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ISSUE NO.65 MAY, 2014

RNM ALERT

Thinking of the Bottom Line – Think of Us

Dear Readers, India has been mired in coalition politics for the past thirty years; now in 2014, the world’s largest democratic nation has voted in a single party with a decisive majority to lead the country. Armed by its “good governance” ideology, the Narendra Modi led government is expected to ring in paradigm shifts in key economic indicators and business dynamics. In this backdrop, we are expecting the Union Budget in first

week of July 2014 where the new Finance Minister will have a tough time to get the economy out of a ‘difficult situation’. Exports rose by 5.3% YOY in April whilst manufacturing and services PMIs continued their improvement of the last few months, following eight months of decline. Inflation edged up in April, due to rising food prices, but inflation expectations seem to be well anchored by the Reserve Bank of India (RBI). Indian stocks rose sharply in May to fresh all-time high levels. From a valuation standpoint, the profitability for investors of Indian stocks has rebounded since July last year, but remains at levels (ROE at 16.3) lower than 10 year averages. Further more, Indian stocks aren't cheap from a price-to-book perspective, at 2.8x. However, we have some experts sounding out the bugles with talk of ‘being on the cusp of a sustained long term bull run’. Whether the retail investors return to the market is a key factor in determining the sustainability of the bull run, where the Nifty touched life time high closing on June 6, 2014 at well above 7500 levels. Singapore has replaced Mauritius as the top source of foreign direct investment into India, accounting for about 25 per cent of FDI inflows in 2013-14. During the last financial year, India attracted $5.98 billion in FDI from Singapore, whereas it was USD4.85 billion from Mauritius, according to the data of the Department of Industrial Policy and Promotion (DIPP). RBI has enhanced the remittance limit under Liberalised Remittance Scheme (LRS) from existing limit of USD 75,000 per financial year (April-March) to USD 125,000 with immediate effect, for any permitted current or capital account transaction or a combination of both.

Regards, CA U.N. Marwah

For and behalf of the RNM Alert Editorial Board

Issue No. 65: May, 2014 Page 2 of 20

CONTENTS Direct Tax

- Case Laws - Definitions 4 - Income deemed to accrue or arise in India 4 - Expenditure incurred in relation to exempt Income 4 - Income from House Property 4 - Depreciation 4 - General Expenses allowed as deduction 4 - Capital Gain 5 - Cash Credit 5 - Transfer Pricing 5 - Assessment 5-6 - Collection & Recovery 6 - Appeal & Revision 6 - Penalties 6

- Notifications 6

Indirect Tax Service Tax

- Case Laws - Cenvat credit available even if service provider does not deposit to Govt. account 7 - No service tax on collection to toll charges 7 - Composite service only classifiable under works contract service 7 - Service Tax applicable on 99 yrs. long lease of plot 7 - Hiring of buses to state roadways is rent a cab service 7 - Service Tax on restaurant is valid & constitutional 7 - Limitation regarding refund application is governed by sec 11(b) if CEA 7 - No service tax on lease of property with right to transfer 8 - Cenvat Credit available against renting of mall 8 - Cenvat credit of GTA service 8

Issue No. 65: May, 2014 Page 3 of 20

DIRECT TAX DIRECT TAX

Company Law Updates

- Circular - Extension of validity period for names reserve as on 31st March’14 9 - Applicability of PAN requirement for Foreign Nationals 9 - Delegation of powers u/s 153 & 154 of Cos. Act 2013 to RD Noida 9 - Delegation of powers u/s 458 of Cos. Act 2013 to ROCs 9 - Delegation of powers u/s 458 of Cos. Act 2013 to RDs 10 - One time opportunity for extension of period of reservation of Name 10 - Certif. of E-forms/non e-forms under the Cos. Act 2013 by the Practicing Professional 10

RBI Updates

- Circular - LRS for resident individuals – Increase in limit from $75000 to $ 125000 11 - ODI – LLP as Indian party 11 - ECB from Foreign equity holder – simplification of procedure 11 - ECB policy – Refinance/Repayment of Re. loan raised from domestic banking system 12 - ECB policy – reschedulement of ECB – simplification of procedure FDI in India 12 - Reporting mechanism for transfer of equity shares/fully & mandatory 12

