VOL 1 JANUARY 2018

CORPOR ATE Dossier

CORPORATE DOSSIER is an quarterly publication from UJA, Udyen Jain & Associates.

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INDUSTRY 4.0

Industry 4.0 Technology is sweeping the

Manufacturing sector. Industry 4.0 is soon going

to be the norm. The rst industrial revolution was

mechanization, water power and steam power

used for production. The second industrial

revolution used electric power to mass produce.

The third used computers and automation in

production. We

are now

entering

Industry 4.0, in

which

computers and

automation

come together,

with robotics

connected

remotely to

computer

systems

equipped with

machine learning algorithms that can learn and

control the robotics with very little input from human

operators. This is the 'smart factory' of tomorrow.

Machines, devices, sensors and people are connected

and communicate with one another through the

wireless web. Many companies around the world are

digitizing their functions and they expect to reduce

operational costs and increase efciency.

In 2016 Gartner released a list of top industry trends:

· The device mesh - Mesh means a certain

type of connection among the devices. That

connection helps the devices to connect and interact

with each other.

The network of

the physical

version of that

connection – the

physical devices –

is the Device

Mesh. Devices talk

to each other on

command or automatically to pass information,

orders, etc. and gets things done.

Ambient user experience - is the smooth

experience generated by the mesh of the devices

3D printing material - Advances in 3D

printing have already enabled 3D printing to use a

wide range of materials, including advanced nickel

alloys, carbon ber, glass, conductive ink, electronics,

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pharmaceuticals and

biological materials.

These advances will

necessitate a

rethinking of

assembly line and

supply chain

processes to exploit

3D printing.

Information

of everything -

Everything in the

digital mesh

produces uses and

transmits information. This information goes beyond

textual, audio and video information to include

sensory and contextual information. Information of

everything addresses this inux with strategies and

technologies to link data from all these different data

sources.

Advanced machine learning - Deep neural

nets (DNNs) move beyond classic computing and

information management to create systems that can

autonomously learn to perceive the world, on their

own. The explosion of data sources and complexity of

information makes manual classication and analysis

infeasible and uneconomic. DNNs automate these

tasks and make it possible to address key challenges

related to the information of everything trend.

Autonomous agents and Things - Machine

learning gives rise to a spectrum of smart machine

implementations — including robots, autonomous

Nandita Khaire

What CFOsmust know about Industry 4.0

Many companies around the

world are digitizing their

functions and they expect to

reduce operational costs and

increase efciency.

vehicles, virtual

personal assistants

(VPAs) and smart

advisors — that act in

an autonomous (or at

least

semiautonomous)

manner. While

advances in physical

smart machines such

as robots get a great

deal of attention, the

software-based smart machines have a more near-

term and broader impact. VPAs such as Google Now,

Microsoft's Cortana and Apple's Siri are becoming

smarter and are precursors to autonomous agents.

Adaptive security architecture - The

complexities of digital business and the algorithmic

economy combined with an emerging "hacker

industry" signicantly increase the threat surface for

an organization. IT leaders must focus on detecting

and responding to threats, as well as more traditional

blocking and other measures to prevent attacks.

Application self-protection, as well as user and entity

behavior analytics, will help fulll the adaptive

security architecture.

Advanced system architecture - The digital

mesh and smart machines require intense computing

architecture demands to make them viable for

organizations. Providing this required boost are high-

powered and ultraefcient neuromorphic

architectures.

Mesh app and service architecture -

Monolithic, linear application designs (e.g., the three-

tier architecture) are giving way to a more loosely

coupled integrative approach: the apps and services

architecture. Enabled by software-dened application

services, this new approach enables Web-scale

CORPOR ATE

Dossier performance, exibility and agility.

IOT architecture and platforms - IoT

platforms complement the mesh app and service

architecture. The management, security, integration

and other technologies and standards of the IoT

platform are the base set of capabilities for building,

managing and securing elements in the IoT.

Implications for

CFOs The nance function is being

transformed at the core and it would be a

challenge to embrace these new

technologies. It would involve a change in

the mindset and culture in the organization.

Investing into new technologies in

hardware and software, training in these

digital technologies would be imperative if

the company has to stay ahead. Investments

would be required in sensor-based

technology, modern ERP solutions, Big Data

analytics, and cloud deployment. Thus the

CFO has to take crucial decisions.

Automation would reduce routine

activities, thus allowing the CFO to focus on

high value activities. A number of manual

jobs will become redundant and more time

would be spent on managing all kinds of

data – from nance, market information,

competitive information, customer

information etc. The CFO would be more

involved in 'non-nance' like corporate

strategy.

CFOs would be required to have an

in-depth knowledge of the business in

which the company operates. There will be a

need to understand these technologies so

that the CFO can determine ROI. Intelligent

nance management would be the mantra

Your CEO will need support

stretching over nance to market

information, competitive information,

customer information and strategic

information and the expectation is that the

CFO gets more involved in non-nance

related topics to be able to have a formed

opinion on strategic matters.

Industry 4.0 should not be seen as a

threat, but as an opportunity to innovate,

increase revenues and protability.

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On 31st December 2017, the Finance Ministry in its official statement released, elucidated that Bitcoin or any other form of crypto currency is not a legal tender in India, and before any decision to regularize such currency the government awaits a repor t of exper t on cryptocurrencies. An official statement issued by the �nance ministry on 26th December 2017 stated that “there is a real and heightened risk of investment bubble of the type seen in Ponzi schemes which can result in sudden and prolonged crash exposing investors, especially retail consumers losing their hard-earned money. Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes.” Apparently, the government has cautioned the investors to keep their eyes open while placing their bets on virtual currencies, drawing a correlation of the virtual currencies with those Ponzi schemes of investments without any legal tender or protection. Let us �rst try to understand the meaning of Bitcoin. A Bitcoin, like any other cryptocurrency is a form of virtual money, with no physical form also known as FIAT money in common parlance. Cryptocurrencies possess all qualities of money except for the main essence that they are far away from having a legal tender. Bitcoins being traded on a global platform still strive hard to get a legal validity in any of the 193 economies being the part of the United Nations. A major disparity between Cryptocurrency and other form of money is that the earlier are designed in such a manner that it does not need a Bank or a regulator for movability or storage. In other words we can say Bitcoins are decentralized and a physical representation of the currency is not needed. Cryptocurrency are “self-contained” for their value. For instance, in case you wish to purchase bitcoins today, you need not go anywhere. Download the Zebpay App on your iOS or Android powered smartphone, create an account with some basic details, split some cash into your e-wallet (Net

Banking and Card payment are other viable options too) and Game on!! You can step into the Virtual world of Bitcoins. Once you own the Bitcoins you can trade them just as gold / silver coins lying in your back pocket.

Creation and Origin of Bitcoin: The Bitcoins were �rst created using a

s o p h i s t i c a t e d c o m p u t e r algorithm which creates a block of data using high power computer p r o c e s s e s t h a t contains bitcoins. There is a cap on t h e m a x i m u m

number of bitcoins which shall exist in a single block (25 per block) and there is also diminishing returns built into the system. This process is also called mining, meaning creation of crypto currencies using high end computer processing power.

