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ISSUE NO.66 JUNE, 2014

RNM ALERT

Thinking of the Bottom Line – Think of Us

Dear Readers, During this past month, I am sure that a lot of you would have taken the opportunity to enjoy the summer break with family and get away to cooler locales, with the Capital City touching 47 degree Centigrade.

Activity indicators published in June showed some early signs of recovery of the economy, particularly in industrial production (up 3.4% yoy, up from -0.5% in March), whilst exports continued to gather pace with yoy growth accelerating from 5.3% in April to 12.4% in May. The new Modi Government seemed to have lifted the tide in the service sector with the HSBC Purchasing Managers’ Index (PMI) rising to a 17 month high. Indian stocks prolonged their sharp uptrend of May into June to fresh all-time high levels. Markets continue to be driven by old economy/cyclicals with Industrials (29%) & Metals (21.5%) posting the maximum outperformance in last 6 months; while defensives like Pharma (-16%), Technology (-15%) & Consumers (-8.5%) performing poorly.

There have been a flurry of notifications/ clarifications this past month by the Ministry of Corporate Affairs in regard to various issues relating to the new Companies Act, 2013 (‘Act’). Various kinks have been ironed out and still more changes are expected as India Inc. is coming to terms with the nuances of the new Act. The notification granting relief to private limited Companies from some of the onerous provisions of the Act, is keenly awaited based upon the Draft Notification which was put up for public comment by the Ministry recently. The chief protagonist of Lawyers and CA’s ire was the applicability of Section 185 of the Act to Private Limited Companies a notification on which is expected any day.

The Union Budget for 2014-15 is around the corner and I am sure most of you have your Budget Wishlist firmly in place. Keep a look out for the RNM Alert Budget Flash and the RNM Indian Union Budget Highlight 2014-15 soon.

Regards,

CA U.N. Marwah For and behalf of the RNM Alert Editorial Board

Issue No. 66: June, 2014 of 27

CONTENTS Direct Tax

- Case Laws - Definitions 4 - Income deemed to accrue or arise in India 4 - Expenditure incurred in relation to exempt Income 4 - Profit & Gain from Business & Profession 4 - Capital Gain 4-5 - Loss in speculation Business 5 - Tax on long term Capital Gain 5 - Procedure for assessments 5 - Special procedure for assessments of search cases 6 - Tax Deduction at Source 6 - Appeal & Revision 6 - Penalties 6

- Notifications 7

Indirect Tax Service Tax

- Case Laws - Temporary transfer of copy right is taxable service 8 - No penalty, if no Malafide intention 8 - Refund of service tax to exporter 8 - Interest on belated refund of cenvat credit 8 - Penalty leviable if tax & interest paid once investigation was initiated 8 - Service tax authority did not have authority for granting extn. Of time under VCES 8 - No power to service tax authority to Freeze Bank account 8-9 - Deputation of employees to subsidiary Co not manpower supply service 9 - Service provider can recover service tax from service recipient 9 - Transfer of goodwill along with right to use particular name is Intellectual Property Service 9


DIRECT TAX DIRECT TAX

Company Law Updates - Circular

- Amendment of Cos. Rules, 2014 10 - Cos. Rules, 2014 10 - Clarification on Filing of Form DPT 4 under Cos. Act, 2013 10 - Clarification with regards to use of word “Commodity Exchange’ in Cos. 10 - Clarification on applicability of requirement for resident director 10 - Clarification with regard to holding of shares in fiduciary capacity by associate Co. 11 - Clarification relation to incorporation of a Co. 11 - Clarification with regard to format of annual return for FY 2013-14 11 - Amendment of Cos. Rules, 2014 11 - Amendment of Cos. Rules, 2014 11 - Clarification regarding corporate social responsibility u/s 135 11-12 - Clarification with regard to voting through electronic mean 13 - Notification for Registrar of Cos. at Hyderabad having 13 territorial jurisdiction in the whole state of Telangana - Notification for OL of Cos. at Hyderabad having 13 territorial jurisdiction in the whole state of Telangana - Amendment of Cos. Rules, 2014 13 - Amendment of Cos. Rules, 2014 13-14 - Clarification on Rules prescribed under Co. Act, 2013 14 - Clarification on Filing form INC-27 under Cos. Act, 2013 14 - Filing of MGT-10 – Clarification 14 - Applicability of PAN requirement for Foreign Nationals 14 - Clarification on maintaining Register in new format 15 - Clarification on Appointment & Qualification of Director 15 - Amendment on Cos. Rules, 2014 16 - Amendment on Cos. Rules, 2014 16 - Commencement on provision of Sub sections(2) (3) of section 74 16

RBI Updates - Circular

- Remittance to NR – TDS 17 - Transfer of asset of LO/BO/PO for foreign entity either to its WOS/JV/other in India 17-18 - FII – participation by registered FPI, SEBI registered long term investors 18 - FII in insurance sector – amendment to FDI scheme 18

Corporate Finance - Latest News

- Private Equity 19-20 - Mergers & Acquisition 21-24 - Venture Capital 24-26


DIRECT TAX Case Laws Definitions Sec 2(22)(e) - Loan granted to assessee-company, which was neither a shareholder nor a member of payer company, could not be treated as deemed dividend in hands of assessee [Source: CIT v. Bikaner Cuisine (P.) Ltd. [2014] 45 taxmann.com 253 (Delhi)] Sec 2(47)(v): Transfer under a development agreement takes place on handing over possession. Capital gains are chargeable to tax even if no consideration is received by assessee [Source: Potla Nageswara Rao vs. DCIT (Andhra Pradesh High Court) ITA No. 245 OF 2014] Income Deemed to accrue or arise in India Sec 9 - Agency/sales commission payment to non-resident agents for services outside India is not tax deductible at source and outside the purview of section 40(a)(i) [Source: ACIT v. T. Abdul Wahid & Co [2014] 46 taxmann.com 75 (Chennai - Trib.)] Expenditure incurred in relation to exempt income Sec 14A - Disallowance cannot be made if the assessee has no tax-free income in the year [Source: CIT vs. Lakhani Marketing (P&H High Court) ITA No.970 of 2008 (O&M)] Profit & Gain from Business & Profession Sec 37(1) - No disallowance of lawful exp. merely due to non-compliance with provisions of Companies Act. [Source: Jai Surgicals Ltd. v. ACIT [2014] 46 taxmann.com 246 (Delhi - Trib.)]

