NL Mar 2019 - BBF India

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R.N.I. No. MAHENG/2012/47145Postal Registration No. MCS/153/2019-21 • MR/Tech/WPP-355/South/2019

st rd thPublished on 1 (Day) of every month • Posted at Patrika Channel Sorting Office, Mumbai - 400001 • Posting date: 3 & 4 of every month

`15/-|MARCH 2019 VOLUME: 7 • ISSUE NO. 12 •|BOMBAY STOCK EXCHANGE BROKERS' FORUM (BBF) MUMBAI, INDIA

FORUM VIEWS

In support with

Tokyo, Japan

INSIDEBBF GLOBAL CONNECTS' SOUTH KOREA | JAPAN

th st28 January - 1 February 2019

2 3 FORUM VIEWS - MARCH 2019

EXECUTIVE COMMITTEE

Uttam BagriChairman

Anurag BansalVice-Chairman

Purav Fozdar Secretary

Harin MehtaJt. Secretary

Lalit MundraJt. Treasurer

GOVERNING BOARD 201BOMBAY STOCK EXCHANGE BROKERS’FORUM (BBF) GOVERNING BOARD 2018 - 19

Kamlesh D ShroffTreasurer

GOVERNING BOARD MEMBERS

AnjanaVijay Shah

AshokAjmera

AnupGupta

HemantDesai

HemantMajethia

ArpitAgarwal

JayToshniwal

Jitendra KumarPanda

KetanMarwadi

KishorKansagra

KushalA. Shah

MadhaviVora

NiravGandhi

RajivChoksey

NithinKamath

ParthNyati

VirenderMansukhani

MehulPatel

NareshRana

MahavirLunawat

BOMBAY STOCK EXCHANGEBROKERS' FORUM (BBF)OFFICIAL MASCOT

CEO & COO DESK06

SEMINARS & EVENTS CONDUCTEDBY BBF FOR THE PROGRESS OFJANUARY - FEBRUARY 2019

48

14 BULLS & BEARS: NFRA - THE NEWWATCHDOG FOR ACCOUNTANCYAND AUDIT PRACTICES

4 FORUM VIEWS - MARCH 2019

Disclaimer: This magazine is meant for information purposes only and does not constitute any opinion or guidelines or recommendation on any course of action to be followed by the reader(s). It is not intended to be used as trading or investment advice by anybody and should not in any way be treated as a recommendation. The information contained in this magazine does not constitute or form part of and should not be construed as, any offer for purchase or sale of any product or service. While the information in the magazine has been compiled from sources believed to be reliable and in good faith, readers may note that the contents thereof including text, graphics, links or other items are provided without warranties of any kind. BSE Brokers' Forum expressly disclaims any warranty as to the accuracy, correctness, reliability, timeliness, merchantability or fitness for any particular purpose, of this magazine. BSE Brokers' Forum shall also not be liable for any damage or loss of any kind, howsoever caused as a result (direct or indirect) of the use of the information or data contained in this magazine. Any alteration, transmission, photocopied distribution in part or in whole or reproduction of any form of this magazine or any part thereof without prior consent of BSE Brokers' Forum is prohibited.

Printed, Published and Edited by Dr. VISPI RUSI BHATHENA, PhD (h.c.)& Dr. V. ADITYA SRINIVAS on behalf of BSE BROKERS' FORUM,

printed at KSHITIJ PRINTERS, 49, Parsi Panchayat Road,Ashok Ind. Estate, 1st, Floor, Andheri (East) Mumbai - 400 069.

and published from BSE BROKERS' FORUM, 808 A,P. J. TOWERS, DALAL STREET, FORT, MUMBAI - 400 001.

Editor: Dr. V. ADITYA SRINIVASDesign by: Harshad Gajera | Photographer: Sanjeev Dubey

BSE Brokers’ Forum Steering CommitteeUttam Bagri (Chairman)

Anurag Bansal (Vice - Chairman)Purav Fozdar (Secretary)

Harin Mehta (Jt. Secretary)Kamlesh D Shroff (Treasurer)Lalit Mundra (Jt. Treasurer)