Bitcoin Wallets and forms of Bitcoin: A Bitcoin wallet is like a bank account. It allows you to receive bitcoins, store them, and then send them to others. Out of the available crypto currencies in markets, Bitcoin is the most valuable. Other crypto currencies trading globally but not on a scale as large as Bitcoins include Etherum, Litecoins, Zcash, Dash, Ripple, Monero etc. As of December 2017, there are over 1,377 digital currencies in existence.

Criticism and risks: Cryptocurrency are often juxtaposition with economic bubbles with lack of central control and a legal viability. Regulators of different countries have time to time raised concerns with the investors over crypto currencies and some economies going ahead have also taken concrete regulatory measures to dissuade the developers and users. Speaking about risks, the cryptocurrency can be enduringly lost from local storage due to malware or data loss. Cases of malware such as Bitcoin Trojan have been surfaced recently, where the malware programme would mail target’s wallet back to the attacker thieving the wallet of the target. Previously, we have also come across cases where the hackers have managed to hack the website of the exchanges where bitcoins are traded and larceny the cryptocurrencies crumbling the developer’s claim of highly secured technology against the cryptocurrency. This lead to a dip in the price of bitcoin drastically low within a span of few hours.

Taxation of Bitcoins in India: Considering the recent trends and environment gathered around bitcoins

Biting the Bitcoinby , Assistant Manager, Audit, UJAAshwin Singh

CORPOR ATE

Dossier and also a number of savvy businessmen and investors splashing their pockets on this new generation virtual form of money have already raised the taxmen’s eyebrows. Fi rst ly, we leaf through the newly implemented GST Act, where there has not yet been any k ind of tax levied on the purchase or sale of cryptocurrency. Thus, we can say that Bitcoin is out of the

ambit of GST’s net as of now. For the direct taxation part, under the Income Tax Act, 1961 the gains made on transfer of cryptocurrencies shall be taxable as it shall fall under the ambit of section 9 – deemed to be accrued in India. The ambiguity where the budget of 2018 is awaited to clear the air is the matter of fact that whether the Bitcoins be treated as capital asset under the de�nition of section 2(14) of the Income Tax Act, 1961 or the taxmen would prefer it as other source of income. In both the cases, the possibilities are given below. In the light of the blistering bull run observed in the value of bitcoins and it’s per unit value surging over globally, in the month of December 2017 the Income Tax Department has issued notices under section 133A of the Income Tax Act, 1961 seeking �nancial details of about four to �ve lakh High Net Individuals (HNI’s) further exploring the possibilities of establishing tax demands. Not only this incident has been viewed as tax evasion but

t h e t a x m e n a r e a l s o s k e p t i c a l a b o u t cryptocurrencies as a safe passage of conversion of black money on similar grounds as of the Panama Ta x H e a v e n s r o u t e . W h a t e v e r , t h e c a s e m a y b e , i t i s recommended to include the pro�ts minted on the transfer of bitcoins, while computing the taxable

income and also disclose the bitcoin holdings in the statement of wealth of individuals wherever applicable.Legality of the cryptocurrencies in India: As of now Reserve Bank of India, the federal agency of the country has not given any legal validity to cryptocurrencies. But since, the laws and statutes pending to be amended, the RBI stands still in a wait and

watch position, embedding a warning sign board to caution the investors over the digital currencies. Moreover, in another view, currently the cryptocurrencies fall under the provisions of the Securities Exchange Board of India Act, 1992 and the rules framed under. Accordingly, the e xc h a n g e h o u s e s f a c i l i t a t i n g t r a d e o f cryptocurrency shall be expected to strictly adhere to KYC norms and AML regulations. In a nutshell, nothing is illegal, yet nothing has been given a legal validity yet. In March 2017, the Ministry of Finance had set up an Inter-Disciplinary Committee to probe into the legality of the trading of cryptocurrencies. The committee’s report is still under examination of the Department of Economic Affairs. All eyes are upto the Finance Minister for enlightening the countrymen on the legality and taxability on this

in the forthcoming budget. At the end of this article we leave you a glimpse of the peaks and bottoms which can be observed in the

value of bitcoins since its inception in 2009.*All above prices are stated in USDNote: With Inputs from Press Trust of India, Economic Times, and Wikipedia. Accordingly, information comes from a reliable source and all rights are reserved with original publisher. The information contained in this article is intended solely for informative purpose and may be subject to legal privilege. Udyen Jain & Associates accept no liability for any damage caused, directly or indirectly, accept any sort of liability for any errors or omissions caused due to this information. All rights reserved with the author.

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MEANING: External Commercial Borrowings refer to commercial loans raised by eligible resident entities from recognized non-resident entities and should conform to parameters such as minimum maturity, permitted and non-permitted end-uses, maximum all-in-cost ceiling, etc. The Parameters apply in totality and not on a standalone basis.

These loans are permitted by Government as a source of �nance for Corporates to expand their existing capacity & for fresh investment. Greater priority is given for projects in infrastructures, power, oil, telecom, railways, roads & bridges, ports, Industrial parks, urban infrastructure & export sectors.

EXTERNAL COMMERCIAL BORROWINGS AN ANALYSIS by , Senior Manager - Audit, UJA Deepak Valecha

AUDIT

BANK LOANSSECURED

INVESTMENTS SUPPLIER

CREDIT BUYER CREDIT

FINANCIAL LEASE

FOREIGN

CURRENCY CONVERTIBLE

BONDS (FCCBs)

FOREIGN CURRENCY

EXCHANGEABLE BONDS (FCEBs)

lisa Montanari works with UJA as Business Manager Italy. She came

to India to work as an intern and prepare for her thesis while studying

at Luiss Guido Carli University. Her thesis is titled “Monsanto in India: Market Failures and Intellectual Property Rights in the Indian Scenario”. She has analysed the introduction of genetically modi�ed seeds operated by Monsanto in India. From a general description of the mechanism of Intellectual Property Rights global system and regulation to a more empirical analysis of Indian agriculture and productivity, the aim of the thesis has been to evaluate the impact and consequences of the usage of GMO cotton seeds

on the Indian economy and society. Moreover, she has personally documented the biodiversity loss related to monoculture adoption, the exposure of the weakest classes of the population to international competition and household’s arising level of indebtedness due to the increasing concentration of seed markets. She received an recognition for

the thesis. It is 110 Cum Laude and Special Mention for the Relevance that her research has brought to the academic community

She is also working on publication of more articles for two international academic journals.

ELISA MONTANARI, Business Manager- Italy UJA wins academic accolades

E

EXTERNAL means : Outside India from Non Residents.- COMMERCIAL means : To be used for permitted purpose BORROWINGS means : Amount borrowed in foreign and Indian currency.

