of domestic company, the rate of income-tax shall be 25% of the total income if the total turnover or gross receipts for the financial year 2016-17 does not exceed INR 2,500 million. For other domestic companies, the rate of Income-tax shall continue to be 30% of the total income and applicable surcharge and cess thereon. Surcharge in case applicable remains the same.
  • Education Cess on income-tax” and "Secondary and Higher Education Cess on income-tax" shall be discontinued from the financial year 2018-19 onwards. However, an additional surcharge called the "Health and Education Cess on income-tax" shall be levied at the rate of 4% on the amount of income tax computed, inclusive of surcharge (wherever applicable), in all cases.

The Growing Importance of Due Diligence

'Due Diligence', as simple as it sounds, refers to conducting a 'diligent' investigation to obtain all the relevant and material information about the company in question, and disclosing them in a dutiful and forthcoming manner. The concept was first introduced in U.S. with the roll-out of U.S. Securities Act, 1933 which put the onus of full of material information relating to securities and instruments to the potential buyers, on the brokers and dealers; failing which they had to face criminal prosecution. In order to protect the righteous brokers and dealers, 'due diligence' defense was put forward which made them not liable for any inadvertent non-disclosure of information that was not discovered in the process of investigation.

Insolvency & Bankruptcy Code” (IBC) - the good, the bad and the evil

The worm of Non-Performing Assets (NPAs) has been stealthily creeping and procreating inside the body of Indian Banking System (IBS) ever since the sub-prime crisis. And whenever anyone tried to weed it out, the defaulters either flee or took shelter in the incessant process of insolvency. Banks, both public and private, shrugged off the problem and swept the non-moving advances under the rug. In the wake of unfortunate events, RBI, with Raghuram Rajan at the helm, instituted Asset Quality Review (AQR). The whole exercise of random checks opened the Pandora box of Indian banks. And now, no one could turn a blind eye to this elephant in the room. Estimated NPAs and restructured assets were close to Rs.8 Lac crores, constituting for over 12 percent of the total advances by the banks.

The Dynamic Law of the Land: GST

‘One Nation, One Tax’- People had been talking about it in India since a decade but in this process of verbal drama, many lost faith in its execution, only to be resurrected after the current Government came to power in the Centre in mid-2014. 3 years of rejig got implemented after 10 years of rigmarole, with some 30 plus groups and committees formed over the years which met collectively for hundreds of times. Constitutional amendments were made for the biggest tax overhaul since Independence but hastily implemented on the midnight of 30th June with the primary objective of eliminating double taxation and simplifying tax payment which will spur consumption in the economy by pruning costs of goods and services. The overwhelming idea of clubbing plethora of stodgy state and central taxes into one blanket tax regime looked appealing but proved to be appalling after hurried implementation. The disruptive roll-out was poorly received by small & medium enterprises and proprietors, who had no or little idea about the rates and return filing procedure. Increased compliance cost and onerous reporting made small players to revisit the idea of doing business.

Highlights of Union Budget 2017

Union Budget 2016 – Highlights

  • The budget focuses on enhancing expenditure in priority areas of - farm and rural sector, social sector, infrastructure sector employment generation and recapitalization of the banks.
  • Allocation for Agriculture and Farmers’ welfare is INR 35,984 crores to be utilized in bringing 28.5 lakh hectares of land under irrigation, bringing 89 irrigation projects under fast track mode, constructing 5 lakh farm ponds & dug wells in rain fed areas and 10 lakh compost pits for production of organic manure etc.
  • Total investment in the road sector, including Prime Minister Gram Sadak Yojana (PMGSY) allocation, would be INR 97,000 crores during 2016-17 to be utilized in constructing nearly 10,000 kms of highways in 2016-17.
  • 100% Foreign Direct Investment to be allowed through Foreign Investment Promotion Board route in marketing of food products produced and manufactured in India.

#Startup – A Chief Initiative of GOI

This initiative of Government of India Intends to build a strong ecosytem for encouraging innovative ideas and startup business in the country. GOI presumes that this will drive sustainable economic growth and generate large scale employemnet opportunities. The Government through this initiative aims to empower Startups to grow through innovation and design .