Sec 40(a)(ia): If an amount is made taxable by a retrospective amendment, the payer cannot be held liable to deduct TDS on a payment made earlier and to suffer disallowance u/s 40(a)(ia) [Source: Kerala Vision Ltd vs. ACIT (ITAT Cochin) I.T.A. No. 794/Coch/2013]

Sec 40(a)(ia) - No s. 40(a)(ia) disallowance for failure to deduct TDS on payment if payee has offered amount to tax. Second Proviso to s. 40(a)(ia) inserted by Finance Act 2013 w.e.f. 1.4.2013 should be treated as curative and to have retrospective effect from 1.4.2005 Rajeev Kumar Agarwal vs. ACIT (ITAT Agra) I.T.A. No.:337/Agra/2013 Capital Gain Sec 45 - Where assessee treated shares as investment, used his own funds and share transactions did not relate to his main business, in spite of assessee receiving bonus share, income arising from sale of such shares were to be treated as 'capital gain', and not as business income. [Source: CIT v. Om Prakash Arora (2014) 45 taxmann.com 565 (Delhi)]


Sec 48 - Ascertainment of fair market value with aid of DVO's report would have no relevance for purpose of determining full value of consideration received or accruing as a result of transfer of capital asset for purposes of section 48 [Source: CIT v. Gauranginiben S. Shodhan Indl. [2014] 45 taxmann.com 356 (Gujarat)] Sec 50C: If the stamp duty valuation is higher than the consideration received, the AO must refer the valuation to the DVO even if there is no request by the assessee [Source: Sunil Kumar Agarwal vs. CIT (Calcutta High Court) ITAT No. 221 of 2013]

Loss in Speculation Business Sec 73 - Speculation loss on transactions in derivatives can be set off against the gains of delivery shares [Source: CIT vs. Baljeet Securities Pvt. Ltd (Calcutta High Court) ITAT No. 215 of 2013]

Tax on long term Capital Gain Sec 112: Though gains on depreciable assets held for more than 3 years have to be treated as STCG u/s 50, the gains have to be taxed at the rate applicable to a LTCG. [Source: Smita Conductors Ltd vs. DCIT (ITAT Mumbai) ITA NO. 4004/Mum/2011] Procedure for Assessments Sec 144C - Assessment quashed as AO had passed final order instead of draft order under sec. 144C pursuant to order of TPO. [Source: Vijay Television (P.) Ltd. v. DRP [2014] 46 taxmann.com 100 (Madras)] Sec 148 - Where Assessing Officer passed reassessment order without recording reasons for initiating reassessment proceedings despite repeated requests for same, order so passed being invalid, deserved to be quashed [Source: Torrent Power SEC Ltd. v. ACIT [2014] 45 taxmann.com 561 (Gujarat)] Sec 148 - Even where assessee requested Assessing Officer to treat original return as one in response to section 148 proceeding, notice under section 143(2) was mandatory; otherwise re-assessment would be bad in law. [Source: CIT v. Alstom T & D India Ltd [2014] 45 taxmann.com 424 (Madras)] Sec 153 - Assessment within limitation period cannot be doubted merely because demand notice is served after 47 days of said period. [Source: CIT v. Subrata Roy [2014] 45 taxmann.com 513 (Calcutta)]

Sec 153A: Addition in a search assessment for a AY which is not pending can be made only if incriminating material is found during search [Source: Sanjay Aggarwal vs. DCIT (ITAT Delhi) ITA No.3184/Del/2013]

Special procedure for assessment of Search Cases Sec 158BD - Material found during search not sustained in case of searched person, couldn't be used for other person as well [Source: Narvirsinh Parmar v. ACIT [2014] 45 taxmann.com 466 (Gujarat)]


Deduction at Source Sec 197 - Where TDS certificate for deduction at lower rate effective from beginning of financial year, was issue in middle of relevant year, penalty cannot be levied only on ground that certificate can be made effective only from its date of issue and not for a period prior thereto. [Source: CIT v. Prakausali Investments India (P.) Ltd. [2014] 45 taxmann.com 252 (Delhi)] Sec 199 - Assessee cannot be denied credit for TDS on the ground of Form 26AS mismatch because he is not at fault. Non-grant of TDS credit causes harassment, inconvenience & makes the assessee feel cheated. Dept to pay interest + costs of Rs. 25,000 [Source: Rakesh Kumar Gupta vs. UOI (Allahabad High Court) Civil Misc Writ Petition (Tax) No.657 of 2013] Sec 199 - TDS Certificate to supersede Form 26AS in case of variation between two. [Source: LSG Sky Chef (India) (P.) Ltd. v. DCIT [2014] 45 taxmann.com 256 (Mumbai - Trib.)]

Sec 201/ 201(1A): The payer is not liable for TDS default if the Dept does not prove that the tax could not be recovered from the recipient. [Source: Allahabad Bank vs. ITO (ITAT Agra) I.T.A. No.:448 to 454/Agra/2011]

Appeals & Revisions Sec 263: The CIT can revise an assessment only if he can show unmistakably that the order of the AO is unsustainable. Fact that the AO has passed a non-speaking order does not mean that he has not applied his mind. [Source: CIT vs. J. L. Morrison (India) Ltd (Calcutta High Court) ITA NO. 168 of 2011]

Penalties Sec 271(1)(c) - Fact that assessee has huge carry forward losses and depreciation and filed a nil return suggests that there is no motive or incentive to make a bogus claim in the return [Source: Toscana Lasts Limited vs. ITO (ITAT Delhi) ITA No.4600/Del./2010] Sec 271(1)(c)/271(1B): If, in the assessment order, AO directs initiation of penalty on specific issues but not on others, he is not entitled to levy penalty on the other issue. [Source: CIT vs. Triveni Engineering & Industries Ltd (Allahabad High Court) ITA nos. 103 of 2014] Sec 271(1)(c): The giving up of a bogus claim for deduction to eschew inquiry by AO/ TPO is not voluntary & bona fide & attracts levy of penalty. [Source: Deloitte Consulting India Pvt. Ltd vs. ACIT (ITAT Mumbai) I.T.A. Nos. 7650& 7651/Mum/2013] Sec 271AAA - Where assessee having surrendered certain income in course of search, filed return wherein said amount was duly disclosed and taxes were paid accordingly, there was sufficient compliance of provisions of section 271AAA(2) and, thus, impugned penalty order deserved to be set aside. [Source: ACIT v. Munish Kumar Goyal [2014] 45 taxmann.com 563 (Chandigarh - Trib.)]


Notification Govt. notifies ‘1024’ as Cost Inflation Index for Financial Year 2014-15 [Source: NOTIFICATION NO. 31/2014 [F. NO. 142/3/2014-TPL]/SO 1498(E), DATED 11-6-2014] CBDT notifies new Wealth-tax return form - Mandatory e-filing except by Individual/HUF not liable to tax audit [Source: NOTIFICATION NO.32/2014 [F.NO.143/1/2014-TPL]/SO 1576(E), DATED 23-6-2014]