26 ASIA-PACIFIC MARKETSMONTHLY HIGHLIGHTSAND INSIGHTS

THE UNDERPINNINGS OFEMPLOYMENT CREATIONIN INDIA: AN OVERVIEW

20

COMPLIANCE CALENDARMARCH 201930

24 ENTERPRISE SOFTWARE OPTIONS:LEGACY VS. CLOUD PART 2

PHILOSOPHY & SELF MANAGEMENT:SCULPT YOUR FUTURE50

CIRCULARS34

WELLNESS Q&A:OSTEOPOROSIS51

REGULATORYPULSE32

HEALING INSTITUTE: CILANTRO: THE 'SUPER HERB’52

S&P BSE SENSEX DURINGTHE MODI ADMINISTRATION’SBUDGET SESSIONS

22

MARCH 2019 CONTEMARCH 2019 CONTENTS

Follow us on: @bsebrokersforum /bsebrokersforum/brokersforumofindia /bsebrokers’forum

Write to us:We would be happy to hear from you! Do send in your suggestions, feedback and comments via email to

[email protected] | Visit us: www.brokersforumofindia.com

FITNESS CLINIC: TOBACCO & DIABETES:AN UNDERCOVER RELATIONSHIP?54

UNIFIED REGULATORY AUTHORITYFOR IFSC - INTERNATIONAL FINANCIALSERVICES CENTRES AUTHORITY

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CEO 4.0 EMPATHY : KEY TOFULFILLING RELATIONSHIPS -PERSONAL OR PROFESSIONAL

46

BUDGET- ARE WE GETTINGRICH OR POOR?42ARTICLE ON: EMPLOYEESPROVIDENT FUND43

07 BBF GLOBAL CONNECTS -ONE BBF ONE WORLD

5

In support with

SOUTH KOREACONNECTS'

JAPAN

BOMBAY STOCK EXCHANGE BROKERS' FORUM (BBF)

AND

th th st st28 - 30 January 2019, South Korea | 31 January - 1 February 2019, Japan

Tokyo, Japan

7

ceo & coo message


WelcomeDr. Vispi RusiBhathena,PhD (h.c.)

to magazine.Forum Views

The Interim Budget 2019 tried to touch various

segments of the economy especially the common man.

INTERIM BUDGET - tried to place money into common man’s hand!

The Interim Budget 2019 tried to touch various segments of the economy especially the common man. The key features which attracted the attention were the increased income tax exemption limit from current Rs. 2.5 lakhs to Rs. 5 lakhs. This would put more money into the hands of the common man for demand and consumption and thus contribute to the GDP growth of the country.

The other features like SME having GST number would be getting 2% interest subvention loan till Rs. 1 crore, it will also help SME segment to get credit and thus create jobs at the grass root level.

The SME companies have also been given the preference in all the Government projects where the 25% of the procurement will have to be done from the SME companies. This will give lots of business opportunity for the SME companies and thus add to their business and help the economy grow. SME's contribute around 40% of the total exports and around 45% of the total production is done by the SME segment.

The defense budget has been extended to Rs. 3 lakh crores which will also give lots of impetus to "MAKE IN INDIA" and thus create lakhs of jobs in the manufacturing segment. This will also save precious foreign exchange of the country and thus contribute to making the Balance of Payment very strong. The "BRAND INDIA" will also get boost from this and thus create many jobs at the grass root level.

RBI has reduced the Repo Rate from 6.5% to 6.25% which will reduce the cost of capital and thus contribute on the consumption side and also on the credit off-take side. The reduced cost of borrowing would also include corporates to expand and thus create jobs in the economy. The CPI data has still reduced from 2.19% to 2.05% and rise in Index of Industrial Production (IIP) data from 0.5% to 2.4% as the manufacturing expanded to 2.7% thus raising hopes that the demand in the manufacturing segment is rising. The reduced CPI and the increased IIP index will further give room to RBI to reduce the interest rates in the coming months and thus stimulate the economy.

BBF - Investor Education & Awareness Initiatives

On the BBF Front:

BBF - Representations

Reporting of auction and pay-in/payout shortages data Further suggestions and request for a review meeting

14 Jan SEBI

Represented ToTopicDate

BBF - Seminars and Events

Date Institutions

South Indians' Welfare Society College


(Batch 1-2)

Lala Lajpat Rai College of Commerce

and Economics

Laxmichand Golwala College of Commerce &

Economics (Batch 1-2)

P. P. Savani University (Batch 1-3)

SDJ International College (Batch 1-4)

M. L. Dahanukar College of Commerce

(Batch 1-4)

Lala Lajpat Rai Institute of Management

(Batch 1-2)

