KREO CAPITAL PRIVATE LIMITED

NEWSLETTER – NINTH EDITION, 2019

SEBI REGISTERED CATEGORY I MERCHANT BANKER

Friday, May 03, 2019

“An investment in knowledge yields the best return.”

In the ever changing and dynamic Capital Market Environment, staying

updated with the latest happenings is the need of the hour.

Keeping up to date with laws & notifications is time consuming and

legislation itself is complex. However, it is of vital importance that

businesses stay up to date on regulations in their sector to keep pace with

best practices.

This is our series of knowledge sharing initiative towards sharing

regulations and updates on corporate laws.

BODIES COVERED

KREO CAPITAL NEWSLETTER EDITION – JULY, 2018 KREO CAPITAL NEWSLETTER - NINTH EDITION

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LISTED ENTITY HAVING SUBSIDIARIES REQUIRED TO SUBMIT QUARTERLY/YEAR-TO-DATE CONSOLIDATED FINANCIAL RESULTS For more details, please refer link : https://www.sebi.gov.in/legal/regulations/feb-2017/sebi-listing-obligations-and-disclosure-requirements-regulations-2015-last-amended-on-march-29-2019-_37269.html

RBI MOVES TO TIGHTEN CURRENT ACCOUNT OPERATING NORMS TO

CHECK FUND DIVERSION For more details, please refer link : //economictimes.indiatimes.com/articleshow/69088982.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst i-policy-in-ecommerce-may-be-deferred/ar8.cms

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BROAD ECONOMIC NEWS…

KREO CAPITAL NEWSLETTER - NINTH EDITION

MOST IPOS’ THIS YEAR GENERATE GOOD RETURNS FOR INVESTORS For more details, please refer link : https://www.livemint.com/market/ipo/most-ipos-this-year-generate-good-returns-for-investors-1556539464822.html

BUSINESSES CAN APPLY FOR REVOKING CANCELLATION OF GST REGISTRATION BY JULY 22: CBIC For more details, please refer link : https://www.businesstoday.in/top-story/businesses-can-apply-for-revoking-cancellation-of-gst-registration-by-july-22-cbic/story/340384.html

IN MARCH, PE, VC INFLOW HIT ALL TIME HIGH OF $7 BILLION For more details, please refer link : https://www.newsrain.in/news/69049881/In-March,-PE,-VC-inflow-hit-all~time-high-of-$7-billion

RBI'S REVISED GUIDELINES FOR RESOLUTION OF STRESSED ASSETS LIKELY BEFORE MAY 23 For more details, please refer link : //economictimes.indiatimes.com/articleshow/69081622.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

ITR-1 FOR FY2018-19 ASKS FOR INTEREST INCOME BREAK-UP FROM TAX PAYERS For more details, please refer link : //economictimes.indiatimes.com/articleshow/68826419.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

ONLY REGISTERED VALUERS CAN CONDUCT VALUATIONS UNDER IBBI CODE OR REGULATIONS For more details, please refer link : https://taxguru.in/company-law/valuation-reports-registered-valuers-ibbi.html

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KREO CAPITAL NEWSLETTER - NINTH EDITION

SEBI REVISES CHARGES RELATED TO

BASIC SERVICES DEMAT ACCOUNT

Key Highlights

• Annual maintenance charges levied on debt securities held through basic services demat accounts will be revised from June 1, according to SEBI.

• Basic Services Demat Account (BSDA) offers limited services at a lower cost for retail investors.

• For debt securities worth up to Rs 1 lakh held through BSDA, there would no annual maintenance charge.

• A maximum charge of Rs 100 would be levied if the value of holdings is above Rs 1 lakh and up to Rs 2 lakh.

• Currently, a uniform annual maintenance charge of Rs 100 is levied on securities worth over Rs 50,000 and up to Rs 2 lakh

irrespective of type of holding.