ECBs can be raised in two ways:Automatic Route: Where no approval of RBI is requiredApproval route: Where approval of RBI is required

ECBs include

The ECBs are classi�ed under three tracks as follows

TRACK 1 (ECB IN FCY OVER 3/5YEARS

TRACK 2 (ECB IN FCY OVER 10

TRACK 3(ECB IN INR OVER 3/5 YRS AVERAGE

Minimum Average Maturity

Ÿ Upto $50 million - 3 yearsŸ Beyond $50 million -5 years

Ÿ 10 Years – irrespective of amount Ÿ Upto $50 million -3 YearsŸ Beyond $50 Million -5 years

Eligible borrowers

Companies in following sectors:.Ÿ Manufacturing SectorŸ Software DevelopmentŸ Shipping & Airline Companies.

Ÿ Units in SEZsŸ Small Industries and Development Bank of IndiaŸ Exim Bank (Approval Route)

Ÿ All entities under Track I Companies in the infrastructure sector

Ÿ Holding CompaniesŸ Core Investment CompaniesŸ Real Estate Investment Trusts

registered with SEBI.Ÿ Infrastructure Investment Trusts

registered with SEBI.

Ÿ All entities under Track II.Ÿ All NBFCs.Ÿ Entities engaged in micro �nance activities.Ÿ SEZs & NMIZs DevelopersŸ Companies in Miscellaneous Services viz

Ÿ Research & Development.Ÿ Training Institutes (excluding educational)Ÿ Companies supporting infrastructureŸ Logistics service.

Ineligible borrowers

Ÿ Hotels & Hospitals

Recognised lenders

Ÿ International BanksŸ International Capital MarketsŸ Multilateral/Regional/Government owned Financials InstitutionsŸ Export Credit AgenciesŸ Suppliers of EquipmentŸ Foreign Equity HoldersŸ Overseas Long Term Investors such as

Ÿ Prudentially regulated �nancial entities.Ÿ Pension Funds

Ÿ Insurance CompaniesŸ Sovereign Wealth FundsŸ Financial institutions located in International Financial Services in

IndiaŸ Overseas branches / subsidiaries of Indian banks (only for borrowers

under Track I)Ÿ In case of Mutual Funds entities under Track III overseas

organizations and individuals are included.

All-in-Cost Ceiling (AIC)

Ÿ Average Maturity of 3-5 Years 300 bps over the 6-month LIBOR.

Ÿ Average Maturity of above 5 Years 450 bps over the 6-month LIBOR.

Ÿ Penal Interest: Maximum 2% over and above contracted interest rate.

Ÿ Maximum spread of 500 bps per annum over the benchmark has been prescribed.

Ÿ In line with market conditions.

Ÿ PERMITTED END USES

Ÿ Capital Expenditure in the form of.Ÿ Import of capital goodsŸ Local sourcing of capital goods.Ÿ New projects.Ÿ Modernization & expansion of existing

projects.Ÿ Investment in Joint Ventures/ Wholly owned

subsidiaries overseas.Ÿ Acquisition of shares of PSUs under the

disinvestment programme of Govt of India.Ÿ Re�nancing of existing trade credit for import

of capital goods.Ÿ Payment for capital goods already

shipped/imported but unpaid.Ÿ Re�nancing of existing ECB provided residual

maturity is not reduced.Ÿ SIDBI –Only for the purpose of on-lending to

borrowers in the MSME sector Ÿ Import of vessels & aircrafts.Ÿ For general corporate purpose including working

capital provided the ECB is raised from direct / indirect equity holder or from group company for a minimum average maturity period of 5 years.

Ÿ For requirements of SEZs.

Ÿ Any end use other than the followingŸ Real estate activities.Ÿ Investing in capital markets.Ÿ Using proceeds for equity

investment domestically.Ÿ On-lending to other entities

with any of the above objectives.

Ÿ Purchase of Land.

Ÿ Any end use other than the followingŸ Real estate activities.Ÿ Investing in capital markets.Ÿ Using proceeds for equity investment domestically.Ÿ On-lending to other entities with any of the above

objectives.Ÿ Purchase of Land.

Ÿ SEZ/NMIZs Developers – Only for providing infrastructure facilities within SEZ/NMIZs.

Ÿ NBFCs can use ECB proceeds forŸ On-lending to infrastructure sectore activity including

capacity building. Ÿ Hypothecated loans to domestic entities for

acquisition of capital goods & equipment.Ÿ Providing capital goods & equipment to domestic

entities by way of lease/hire-purchase.Ÿ Entities in micro �nance sector – Only for on-lending

to self-help groups or for micro credit or for bona �de micro �nance activity including capacity building.

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XYZ LTD. Loan Amount = USD 2 Million

Date of drawal / repyament

drawal Repayment Balance No. of days balance with the borrower

Product (Col 4 * Col 5)/(Loan amount

Col 1 Col 2 Col 3 Col 4 Col 5 Col 6

05/11/2007 0.75 0.75 24 0.0250

06/05/2007 0.50 1.25 85 0.1476

08/31/2007 0.75 2.00 477 1.3250

12/27/2008 0.20 1.80 180 0.4500

06/27/2009 0.25 1.55 180 0.3875

12/27/2009 0.25 1.30 180 0.3250

06/27/2010 0.30 1.00 180 0.2500

12/27/2010 0.25 0.75 180 0.1875

06/27/2011 0.25 0.50 180 0.1250

12/27/2011 0.25 0.25 180 0.625

06/27/2012 0.25 0.00

Average Maturity: 3.2851 Calculated by = DAY $360 (�rstdate, second date, 360)

Calculation of average maturity

5. Change of designated AD bank: Change of designated bank is permitted, subject to NOC from existing AD bank.

6. Dissemination of ECB Information: ECB details such as name of the borrower, amount, purpose and maturity under automatic/approval routes would be put up on RBI’s website on a monthly basis.

Procedure for ECB in brief 1. Submit Form 83 in duplicate, certi�ed by the Company Secretary or

Chartered Accountant. One copy is forwarded to AD and other copies to DSIM, RBI.

2. Obtain Loan request number (LRN)3. Draw-down the loan after obtaining LRN4. Borrowers are required to submit Form ECB 2 Return by designated

AD to DSIM, RBI within Se7en days from the end of the month to which it relates.

Conclusion ECBs can be raised for �nancing the permitted transactions as stated above by the eligible borrowers. It is advantageous for the corporates as it does not dilute the value of shareholder’s equity by adding to the number of shares outstanding and also does not gives away the control. Also interest rate risk can be hedged by swaps & futures. ECBs also come with risks like default risk, bankruptcy risk, having more debt on company’s balance sheet, increase in cost of borrowings, lowering of companies ratings etc.

OTHER POINTS1. Currency of Borrowing: Ÿ ECB can be raised in any freely convertible currency as well as

INR.Ÿ For INR-denominated ECB, lenders( other than foreign equity

holder ) are required to mobilise INR through swaps/outright sale undertaken through an AD(Authorized Dealer) Category I bank in India.

Ÿ Change of currency from one convertible foreign currency to another convertible foreign currency/INR is freely permitted.

Ÿ Rate for conversion into INR: The rate prevailing on the date of agreement for such change or any exchange rate lower than the rate prevailing on the date of agreement.

Ÿ Change of currency from INR to foreign currency is not permitted.