A. E. Kalsekar Degree College of Arts

Science and Commerce

Oriental College of Education (Batch 1-4)

Vivek College of Commerce (Batch 1-3)

K. J. Somaiya College of Arts and Commerce

(Batch 1-4)

Jashbhai Maganbhai Patel College of

Commerce (Batch 1-4)

SVKM's Narsee Monjee Institute of

Management Studies - NMIMS


PU's Education Services (Batch1-2)

15 Jan

16 Jan

16 Jan

21 Jan

22 Jan

23 Jan

28 Jan

29 Jan

30 Jan

4 Feb

5 Feb

6 Feb

11 Feb

12 Feb

13 Feb

13 Feb

Dr. Aditya Srinivas

a new life line to the global capital markets; the FII's in Indian markets have invested Rs. 6000 crores in the first week of February and thus they have turned net buyers. The year 2018 saw that despite FII's being net sellers to the tune of Rs. 32000 crores, the BSE SENSEX gave 5.6% return as the Indian Mutual Funds

The US Federal Reserve in its meeting held on 31st January 2019 also indicated that they are not in any hurry to increase interest rates in the USA. This will give

invested Rs. 1,20,000 crores. This shows that the Indian stock markets have become independent as retail investors are putting money through SIP (Systematic Investment Plan) and thus contributing into the growth of the Indian stock markets.

Seminar on Surveillance Measures includingGSM/ASM (With BSE Ltd.) | Mumbai

13 Feb

TopicDate

Investment Outlook 2019 | Ahmedabad22 Feb

CAMP for Single Registration (With BSE Ltd.)15 & 18 Feb

Bombay Stock Exchange Brokers’ Forum (BBF) Connects TourSouth Korea and Japan - January 2019

BACKGROUND

The growth of the Indian economy requires Capital infusion at all levels, from smaller businesses to larger infrastructural projects. Foreign Portfolio Investors (FPI) and Foreign Direct Investors (FDI) are an important source of inflow for this capital.

Various Indian entities including government, businesses and intermediaries approach potential investors throughout the world. However, the list of such potential investors is not readily available and this leads to lots of hits and misses.

The Bombay Stock Exchange Brokers Forum (BBF) is one of the apex trade bodies of the securities firms in India. BBF is also a member of various international forums like Asia Securities Forum (ASF), International Council of Securities Associations (ICSA) and International Forum for Investor Education (IFIE). At these forums, we are in touch with local financial market bodies of various jurisdictions around the world.

Using the rapport and relations built with these members, BBF has embarked upon a mission to target potential investors of various jurisdictions who would be interested in investing in Indian assets. We began our journey with South Korea and Japan.

In case of South Korea, we partnered with Korea Financial Investment Association (KOFIA), the Self-Regulatory Organization (SRO) of securities firms and asset management companiesof South Korea.In case of Japan, we partnered with Japan Securities Dealers Association (JSDA), the SRO of securities firms in Japan.

FORMAT OF THE BBF CONNECTS TOUR

The tour was conducted in the last week of January 2019. The format followed in both the countries was:

Day 1 - Public seminarDay 2 - One to one meetings of the attendees with the delegates

The venues were the KOFIA conference room at Seoul, South Korea and JSDA conference room at Tokyo, Japan.

All attendees were invited by our local partners viz. KOFIA and JSDA, since their understanding of the home market would be deeper than any other agency.

INDIAN DELEGATION

The Indian delegation consisted of office bearers of BBF, an Indian Custodian, an Indian Tax expert, an Indian Mutual Fund representative and a Stock Exchange representative. Attempt was made to have a composition that covered the entire gamut of investing in India with a particular emphasis on Indian Capital and Financial Markets.

INDIAN Delegation along with KOFIA representatives at Seoul (28-Jan-2019)

Indian delegation - left to right (Mr. Myungsoo Sim -KOFIA, Mr. Vinay Purohit -SHCIL, Mr. Ujwal Damani -BBF, Mr. V. Bala-India INX, Mr. R. Anand -SHCIL, Mr. Uttam Bagri -Chairman BBF, Mr. Young Won Kwon -Chairman KOFIA, Mr. GaurabParija -IDFC AMC, Mr. Anurag

Bansal -Vice Chairman BBF, Mr. Vineet Potnis -SHCIL, Mr. Sangchul Park -KOFIA, Mr. Manoj Purohit -Deloitte, Ms. Hanni Kang -KOFIA)


BBF GLOBAL CONNECTBBF GLOBAL CONNECTS’


HIGHLIGHTS• Program was supported by both the Indian Embassy in Seoul and the Indian Embassy in Tokyo. The Indian

ambassadors at both places took personal interest in the outreach program.