convertible preference shares and debentures

Corporate Finance - Latest News

- Private Equity 13-14 - Mergers & Acquisition 15-17 - Venture Capital 17-19

Issue No. 65: May, 2014 Page 4 of 20

DIRECT TAX Case Laws Definitions Sec 2(47) - Where assessee entered into a development agreement of land with a developer in terms of which developer had to develop property according to approved plan and deliver a part of constructed area to assessee, in view of fact that developer had not done anything to discharge obligations cast on it, capital gains could not be brought to tax in year under appeal merely on basis of signing of development agreement. [Source: Binjusaria Properties (P.) Ltd. v. ACIT [2014] 45 taxmann.com 115] Income Deemed to accrue or arise in India Sec 9 - Sales promotion services rendered by 'G' for promotion of books and brand name of applicant in Sri Lanka were not technical services as defined in the Act –Such payments were not taxable in India as Article 14 of India-Sri Lanka DTAA provided that such income would be taxable only in the country in which services were rendered [Source: Oxford University Press, AAR (INCOME-TAX), NEW DELHI [2014] 45 taxmann.com 282] Expenditure incurred in relation to exempt income Sec 14A - No disallowance u/s 14A & Rule 8D can be made if the assessee does not have tax-free income & no claim for exemption is sought. [Source: CIT vs. Cortech Energy Pvt. Ltd (Gujarat High Court) ITA No. 239/2014] Sec 14A - No s. 14A & Rule 8D disallowance if there is no tax-free income. [Source: CIT vs. Shivam Motors (P) Ltd (Allahabad High Court) ITA No. 88/2014] Income from House property Sec 22 - Rent from letting out of flat with amenities was income from house property in absence of any business activity. [Source: Meeraj Estate & Developers v. DCIT[2014] 44 taxmann.com 431] Depreciation Sec 32 - Sum paid to merged bank in excess of its net worth is an intangible asset and eligible for depreciation [Source: Cosmos Co-op Bank Ltd. v. DCIT [2014] 45 taxmann.com 13] General Expenses allowed as deduction Sec 37(1) - Where expenditure on higher education of employee had an intimate and direct connection with assessee's business, it would be appropriately deductible, even though such an employee was son of a director. [Source: Kostub Investment Ltd. v. CIT [2014] 45 taxmann.com 123]

Issue No. 65: May, 2014 Page 5 of 20

Capital Gain Sec 45 - Gains arising from PMS transactions are capital gains & not business profits [Source: Radials International vs. ACIT (Delhi High Court) ITA No. 485/2012] Sec 45 - Where shares were held as investment and same were not traded regularly and frequency and volume of transaction were less, it had to be treated as investment activity and not as business. [Source: CIT v. Ashok Wadia [2014] 45 taxmann.com 182] Sec 50B – This section applies only to a “sale” for a “monetary consideration” and not to a case of “exchange” of the undertaking for shares under a s. 391/394 scheme of arrangement [Source: CIT vs. Bharat Bijlee Ltd (Bombay High Court) ITA No. 2153/2011] Sec 54F - Where building has been constructed for residential use with all amenities like kitchen, bathroom etc., which are necessary for residential accommodation, in such a case, even if it is used as a school or for any other commercial purpose, it cannot lose its character as a residential building so as to claim deduction under section 54F. A residential house does not mean a single residential house and, thus, where assessee constructs or receives a number of flats adjacent to each other or in different floors of same building then also assessee would be entitled for deduction under section 54F. [Source: N. Revathi v. ITO [2014] 45 taxmann.com 30] Cash Credit Sec 68 - Unless Assessing Officer brings material to show that amount brought in firm by partners represents unaccounted income of firm and that partners had no capacity to make such investment, capital brought in firm could not be assessed in hands of firm [Source: CIT v. Odedara Construction [2014] 45 taxmann.com 65 ] Transfer Pricing Sec 92C - Where there was complete uniformity in act of assessee in not charging interest from both Associated Enterprises and non-Associated Enterprises debtors for delay in realization of export proceeds, Assessing Officer was not justified in making addition of notional interest to assessee's ALP on aforesaid ground in course of transfer pricing proceedings. [Source: CIT v. Indo American Jewellery Ltd [2014] 44 taxmann.com 310] Assessment Sec 143 - Principle of res judicata is not applicable to decision of revenue authorities and, therefore, decisions given in an assessment for an earlier year are not binding either on assessee or on department in a subsequent year [Source: Meeraj Estate & Developers v. DCIT [2014] 44 taxmann.com 431]

Sec 147 - Reopening, even within 4 years, solely on the basis of a Clarificatory retrospective amendment is not permissible. [Source: Sadbhav Engineering Ltd vs. DCIT (Gujarat High Court) Special Civil Application No. 5848 – 5850 / 2010]

Issue No. 65: May, 2014 Page 6 of 20

Sec 148 - Assessee is bound to furnish a return in response to notice u/s. 148. The reasons for reopening can be given only thereafter. A writ involving disputed factual issues cannot be entertained [Source: Adobe Systems Software Ireland Ltd vs. ADIT (Delhi High Court) W.P. (C) 2326/2013] Collection & Recovery Sec 220 - No notice is required for initiating action for attaching account of tax defaulter; notice required when such act is contemplated. [Source: Anil Kumar Banerjee v. Union of India [2014] 44 taxmann.com 465]

Appeals & Revisions Sec 251 - No breach of IT rules on admission of additional evidence by CIT(A) if AO was allowed to comment on it [Source: CIT v. Kamlaben Sureshchandra Bhatti [2014] 44 taxmann.com 459] Penalties Sec 271(1)(c) - No s. 271(1)(c) penalty for concealment under normal provisions if s. 115JB book profits assessed. [Source: CIT vs. Jindal Polyester & Steel Ltd (Allahabad High Court) ITA No. 73/2001]