2. Part re�nancing of existing ECB: Raising fresh ECB for part re�nance is permissible provided (1) there is no reduction in residual maturity of the ECB and (2) fresh ECB has lower all-in-cost.

3. Parking of proceeds: ECB borrowers can park ECB proceeds in term deposits with AD Banks up to 12 months. The deposits should be invested in such a way that they can be liquidated when required.

4. Prepayment of ECB: Pre-payment is permitted without any restriction on amount subject to compliance with stipulated minimum average maturity.

Major Indian Companies availing ECB Facility Major Arrangers for ECB in India: -

• Telecom: IDEA, Aircel, Vodafone, Tata Teleservices• Reliance Industries.• Finance: Power Finance Corporation, Rural

Electri�cation Corporation.

• State Bank of India• Punjab National Bank• IDBI• Standard Chartered Bank

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Ÿ The GST provision requiring transporters to carry an electronic waybill or e-way bill when moving a consignment of goods between states will be implemented from February 1, 2018

Ÿ E-way bill is an electronic way bill for movement of goods which can be generated on the GSTN (common portal)

Ÿ The e-way bill shall be mandatory for allconsignment of goods above the value of Rs 50,000 moved, from one state to another.

Ÿ E-way bill for Inter-state movements will be implemented from February 1, 2018 and for Intra-state movement from June 1, 2018.

Ÿ The states have been given the option of choosing when they want to implement the intra-state e-way bill between February 1 and June 1, 2018 and there might be cases where a particular state has opted for implementing the E-way bill system for both inter-state as well as intra state transactions from February 1, 2018.

Ÿ Movement of goods of more than Rs 50,000 in value cannot be made by a registered person without an e-way bill.

Ÿ The e-way bill can also be generated or cancelled through SMS. When an e-way bill is generated, a unique e-way bill number (EBN) is allocated and is available to the supplier, recipient, and the transporter.

Ÿ Trade and transporters can start using this system on

Implementation of E-Way Bill on Interstate Transactions from February 1, 2018

Key takeaways from the Information provided in a press release by the GST council as on December 31, 2017

by Ashwin Singh, Assistant Manager Audit, UJA

a voluntary basis from January 16.Exemptions for carrying E-way bill:1. Transactions involving value less than INR 50,000/-2. Movement of goods within 10-km

3. All essential goods The following bene�ts have been highlighted by the GST council on implementation of the new e-way bill system;Ÿ The e-way bill will boost revenues by 15-20 per centŸ Tax avoidance will become extremely difficult as the

government will have details of all goods above the value of INR 50,000 moved and can spot mismatch if either the supplier or the purchaser does not �le tax returns.

Ÿ This will bring uniformity across the states for seamless inter-state movement of goods.

A pilot of e-way bill has been successfully run in Karnataka and the IT system is fully geared to meet any requirement.

Note: The original content has been �rst published by the Press Trust of India (PTI) accordingly, information comes from a reliable source and all rights are reserved with original publisher. The information contained in this article is intended solely for informative purpose and may be subject to legal privilege. Udyen Jain & Associates accept no liability for any damage caused, directly or indirectly, accept any sort of liability for any errors or omissions caused due to this information. All rights reserved with the author.

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President Emmanuel Macron is expected to visit India during the beginning of 2018. In addition to the Solar Alliance, one of the main Indian initiative at the international level, business topics should be at the centre of the discussions. Possible contracts in sectors like energy or defence should be negotiated by both the Heads of State. If such meetings are widely mediatized, daily and long-term work of French foreign policy makers should not be eclipsed.

French foreign policy has changed drastically after previous Minister Laurent Fabius took his function. Inspired by the British and US policies, Foreign Affairs Minister Fabius decided that France had to focus much more on its economic interests. Real Politik should become a reality in the business area. This has been motivated by the fact that diplomacy can be a way to boost French exports and thus country's growth and employment rate. Such a switch has important implications for the Embassies, not only in India but around the world. In India, Ambassador Alexandre Ziegler perfectly embodies the new objectives of France. Appointed in July 2016, he actively supports French companies by

Indo French partnership Indo French partnership is seeing an increasing traction under the

leadership of Emmanual Macron and Narendra Modi. The two leaders have given a momentum to the relationship. Yet a lot needs to be done writes

Pierrick Harrant Business Manager France at UJA

participating to numerous business delegations, by assisting French �rms to be connected with key decision makers and by representing his country at various events. Therefore it is not surprising to hear French companies praising his merits. Thus France focuses on Smart Cities. The Hexagon supports India's initiative as it has been decided during the COP 21 (Conference of the Parties 21). Thereby it incentivizes French companies to enter into this �eld in India; and some major successes are there. Alstom award for Kochi's metro or Lumiplan's nomination for Hyderabad bus system are only a couple of examples in the �eld of transport that highlight the ability of French companies to perform on the Indian market. Nevertheless, on a global

perspective, �gures are not strong enough to conclude that this change in the diplomacy is a success. Above all, the key challenge is to support SMEs so that they can bene�t from Governmental delegations. Nevertheless, despite the involvement of French organisms like the Indo-French Chamber of

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Dossier Commerce and Industry (IFCCI) or Business France, the French economic policy depends highly on the European Union. Indeed the EU is the decision maker as far as foreign trade policy is concerned. Thus, the project of a Free Trade Agreement is not between India and France anymore but between India and the EU. The EU is India's �rst business partner, representing more than 13% of its trade with the world. Exchanges of goods between India and the EU have increased by more than 70% between 2005 and 2015. And the value of trade in services has tripled since 2005. Strengthening trade relationships between both Europe and India could make sense in order to improve the competitiveness of European �rms and boost the Indian growth. Yet the FTA is currently blocked. Intellectual property rights, migration policy and sanitary norms are some of the major issues to be solved.

Even traditional aspects of the French foreign policy have been reframed. The French development bank Agence Française de Développement (AFD) has decided to concentrate its actions in India on a few selected projects in cities that are not among the biggest ones. Thus the AFD provides funds and assistance to initiatives it considers having the highest potential while playing a key role as a major funding partner. The AFD would not intervene in Mumbai or Delhi but it targets cities like Kochi, Nagpur, Chandigarh or Pondicherry where it can have a say in the decision making. For instance, in the �rst of these cities, it contributed to �nancing the metro construction. It offered assistance to the three following cities to design and implement their “Smart City” projects. It even gathered a multi-disciplinary team called TACTIS Innovation Services which supports local policy

makers concerning public transport modernization, digital gap reduction and local economy boost. In addition to development assistance

policy, the cultural policy has been impacted. Bonjour India is an illustration of this adaptation. During 4 months, from November 2017 to February 2018, nearly 300 cultural events have been/will be organised across India. It attempts to diffuse cooperation and business-oriented values. Indeed, the keywords for this festival are “innovation, creativity, partnership”: exactly what is required for a

�rm to be competitive in today's economy. Innovation may take different shapes in India, whether it deals with implementing new technologies or inventing out-of-the-box business models. Obviously, it needs a strong sense of creativity to be able to cope with on-the-ground reality. And therefore companies adapt their products and their way of doing business. For instance, Alstom is the �rst company to manufacture electric locomotives in India and in order to do so, it had to adapt the Prima T8 (WAG12) to Indian rails as locomotives from the Prima range do not �t with it. While it can drive at a speed of about 200 km/hour in Europe, trains reach in average 50 km/hour in India. The 800 locomotives will be produced in India, in a factory located at Madhepura in Bihar. It also had to partner with an Indian partner: Indian Railways which is holding 26% of the shares of the joint-venture.