For more details, please refer link: //economictimes.indiatimes.com/articleshow/68819166.cms?from=mdr&utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

SEBI REDUCES MINIMUM SUBSCRIPTION REQUIREMENT FOR REITS, INVITS

Key Highlights

• SEBI has reduced the minimum subscription requirement as well as defined trading lots for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).

• REITs have to offer their units in lots worth at least Rs 50,000 in initial and follow on public offers.

• The minimum value of a single lot should be Rs 1 lakh in the case of InvITs.

• The amendments are aimed at providing flexibility to the issuers in terms of fundraising and increasing the access of these investment vehicles to investors

For more details, please refer link : //economictimes.indiatimes.com/articleshow/69012974.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

KREO CAPITAL NEWSLETTER

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KREO CAPITAL NEWSLETTER - NINTH EDITION

SEBI EXTENDS UPI IMPLEMENTATION FOR RETAIL IPO INVESTORS TILL JUNE 30

Key Highlights

• SEBI extended the timeline for the implementation of phase 1 of Unified Payments Interface (UPI) as an alternative payment mechanism for retail investors, buying shares in a public issue.

• However, the timeline for implementing phase 2 and phase 3 shall remain unchanged from the date of completion of phase 1, SEBI said in a circular.

• Currently, retail investors either invest in an initial public offering (IPO) through bank ASBA or through broker ASBA, where the broker does the bidding and hands over the application form to the investors’ bank.

For more details, please refer link: https://www.thehindubusinessline.com/markets/sebi-extends-upi-implementation-for-retail-ipo-investors-till-june-30/article26723124.ece

GOVT NOTIFIES NEW ACCOUNTING STANDARD, LEASE RULE TO IMPACT AIRLINES

Key Highlights

• The government has notified a new accounting standard Ind AS 116 that will bring in more transparency in recognition and disclosures about leases in companies' balance sheets .

• The Indian Accounting Standard (Ind AS) 116 is expected to have a significant impact on various industries, including aviation where airlines mostly operate planes on lease.

• Ind AS 116 to be effective from April 1 sets out the principles for recognition, presentation and disclosure of leases.

For more details, please refer link: https://www.business-standard.com/article/pti-stories/govt-notifies-new-accounting-standard-on-leases-effective-from-apr-1-119033100496_1.html

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COMPANIES MAY TAKE ONLY 3 DAYS TO REGISTER WITH CENTRAL AGENCIES

Key Highlights

• In a bid to break into the top 50 countries for ease of doing business, India may soon put in place a simple, single clearance process to incorporate a company with seamless registration of PAN, TAN, GST, Employee Provident Fund Organisation and Employee State Insurance Corporation in flat 3 days.

• At present, there are issues on name reservation that is being sorted out by the ministry of corporate affairs, said a senior government official.

• It is working on the regulation on how this will be done and the process that will be followed.

• Sometimes, due to queuing at other agencies, clearances can take longer, which is being fixed.

For more details, please refer link : //economictimes.indiatimes.com/articleshow/68984821.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

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KREO CAPITAL NEWSLETTER - NINTH EDITION

FILING OF ONE TIME RETURN IN DPT -3 FORM

Key Highlights

• Every company other than Government company shall file a onetime return of outstanding receipt of money or loan by a company but not considered as deposits.

• It may also be noted that data on deposits should be filed upto 31st March, 2019 (as opposed to 22nd January, 2019 which was originally indicated in the said Rule).

• Pending the deployment of DPT-3 Form on MCA 21 portal and in order to avoid inconvenience to stakeholders on account of various factors, it is stated that the additional fee, as provided under the Companies (Registration Offices and Fees) Rules, 2014, shall be levied after 30 days from the date of deployment of the DPT- 3 form on MCA 21 portal.