Notification Substitution of Forms 49A and 49AA: The CBDT vide Notification No.26/2014 dated 16.05.2014 in exercise of the powers conferred by section 295, have substituted Forms 49A and 49AA. In the case of Indian citizen, Indian companies, entities incorporated in India or unincorporated entities formed in India, the application for allotment of Permanent Account Number (PAN) must be fi led in Form No.49A. In the case of individuals not being citizen of India, entities incorporated outside India or unincorporated entities formed outside India, the application for allotment of Permanent Account Number (PAN) must be fi led in Form No.49AA. [Source: Notification No.26/2014 dated 16.05.2014] Declaration on automatic exchange of information in tax matters: In the Press Statement dated 12.05.2014 it was informed that 46 countries including India besides European Union have adopted a declaration on automatic exchange of information in tax matters. It is worth noting that Switzerland was also one of the signatories to the declaration. The Declaration recognizes that investments kept offshore by tax payers should not go untaxed. It stressed that a key aspect of cooperation between tax administrations is, effective exchange of information on automatic basis subject to appropriate safeguards. Earlier, India signed the multilateral convention which was signed by over 60 countries including almost all OECD countries and all G-20 countries. [Source: Press Statement dated 12.05.2014]

Issue No. 65: May, 2014 Page 7 of 20

INDIRECT TAX

Service Tax

Case Law CENVAT Credit Available Even if Service Provider Does Not Deposit to Government Account Activity or action of service provider in not depositing same in Government Treasury will not bar service recipient from taking Cenvat credit on service tax paid, if eligible. [Source: Memories Photography Studio v. Comm. of Cent. Ex.,Vadodara – I, [2014] 45 taxmann.com 237 (Ahmd-CESTAT)] No Service Tax on Collection of Toll Charges Construction of roads on Build, Operate and Transfer (BOT) basis and receiving consideration therefor by collection of toll charges for a fixed tenure is not liable to service tax [Source: IDAA Infrastructure (P.) Ltd. v. Comm. of Serv. Tax, Mumbai-II, [2014] 44 taxmann.com 270(Mum - CESTAT)]

Composite Service Only Classifiable Under Works Contract Service Prima facie, composite services could not be classified as commercial or industrial construction services after introduction of works contract services from 1-6-2007. [Source: D.P. Singh Chadha v. Comm. of Central Excise, Ludhiana [2014] 44 taxmann.com 395 (Punjab & Haryana)]

Service Tax Applicable on 99 Year Long Lease of Plot Even long-term leases of 99 years by state industrial development authorities amount to 'lease' and are liable to service tax under Renting of Immovable Property Services [Source: New Okhla Industrial Development Authority v. Comm. of Cent. Ex. & Serv. Tax, Noida [2014] 44 taxmann.com 287 (New Delhi - CESTAT)] Hiring of Buses to State Roadways is Rent-a-Cab Service Hire charges from State Roadways for buses supplied under specific contract are prima facie liable under 'rent-a-cab service' and not 'supply of tangible goods service' [Source: M. Shanthappa v. Comm. of Central Excise, Mangalore [2014] 44 taxmann.com 393 (Bangalore - CESTAT)] Service Tax on Restaurant is Valid and Constitutional Article 366(29)(f) enabling levy of VAT on 'deemed sale' of food, etc. cannot bar imposition of service tax on service rendered by a restaurant; hence, imposition of service tax on service element in restaurant transactions was valid but pleas of double taxation was not considered, as same was not raised by assessee. [Source: Indian Hotels & Restaurant Association v. Union of India [2014] 44 taxmann.com 455 (Bombay)] Limitation Regarding Refund Application is Governed by Sec. 11(B) of CEA Once application for refund is made in terms of Central Excise Act, 1944, it has to be considered in accordance therewith and not otherwise; therefore, refund of tax mistakenly paid on export of services, would be subject to bar of limitation under section 11B(1) of Central Excise Act, 1944 [Source: Andrew Telecom (I) (P.) Ltd. v. Comm. of Customs & Cent Excise, Goa [2014] 44taxmann.com 477 (Bombay)]

Issue No. 65: May, 2014 Page 8 of 20

No Service Tax on Lease of Property with Right to Transfer Renting/Leasing referred to in section 65(105)(zzzz) does not, prima facie, cover 'long-term leasing' where a property is given to a person with rights to transfer, assign and mortgage rights, as such transfers are more akin to sale. [Source: Greater Noida Industrial Development Authority v. Comm. of Cent. Ex., Noida, [2014] 44 taxmann.com 271 (New Delhi - CESTAT)] CENVAT Credit Available against Renting of Mall Service Tax paid under category of 'Works Contract Services' provided by person who has constructed mall is available as credit for paying service on output service of renting of mall [Source: Galaxy Mercantile Ltd. v. Comm. of Cent. Excise, Noida [2014] 45 taxmann.com 164 (New Delhi - CESTAT)] CENVAT Credit of GTA Service Prior to 1-4-2008, transport service for clearance of goods from place of removal is eligible for Cenvat credit as 'input service' [Source: Commissioner v. Ellora Time Ltd. [2014] 44 taxmann.com 83 (Gujarat)]