French foreign policy in India has de�nitely adopted a focus on business issues as per Government expectations. With its 1.3 billion inhabitants and a growth rate above 7%, India has been clearly identi�ed as a real growth driver for French companies. Thereby, strengthening political links has become crucial. And as well on various other domains like �ght against terrorism or against climate change for which India's involvement is determining at a global level.

Recently Ministry of Corporate Affairs has started to strike off companies that are dormant and disqualify the directors of companies that have not �lled the Annual Return for a continuous Period of three years. For understanding the concept of disquali�cation of director, let's �rst understand under which circumstances the director will be disquali�ed and what are the

effects of disquali�cation and what are the remedies available to it.

1 Section and Provision of Disquali�cation of Director-

Under Companies Act 2013, Chapter XI-Appointment and Quali�cation of Director, Section 164 deals with the disquali�cation for the appointment of directors:

I. The following persons shall not be eligible for appointment as a director of the Company (In this case the following persons are not eligible for the fresh appointments in the Company): (a) If he is of unsound mind and stands so declared by a competent court; (b) If he is an undischarged insolvent; (c) If he has applied to be adjudicated as an insolvent and his application is pending; (d) if he has been convicted by a court of any

offence, whether involving moral turpitude or otherwise, and sentenced in respect thereof to imprisonment for not less than six months and a period of �ve years has not elapsed from the date of expiry of the sentence:

Provided that if a person has been convicted of any offence and sentenced in respect thereof to imprisonment for a period of seven years or more, he shall not be eligible to be appointed as a director in any company;

(e) An order disqualifying him for appointment as a director has been passed by a court or Tribunal and the order is in force;

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shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the last day �xed for the payment of the call;

(g) He has been convicted of the offence dealing with related party transactions under section 188 at any time during the last preceding �ve years; or

(h) He has not complied with sub-section (3) of section 152

Sub-section (3) of Section 152 states – No person shall be appointed as a director of a company unless he has been allotted the Director Identi�cation

Number as prescribed under the Act.

2. No person who is or has been a director of a company which (For Existing Companies in which a person is a director) (a) Has not �led �nancial statements or annual returns for any continuous period of three �nancial years; or (b) has failed to repay the deposits accepted by it or pay interest thereon or to redeem any debentures on the due date or pay interest due thereon or pay any dividend declared and such failure to pay or redeem continues for one year or more, shall be eligible to be re-appointed as a director of that company or appointed in other company for a period of �ve years from the date on which the said company fails to do so.As mentioned in 2(a), a person can be disquali�ed from being a Director in the Company, if a company on which the person is a Director has not �led balance sheet and annual return on MCA for a continuous period of three years. Hence, it's important for all the Companies to �le balance sheet and annual return on MCA on time and maintain compliance under Companies Act, 2013.

II Effects of disquali�cation on existing Directors: Ÿ Following are the disquali�cation by Ministry of

Corporate Affairs (MCA), directors have been barred from using their digital signature to sign any document.

Ÿ Disquali�ed directors have to vacate all board positions(pursuant to Section 167 of the Companies Act, 2013)

COMPANY AFFAIRS

DISQUALIFICATION OF DIRECTORSby Payal Palesha, Assistant Company Secretary, UJA

III Actions taken by the various authorities:

According MCA press information bureau, dated 5th November 2017, around 2.24 lakh companies have been struck off as of November 2017. Around 3.09 lakh Directors have been disquali�ed from the board of the companies who have failed to �le �nancial statements and annual returns for continuous three �nancial years. 12th September 2017: MCA says it has identi�ed 106,000 directors for disquali�cation. Last week of September: National Stock Exchange (NSE) sends out 210 notices to listed Companies whose directors have been disquali�ed by MCABombay Stock Exchange (BSE) identi�es 500 Companies who appear to have directors disquali�ed by MCA on their board. 06th October 2017: NSE sends out an additional 97 Notices to listed Firms. A press release issued by Ministry of Corporate Affairs placed on the website of Press Information Bureau has similar communication. This press release has two important points –Department of Financial Services (DoFS) issued instructions to all the Banks on 5th September 2017, the Directors (ex-) or their authorized signatories had been restricted from operating the Bank accounts of such struck off companies and they cannot syphon off money from the accounts of these “struck off” companies.

It has been decided that in case the Director or authorized signatory of any “struck off” company tries to unauthorized syphon-off money from its bank account, he/she may attract punishment of imprisonment of not less than six months extendable to 10 years. If it is found that the fraud involves public interest, the punishment shall not be less than 3 years (imprisonment) and �ne may also be imposed which would be three times the amount involved.

Ministry of corporate affairs has struck off more than 2 lakh companies and disquali�ed 3 lakh directors as part of an ongoing exercise of cleaning up Corporate India and a crackdown on shell companies.

(I) CASE LAWSMADRAS HC STAYS ROC ORDER DISQUALIFYING INDIVIDUAL DIRECTOR:

The Madras High Court has issued an interim stay against an order of the Registrar of Companies (RoC), Chennai, disqualifying an individual from being director under the Companies Act, 2013, for �ve years till 2021. The court has also issued notice of motion to the Centre and the Registrar of Companies, in a petition �led by an individual director.

Facts of the Case: The petition was �led by R Ganapathi, who has been the director at RSG Engineering and Constructions Pvt Ltd, Deccan Softlab Pvt Ltd and Projelec Marketing and Management Pvt Ltd, which weren't operative and were struck off from the Register of Companies prior to 2010. However, he was named in RoC's list of disquali�ed directors in an order dated September 8, 2017, for being a director in some other companies that had not �led annual returns continuously for three years.Ganapathi argued that RoC order had to be quashed as illegal, arbitrary and devoid of merit, and also sought direction from the Court to the Ministry and the Registrar to permit him to get re-appointed or appointed as director of any company in any company without any hindrance.

Legal Grounds: He argued that the new regulation disqualifying a company if it fails to �le annual returns for three �nancial years, as per Section 164 of the Companies Act, 2013, came into effect only on April 1, 2014 and the time limit to disqualify companies under this would start only after October 30, 2017. The argument is that the three years from April 2014, would fall only by the end of March 31, 2017 and that the last date for �ling annual return for the �scal 2016-17 -- the third year from implementation of the new Act -- is October 30, 2017.