For more details, please refer link: http://www.mca.gov.in/Ministry/pdf/CircularDPT-3Form_12042019.pdf

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ACTIVE DEADLINE EXTENDED, COMPANIES GET TIME TILL JUNE 15

TO MEET NEW DISCLOSURE NORMS

Key Highlights

• The government has extended the deadline for uploading photos of business premises to June 15, giving corporates more time to comply with a provision aimed at spotting shell companies.

• The disclosure norms, which came into effect from February, make it mandatory for registered companies to upload pictures of their business premises and at least one director. The last date for compliance was

Thursday, April 25 .

• The move came after the ministry received representations from industry associations with many

companies yet to comply .

For more details, please refer link : //economictimes.indiatimes.com/articleshow/69031617.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

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KREO CAPITAL NEWSLETTER - NINTH EDITION

LIMITED LIABILITY PARTNERSHIP FRAMEWORK REVAMP IN THE WORKS

Key Highlights

• The ministry of corporate affairs will soon set up a committee to review the structure of LLPs, touted as a low compliance hybrid between companies and partnerships.

• The review comes following representations about a Rs 100 per day penalty for delayed filing and difficulties faced in dissolution.

• Besides, lesser compliance compared to companies, LLPs also offer tax advantages with exemption from dividend distribution tax (DDT) and minimum alternate tax.

• Owing to flexibility in its structure and lesser cost of compliances as well as ease of formation, it is an ideal form of organisation for small entrepreneurs and for investment by venture capital.

For more details, please refer link: //economictimes.indiatimes.com/articleshow/68898085.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

RBI PROPOSES NEW RULES FOR MORTGAGE SECURITIZATION

Key Highlights

• The central bank is proposing new rules to securitise mortgages and enhance their marketability, making it easier for home financiers and para banks to access cash and adding momentum to India’s corporate loans market.

• RBI move would make additional liquidity available to NBFC, which have a significant share in overall credit disbursement but are struggling to raise funds cheaply after the IL&FS defaults.

• The central bank would explore measures such as loan contract standards, digital loan contract registry, ease of due diligence and verification by potential loan buyers, online platform for loan sales.

For more details, please refer link : //economictimes.indiatimes.com/articleshow/68732390.cms?utm_source=ETMyNews&utm_medium=HPMN&utm_campaign=AL1&utm_content=20&utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

KREO CAPITAL NEWSLETTER EDITION – JULY, 2018

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KREO CAPITAL NEWSLETTER - NINTH EDITION

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UNDER IBC, IRREGULARITIES FOUND

IN COMPANIES

Key Highlights

• The ministry of corporate affairs (MCA) is responsible for implementation of the Insolvency and Bankruptcy Code.

• MCA is expected to initiate action against the promoters, directors and even auditors in some cases, although it is stretched for manpower and resources.

• Apart from siphoning of funds, instances of transactions with related parties and several other irregularities have been found, including involvement of banks.

• In a majority of the dozen high-profile cases referred for action by the Reserve Bank of India, irregularities have been noticed, which also being probed separately by agencies such as the Serious Frauds Investigation Office

For more details, please refer link: http://timesofindia.indiatimes.com/articleshow/68983427.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

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KREO CAPITAL NEWSLETTER - NINTH EDITION

RBI EXTENDS OMBUDSMAN SCHEME

TO NON-DEPOSIT TAKING NBFCs

Key Highlights

• In a move to improve customer confidence in NBFC lending routes, RBI has announced to extend the ambit of Ombudsman Scheme for NBFCs to all eligible non-deposit taking NBFCs as well.

• All Non-Deposit Taking NBFC having customer interface, with assets size of Rupees 100 crore or above, will come within the ambit and shall comply with the provisions of the Ombudsman Scheme for NBFC.

• However, the scheme still excludes various NBFC groups such as Infrastructure Finance Companies (NBFC-IFC), Core Investment Company (CIC), Infrastructure Debt Fund-Non-Banking Financial Company (IDF-NBFC) and also NBFCs under liquidation.