Issue No. 65: May, 2014 Page 9 of 20

COMPANY LAW UPDATES Circular/Notification/Guidance Extension of validity period for names reserve as on 31st March, 2014 In Continuation of the General Circular No. 11/2014 dated 12th May, 2014, approval of the Competent Authority is hereby conveyed to extend continuity of all reserved names as on 31st March, 2014 for another 15 days period from the date of issue of this circular. [Source: General Circular No. 13 dated 23rd May, 2014] Applicability of PAN requirement for Foreign Nationals It is hereby clarified that PAN details are mandatory only for those foreign nationals who are required to possess "PAN" in terms of provisions of the Income Tax Act, 1961 on the date of application for incorporation. Where the intending Director who is a Foreign National is not required to compulsorily possess PAN, it will be sufficient for such a person to furnish his/her passport number, along with undertaking stating that provisions of mandatory applicability of PAN are not applicable to the person concerned. [Source: General Circular No. 12 dated 22nd May, 2014] Delegation of powers u/s 153 and 154 of CA 2013 to RD Noida In exercise of the powers conferred by Section 458 of the Companies Act, 2013 (18 of 2013), and in supersession of the notification G.S.R. 650(E), dated the 19th October, 2006 except as respects things done or omitted to be done before such supersession, the Central Government hereby delegates the powers and functions of the Central Government in respect of allotment of Director Identification Number under Sections 153 and 154 of the said Act to the Regional Director, Joint Director, Deputy Director or Assistant Director posted in the office of Regional Director at Noida. [Source: Notification No. S.O. 1354(E) dated 21st May, 2014] Delegation of powers u/s 458 of CA 2013 to ROCs In exercise of the powers conferred by Sec 458 of the Companies Act, 2013 (18 of 2013), and in supersession of the notification number S.O. 1538 (E), dated the 10th July, 2012, in so far as it relates to items (a) to (b) and items (d) to (e), except as respects things done or omitted to be done before such supersession, the Central Government hereby delegates to the Registrar of Companies, the power and functions vested in it under the following sections of the said Act, subject to the condition that the Central Government may revoke such delegation of powers or may itself exercise the powers and functions under the said sections, if in its opinion, such a course of action is necessary in the public interest, namely:

1) sub-sec(2) of Sec 4; 2) sub-sec(1) of Sec 8; 3) clause (i) of sub-sec(4) of Sec 8, except for alteration of memorandum in case of conversion into

another kind of company; 4) sub-sec(5) of Sec 8 & 5) sub-sec(2) of Sec 13

[Source: Notification No. S.O. 1353(E) dated 21st May, 2014]

Issue No. 65: May, 2014 Page 10 of 20

Delegation of powers u/s 458 of CA 2013 to RDs In exercise of the powers conferred by Section 458 of the Companies Act, 2013 (18 of 2013), and in supersession of the notification number S.O. 1539(E), dated the 10th July, 2012, in so far as it relates to items (a) to (f) and item (n), except as respects things done or omitted to be done before such supersession, the Central Government hereby delegates to the Regional Directors at Mumbai, Kolkata, Chennai, Noida, Ahmadabad, Hyderabad and Shillong, the power and functions vested in it under the following sections of the said Act, subject to the condition that the Central Government may revoke such delegation of powers or may itself exercise the powers under the said sections, if in its opinion such a course of action is necessary in the public interest, namely :

1) clause (i) of sub-sec(4) of Sec 8 (for alteration of memorandum in case of conversion into another kind of company);

2) sub-sec(6) of Sec 8; 3) sub-sec(4) and (5) of Sec 13; 4) Sec 16; 5) Sec 87; 6) sub-sec(3) of Sec 111; 7) sub-sec(1) of Sec 140; and 8) proviso (i) to sub-sec(1) of Sec 399

[Source: Notification No. S.O. 1352(E) dated 21st May, 2014] One time opportunity for extension of period of Reservation of Name Services for incorporation of companies were not available on the MCA21 portal to stakeholders from 1st April, 2014 to 2gth AW]L 2014 because of the deployment requirements for new E-forms. Many stakeholders had reserved names for the purpose of Company incorporation with 60 days prescribed validity expiring during the above mentioned period. They could not avail of the 60 days prescribed period for using the name to complete the corresponding incorporation requirements due to the non-availability of services. In view of this, the validity of reservation of all such names with due date of expiry between 1st April, 2014 to 28th April, 2074 is hereby extended upto 31sr May, 2014. [Source: General Circular No. 11 dated 12th May, 2014] Certification of E-forms/non e-forms under the Companies Act, 2013 by the Practicing Professionals Where any instance of filing of documents, application or return or petition etc. containing false or misleading information or omission of material fact or incomplete information is observed, the Regional Director or the Registrar as the case may be, shall conduct a quick inquiry against the professionals who certified the form and signatory thereof including an officer in default who appears prima facie responsible for submitting false or misleading or incorrect information pursuant to requirement of Companies (Registration Office and Fees) Rules, 2014; 15 day notice may be given for the purpose. [Source: General Circular No. 10 dated 07th May, 2014]