• The Seoul seminar saw around 125 attendees, while the Tokyo seminar had around 80 attendees. The interest was more than envisaged by the local support partners themselves.

KEY OBSERVATIONS

• Securities firms in South Korea and Japan follow an omnibus structure where the client’s funds and securities are held by the securities firms and they invest in dozens of other jurisdictions in the name of the securities firm without needing to register their final clients.

• Among the High Net-worth Individual (HNI)’s of foreign jurisdictions, there is a significant resistance in registering with the income tax authority of any other country and therefore they find taking Indian Permanent Account Number (PAN) extremely challenging.

• There is a general perception that Indian Markets are very complex and most attendees had opinions of Indian Markets which were dated. Most were not aware of the latest structures and regulations and some queries were very basic.

• There were many tax related queries. The attendees were happy to be made aware of the Indian Double Tax Avoidance Treaty (DTAA) with South Korea and Japan and the benefits under the same.

• The ageing population and very low interest rates in both the countries lead to most attendees being highly curious of the higher interest rates in India combined with a young population.

• The option of coming in the International Financial Services Centre (IFSC) at Gujarat International Finance Tec-City (GIFT) was very much appreciated. However, the interest towards investing in Indian Equities rather than Derivative instruments was more.

• There was repeated interest shown in investing in Indian Fixed Income Securities starting with Indian Government Securities and queries on the how were commonplace. There were also queries on style and manner of hedging the currency risks.

• Some foreign entities who had ventured into India in the past have not had a good experience primarily because of lack of local domain knowledge. However, they are still open to consider India once more.

• Interest was shown by entities in setting up their Indian operations either in form of 100% owned subsidiaries or taking strategic (open to both majority or minority) stakes in Indian financial firms.

• Both the countries are happy to promote listing of Indian Securities on their market with special interest shown for Japanese Securities Receipts (JDR)



SOME LIGHT MOMENTS28th January | Korea | Seminar & Dinner with Ambassador at Republic Day Function



Indian Delegation with H.E. Smt. Sripriya Ranganathan, Ambassador of India to South Korea

Indian Delegation with H.E. Shri Sanjay Kumar Verma, Ambassador of India to Japan

SUGGESTIONS- The omnibus account structure is used by many participants for many jurisdictions. India must consider creating

some midway to take care of (KYC) requirements and at the same time not disrupt the existing style of operations of the foreign entities, esp. for well regulated entities in countries like South Korea and Japan.

- The level of understanding and knowledge of the Indian Capital Markets is woefully inadequate. More frequent knowledge sessions and reach outs are essential for potential investors to get excited about India and consider India as a serious Investment option.

OUR MESSAGE TO POTENTIAL FORIEGN INVESTORSAt all levels of interactions, the delegation stressed upon the need for all global firms to setup dedicated Indian investment teams with local talent to the extent possible for higher chances of success.

SPECIFIC DEALS UNDER DISCUSSION - One large Asset Management Company in South Korea is contemplating setting up Mutual Fund Operations in

India.

- A medium size securities firm in Japan is contemplating taking a minority stake in an Indian securities firm and using the same as a vehicle to route Japanese Investments into India

- Some Korean & Japanese firms are looking at investing into Indian Government Securities

- One Korean firm is looking at Real estate opportunities in India on a buy and rent model

The indicative size of above deals is in the range of USD 10 - 30 million

Going AheadWe believe the above is a trickle which can become a flood if dealt well. It is critical that Foreign Investors in India get right advice and earn reasonable returns since their experiences create a significant word of mouth message in their rather tight-knit financial community.

BBF will continue its endeavors to improve awareness of Investment Opportunities in India in general and Indian Capital Markets in particular in the above jurisdictions and more.