For more details, please refer link: //economictimes.indiatimes.com/articleshow/69067821.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

ACTION(S) TO BE INITIATED AGAINST LISTED COMPANIES FOR NON-PAYMENT OF OUTSTANDING ANNUAL LISTING FEES (“ALF”) Key Highlights

• The Exchange has decided to proceed to initiate the following actions against the defaulting company, which has failed to pay all outstanding ALF including the fee payable for Financial Year 2018-19, on or before April 13, 2019.

• The exchange has provided the actions to be taken against defaulting companies w.e.f April 15, 2019 and July 1, 2019.

• If the defaulting company fails to pay the outstanding ALF as on July 15,2019, in addition to the aforesaid action(s), an administrative fee of Rs. 50,000/- (which shall be reviewed from time to time) will be levied upon the defaulting company for every filing sought to be done by the defaulting company on the Listing Centre portal of the Exchange .

For more details, please refer link: https://www.bseindia.com/corporates/Displaydata.aspx?Id=82549dd2-3876-4e95-b838-492d6a613de3&Page=cir

INVESTORS PANIC AS INCOME TAX SEEKS DETAILS FROM UNLISTED COMPANIES Key Highlights

• According the tax return form released by the department, assessees must provide details of any investment they have made and directorial positions they hold in unlisted companies in their tax returns.

• The fear is that tax officials could closely scrutinise those data and initiate investigations if they find any mismatch, they said.

• The way the enhanced details of the shareholding in private companies in India and abroad are sought by the tax department, going ahead they could be looking to cross verify this with the ROC or other secondary

records .

For more details, please refer link: //economictimes.indiatimes.com/articleshow/68948295.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

TO WIDEN TAX BASE, GOVT MAY TWEAK FOREIGN TAXATION RULES Key Highlights

• India is set to revamp its foreign taxation norms in the upcoming direct tax code to widen its corporate tax base and prevent other nations from taking a bigger chunk of profits their multinational companies earn in India.

• The new norms will apply to profits of foreign companies in India as well as that of Indian companies abroad.

• The move could reset the balance of taxation powers between India and developed nations with respect to cross-border investments.

• It could also necessitate business strategy changes by both Indian firms investing abroad and non-resident companies doing business in India without a subsidiary.

For more details, please refer link: https://www.livemint.com/politics/policy/to-widen-tax-base-govt-may-tweak-foreign-taxation-rules-1555616149963.html

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KREO CAPITAL NEWSLETTER - NINTH EDITION

CHANGED INSOLVENCY NORMS BY APRIL NEXT TO SPEED UP PROCESS

Key Highlights

• The IBC is in the process of being changed to be effective from the next fiscal to accommodate the fast changing creditor-debtor scenario, according to the IBBI.

• The IBBI invited comments from stakeholders and the public on making changes to the current regulations notified under the IBC, 2016.

• The changes the IBBI is looking are in the regulations under Voluntary Liquidation Process, 2017, Fast Track Corporate Insolvency Resolution Process regulations, 2017, Liquidation Process, 2016, and the Insolvency Resolution Process for Corporate Persons, 2016, among others.

For more details, please refer link://economictimes.indiatimes.com/articleshow/68977148.cms?utm_source=ETMyNews&utm_medium=HPMN&utm_campaign=AL1&utm_content=20&utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

CAPITAL GAINS TAX RELIEF LIKELY FOR INVESTORS EXITING STARTUPS Key Highlights

• After giving investors and entrepreneurs relief from the so-called angel tax, the government now wants to encourage startups and is examining regulatory issues, including taxation, which need to be eased.

• Under Section 54 GB of the Income Tax Act, they get exemption from tax on capital gains arising from sale of a residential house or plot if the amount of net consideration is invested in equity shares of an eligible startup for

purchase of a specified asset .