Issue No. 65: May, 2014 Page 11 of 20

RBI UPDATES Circular/Notification/Guidance Liberalized Remittance Scheme (LRS) for resident individuals-Increase in the limit from USD 75,000 to USD 125,000 It has now been decided to enhance the existing limit of USD 75,000 per financial year (April-March) to USD 125,000 with immediate effect. Accordingly, AD Category –I banks may now allow remittances up to USD 125,000 per financial year, under the Scheme, for any permitted current or capital account transaction or a combination of both. The Scheme should not be used for making remittances for any prohibited or illegal activities such as margin trading, lottery, etc. [Source: RBI/2013-14/624 A.P. (DIR Series) Circular No.138 dated 03rd June, 2014]

Overseas Direct Investments – Limited Liability Partnership (LLP) as Indian Party It has been decided to notify a Limited Liability Partnership (LLP), registered under the Limited Liability Partnership Act, 2008 (6 of 2009), as an “Indian Party” under clause (k) of Regulation 2 of the Notification ibid. Accordingly, a LLP may henceforth undertake financial commitment to / on behalf of a JV / WOS abroad in terms of the extant FEMA provisions under Regulation 6 (and regulation 7, if applicable) of the Notification ibid. [Source: RBI/2013-14/595 A.P. (DIR Series) Circular No.131 dated 19th May, 2014] External Commercial Borrowings (ECB) from Foreign Equity Holder - Simplification of Procedure It has been decided to delegate powers to AD banks to approve the following cases under the automatic route:

1. Proposals for raising ECB by companies belonging to manufacturing, infrastructure, hotels, hospitals and software sectors from indirect equity holders and group companies;

2. Proposals for raising ECB for companies in miscellaneous services from direct / indirect equity holders and group companies. Miscellaneous services mean companies engaged in training activities (but not educational institutes), research and development activities and companies supporting infrastructure sector. Companies doing trading business, companies providing logistics services, financial services and consultancy services are, however, not covered under the facility;

3. Proposals for raising ECB by companies belonging to manufacturing, infrastructure, hotels, hospitals and software sectors for general corporate purpose.ECB for general corporate purpose (which includes working capital financing) is, however, permitted only from direct equity holder;

4. Proposals involving change of lender when the ECB is from FEH – direct / indirect equity holders and group company

[Source: RBI/2013-14/594 A.P. (DIR Series) Circular No.130 dated 16th May, 2014]

Issue No. 65: May, 2014 Page 12 of 20

External Commercial Borrowings (ECB) Policy - Refinance / Repayment of Rupee loans raised from domestic banking system It has been decided that eligible Indian companies will not be permitted to raise ECB from overseas branches / subsidiaries of Indian banks for the purpose of refinance / repayment of the Rupee loans raised from the domestic banking system in respect of the following:

a) Scheme of take-out financing: Reference A.P. (DIR Series) Circular No. 04 dated July 22, 2010; b) Repayment of existing Rupee loans for companies in infrastructure sector: Reference A.P. (DIR

Series) Circulars Nos. 25 and 111 dated September 23, 2011 and April 20, 2012 respectively; c) Spectrum allocation: Reference A.P. (DIR Series) Circulars Nos. 28 and 54 dated January 25, 2010

and November 26, 2012 respectively; d) Repayment of Rupee loans: Reference A.P. (DIR Series) Circulars Nos. 134, 26, 78 and 12 dated

June 25, 2012, September 11, 2012, January 21, 2013 and July 15, 2013 respectively. [Source: RBI/2013-14/585 A.P. (DIR Series) Circular No.129 dated 09th May, 2014] External Commercial Borrowings (ECB) Policy: Re-schedulement of ECB - Simplification of procedure Foreign Direct Investment (FDI) in India It has been decided to delegate the power to the designated AD Category – I bank to allow re-schedulement of ECB due to changes in draw-down schedule and / or repayment schedule with the following conditions:

1. Changes, if any, in all-in-cost (AIC) is only on account of the change in average maturity period (AMP) due to re-schedulement of ECB and post re-schedulement, the AIC and the AMP are in conformity with applicable guidelines. There should not be any increase in the rate of interest and no additional cost (in foreign currency / Indian Rupees) should be involved;

2. The re-schedulement is allowed only once, before the maturity of the ECB; 3. If the lender is an overseas branch of a domestic bank, the prudential norms applicable on account

of re-schedulement should be complied with; 4. The changes on account of re-schedulement should be reported to DSIM through revised Form 83; 5. The ECB should be in compliance with all applicable guidelines related to eligible borrower,

recognized lender, AIC, AMP, end-uses, etc; 6. The borrower should not be in the default / caution list of RBI and should not be under the

investigation of Directorate of Enforcement. [Source: RBI/2013-14/584 A.P. (DIR Series) Circular No.128 dated 09th May, 2014] Reporting mechanism for transfer of equity shares/ fully and mandatorily convertible preference shares/ fully and mandatorily convertible debentures In cases where the NR investor including an NRI acquires shares on the stock exchanges in terms of A.P. (DIR Series) Circular No. 38 dated September 6, 2013, the investee company would have to file form FC-TRS with the AD Category-I bank. In order to facilitate operational convenience, it has been decided that the AD Category-I bank may approach Regional Office concerned of Reserve Bank of India, Foreign Exchange Department to regularize the delay in submission of form FC-TRS, beyond the prescribed period of 60 days and in all other cases, form FC-TRS shall continue to be scrutinized at AD bank level as per extant practice. The AD banks shall continue to comply with the consolidated reporting requirement as stipulated in terms of Para 6.4 of A. P. (DIR Series) Circular No. 16 dated October 4, 2004. [Source: RBI/2013-14/577 A.P. (DIR Series) Circular No.127 dated 02nd May, 2014]