News Letter – December 2015

Preamble

The Companies Act, 2013 has made it mandatory to certain companies to follow the CSR guidelines by inserting a new section, i.e., Section 135 in the Act. In exercise of the powers conferred under clause (o) and clause (q) of sub-section 3 of Section 134 read with Section 135 and sub-sections (1) and (2) of Section 469 of the Companies Act, 2013 the Central Government hereby makes the Rules namely “Company (Corporate Social Responsibility Policy) Rules, 2014”. The rules shall come into force on the 1st day of April, 2014 as notified through publication in the official gazette on 27th February, 2014 and shall be applicable from the financial year 2014-15.

News Letter - July 2015

Preamble

On February 16, 2015, the Ministry of Corporate Affairs (MCA) released a roadmap for the next phase of implementation of IND AS which would be applicable on companies in the financial year 2015-16 as voluntarily and from 2016-17 on a mandatory basis. Its applicability was detailed in Companies (Indian Accounting standard) Rules 2015.

New Governance Requirements and Its Impact

The Government of India has recently notified Companies Act, 2013 ("CA 2013"), which replaces the former Companies Act, 1956 ("CA 1956"). In this report, we analyze the key changes and its major impact on stakeholders, by illustrating the practical impact of the changes introduced by CA 2013.

Corporate Social Responsibility – Doing Our Bit!!!

Applicability

As per section 135 of the Companies Act 2013, every company:
  • having a Net Worth of INR 500 Crore or more, or
  • having a Turnover of INR 1,000 Crore or more, or
  • having a Net Profit of INR 5 Crore or more during any financial year shall comply with the requirements of CSR.
However, if a company does not meet any of the aforesaid conditions for a continuous period of 3 financial years, then it is not required to comply with the CSR provisions.

Highlights of Companies (Amendment) Bill 2014

Preface

Based on the suggestions and recommendations from various bodies including industry - people, professionals and other experts, Ministry of Corporate Affairs has incorporated some of them by introducing the Companies (Amendment) Bill 2014 in lower house of Parliament. Companies (Amendment) Bill 2014 was placed and passed in Lok Sabha by Hon‘ble Finance Minister on 8th December 2014 and 17 December 2014 respectively. It is pending approval by Rajya Sabha. However, it seems that more amendments in the Companies Act, 2013 will be required in future to overcome practical difficulties and creating a path for ease of doing business in India.

Overview on Revised Schedule VI

Applicability

Vide notification S.O. 447 (E) dated 28.02.2011 read with amendment notification S.O. 653 (E) dated 30.3.2011, the revised schedule VI would be applicable for the Balance Sheet and Profit and Loss Account to be prepared for the financial year commencing on or after 1-4-2011.

At a Glance

  • The privilege of having a balance sheet under horizontal or vertical format has been done away with. Option of only one format i.e vertical format is now available for preparation of the Balance Sheet.
  • Introduction of a new format for publishing profit & loss account.

Overview on Extensible Business Reporting Language

Background

On 31 March 2011, the MCA issued a Circular (General Circular No. 09/2011) mandating all listed companies and certain unlisted companies, to file their balance sheet and profit and loss account (financial statements) for the year ended 31 March 2011 onward using an XBRL (eXtensible Business Reporting Language) format. This Circular marks an important step in ensuring XBRL compliance for financial statements filed by Indian companies, and is part of a series of XBRL initiatives by various regulators.

Country Tax Guides

Corporate Income Taxes

Resident companies, defined as companies which are incorporated and registered under Indian law, or companies which are incorporated and registered elsewhere but which are managed and controlled in India, are liable to income tax on their worldwide income.

Other companies are liable to income tax on their income from sources in India, subject to the terms of any relevant double tax treaty.

For resident companies the normal rate of income tax is 30%. An education cess (EC) of 2% and a secondary and higher education cess (SHEC) of 1% are charged on the tax payable, giving an effective rate of 30.9%. If profits exceed INR10m a surcharge of 10% is applied to the tax payable at the normal rate, with the EC and the SHEC then applied to the increased amount, giving an effective rate overall of 33.2175%.