• Further, Section 54 EE of the Finance Act, 2016, provides for exemption of tax on capital gains arising out of transfer of long-term capital assets not exceeding INR 50 lakh in a financial year invested in a fund notified by the

central government

For more details, please refer link: //economictimes.indiatimes.com/articleshow/69031790.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

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FINANCE MINISTRY BRINGS IN CHANGES IN E-WAY BILL SYSTEM TO

CHECK GST EVASION Key Highlights

• The Finance Ministry has introduced changes in the e-way bill system, including auto calculation of distance based on PIN codes for generation of e-way bill and blocking generation of multiple bills on one invoice, as it seeks to crack down on GST evaders.

• With instances of malpractices in e-way bill generation getting detected, the revenue department decided to rework the system for generation of e-way bill by transporters and business.

• The user would be allowed to enter the actual distance as per the movement of goods, which will be limited to 10% more than the auto calculated distance displayed, according to the e-way bill portal.

For more details, please refer link: //economictimes.indiatimes.com/articleshow/69028448.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

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COMPOSITION SCHEME BIZ TO NOW FILE SIMPLIFIED 'SELF-ASSESSED’ GST RETURN QUARTERLY Key Highlights

• Giving relief to composition scheme taxpayers under the GST, the finance ministry has allowed such businesses to file 'self-assessed tax' return on quarterly basis in a simplified form.

• As per Central Board of Indirect Taxes and Customs (CBIC) notification, composition scheme taxpayers will now file GSTR-4 annually by April 30 for the previous financial year ending March 31.

• The CBIC has notified the simplified statement for payment of self-assessed tax in Form GST CMP08 to be filed by taxpayers who have opted for composition scheme, under which businesses have to pay lower

rate of tax on their turnover .

For more details, please refer link: //economictimes.indiatimes.com/articleshow/69025791.cms?utm_source=ETMyNews&utm_medium=HPMN&utm_campaign=AL1&utm_content=20&utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst 11

KREO CAPITAL NEWSLETTER - NINTH EDITION

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KREO CAPITAL MEDIA COVERAGE

12 Source : The Hitavada dated 15.04.2019

CA Varun Parakh Managing Director M:+91-9890920892

E: varun@kreocapital.com

HEAD OFFICE: 6th floor, B-Wing, Shriram Towers, Civil Lines, Nagpur – 440001. T: +91-0712-6652070

MUMBAI OFFICE: Unit 202, Tower-A, Peninsula Business Park, Senapati Bapat Marg, Lower Parel, Mumbai – 400013 T:+91-22-41731000

W: www.kreocapital.com E: info@kreocapital.com

KREO CAPITAL PRIVATE LIMITED MERCHANT BANKING | CORPORATE ADVISORY | WEALTH MANAGEMENT | LENDING SOLUTIONS

ABOUT OUR CORPORATE ADVISORY SERVICES Our corporate advisory division works with a wide range of clients including young, cutting-edge start-ups and established market leaders. We advise our clients on mergers and acquisitions, private equity funding, divestments, corporate restructuring, valuation of shares as per SEBI guidelines, company law and secretarial advisory. Our advice is built from a rigorous and up-to-date understanding of the market, coupled with clients financial vision. This means we only offer solutions that work best for our clients.

ABOUT KREO CAPITAL

Kreo Capital is a boutique financial service company with Mid Market focus, offering integrated financial advice and services. Promoted by professionals with rich experience in financial and capital markets, Kreo Capital is a financial expert for all growth oriented companies.

Team Kreo is committed to long term relationships and has a proficient and skilled work force invested in its clients and their business. Our services enable our clients to access Capital Markets, Corporate Finance Advisory, Wealth Management Advisory, Mergers and Acquisition Advisory, ESOP & Valuation Advisory, Equity/Debt Placements and Restructuring.

Disclaimer : All data and information is provided for informational purposes only and is not intended for any factual use. It should not be considered as binding / statutory provisions. Neither Kreo Capital, nor any of its group company, directors, or employees shall be liable for any of the data or content provided for any actions taken in reliance.

SEBI REGISTRATION NO: INM000012689

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