INDIRECT TAX

Service Tax

Case Law Temporary Transfer of Copyright is Taxable Service Variant modes of business transactions between producer and distributor, distributor and sub-distributor or area distributor or exhibitor (theatre owner) are not "sale or deemed sale of goods" and therefore, Levy of service tax on Temporary transfer of copyright in film under section 65(105)(zzzzt) is constitutionally valid [Source: GS Entertainment (P.) Ltd. v. Union of India, [2014] 46 taxmann.com 92 (Madras)] No Penalty, If No Malafide Intention, In view of finding of fact that there was no mala fide intent of assessee in not depositing service tax in time, penalty could be waived under section 80 [Source: Commissioner of Central Excise v. Muniruddin [2014] 45 taxmann.com 218 (Allahabad)] Refund of Service Tax to Exporter Exporter is entitled to refund of tax paid on service used for export without verification of registration certificate of service provider, even if provider is registered for one service only. [Source: Devarsons Industries (P.) Ltd. v. Comm. of Cent. Ex. Ahmd – II [2014]45taxmann.com24 (Ahmd - CESTAT)] Interest on Belated Refund of CENVAT Credit Belated grant of credit would be meaningless if assessee has moved out of Cenvat scheme in meantime; said credit/re-credit must be granted in cash and any belated refund would be eligible for interest under section 11BB read with section 11B of Central Excise Act, 1944 [Source: Rishabh Velveleen Ltd. v. CESTAT [2014] 45 taxmann.com 540 (Uttarakhand)] Penalty Leviable if Tax and Interest Paid Once Investigation was Initiated Where tax and interest were paid by assessee after summons were issued to them and investigation was initiated against them, it could not be said that assessee had made payment on their own and, therefore, benefit of section 73(3) was inapplicable and penalty was leviable [Source: Care & Cure (P.) Ltd. v. Commissioner of Central Excise [2014] 45 taxmann.com 192 (New Delhi - CESTAT)]

Service Tax Authority Did Not have Authority for Granting Extension of Time Under VCES Service Tax : Right of assessee to claim benefit of Service Tax Voluntary Compliance Encouragement Scheme is dependent upon its depositing initial 50%, which is a mandatory condition and authorities do not have any discretion to grant extension of time to make initial deposit of 50% of declared tax amount beyond 31-12-2013 [Source: Teknow Overseas (P.) Ltd. v. Assist. Comm. of Service Tax (VCES), Delhi[2014] 45 taxmann.com 542 (Delhi)] No Power to Service Tax Authority to Freeze Bank Account


Section 87 provides for recovery of amount due and payable after adjudication is done and there is no power in section 87(b) to freeze bank accounts; at most, money can be claimed from bank itself after final adjudication [Source: R.V. Man Power Solution v. Comm. of Customs & Central Excise [2014] 45 taxmann.com 215 (Uttarakhand)] Deputation of Employees to Subsidiary Companies Not Manpower Supply Service Deputation of employees to subsidiary companies for limited period on cost-sharing basis does not make assessee a 'commercial concern' and does not establish 'agency-client' relationship and is, therefore, not covered under Manpower Recruitment or Supply Agency's Services [Source: Commissioner of Service Tax v. Arvind Mills Ltd. [2014] 45 taxmann.com 376 (Gujarat)] Service Provider Can Recover Service Tax From Service Recipient Service tax law imposes tax on recipient and service provider is merely a collecting agency; hence, recipient must reimburse tax to provider where service tax is demanded from provider, even if same is not contemplated in agreement [Source: Bhagwati Security Services (Regd.) v. Union of India, [2014] 45 taxmann.com 217 (Allahabad)] Transfer of Goodwill Along with Right to Use Particular Name is Intellectual Property Service Where applicant received money on transfer of goodwill and right to use a particular name as part of purchaser's name for 30 years and agreement stipulated termination clause in certain circumstances, services rendered by applicant would fall under category of 'Right to Intellectual Property' [Source: Tata Global Beverages Ltd. v. Commissioner of Service Tax, Kolkata [2014] 45 taxmann.com 506 (Kolkata - CESTAT)]


COMPANY LAW UPDATES Circular/Notification/Guidance Amendment of the Companies (Prospectus and Allotment of Securities) Rules, 2014 In the Companies (Prospectus and Allotment of Securities) Rules, 2014, in rule 14, in sub-rule (2), in clause (a), after the second proviso, the following proviso shall be inserted, namely:- “Provided also that in case of an offer or invitation for non-convertible debentures referred to in the second proviso, made within a period of six months from the date of commencement of these rules, the special resolution referred to in the second proviso may be passed within the said period of six months from the date of commencement of these rules.” [Source: Notification No. G.S.R. (E) dated 30th June, 2014] Companies (cost records and audit) Rules, 2014 MCA has notified Companies (cost records and audit) Rules, 2014. These rules shall come into force on date of their publication on the official gazette. [Source: Notification No. G.S.R. (E) dated 30th June, 2014] Clarification regarding filing of Form DPT4 under Companies Act, 2013 It has been decided to grant extension of time for the period of 2 months i.e. upto 31-08-2014 without any additional fee in terms of section 403 of the Act to enable the companies for filing of statement under Form DPT 4 with the Registrar. [Source: General Circular No. 27/2014 dated 30th June, 2014] Clarification with regard to use of the words “Commodity Exchange” in a Company regarding In continuation of this Ministry's circular no. 02/2014 dated 11.02.2014, it is hereby clarified the use of the word "Commodity Exchange" may be allowed only where a "No Objection Certificate" from the Forward Markets Commission (F//'O is furnished by the applicant. All other provisions of the Companies (Incorporation) Rules, 2014 will continue to be applicable. It is also clarified that the certificate from Forward Markets Commission will also be required in cases of companies registered with the words "Commodity Exchange” before the issue of this circular. [Source: General Circular No. 26/2014 dated 27th June, 2014] Clarification on applicability of requirement for resident Director It is clarified that the, ‘residency requirement' would be reckoned from the date of commencement of section 149 of the Act i.e. 1st April, 2014. The first ‘previous calendar year’ for compliance with these provisions would, therefore, be Calendar year 2014. The period to be taken into account for compliance with these provisions will be the remaining period of calendar year 2014 (i.e. 1st April to 31st December). Therefore, on a proportionate basis the number of days for which the director(s) would need to be resident in India during Calendar year.2014, shall exceed 136 days. Regarding newly incorporated companies it is clarified that companies incorporated between 1.4.2014 to 30.9.2014 should have a resident director either at the incorporation stage itself or within six months of their incorporation. Companies incorporated after 30.9.2014 needs to have the resident director from the date of incorporation itself. [Source: General Circular No. 25/2014 dated 26th June, 2014]