High Court Order: The order of Registrar of Companies, Chennai, disqualifying the director without giving him any opportunity of being heard is against the provisions of the Act, argued Kumarpal R Chopra, corporate lawyer and partner of Mitraa Legal, Ganapathi's counsel. Chopra said around 45,000

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individuals/directors in Chennai alone were affected due to the Registrar's action in similar matters. Hearing the petition, Justice M Duraiswamy issued an order to issue a notice of motion returnable in four weeks. The Central Government had called for disqualifying various companies and directors for misuse of books of accounts, non-�ling of returns for continuous three years, among others. Some of the companies approached various forums against such disquali�cation. In mid-September, the Securities and Exchange Board of India (SEBI) revoked the actions taken by the Board and the Stock Exchanges against Lotus Eye Hospital and Institute Ltd, which was named by the Ministry of Corporate Affairs as one of 331 shell companies. An order by SEBI observed that the company is a going concern for the last 20 years and there is no evidence of misrepresentation on its part, misuse of books of accounts or funds or violation of Listing Obligation and Disclosure Requirements (LODR) Regulations.

(ii) Remedies available for Companies having disquali�ed directors:

There are many cases where it is a Company having 2 directors and both the directors are disquali�ed under Section 164(2). Now the question arises is how the Active Company can run its business without having quali�ed Directors.So as per the Circular Dated 06/10/2017 issued by the Ministry of Corporate Affairs has led down the Procedure for Request for insertion of DIN from back end by the request letter signed by the shareholders of the Company that the directors are disquali�ed and requesting for insertion of a new director through back end of the E-portal with the following Documents: a) Appointment Letter of the new director by

the promoters/Shareholders. b) NOC from all the disquali�ed directors from

the Company for appointment of new director.

c) Digitally �lled in DIR-12 by the professional for the new director.

d) Proof of the Shareholding of the Promoters/Shareholders who appoints the new director.

e) A certi�cate from the Professional stating

that the applicants are the majority shareholders.

f ) Copy of Resolution of appointment of the new director along with notice and explanatory statement.

g) Along with the above said Hard Copies submit the documents in a CD/ Pen drive.

(iii) Remedies available to the Directors for removal of disquali�cation:

The Companies (Appointment and Quali�cation of Directors) Rules, 2014 contain a provision empowering the Registrar of Companies to remove the disquali�cation.A Director who is disquali�ed under sub section (2) of Section 164 of the Companies Act, 2013, may make an application for removal of disquali�cation in Form DIR-10 and the said application can be made only at the end of the tenure of �ve years post his disquali�cation. He/she has to specify the following details in the Form: (a) Details of the Company wherein he is a

Director viz. Registration No. Nominal Capital, Paid-up Capital and address of the Company;

(b) Ground(s) under which the Director is disquali�ed;

(c) Date of disquali�cation; (d) Details of the application.

IV CONCLUSION By understanding the provisions relating to disquali�cation of Directors, we may conclude that the Companies and the individual Directors are certainly having the remedies for removal of such disquali�cations.

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During last few years we are introduced with various International Taxation terms and concepts, which were “known” to us just as an information. But now those terms have become part of our daily routine and living.In 1829, Supreme Court Justice Joseph Story stated: “The law is a jealous mistress and requires a long and constant courtship. It is not to be won by tri�ing favors, but by lavish homage.” This quote has relevancy with International Taxation terminologies. Law provisions are all about interpretations and reading between lines. Sometimes reader’s interest fades if some jargons comes up while reading. In the complex world of Transfer pricing many jargons are used. These jargons are very interesting yet of vital relevance while studying International Taxation. With the plain reading of terms, different meaning and understanding appears however it has very spellbinding meaning. To have thorough knowledge, some jargons are explained in simple language for readers of international taxation law:

is a method of BACK-TO-BACK LOANborrowing between related parties where a loan is channeled through an independent third-party intermediary. This is a hedge tool against currency �uctuations.A back-to-back loan is a loan in which two companies in different countries borrow offsetting amounts from one another in each other's currency. Though, currency swaps has replaced this type of transaction, but it has relevance in traditional �nancing method.Example: Company ABC from United States and Bank XYZ is in France. Company ABC is concerned about the value of the dollar changing relative to the euro. To mitigate this concern, Company ABC and Bank XYZ structure a back-to-back loan, whereby Company ABC deposits $1 billion with Bank XYZ, and Bank ABC (using the deposit as security) lends Company ABC $1 billion worth of euros. The current exchange rate between American dollars and euros is 1:0.75 (that is, $1 buys 0.75 a euro). The bank and Company ABC agree to a one-year term on the loan and a 6% interest rate. When the loan term ends, Company ABC repays the loan at the �xed rate agreed upon at the beginning of the loan term, thereby insuring against currency risk during the term of the loan.

BERRY RATIO is used to establish an arm's length pro�t. The Berry ratio is the ratio of a business's gross income to operating costs.The Berry ratio is the ratio of a company's gross pro�ts to operating expenses. This ratio is used as an indicator of a company's pro�ts in a given period of time. A ratio co-efficient of 1 or more indicates that the company is making pro�t above all variable expenses, whereas a

coefficient below 1 indicates that the company is losing money. The formula is as follows: Legal emphasis: In a recent ruling, the Delhi Bench of the Income-tax Appellate Tribunal (Tribunal), placing extensive reliance on the ruling made by the same

bench in the case of Mitsubishi Corporation India Private Limited has upheld the use of the ‘Berry ratio’ as pro�t level indicator (PLI).

CAPTIVE BANK is generally wholly owned subsidiary of a multinational group of companies. Purpose of this bank is to provide banking service to the group and those with whom the group deals. In order to avail low capital requirements and freedom from exchange control, captive banks are usually located in a tax haven. Services provided by a captive bank include safe keeping of deposits, merchant banking, �nancing, and other services in association with commercial banks. CHERRY PICKING is used in the USA in R&D arrangements to prevent a contracting party from selecting or funding only the technologies that are successfully developed, i.e. "cherry picking". In transfer pricing context, it often describes a situation where a tax authority tries to impose a TP adjustment on a taxpayer based on a few of “cherry picked” related party transactions of other comparable companies with an intention to maximize its adjustment. The Para 5.4.4 UN TP guideline [3] discusses the Cherry Picking of Companies. It is frequently not possible to obtain information on perfect comparables in practice, and it is therefore often necessary to use broad search criteria when identifying third party comparables. It must be ensured that potentially relevant external comparables are not excluded because of “cherry picking” of favourable third party information by either the taxpayers or the tax authorities, ignoring other information that does not support the position argued for. For example, extreme results may be rejected as comparables after careful consideration of reasons for such extreme results by the tax authorities as they tend to skew the data. While this could on the one hand be a

writes Manager,NUTAN GHAYAL DAMLE Direct Taxation & Transfer pricing at UJA.

TRANSFER PRICING

“A Roller Coaster Ride of International T axation T erminology”

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Dossier correct application of the arm’s length principle in certain circumstances, on the other hand the reasons for a loss may be genuine and may not always justify rejecting the loss-making company from the pool of comparables. This may be e.g. where the loss is due to a recession year which hit the controlled and uncontrolled transactions in the same way, or where it is due to the independent enterprise being in a start-up phase while the associated enterprise is also in a comparable start-up phase, etc.