31st January | Japan | Stock Exchanges visit, Seminar Networking Dinner


12 FORUM VIEWS - MARCH 2019FORUM VIEWS - MARCH 2019

29th January | Korea | Visit to KSD & Networking Dinner



NFRA - THE NEW WATCHDOG FORACCOUNTANCY AND AUDIT PRACTICES

By Prachi JainAdvocate, RegStreet Law Advisors

BULLS & BEARSBulls & Bears

1he Ministry of Corporate Affairs (“MCA”) videnotification dated October 01, 2018 notified sub-section (1) and (12) of Tsection 132 of the Companies Act, 2013 (“Companies Act”

or the “Act”) with immediate effect. These sections empower the Central Government to constitute a National Financial Reporting Authority (“NFRA”) for making recommendations on accounting policies and auditing standards to the Central Government. In view thereof, the MCA notified the National Financial Reporting

2Authority Rules, 2018 (“NFRA Rules”) videnotification dated November 13, 2018 effective from November 14, 2018.Former IAS officer Mr. Rangachari Sridharan was appointed as the first chairman of NFRA.

WHY NFRA?

In the wake of several high profile accounting scams, establishing NFRA is necessary for enforcement of auditing standards and ensuring the quality of audits to strengthen the independence of audit firms, among others.

Statistical analyses carried out by MCA revealed as follows:

• Of the 1,972 cases taken up by the Disciplinary Committee/Board of Discipline of the Institute of Chartered Accountants of India (‘ICAI’), only in the matter relating to Satyam Computers have the members been permanently removed. Only in 14 of these cases, has a penalty of one year or more been imposed on the members.. In majority of the cases, the members had been found not guilty. Further, in majority of the cases where members have been found guilty, they have been merely reprimanded or cautioned.

• 1226 cases were closed at prima facie stage by the Board of Discipline/Disciplinary Committee. Of these, 117 cases were referred by various Government agencies/regulators. 49 of these cases were referred by MCA/SEBI and the professional involved were found to be not guilty at the prima facie stage. The closure of these cases took from 1-4 years.

• Only 4 percent of the 746 cases which proceeded beyond the prima facie stage before the Disciplinary Committee/Board of Discipline of the ICAI since 2007 have been on a suo-moto

basis. Other than Satyam matter, only in 6 of these cases have the Members been found guilty and they have been reprimanded or cautioned.

• 137 of 746 cases taken up for considered beyond the prima facie stage by the Disciplinary Committee/Board of Discipline were based on complaints by government/regulatory agencies. The Committee found members guilty in 54 of these cases, of which in 5 cases, the Committee imposed a penalty of name removal for one year or more and/or fine.

Accordingly, it may be noticed that in various cases, ICAI failed miserably in fulfilling its responsibility to even investigate into the acts and affairs of the auditors and at a later stage to even punish and proceed against such defaulting auditors. Further, cases involving investigation by ICAI took long to conclude, due to which the purpose behind the auditor(s) being investigated was defeated altogether.

In various other cases, ICAI even failed to take preliminary action on cases, which were referred by MCA, for examining the role of auditor and possible misconduct with regard to 132 listed companies identified by SEBI for suspected abnormal price rise, wherein such price rise was not supported by the fundamentals of the companies. Such was the lethargic and irresponsive behavior of ICAI despite several reminders.

It is relevant here to recall the scam in the matter of United Spirits Limited (USL) wherein fraud during the years 2010 to 2013 was detected pursuant to the forensic audit conducted by PricewaterhouseCoopers (PwC) UK with the assistance of PwC India. Ironically, Price Waterhouse was the auditor for USL till 2010-11. However, till date ICAI has not taken any action against the errant auditors.

One must not forget the PNB Scam case, wherein various media articles state that if there was a breakdown of checks and balances in PNB, the auditor should have been the first one to point it out. One of these articles goes on to further state that the technology auditors of the bank need to be asked how come two technical systems, SWIFT, and the core banking system, do not

3talk to each other. It is a case of system failure .

ICAI is a body vested with limited powers of initiating disciplinary proceedings against auditors only and not against audit firms which ultimately failed to deter audit firms from acting hand in glove with the management of the companies.

CONSTITUTION OF NFRA

1) Reservations by ICAI

While the recommendations for constitution of NFRA as a separate and independent body for overseeing the implementation of widely accepted international accounting and

In the wake of several high profile accounting scams, establishing

NFRA is necessary for enforcement of auditing

standards and ensuring the quality of audits to strengthen the

independence of audit firms, among others.