Clarification with regard to holding of shares in a fiduciary capacity by associate company under section 2(6) of the Companies Act, 2013 In continuation of the General circular No. 20/2013 dated 27/12/2013, it is clarified that the shares held by a company in another company in a 'fiduciary capacity' shall not be counted for the purpose of determining the relationship of 'associate company' under section 2(6) of the Companies Act, 2013. [Source: General Circular No. 24/2014 dated 25th June, 2014] Clarification relating to incorporation of a company i.e. company Incorporated outside India It is clarified that there is no bar in the new Act for a company incorporated outside India to incorporate a subsidiary either as a public company or a private company. An existing company, being a subsidiary of a company incorporated outside India, registered under the Companies Act, 1956, either as private company or a public company by virtue of section 4(7) of that Act, will continue as a private company or public company, as the case may be, without any change in the incorporation status of such company. [Source: General Circular No. 23/2014 dated 25th June, 2014] Clarification with regard to format of annual return applicable for Financial Year 2013-14 and fees to be charged by companies for allowing inspection of records It is, clarified that Form MGT-7 shall not apply to annual returns in respect of companies whose financial year ended on or before 1st April, 2014 and for annual returns pertaining to earlier years. These companies may file their returns in the relevant Form applicable under the Companies Act, 1956. It is clarified that until the requisite fee is specified by companies, inspections of records under rule 14(2) and rule 16 could be allowed without levy of fee. [Source: General Circular No. 22/2014 dated 25th June, 2014] Amendment of the Companies (Management and Administration) Rules, 2014 In the Companies (Management and Administration) Rules, 2014, in rule 20 sub-rule (1) and (3) shall be substituted as under:- Sub-rule (1):- “provided that the company may provide the facility referred to in this sub-rule on or before the 1st day of January, 2015” Sub-rule (3):- which opts to provide has been substituted by which provides [Source: Notification No. G.S.R. (E) dated 23rd June, 2014] Amendment of the Companies (Share Capital and Debentures) Rules, 2014 The Central Government hereby makes amendments in the Companies (Share Capital and Debentures) Rules, 2014 and these rules may be called the Companies (Share Capital and Debentures) Amendment Rules, 2014. [Source: Notification No. G.S.R. 413(E) dated 18th June, 2014] Clarifications with regard to provisions of Corporate Social Responsibility under section 135 of the Companies Act, 2013 Clarifications with respect to representations received in the Ministry on Corporate Social Responsibility (herein after referred as (‘CSR’) are as under:-


1. The statutory provision and provisions of CSR Rules, 2014, is to ensure that while activities undertaken in pursuance of the CSR policy must be relatable to Schedule VII of the Companies Act 2013, the entries in the said Schedule VII must be interpreted liberally so as to capture the essence of the subjects enumerated in the said Schedule. The items enlisted in the amended Schedule VII of the Act, are broad-based and are intended to cover a wide range of activities;

2. It is further clarified that CSR activities should be undertaken by the companies in project/ programme mode [as referred in Rule 4 (1) of Companies CSR Rules, 2014]. One-off events such as marathons/ awards/ charitable contribution/ advertisement/ sponsorships of TV programmes etc. would not be qualified as part of CSR expenditure;

3. Expenses incurred by companies for the fulfillment of any Act/ Statute of regulations (such as Labour Laws, Land Acquisition Act etc.) would not count as CSR expenditure under the Companies Act;

4. Salaries paid by the companies to regular CSR staff as well as to volunteers of the companies (in proportion to company’s time/hours spent specifically on CSR) can be factored into CSR project cost as part of the CSR expenditure;

5. “Any financial year” referred under Sub-Section (1) of Section 135 of the Act read with Rule 3(2) of Companies CSR Rule, 2014, implies ‘any of the three preceding financial years;

6. Expenditure incurred by Foreign Holding Company for CSR activities in India will qualify as CSR spend of the Indian subsidiary if, the CSR expenditures are routed through Indian subsidiaries and if the Indian subsidiary is required to do so as per section 135 of the Act;

7. ‘Registered Trust’ (as referred in Rule 4(2) of the Companies CSR Rules, 2014) would include Trusts registered under Income Tax Act 1956, for those States where registration of Trust is not mandatory;

8. Contribution to Corpus of a Trust/ society/ section 8 companies etc. will qualify as CSR expenditure as long as (a) the Trust/ society/ section 8 companies etc. is created exclusively for undertaking CSR activities or (b) where the corpus is created exclusively for a purpose directly relatable to a subject covered in Schedule VII of the Act.

[Source: General Circular No. 21/2014 dated 18th June, 2014]


Clarification with regard to voting through electronic means Section 108 of the Companies Act, 2013 read with rule 20 of the Companies (Management and Administration) Rules, 2014 deal with the exercise of right to vote by members by electronic means (e-means), The provisions seek to ensure wider shareholders participation in the decision making process in companies. Corporates and other stakeholders while appreciating the new approach have drawn attention to some practical difficulties in respect of general meetings to be held in the next few months. It is noticed that compliance with procedural requirements, engagement of Depository Agencies and the need for clarity on matter like demand for poll/ postal ballot etc will take some more time. Accordingly, it has been decided not to treat the relevant provisions as mandatory till 31st December, 2014. The relevant notification in this regard is being issued separately. [Source: General Circular No. 20/2014 dated 17th June, 2014] Notification for Registrar of Companies at Hyderabad having territorial jurisdiction in the whole State of Telangana In exercise of powers conferred by sub-section (1) and sub-section (2) of section 396 of the Companies Act, 2013 (18 of 2013), the Central Government hereby establish the office of the Registrar of Companies at Hyderabad having territorial jurisdiction for the purposes of the said Act for discharging the functions of the Registrar of Companies in the whole State of Telangana and appoints the Registrar of Companies, Hyderabad as Registrar of Companies for the purpose of registration of companies under the said Act in the State of Telangana. [Source: Notification No. S.O. 1525 (E) dated 13th June, 2014] Notification for the Official Liquidator at Hyderabad having territorial jurisdiction in the whole State of Telangana In exercise of powers conferred by section 448 of the Companies Act, 1956 (1 of 1956), the Central Government hereby establish the office of the Official Liquidator at Hyderabad having territorial jurisdiction for the purposes of the said Act for discharging the functions of the Official Liquidator in the whole State of Telangana and appoints the Official Liquidator at Hyderabad as Official Liquidator for the liquidation of companies under the said Act in the State of Telangana. [Source: Notification No. S.O. 1524 (E) dated 13th June, 2014] Amendment of the Companies (Declaration and Payment of Dividend) Rules, 2014 In the Companies (Declaration and Payment of Dividend) Rules, 2014, in rule 3, for sub-rule (5), the following sub-rule shall be substituted, namely:- “(5) No company shall declare dividend unless carried over previous losses and depreciation not provided in previous year or years are set off against profit of the company of the current year.” [Source: Notification No. G.S.R. (E) dated 12th June, 2014] Amendment of the Companies (Meetings and Powers of Board) Rules, 2014 In the Companies (Meetings and Powers of Board) Rules, 2014, in rule 6, after the explanation, the following shall be inserted, namely:- “Provided that public companies covered under this rule which were not required to constitute Audit Committee under section 292A of the Companies Act, 1956 (1 of 1956) shall constitute their Audit Committee within one year from the commencement of these rules or appointment of independent directors by them, whichever is earlier:


Provided further that public companies covered under this rule shall constitute their Nomination and Remuneration Committee within one year from the commencement of these rules or appointment of independent directors by them, whichever is earlier. [Source: Notification No. G.S.R. 398(E) dated 12th June, 2014] Clarification on Rules prescribed under the Companies Act, 2013- Matters relating to share capital and debentures It is clarified that since transaction relating to transfer of shares is a contract between two or more persons/shareholders, any share transfer form executed before 01st April, 2014 and submitted to the company concerned within the period prescribed under relevant section of the Companies Act, 1956 needs to be accepted by the companies for registration of transfers. In case any such share transfer form, executed prior to 1st April, 2014, is not submitted within the prescribed period under the Companies Act, 1956, the concerned company may get itself satisfied suitably with regard to justification of delay in submission etc. In case a company decides not to accept the share transfer form, it shall convey the reasons for such non-acceptance within time provided under section 56 (4) (c) of the Act. In regard to the queries that whether issue of duplicate share certificates can be exercised by a committee of directors, Ministry has clarified that a committee of directors may exercise such powers, subject to any regulations imposed by the board in this regard. [Source: General Circular No. 19/2014 dated 12th June, 2014] Clarification for filing of Form No. INC-27 for conversion of company from public to private under the provisions of Companies Act, 2013 The relevant provisions of Companies Act, 2013(second proviso to sub-section (1) and sub-section (2) of section 14) have not been notified. In view of this, the corresponding provisions of Companies Act, 1956 (proviso to sub-section (1) and sub-section (2A) of section 31) shall remain in force till corresponding provisions of the Companies Act, 2013 are notified. The Central Government has delegated such powers under the Companies Act, 1956 to the Registrar of Companies (ROCs) vide item no. (c) of the notification number S.O. 1538(E) dated 10th July, 2012 and this delegated power remains in force. Applications for such conversions, therefore, have to be filed and disposed as per the earlier provisions. [Source: General Circular No. 18/2014 dated 11th June, 2014] Filing of MGT-10-clarification In continuation of General Circular No. 06/2014 dated 29.03.2014 and 09/2014 dated 25.04.2014, it is further informed that stakeholders are required to fill Form MGT-10 physically, get it duly signed/certified by a professional and file it along with other required enclosures as attachments with the prescribed General E-Form No. GNL-2. This temporary will continue till an E-Form for MGT-10 is made available. [Source: General Circular No. 17/2014 dated 11th June, 2014] Applicability of PAN requirement for Foreign Nationals In continuation of General Circular No. 12/2014 dated 22.05.2014 regards the above subject, it is clarified that the provisions of the said circular are applicable to a Foreign National who is a subscriber/promoter at the time of incorporation of the Company. In case said subscriber/promoter does not possess PAN, he/she shall furnish a declaration in the prescribed proforma, as an attachment to the Incorporation Form. [Source: General Circular No. 16/2014 dated 10th June, 2014]


Clarification regarding maintaining register in new format [sub-section (9) of section 186] It is hereby clarified that registers maintained by companies pursuant to sub-section (5) of Section 372A of the Companies Act, 1956 may continue as per requirements under these provisions and the new format prescribed vide Form MBP-2 shall be used for particulars entered in such registers on and from 01.04.2014. [Source: General Circular No. 15/2014 dated 09th June, 2014] Clarifications on Rules prescribed under the Companies Act, 2013 - Matters relating to appointment and qualifications of directors and Independent directors Section 149 (6) (c)-Pecuniary interest in certain transactions Clarifications have been sought whether a transaction entered into by an Independent Director with the company concerned at par with any member of the general public and at the same price as is payable/paid by such member of public would attract the bar of ‘pecuniary relationship’ under section 149 (6) (c). It is hereby clarified that in view of the provisions of section 188 which take away transactions in the ordinary course of business at arm’s length price from the purview of related party transactions, an Independent Director will not be said to have ‘pecuniary relationship’ under section 149 (6) (c) in such cases. Further in consultation with SEBI it is clarified that ‘pecuniary relationship’ provided in section 149 (6) (c) of the Act does not include receipt of remuneration from one or more companies, by way of fee provided under sub-section (5) of section 197, reimbursement of expenses for participation in the Board and other meetings and profit related commission approved by the members, in accordance with the provisions of the Act. Section 149-Appointment of Independent Director(s) It is hereby clarified that it would be necessary that if it is intended to appoint existing Independent Director(s) under the new Act, such appointment shall be made expressly under section 149 (10)/(11) read with schedule IV of the Act within 1 year from 01st April, 2014, subject to compliance with eligibility and other prescribed conditions. Section 149 (10)/(11)-Appointment of Independent Director(s) for less than 5 years It is clarified that section 149 (10) of the Act provides for a term of “upto five consecutive years” for an Independent Director. As such while appointment of an Independent Director for a term of less than five years would be permissible, appointment for any term (whether for five years or less) is to be treated as a one term under section 149 (10) of the Act. Further, under section 149 (11) of the Act, no person can hold office of Independent Director for more than ‘two consecutive terms’. Such a person shall have to demit office after 2 consecutive terms even if the total number of years of his appointment in such 2 consecutive terms is less than 10 years. In such a case the person completing ‘consecutive terms of less than ten years’ shall be eligible for appointment only after the expiry of the requisite cooling-off period of 3 years. Appointment of Independent Director(s) through letter of appointment In view of the specific provisions of Schedule IV, appointment of Independent Director(s) under the new Act would need to be formalized through a letter of appointment. [Source: General Circular No. 14/2014 dated 09th June, 2014]


Amendment of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 In the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 after rule 8, the following rule shall be inserted, namely:— “8A. Appointment of Company Secretaries in companies not covered under rule 8.—A company other than a company covered under rule 8 which has a paid up share capital of five crore rupees or more shall have a whole-time company secretary.” [Source: Notification No. G.S.R. 390(E) dated 09th June, 2014] Amendment of the Companies (Acceptance of Deposit) Rules, 2014 In the Companies (Acceptance of Deposits) Rules, 2014, in rule 5, in sub-rule (1), the following proviso shall be inserted, namely:- “Provided that the companies may accept the deposits without deposit insurance contract till the 31st March, 2015.” [Source: Notification No. G.S.R. 386(E) dated 06th June, 2014] Commencement of provisions of sub sections (2) and (3) of section 74 In exercise of the powers conferred by sub-section (3) of Section 1 of the Companies Act, 2013 (18 of 2013), the Central Government hereby appoints the 6th day of June, 2014 as the date on which the provisions of sub-sections (2) and (3) of Section 74 of the said Act shall come into force. [Source: Notification No. S.O. 1459(E) dated 06th June, 2014]