DOUBLE DIPPING is used to indicate the possibility for dual resident companies to deduct the same expenses in two jurisdictions. For example the usually illicit practice of accepting income from two mutually exclusive sources as from a government pension and a government salary or from two insurers for the same loss.

is a term applied when a HABITUAL ABODE person's residency status as a citizen is indeterminate for purposes of establishing a tax domicile. Where citizenship or permanent home ownership is vague or is shared between multiple states, a person's tax residency can be determine based on the state in which he spends the most time.

In the context of the tie-breaker rule of the OECD model tax treaty, habitual abode is one of the criteria used to resolve the problem of dual residence. It refers to the period of time a taxpayer spends in each country.

is a special tax law created in 1986 KIDDIE TAXimposed on individuals under 17 years old whose earned income is more than an annually determined threshold. Any extra income earned above of the threshold is taxed at the guardian's rate. It has same relevance like clubbing provisions of Income Tax Act, 1961 i.e. to club minor child’s income in the hands of earning parents.

QUARANTINING in the context of the foreign tax credit system, this term denotes the separate calculation of the foreign tax payable on all foreign income of a particular category which may be credited against the domestic tax payable on that category of foreign income.

(W.I. Ramsay Ltd. v. IRC, Eilbeck RAMSAY CASE (Inspector of Taxes) v. Rawling), decided by the UK House of Lords in 1981, involved complicated tax avoidance scheme which were marketed in the UK in the 1970s. The case established that a series of transactions with the purpose of tax avoidance, which ultimately cancelled each other out, could be ignored for tax purposes. In summary, companies that had

made substantial capital gains had entered into complex and self-cancelling series of transactions that had generated arti�cial capital losses, for the purpose of avoiding capital gains tax. The House of Lords decided that where a transaction has pre-arranged arti�cial steps that serve no commercial purpose other than to save tax, the proper approach is to tax the effect of the transaction as a whole. The decision is not limited to capital gains tax, but applies to all forms of direct taxation, and is an important restraint on the ability of taxpayers to engage in creative tax planning.

is a basis for RECIPROCITY PRINCIPLE relieving a taxpayer under domestic law, e.g. relief is granted for foreign tax if the other country gives corresponding or equivalent relief. The principle of give-and-take operates in a variety of tax contexts (particularly in the case of tax treaties) where an exchange of tax privileges between countries is desired. In international relations and treaties, the principle of reciprocity states that favours, bene�ts, or penalties that are granted by one state to the citizens or legal entities of another, should be returned in kind.For example, reciprocity has been used in the reduction of tariffs, the grant of copyrights to foreign authors, the mutual recognition and enforcement of judgments, and the relaxation of travel restrictions and visa requirements.

is a person is said to be a RESIDENT ALIEN resident alien of a country if he resides in that country but is a citizen of another country. For the portion of the year in which they are classi�ed as resident aliens, they are taxed on all forms of income regardless of source. A taxpayer that has met the criteria to be both a resident and nonresident alien in a single tax year. The duality of the taxpayer's status pertains only to residence, not citizenship.

s a protection-based transfer of RING FENCE iassets from one destination to another, usually through the use of offshore accounting. A ring fence is meant to protect the assets from inclusion in an investor's calculable net worth or to lower tax consequences. Moves to ring fence an asset are often called “ring fence trades.” Ring fencing is de�ned by the act of setting particular assets aside, removing them from the control exerted upon them within the current situation or directing the funds to a speci�c purpose. While offshoring is one of the more common uses, moving funds into a different arena to allow a business to separate the higher risk ventures away from more stable assets also quali�es. Further, earmarking a particular set of funds or assets to a speci�c goal can also be seen as ring fencing, as these assets are

functional separate from other activities that may put them at risk.

by means of which ROLLOVER RELIEFliability to capital gains tax is deferred. The essential feature of roll-over relief is that a gain which would otherwise have arisen on the occurrence of a taxable event for capital gains tax purposes is deferred, or rolled over, until there is a subsequent disposal of the asset concerned. This concept is in parallel lines with exemption under section 54 for capital gain tax in Income Tax Act,1961.

is a term used in the SECRET COMPARABLEtransfer pricing context. It denotes a comparable whose data is not disclosed to the public or the taxpayer but known only to the tax authority which is making the transfer pricing adjustment. In India the restriction or con�dentiality of assessee’s data under Income Tax law are contained in Sec. 137 (since omitted by the Finance Act, 1964, with effect from 1st April, 1964) & Sec. 138 of the Income Tax Act of 1961. The Supreme Court of India dealt with these provisions as discussed below. However it may be noted that the special provisions for TP assessments of international transactions to determine ALP were enacted later in the year 2001. Secret Comparable in OECD:The UN TP guideline [ Para A.4.3.3 of Chapter III of the OECD Transfer Pricing guidelines 2010 dealing with “Information undisclosed to taxpayers”] also discusses about information available with tax authorities which otherwise is not available with the tax payer. And mentions that, it would be unfair to apply a transfer pricing method on the basis of such data unless the tax administration was able, within the limits of its domestic con�dentiality requirements, to disclose such data to the taxpayer so that there would be an adequate opportunity for the taxpayer to defend its own position and to safeguard effective judicial control by the courts. Some of the decisions with reference to use of secret comparable is as follows:Ÿ Thus while collection of secret comparables by TPO

is not banned in law, use of the same against the assessee company without putting it to him with sufficient opportunity to rebut the same is not mandated by law, nor it is legally permissible. (Moser Baer India Ltd. V. ADDL CIT (2008) TS 9 HC Delhi)

is a geographical location where TAX HAVEN there is low tax or no tax at all, with some level of secrecy. OECD guidelines considers three key factors

for jurisdiction in tax haven:1. No or nominal tax: tax haven levies no or no tax and

they offer themselves as a place to be used by non-residents to escape high taxes in their country of residence.

2. Lack of transparency: to identify the tax haven, another factor is lack of transparency in operation and legislative matter. Lack of transparency in one country can make it difficult, if not impossible, for other tax authorities to apply their laws effectively.

3. Protection of personal �nancial information: Tax havens typically have laws or administrative practices under which businesses and individuals can bene�t from strict rules and other protections against scrutiny by foreign tax authorities. This prevents the transmittance of information about taxpayers who are bene�ting from the low tax jurisdiction.