Issue No. 65: May, 2014 Page 13 of 20

CORPORATE FINANCE

Latest News Private Equity Aster DM Healthcare raises $60M from existing investors Olympus, IVFA Aster DM Healthcare, which runs hospitals spread across India and the Middle East, has raised $60 million from its existing investors Olympus Capital and India Value Fund Advisors (IVFA). In 2012, Olympus Capital invested $100 million through a mix of primary share purchase and secondary transaction which saw existing investor IVFA part exit. IVFA invested over $50 million in two rounds in the company in 2008 and 2011. [Source: VCCircle, May 28, 2014] Piramal Fund invests in Satya Group’s Gurgaon residential project Piramal Group’s real estate private equity division Indiareit, has invested Rs 80-100 crore ($14-17 million) in a residential project by north-based developer, Satya Group. [Source:VCCircle, May 28, 2014] Morgan Stanley Real Estate part exits Oberoi Realty, takes haircut in dollar terms Morgan Stanley Real Estate, the real estate focused asset management arm of financial services giant Morgan Stanley, has part exited its seven year old investment in Mumbai-based Oberoi Realty for $45M. In local currency the gains are modest given the seven year holding period while in dollar returns Morgan Stanley Real Estate took haircut. [Source: VCCircle, May 23, 2014] Hyderabad’s iconic restaurant chain Paradise raises close to $12M from Samara Capital Private equity firm Samara Capital has invested approximately Rs 70 crore ($12 million) in Hyderabad-based restaurant chain Paradise Food Court. The restaurant chain has been looking to raise funds since late 2012. [Source: VCCircle, May 22, 2014] Abu Dhabi Investment Authority picks stake in MT Educare Abu Dhabi Investment Authority, the sovereign wealth fund of the emirate of Abu Dhabi, has picked up 1 per cent stake in coaching services provider MT Educare for Rs 3.88 crore via block deal on Tuesday. [Source: VCCircle, May 20, 2014] Beacon India Private Equity partially exits NCC Mumbai-based Beacon India Private Equity Fund has partially exited construction company NCC Ltd by selling 1.14 per cent equity stake in the firm for Rs 20.61 crore. The construction company is backed by Blackstone, ChrysCapital and ace private investor Rakesh Jhunjhunwala, among others. [Source: VCCircle, May 15, 2014]

Issue No. 65: May, 2014 Page 14 of 20

Matrix Partners part exits Tree House Education with 4x return Multi-stage private equity firm Matrix Partners has partially exited its investment in pre-school chain Tree House Education & Accessories by selling 4.8 per cent stake in an open market transaction. [Source: VCCircle, May 09, 2014]

ChrysCap picks 4% stake in City Union Bank Private equity firm ChrysCapital has picked up 4.08 per cent stake in Tamil Nadu-based City Union Bank in what adds to its portfolio of private sector banks in the country. The PE firm has previously invested in banks such as ING Vysya Bank, Karur Vysya and Federal Bank. [Source: VCCircle, May 08, 2014] Norwest Venture Partners part exits Shriram City Union Finance with 4.2x Multi-stage private investment firm Norwest Venture Partners (NVP) has part exited its investment in consumer lender Shriram City Union Finance clocking over four-fold return in its five-year-old investment. Norwest has been an active investor in the Indian financial services space with investments in companies including Cholamandalam Finance, ING Vysya Bank and IndusInd Bank. [Source: VCCircle, May 07, 2014] Essel Finance investing around $21M in two projects in Bangalore, Chennai Essel Finance, which is raising two realty focused funds, is investing approximately Rs 127 crore ($21 million) across two residential projects in Bangalore and Chennai. The firm is currently investing out of its domestic fund which is raising funds with a target corpus of Rs 1,000 crore, including a green-shoe option of Rs 500 crore. [Source: VCCircle, May 06, 2014]