RBI UPDATES Circular/Notification/Guidance Remittances to non-residents – Deduction of Tax at Source The Central Board of Direct Taxes (CBDT) has revised the existing instructions to be followed while allowing remittances to the non residents, with effect from October 1, 2013. It has issued Income Tax (14th Amendment) Rules, 2013 vide Notification No. S.O 2659(E) dated September 2, 2013 on furnishing of information under Section 195(6) of the Income Tax Act, 1961 and prescribed the rules and forms to this effect. Reserve Bank of India has reviewed the policy relating to issue of instructions under Foreign Exchange Management Act, 1999 (FEMA), clarifying tax issues. It has now been decided that Reserve Bank of India will not issue any instructions under the FEMA, in this regard. It shall be mandatory on the part of Authorised Dealers to comply with the requirement of the tax laws, as applicable. [Source: RBI/2013-14/669 A.P. (DIR Series) Circular No.151 dated 30th June, 2014] Transfer of assets of Liaison Office (LO) / Branch Office (BO) / Project Office (PO) of a foreign entity either to its Wholly Owned Subsidiary (WOS) / Joint Venture (JV) / Others in India– Delegation of powers to AD Banks Presently ADs are delegated with powers to allow closure of the accounts of LO/BO and repatriate the surplus balances subject to submission of prescribed closure documents vide A.P (DIR Series) Circular No.24 dated December 30, 2009. The details of opening and closing POs are laid down in Circular No.37 dated November 15, 2003. With a view to smoothen the entire process of closure of LO/BO/PO, it has been decided to delegate the powers relating to transfer of assets of LO/BO/PO to AD Category-I banks subject to compliance with the following stipulations:-

a) Such proposals will be considered only from LO/BOs who are adhering to the operational guidelines stipulated in our AP DIR Circular No.23 & 24 of December 30, 2009 such as (i) submission of AACs (up to the current financial year) at regular annual intervals with copies endorsed to DGIT (International Taxation) and (ii) obtained PAN from IT Authorities and have got registered with ROC under Companies Act 1956. Similarly, proposals from POs should conform to the guidelines issued in AP DIR Cir.No.44 dated May 17, 2005 with regard to initial reporting requirements (para.2.3) and submission of CA certified annual report indicating project status (para.2.4);

b) A certificate is to be submitted from the Statutory Auditor furnishing details of assets to be transferred indicating their date of acquisition, original price, depreciation till date, present book value or WDV value and sale consideration to be obtained. Statutory Auditor should also confirm that the assets were not re-valued after their initial acquisition. The sale consideration should not be more than the book value in each case;

c) The assets should have been acquired by the LO/BO/PO from inward remittances and no intangible assets such as good will, pre-operative expenses should be included. AD bank should scrutinize and ensure that no revenue expenses such as lease hold improvements incurred by LO/BOs are capitalized and transferred to JV/WOS;


d) AD bank to ensure payment of all applicable taxes while permitting transfer of assets; e) Transfer of assets to be allowed by AD banks only when the foreign entity intends to close their

LO/BO/PO operations in India. Subsequently, the AD banks should ensure closure of LO/BO in accordance with the stipulations indicated in para.5 (iii) of A.P (DIR Series) Circular No.24 of December 30, 2009 and para.5 of A.P (DIR Series) Circular No.37 of November 15, 2003 in respect of Pos;

f) Credits to the bank accounts of LO/BO/PO on account of such transfer of assets will be treated as permissible credits;

g) The relevant documents are to be preserved separately for scrutiny by their own auditors and RBI auditors

[Source: RBI/2013-14/640 A.P. (DIR Series) Circular No.142 dated 12th June, 2014] Foreign investment in India – participation by registered FPIs, SEBI registered long term investors and NRIs in non-convertible/redeemable preference shares or debentures of Indian companies It has now been decided to allow registered Foreign Institutional Investors (FIIs), Qualified Foreign Investors (QFIs) deemed as registered Foreign Portfolio investors, registered Foreign Portfolio Investors (FPIs), long term investors registered with SEBI – Sovereign Wealth Funds (SWFs), Multilateral Agencies, Pension/ Insurance/ Endowment Funds, foreign Central Banks to invest on repatriation basis, in non-convertible/redeemable preference shares or debentures issued by an Indian company in terms of A.P. (DIR Series) Circular No. 84 dated January 6, 2014 and listed on recognized stock exchanges in India, within the overall limit of USD 51 billion earmarked for corporate debt. Further, NRIs may also invest, both on repatriation and non-repatriation basis, in non-convertible/redeemable preference shares or debentures. [Source: RBI/2013-14/632 A.P. (DIR Series) Circular No.140 dated 06th June, 2014] Foreign investment in the Insurance Sector – Amendment to the Foreign Direct Investment Scheme The extant FDI policy for insurance sector has been reviewed and accordingly, effective from February 4, 2014, foreign investment by way of FDI, investment by FIIs/FPIs and NRIs up to 26% under automatic route shall be permitted in insurance sector subject to the conditions specified in the Press Note 2 (2014 Series) dated February 4, 2014 [Source: RBI/2013-14/629 A.P. (DIR Series) Circular No.139 dated 05th June, 2014]


CORPORATE FINANCE

Latest News Private Equity ICICI Venture buys minority stake in KIMS Hospitals for $36M ICICI Venturel to acquire a significant minority stake in Hyderabad-headquartered Krishna Institute of Medical Sciences Limited (KIMS) for Rs 220 crore ($36 million) [Source:VCCircle, JUNE 27,2014] Suguna Foods promoters to buy back 5% stake held by IFC The promoters of Suguna Foods Ltd are buying back 5 per cent stake held in the company by International Finance Corp (IFC). [Source:VCCircle, JUNE 27,2014] Kotak Realty Fund invests $50M in Nirmal Group’s residential project in Mumbai Kotak Realty Fund has invested around Rs 300 crore ($50 million) in a residential project of Mumbai-based developer Nirmal Group. [Source:VCCircle, JUNE 27,2014] ICICI Prudential AMC invests in Mahagun’s residential project in Noida Mahagun Real Estate Pvt Ltd has secured up to Rs 75 crore ($12.5 million) for one of its projects in Noida from ICICI Prudential Asset Management Company Ltd [Source:VCCircle, JUNE 27,2014] Alia Group eyes $35M in PE funding, in talks to acquire digital communication firm Alia Group is planning to raise up to $35 million in private funding for expansion of its printing business and its foray into digital communication space [Source:VCCircle, JUNE 27,2014] Somerset Indus Capital invests in medical equipment firm Prognosys, Chayagraphics Somerset Indus Capital Partners has invested around Rs 20 crore ($3.32 million) in medical imaging equipment manufacturer Prognosys Medical Systems and its sister concern Chayagraphics, which distributes medical products [Source: VCCircle, JUNE 26,2014] ASK Property exits Darode Jog’s Pune residential project with 2.35x ASK Property Investment Advisors (ASK PIA) has exited from Liviano, a residential project by Darode Jog Properties, in Kharadi, Pune, for Rs 87 crore ($14.5 million). [Source:VCCircle, JUNE 25,2014] Blackstone invests $29M in Ozone’s Chennai residential project Blackstone has invested Rs 175 crore ($29.06 million) in a Chennai residential project of Bangalore-based Ozone Group [Source:VCCircle, JUNE 25,2014]