Tax haven countries for India are: Switzerland, British Virgin Islands, Channel Islands, Cyprus, Bahamas to name a few.Classi�cation of Tax haven: Primary tax havens – the location where �nancial capital winds up. Subsidiary shell companies there have obtained rights to collect pro�ts from corporate intellectual property (IP) by transfers from their parent. Semi-tax havens – locations that produce goods for sale primarily outside of their territorial boundaries and have �exible regulations to encourage job growth, such as free trade zones, territorial-only taxation, and similar inducements. Conduit tax havens – locations where income from sales, primarily made outside their boundaries, is collected, and then distributed. Semi-tax havens are reimbursed for actual product costs, perhaps with a commodity markup. The remaining pro�ts are transferred to the primary tax haven, because it holds rights to pro�ts due to the corporate IP. By matching out�ow to income, they do not retain capital and their role, while crucial, remains invisible. is a tax avoidance strategy DUTCH SANDWICHused by some multinational corporations to lower their corporate tax liability. The strategy uses payments between related entities in a corporate structure to shift income from a higher-tax country to a lower-tax country. For example, Google's main operating company is based in Ireland. Google's tax structure involves six territories, resulting in overall payment of just 2.4% tax on all operations outside the United States. To avoid paying income taxes in Ireland, it transfers the pro�ts out of the jurisdiction. Ireland has a high tax on such transfers to a tax haven jurisdiction like Bermuda, so the pro�ts are transferred to the Netherlands, easily done as an EU co-member. From there the pro�ts are transferred at little cost to Bermuda, which has no corporate income tax. In

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2009, Google reported a gross pro�t of €5.5bn, but an operating pro�t of €45m after subtracting "administrative expenses" of €5.467bn. Administrative expenses comprised mainly royalties or a license fee which Google pays its Bermuda headquarters for the right to operate. In 2016, Google saved $24.5 billion in tax using a 'Dutch Sandwich' strategy. This strategy used by Google is also called as BERMUDA BLACK HOLE.

arrangement is a tax strategy DOUBLE IRISH used by some multinational corporations to lower their corporate tax liability. The strategy uses payments between related entities in a corporate structure to transfer income from a higher-tax country to a lower or no-tax jurisdiction. The strategy can be used with any low or no tax jurisdiction. Irish tax law, for example, does not have transfer pricing rules as do the United States and many other jurisdictions. Speci�cally, Ireland has territorial taxation, and does not levy taxes on income booked in subsidiaries of Irish companies outside the country. The double Irish tax structure was �rst used in the late 1980s by large companies, including Apple Inc, Google and many others. In 2013, the Irish government announced that companies which incorporate in Ireland must be tax resident, with effect on 1 January 2015 for newly incorporated companies, and the end of 2020 for companies with existing operations in Ireland.

is a tax avoidance scheme SINGAPORE SLING in which a large multinational company sells products to a subsidiary owned by them in a jurisdiction with lower tax rates, which acts as a 'marketing hub'. The subsidiary then sells the product to end users, marking up its value and attributing the mark-up to various marketing activities undertaken by the subsidiary. The parent company retains a higher pro�t margin due to the lower tax rate. Singapore is a popular location of such subsidiaries, given its low tax rates and its willingness to grant large multinationals 'sweetheart deals' – an extremely low tax rate in exchange for locating the multinational's marketing activities in Singapore. It is currently under investigation as an abusive practice in Australia.

or sweetheart contract is SWEETHEART DEALS an abnormally favorable contractual arrangement, where it is not in the best interests of the stockholders.It particularly applies to government officials and uses of the term involve hints at the presence of corruption. Such deals may also put a third party at a distinct disadvantage, (e.g., price �xing between oil companies or mobility services). In the context of employment rights, a sweetheart contract can involve a deal between an employer and trade union officials that bene�ts both at the expense of employees.

is used to denote a TAX SPARING CREDIT special form of double taxation relief in tax treaties with developing countries. This is a provisions in the DTAA’s between Contracting States which give enjoin the Residence Country to give credit not only for Taxes actually paid in the Source Country but also for Taxes which would have been paid but for the Tax Incentives granted in the Source Country’s Domestic Law. In case of, PCIT Vs. Krishak Bharti Cooperative Ltd. Delhi high Court has given welcome clarity for Tax Sparing credit.

is company is said to THIN CAPITALISATIONbe "thinly capitalized" when its equity capital is small in comparison to its debt capital. It also means that it is gearing or has high leverage. Government of India via Finance Bill, 2017 has proposed to introduce a new section, section 94B in the Income Tax Act, 1961 to overcome loss of revenue by way of thin capitalization. The same shall be applicable w.e.f AY 2018-19. This budget introduces a cap on the total interest deduction to 30% of a company's earnings before interest, taxes, depreciation and amortization. The cap applies to interest paid or payable to non-resident associated enterprises by an Indian company or a permanent establishment of a foreign company in India. Any interest that exceeds the cap is disallowed under the new rules, but may be carried forward up to eight years and qualify for a future deduction. Taxpayers engaged in banking or insurance businesses will not be affected by the new rules, which will be applicable beginning in �nancial year 2017-18.

generally refers to a TREATY SHOPPINGsituation where a person, who is resident in one country (the “home” country) and who earns income or capital gains from another country ( the “source” country), is able to bene�t from a tax treaty between the source country and yet another country (the “third” country). This situation often arises where a person is resident in the home country but the home country does not have a tax treaty with the source country. The roots of the Treaty shopping are in the inconsistencies among international tax regimes. If there is a dissimilarity of tax systems, it can lead to distortion of investment �ows. This has greatly contributed in encouraging FDI in the country but has been a medium of tax evasion. The Supreme Court has also noted in the Azadi Bachao Andolan case that treaty shopping opportunities could be an additional factor to attract such investments.

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Many of the organizations focus on the Offline Marketing Programs to generate the leads. They will have digital marketing done for the organization, however it will be on sleep mode. This article will mainly covers the meaning of Digital Marketing Programs and the ways to use it effectively to generate the leads; convert them into customers and maintain them as customers.

What is Digital Marketing? Digital Marketing is promotion of products/services on internet platforms. The various examples are website, e-brochures,

appearance on social media platforms like Facebook, twitter, Linkedin, you tube, Google plus, Pinterest, emails etc.

Digital marketing development started in 1990s. It has completely changed the way; the brands and businesses use technologies for marketing. People have started using digital devices instead of visiting physical shops. People will now do their research on internet before buying a product or consuming a service. For this reason the organizations has to adapt many digital marketing programs to attract their customers.

Bene�ts of digital marketing over traditional marketingŸ Puts customer in controlŸ Provides convenienceŸ Increases satisfactionŸ Drives Brand LoyaltyŸ Reduces the selling cycleŸ Reduces cost of sales

Ÿ Builds your brandŸ Provides targeted resultsŸ It is highly measurableŸ Cost effective Where all the organizations should concentrate while building the digital strategy?Website design as per user experience. Designs should be mobile friendlyTools for improving digital strategy

Ÿ Search Engine OptimisationŸ Google LocationsŸ Pay per clickŸ Social Media MarketingŸ Live video StreamingŸ Email MarketingŸ Affiliate MarketingŸ Content MarketingŸ Online Reputation Management De�ning Digital Marketing ObjectivesŸ Reaching Right AudienceŸ Engaging the AudienceŸ Motivating the Audience to take actionsŸ Efficient no of campaigns to be run to maintain

relation with customersŸ It is about about generating sales and

capturing leads from customers who are looking out for you(your product/service) on internet.

How should organizations measure Digital Marketing?Ÿ Google AnalyticsŸ Google Search ConsoleŸ Basic Google SearchŸ Google AdwordsŸ Social Media AnalyticsŸ Email Marketing Reports

How to effectively use the Digital Media?

In a business environment of volatility, complexity an proliferation of various digital media options, how do companies get the best from the world of digital marketing. Tina Gujar, Senior Manager, Digital Marketing, UJA writes

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