Issue No. 65: May, 2014 Page 15 of 20

Merger & Acquisition Reliance Inds buying majority stake in Network18 RIL’s board has approved infusion of up to Rs 4,000 crore into Independent Media Trust (IMT), a unit under Reliance Industries, for the acquisition of control in Network 18 Media & Investments Limited (NW18) including its subsidiary TV18 Broadcast Limited (TV18). RIL would get 78 per cent in Network18 Media & Investments Ltd and 9 per cent in its subsidiary TV18. [Source: VCCircle, May 29, 2014] United Breweries to acquire Pacific Spirits' brewery assets for $18M United Breweries Ltd, the country's largest brewing company, is acquiring the brewery assets of Pacific Spirits Pvt Ltd for Rs 105 crore ($17.8 million), as per a stock market disclosure. [Source: VCCircle, May 28, 2014] Ebix acquires online medical advisory network HealthcareMagic in $18.5M cash-cum-earn out deal Ebix Inc, an international supplier of on-demand software and e-commerce services to the insurance, finance and healthcare industries, has acquired Bangalore-based Unified Health Solution Pvt Ltd, the company behind HealthcareMagic, a medical advisory service with an online network of approximately 15,000 general physicians and surgeons [Source: VCCircle, May 28, 2014] Bharti SoftBank buys remaining stake in location-based service Hoppr Bharti Softbank (BSB), a joint venture between Bharti Enterprises and Japanese Internet firm Softbank Corp, has bought the remaining stake in Gurgaon-based Y2CF Digital Media Pvt Ltd, owner of Hoppr, a location based check-in service that works across all mobile devices. In May 2012, BSB partnered with Y2CF to launch Hoppr and invested Rs 40 crore in the firm. [Source: VCCircle, May 28, 2014] Flipkart acquires Myntra, to invest over $100M in fashion business Flipkart, the largest consumer focused e-commerce company in India, has acquired has acquired Myntra Designs Pvt Ltd, the company which runs the online fashion and apparel shop Myntra.com. [Source: VCCircle, May 22, 2014] Former Compass India head Uday Kumar buys 51% stake in restaurant chain Nalas Aappakadai Chennai-based entrepreneur Uday Kumar, who previously served as CEO of Indian unit of international facility management and catering services firm Compass, has acquired majority stake in fine dining restaurant chain Nalas Aappakadai. The firm closed last year with revenue of around $10 million. [Source: VCCircle, May 20, 2014] PubMatic acquires ad serving company Mocean Mobile PubMatic Inc, a California-headquartered digital advertising solutions firm with offices in India, Europe and Australia, has acquired New York-based mobile ad server and monetisation company Mocean Mobile Inc (formerly Mojiva) for an undisclosed amount. [Source: VCCircle, May 20, 2014]

Issue No. 65: May, 2014 Page 16 of 20

Tata Global Beverages acquires Australian coffee firm Bronski Eleven Tata Global Beverages Ltd (TGBL), formerly known as Tata Tea, through its UK-based subsidiary, has acquired Australian firm Bronski Eleven Pty Ltd, for an undisclosed amount, as per a stock market disclosure. [Source: VCCircle, May 19, 2014] US-based Cancer Genetics acquires Ventureast-backed BioServe India US-based Cancer Genetics Inc (CGI), a NASDAQ-listed company that provides DNA-based diagnostics, has acquired Hyderabad-based BioServe Biotechnologies (India) Pvt Ltd, providing genomic and molecular services, for around $1.9 million in an all-stock transaction. [Source: VCCircle, May 15, 2014] Asian Paints to buy Ess Ess Bathroom’s front-end sales business India’s largest paints company Asian Paints Ltd has entered into an agreement with Punjab-based Ess Ess Bathroom Products Pvt Ltd (Ess Ess) to acquire its entire front-end sales business, as per a stock market disclosure. The financial details of the deal are not disclosed [Source: VCCircle, May 15, 2014] Kirusa acquires Bangalore-based mobile messaging app developer Cooltok New Jersey-headquartered Kirusa Inc, which provides voice messaging and social media apps for smartphones, has acquired Bangalore-based mobile messaging apps developer Plusray Innovations Pvt Ltd, which operates under the brand Cooltok. As per the deal, Kirusa has acquired the technology, workforce and intellectual property of Cooltok. [Source: VCCircle, May 12, 2014] Indsur Group acquires UK-based thermal engineering firm CDA Contracts Mumbai-based S M Lodha-led diversified firm Indsur Group has acquired British thermal engineering company CDA Contracts Ltd for an undisclosed amount, making its second acquisition in the European continent. In 2012, Indsur Group had bought UK-based Nevron Eurotherm Insulation in an all-cash deal and renamed it as Indsur Nevron Eurotherm. [Source: VCCircle, May 12, 2014] LionRock-backed baby & kids products e-tailer Hopscotch acquires SkoolShop Hit The Mark Inc, which runs Mumbai-based curated baby and kids products flash sales venture Hopscotch, has acquired Occasion Kommerce Pvt Ltd-run online school supplies retailer, SkoolShop for an undisclosed amount. SkoolShop's investors Blume Ventures and angel investors like Rajan Anand will exit the company as a result of this deal. [Source: VCCircle, May 08, 2014] Godrej & Boyce buys Somany Foam's PU foam business Godrej & Boyce Manufacturing Company Ltd, a part of the diversified business conglomerate Godrej Group, has completed the acquisition of polyurethane (PU) foam business of Somany Foam Limited for an undisclosed amount, according to a statement. [Source: VCCircle, May 02, 2014]

Issue No. 65: May, 2014 Page 17 of 20

Irene Healthcare acquired small hospital in Delhi Delhi-based healthcare service startup Irene Healthcare Pvt Ltd, which operates a chain of secondary hospitals, has acquired a small hospital in South Delhi and rebranded it recently, [Source: VCCircle, May 02, 2014] Edelweiss buys out hedge fund manager Forefront Capital Diversified financial services company Edelweiss Financial Services Limited has acquired Mumbai-based high net- worth individuals-focused asset management company Forefront Capital Management Private Limited for an undisclosed amount, according to a press release. [Source: VCCircle, May 01, 2014]