Milestone Capital investing around $10M in Assotech’s residential project in Gurgaon Milestone Capital is investing around Rs 50-60 crore ($8-10 million) in a luxury residential project located in Gurgaon by North-based developer Assotech Limited. [Source:VCCircle, JUNE 24,2014] Motilal Oswal PE invests $12.5M in façade construction firm Glass Wall Systems Motilal Oswal Private Equity has invested Rs 75 crore ($12.5 million) for a significant minority stake in Glass Wall Systems (India) [Source:VCCircle, JUNE 24,2014] Blackstone part exits Gokaldas Exports at less than one-third of investment cost Blackstone Capital Partners has exit from one of its private investment in public enterprise (or PIPE) deals in the country by part exiting garment exporter Gokaldas Exports Ltd. [Source:VCCircle, JUNE 20,2014] Women apparel brand Go Colors in talks to raise $10M Go Fashion (India) Pvt Ltd is looking to raise $10 million (Rs 60 crore) in PE funding to expand its brand ‘Go Colors’ [Source:VCCircle, JUNE 19,2014] Tano Capital picking 20% stake in luggage maker Safari for around $8.5M Tano Capital is acquiring 20 per cent equity stake in Safari Industries India Ltd for Rs 49.8 crore (around $8.5 million) through a preferential allotment of shares. [Source:VCCircle, JUNE 16,2014] Bain Capital scores 2x with part exit worth $248M from Hero MotoCorp Bain Capital Partners has sold 2.8 per cent or around a third of its holding in Hero MotoCorp Ltd via book-building market transaction for approximately Rs 1,480 crore ($248 million). [Source:VCCircle, JUNE 13,2014] Religare’s debt fund invests around $12M in Orris’ Gurgaon residential project Religare Credit Opportunities Fund has invested Rs 70 crore or ($11.8 million) in a project by north-based developer Orris Infrastructure [Source:VCCircle, JUNE 13,2014] Clearwater Capital part exits Diamond Power Infrastructure Clearwater Capital Partners has part exited Diamond Power Infrastructure by selling 5.5 per cent stake or almost half of its holding for Rs 27.9 crore ($4.7 million) to a bunch domestic investors via open market [Source:VCCircle, JUNE 02,2014]


Merger & Acquisition L&T acquires 74% stake in French defence & aerospace major Thales’ Indian arm L&T Technology Services has acquired 74 per cent stake in Thales Software India Pvt Ltd to grow its avionics business [Source:VCCircle, JUNE 30,2014] Mcleod Russel to acquire Vietnamese tea processing unit for around $2M Mcleod Russel India Ltd has agreed to acquire a tea processing unit in Vietnam for around $2.09 million (approximately Rs 12 crore) [Source:VCCircle, JUNE 27,2014] Gulf Petrochem buying 75% of Sah Petroleums for $10M, makes open offer Gulf Petrochem Group has struck a deal to buy 75 per cent stake held by promoters of public listed Sah Petroleums for Rs 60 crore ($10 million) and has made an open offer for buying the public shareholders which may cost up to Rs 20.02 crore ($3.3 million) if its fully accepted [Source:VCCircle, JUNE 25,2014] Global tour operator TUI raised holding in Delhi-based Le Passage to 91% TUI Travel Plc increased its holding in Le Passage to India Tours and Travels Pvt Ltd (LPTI) to 91 per cent by acquiring 41 per cent more stake. [Source: VCCircle, JUNE 24,2014] Solar power player Capture Solar gets $125M from Cyprus-based Concept Solutions CaptureSolar Energy (CSEL) has raised USD 125 million from the Cyprus-based photovoltaic solar solutions provider Concept Solutions & Innovation to set up a plant in Pune. [Source:VCCircle, JUNE 23,2014]


Moody's raises stake in ICRA to 50.06% for $86M via open offer Moody’s Corp raised its stake holding in ICRA by acquiring additional 21.55 per cent from public shareholders of the company via an open offer, taking its total stake in the company to 50.06 per cent. [Source:VCCircle, JUNE 20,2014] Future Consumer picking 35% stake in Baker Street Future Consumer Enterprise Ltd, the food and FMCG arm of Kishore Biyani-led Future Group is acquiring 35 per cent stake in Mumbai-based Sarjena Foods Private Limited [Source:VCCircle, JUNE 19,2014] Mahindra Holidays acquires 60-room resort in Manali Mahindra Holidays & Resorts India Ltd has acquired a new 60-room resort in Manali, owned by Competent Hotels Private Limited [Source:VCCircle, JUNE 19,2014] Cipla acquires majority stake in Sri Lankan drug distributor for $14M Cipla Ltd has acquired 60 per cent stake in a Sri Lanka-based company for $14 million which would market its products in the country [Source:VCCircle, JUNE 17,2014] Bharti Infratel plans to acquire parent Bharti Airtel's telecom towers in Sri Lanka, Bangladesh Bharti Infratel Ltd is mulling to acquire telecom towers owned by its parent Bharti Airtel in Sri Lanka and Bangladesh. [Source:VCCircle, JUNE 16,2014]

Peepul Capital-controlled UPS maker Consul Consolidated merges with Neowatt Energy Consul Consolidated Pvt Ltd, a manufacturer of UPS systems and voltage stabilisers, has announced its merger with Neowatt Energy Solutions Company Pvt Ltd [Source:VCCircle, JUNE 16,2014] Punj Lloyd expects to sell Medanta Hospital stake by month-end Punj Lloyd is selling its stake in Global Health Pvt Ltd, which owns and runs Gurgaon-based multi speciality hospital Medanta. [Source:VCCircle, JUNE 16,2014] Finland’s Citec buys Cargotec’s Indian engineering operations Citec is acquiring Cargotec’s local engineering centre along with its 110 employees in Pune. [Source:VCCircle, JUNE 13,2014] Japan’s Meiji buying Temasek-backed drugmaker Medreich for $290M Meiji Seika Pharma has signed a deal to acquire Medreich Ltd, a Bangalore-based contract manufacturing pharmaceutical company, for $290 million (Rs 1,720 crore). [Source:VCCircle, JUNE 12,2014]


Indore-based Anik Industries to induct strategic investor for dairy business Indore-based diversified public listed company Anik Industries Limited is looking to induct a strategic investor for its dairy division. [Source:VCCircle, JUNE 11,2014] Core Education to rope in partner for India business, sell non-core assets worth around $67M Core Education & Technologies Ltd has decided to induct joint venture partners for the India business, as part of its efforts to revive the company. [Source:VCCircle, JUNE 11,2014] Eros International acquiring controlling stake in mobile VAS firm Techzone Eros International Media Pvt Ltd is picking a controlling stake in Universal Power Systems Pvt Ltd which operates under the banner of Techzone. [Source:VCCircle, JUNE 09,2014] German group buys Micro Precision Products for around $42M A German industrial group to acquire Faridabad-based engineering firm Micro Precision Products Pvt Ltd for Rs 250 crore ($42 million). [Source:VCCircle, JUNE 06,2014] Alstom India to sell auxiliary components business to Triton for $9M Alstom India Ltd has approved sale of its auxiliary components business (air preheaters and industrial mills) to OAK Energy India Pvt Ltd, an Indian arm of European investment firm Triton for Rs 51.3 crore ($8.6 million). [Source:VCCircle, JUNE 06,2014] Italy’s CRIF acquires majority stake in credit information firm High Mark CRIF SPA to acquire majority stake in the credit information company. [Source:VCCircle, JUNE 05,2014] Reliance taking control of Network18 The deal involves acquisition of around 71.25 per cent of the promoter holding of NW18 for $520 million of which Raghav Bahl and family will get $120 million. [Source: VCCircle, JUNE 04,2014] Varkey Group acquires stake in Dubai's International Horizons College Varkey Group has announced the acquisition of a significant holding in Dubai's International Horizons College (IHC). [Source:VCCircle, JUNE 03,2014]


Speciality Restaurants to acquire majority stake in bakery chain Love Sugar Dough Fine dining restaurant chain Speciality Restaurants is acquiring majority stake in Mumbai-based bakery chain Love Sugar Dough [Source:VCCircle, JUNE 03,2014] Cox & Kings selling camping unit under Holidaybreak to French firm Homair for $149M Cox and Kings Ltd has struck a deal to sell Holidaybreak Ltd to French firm Homair Vacances for £89.20 million (Rs 882.8 crore or $149 million) [Source:VCCircle, JUNE 03,2014]

Venture Capital Orissa-based Milk Mantra raises $13M in Series C led by Fidelity Growth Partners Milk Mantra Dairy Pvt Ltd has raised Rs 80 crore ($13.08 million) in Series C led by Fidelity Growth Partners India with participation of Aavishkaar. [Source:VCCircle, JUNE 29,2014] Global media group Bertelsmann invests in venture capital firm Nirvana Ventures Bertelsmann has announced that it is investing "a multi-million-dollar amount" in Indian venture capital fund Digital Nirvana Fund Co. Ltd It manages two funds with a total endowment of $40.5 million. [Source:VCCircle, JUNE 28,2014] Bank card scheme notifications venture Cardback raises $170K through LetsVenture Orangut Labs Pvt Ltd has raised Rs 1 crore (about $170,000) through LetsVenture, an online platform that connects startups with accredited investors [Source:VCCircle, JUNE 27,2014] 500 Startups raising $100M for third flagship fund 500 Startups is raising a new, and its third, flagship fund with a target corpus of as much as $100 million, more than twice the size of its second umbrella fund raised a year ago. [Source:VCCircle, JUNE 27,2014]


Online financing platform for SMEs Capital Float raises $2M from Aspada Zen Lefin Pvt Ltd, the company behind Capital Float, an online platform that provides working capital finance to SMEs (small and medium enterprises) in India, has received Rs 12 crore ($2 million) in funding from Aspada Investment Company. [Source:VCCircle, JUNE 25,2014] Naspers brought in $52M in Flipkart’s latest funding round, raised holding to 17.7% Naspers Group injected 543 million South African rand (around $52 million based on forex rates in May) or roughly a quarter of the total $210 million that Flipkart Pvt Ltd raised last month. [Source:VCCircle, JUNE 23,2014] Housing.com secures $19M from Helion, Nexus & Qualcomm Ventures Locon Solutions Pvt Ltd has secured Rs 115 crore in funding led by Helion Venture Partners, with participation from Qualcomm Ventures besides existing investor Nexus Venture Partners. [Source:VCCircle, JUNE 19,2014] BookMyShow raises $25M from SAIF Partners and existing investors Accel, Network18 Bigtree Entertainment Pvt. Ltd., which owns India’s online entertainment ticketing property BookMyShow, has raised Rs 150 crore ($25 million) from new investor SAIF Partners. [Source:VCCircle, JUNE 18,2014] Mayfield injects $5M more in ATM e-surveillance firm Securens Systems Mayfield Fund has invested additional Rs 30 crore (a little over $5 million) in Securens Systems Private Limited by subscribing to preference and equity shares of the company [Source:VCCircle, JUNE 11,2014] Fashionandyou raises $10M in Series D round from Sequoia, NVP, Intel & others Fashionandyou.com has raised $10 million (around Rs 59 crore) in its Series D round of funding from both existing and new investors. [Source:VCCircle, JUNE 9,2014]

Social network for artists TouchTalent.com raises $700K in seed funding led by SAIF Partners Talent Unlimited Online Services Pvt Ltd has raised $700,000 in seed funding led by SAIF Partners. [Source:VCCircle, JUNE 9,2014] Video ad tech platform AdSparx secures under $600K from IAN, Mumbai Angels, Growx Novix Media Inc has secured Rs 3.5 crore (under $600,000) in an angel round of funding, led by Indian Angel Network with participation from Mumbai Angels and angel investor Growx Ventures Management. [Source:VCCircle, JUNE 4,2014]


Japan’s Netprice to invest $10M in India in a year Netprice.com Inc is planning to invest $10 million in Indian startups in the next one year. [Source:VCCircle, JUNE 4,2014]

Realty Compass in talks with Kae Capital, Growx, others to raise up to $320K in pre-Series A funding Blitzkrieg Technology Pvt Ltdis in talks with three investors to raise pre-Series A funding. [Source:VCCircle, JUNE 4,2014]

Kerala government launches $1.6M angel fund to support home-grown innovation The government of Kerala is rolling out a $1.6 million (Rs 10 crore) angel fund to support innovative startups based out of the state this financial year. [Source:VCCircle, JUNE 2,2014]


HEAD OFFICE: Mr. U.N. Marwah, Managing Partner 4/80, Janpath New Delhi-1100 01 (India) Tel: +91-11-43192000 Fax: +91-11-43192021 E-mail: [email protected] BRANCH OFFICE: Mr. Rathna Kumar 813 Oxford Towers, 139 Airport Road, Bangalore-560 008 E-mail: [email protected] AFFILIATE OFFICES: Mumbai Mr. Ashish Bairagra, F11, 3rd Floor, ManekMahal, 90 Veer Nariman Road, Church Gate, Mumbai-400 020

OUR OFFICES Tel. +91 22 6117 4949 Fax. +91 22 6117 4950 E-mail: [email protected] Pune Mr. Nitin Khangaonkar 9 ‘B’ & ‘C’ Wing, Supriya Gardens, Aundh, Pune- 411 007 Tel: +91 98230 81701 E-Mail: [email protected] Coimbatore Mr. D. Purushthoman Kaanchan, No. 6, North Hozur Road, Coimbatore- 641 018 Tel. +91 422 2212548, +91 422 2215407 Fax. +91 422 2201206 E-mail: [email protected]

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R.N. Marwah& Company (hereafter referred as RNM) has taken due care and caution in compilation and presenting factually correct data contained herein above. While RNM has made every effort to ensure that the information /data being provided is accurate, RNM does not guarantee the accuracy, adequacy or completeness of any data/information in this newsletter and the same is meant for the use of the recipient and not for circulation. Readers are advised to satisfy themselves about the merits and details of each article and the information contained therein, before taking any decision. RNM does not hold themselves liable for any consequences, legal or otherwise arising out of the use of any such information/data and further states that it has no financial liability whatsoever to the recipient/readers of this newsletter. RNM nor any of its partners/employees/representatives do not accept any liability for any direct or consequential loss arising from the use of information /data contained in this newsletter or any information /data generated from this newsletter. Any dispute arising in future shall be, subject to the court(s) at Delhi.

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