Venture Capital Chinese flash sales venture VIPshop leads Series D funding round in Fashionandyou.com Smile Group’s lifestyle e-com venture Fashionandyou.com, a private shopping site for luxury brands and designer apparel, has raised its Series D round led by NYSE-listed Chinese discount retail specialist VIPshop’s investment arm. [Source: VCCircle, May 29, 2014] Hybrid vocational training startup SkillBoost secures angel funding

Issue No. 65: May, 2014 Page 18 of 20

Delhi-based SkillBoost Services Pvt Ltd, a hybrid (online and offline) provider of vocational training in Microsoft Excel, has raised an undisclosed amount in angel funding from a consortium of private investors, according to news reports. The company will use the proceedings from this round for team expansion, sales and marketing activities and to expand its product portfolio. [Source: VCCircle, May 26, 2014] Online insurance policy aggregator PolicyBazaar raises $20M more, valued around $100M Gurgaon-based eTechAces Marketing and Consulting Pvt Ltd, owner of online insurance policy aggregator PolicyBazaar, has raised Rs 119 crore ($20 million) in Series C round of funding. [Source: VCCircle, May 26, 2014] Chaupaati Bazaar co-founders’ online test preparation platform Toppr gets funding from SAIF, Helion Toppr.com, an online test preparation platform created by Zishaan Hayath and Hemanth Goteti, co-founders of Chaupaati Bazaar which was acquired by Kishore Biyani’s Future Group in 2010, has raised $2 million (under Rs 12 crore) in a seed round of funding from Helion Venture Partners and PE firm SAIF Partners. The capital will be used to launch its marketing activities across cities and also to expand the team. [Source: VCCircle, May 26, 2014] User engagement platform for apps Konotor gets $125K from Qualcomm Ventures, Accel Konotor, a user engagement platform for mobile apps developed by Chennai-based Demach Software India Pvt Ltd, has received $125,000 (Rs 73 lakh) in funding from Qualcomm Ventures and Accel Partners. [Source: VCCircle, May 26, 2014] Snapdeal raises $100M in fresh funding from BlackRock, Temasek, PremjiInvest, others Delhi-based Jasper Infotech Pvt Ltd, which runs the online marketplace Snapdeal.com, has secured $100 million (Rs 590 crore) in fresh round of funding from a group of new investors including US-based BlackRock Financial Management, Singapore’s sovereign wealth fund Temasek, Hong Kong-based Myriad Asset Management and Tybourne Capital Management, besides PremjiInvest, the personal investment vehicle of Wipro chairman Azim Premji. [Source: VCCircle, May 21, 2014] Pearson’s education fund invests in e-learning startup Zaya Labs Mumbai-based Zaya Learning Pvt Ltd, which operates under the brand name Zaya Labs, has received an undisclosed amount in funding from Pearson Affordable Learning Fund (PALF), an education fund run by UK-based education company Pearson Plc, for a minority stake in the company. The company will use the capital for product development. [Source: VCCircle, May 20, 2014] Luxury car hire service Uber in talks for fresh funding at over $10B valuation

Issue No. 65: May, 2014 Page 19 of 20

San Francisco-headquartered online luxury car hire service Uber Technologies Inc is in talks to raise a fresh round of funding at a $10 billion valuation, says a Bloomberg report. Uber raised more than $360 million from Google Ventures and a few other investors in August last year. [Source: VCCircle, May 16, 2014] Helion Venture Partners invests over $4M in enterprise mobility company RapidValue India- and US-based enterprises mobility solutions company Rapid Value IT Services Pvt Ltd has received Rs 25 crore ($4.2 million) in funding from Helion Venture Partners. RapidValue will use the fund to grow in various geographies and strengthen its delivery capabilities. [Source: VCCircle, May 14, 2014] Mumbai-based online test prep startup Embibe raises $4M from Lightbox & Kalaari Capital Mumbai-based Individual Learning Pvt Ltd that runs Embibe.com, an online test prep portal specialising in engineering entrance exams, has raised $4 million from early-stage investor Kalaari Capital and newly formed venture fund Lightbox,. The fund will be used to enhance the company’s student and teacher network, and deepen its research around performance improvement. [Source: VCCircle, May 05, 2014] Helion invests $4.5M in dental care chain Denty’s Hyderabad-based Today's Healthcare India Pvt Ltd, which runs a dental care chain Denty’s that has implemented digitised diagnostic imagery integrated with an electronic health records system across its centres, has secured Rs 27 crore (around $4.5 million) from Helion Venture Partners. [Source: VCCircle, May 05, 2014] Deal origination platform for financial institutions BankerBay raises under $1M in angel funding Bangalore- and Singapore-based BankerBay Technologies Pte Ltd, which helps private equity firms, venture capital firms, hedge funds, banks and investment banks locate deal flow and capital, has secured just under $1 million in an angel round of funding from a group of investors in Asia and Europe. [Source: VCCircle, May 02, 2014]

Issue No. 65: May, 2014 Page 20 of 20

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