BULLS & BEARSBulls & Bears auditing practices by auditors as well as bodies corporate were

4made, according to the 37th report of the Standing Committee on Finance dated December, 2016 several representations were made by the ICAI flagging of inter - aliathe following points of concerns:

a) Multiple Regulatory Bodies: Creating NFRA would result in two regulatory bodies (ICAI and NFRA) governing the same audit profession. This would result in duplication of efforts, and add huge costs with no significant incremental benefits. This would also change the self-regulated profession to an externally regulated body.

b) The ICAI Context: A major objective for constitution of NFRA is to ensure that the functions of setting accounting and auditing standards as well as enforcement of the same are not carried out by the same body. It is important to note that like the Securities and Exchange Board of India (“SEBI”) which is a body constituted by an act of the Parliament, performing dual functions of laying down its own regulations and overseeing the enforcement of the same, similarly ICAI has also been constituted by an act of the Parliament.

Accordingly, the constitution of NFRA needs to be re-examined in the mentioned contexts where relevant mechanisms and units have been enabled by and/or within the ICAI organisation to deliver the twin objectives of robust policy making and unbiased enforcement in a timely manner.

c) Relevance of NFRA in the context of the Companies Act, 2013: The objective of NFRA is to regulate audit quality and protect public interest. These, in any case, are also the main objectives of ICAI which strives to be a world class regulator.

d) Auditing Standards: ICAI as a world class regulator would be more aligned to market needs, international practices and risks and to be able to define and improve auditing standards rather than NFRA.

e) Disciplinary Mechanism: The Disciplinary Committee of ICAI normally completes the process in a reasonable period of about three to four years.

f) International benchmarks: The Public Companies Accounting Oversight Board (PCAOB) of the US may be regarded as a possible closely comparable body to NFRA, if notified. It is relevant to note that PCAOB has evoked mixed responses in its ability to improve audit quality. The PCAOB budget for 2016 is estimated at $250 million and is enabled by 750 audit staff. The challenges of availability of trained and qualified audit staff and the cost thereof may need to be appreciated ahead of the decision to notify NFRA.

g) Uniform administration: Scale based differentiation of regulating authority may result in conflicting judgements on the same issue. Seamless coordination may always not be possible between NFRA and ICAI due to the multiplicity of disciplinary issues that may be handled by both agencies.

2) Clarifications by MCAIn response to the reservations of the ICAI received, the Ministry of Corporate Affairs (‘MCA’) issued inter - alia the following clarifications / reply in order to support its proposal of constituting NFRA, taking into consideration the practices followed by developed economies world over:

clarifications / reply in order to support its proposal of constituting NFRA, taking into consideration the practices followed by developed economies world over:

a) The enforcement of the auditing standards and ensuring the quality of audits moved from self-regulating bodies, in the wake of the accounting scams worldwide, to independent regulators like the Public Company Accounting Oversight Board (PCAOB) and Financial Reporting Council (FRC) in the US and UK respectively. Other major countries have also followed suit. It was recognised in these jurisdictions that establishing regulators, independent ofthose it regulates, would strengthen the independence of audit firms, quality of audits, and enhance investor and public confidence in financial disclosures of companies.

b) World over, the number of independent audit regulators have increasedover a period as one could see from the membership of International Forum of Independent Audit Regulators (IFIAR) which was established in 2006 by independent audit regulators from 18 jurisdictions and now covers 51 jurisdictions (including PCAOB and FRC). IFIAR, inter alia, promotes international collaboration between the regulators. The oversight structure of auditors within ICAI has not been recognized as independent by IFIAR and India is not represented on this body.

c) SEBI had engaged M/s Oliver Wyman (OW), an international consultant to revisit the structural and organisational issues, re-prioritize areas of focus and to look at the technological and manpower needs of SEBI. OW in its report hadinter-alia stated that "Currently the Institute of Chartered Accountants of India (ICAI) is responsible for maintenance of accounting, auditing and ethical standards. However the ICAI's oversight is passive in nature and with limited focus on active investigations. In addition, oversight is rendered challenging given the large number of auditors in India (around 15000 vs around 3000 in USA). Scope to enhance the quality of audit has been recognised by multiple supervisory bodies including SEBI, RBI and Comptroller & Auditor General of India. In the long term, we recommend that SEBI drive the case for establishing a separate regulator for auditors which is independent of audit profession. This body must be set up with a clearly defined mandate, adequate resources for active monitoring and appropriate enforcement process. In the near term it is recommended that SEBI provide inputs for the role of function of National Financial Reporting Authority with respect to supervision of auditors (providing services to listed companies) and mechanisms for interaction with SEBI".

d) Accordingly, once the authority is constituted and starts functioning, it would be recognized in international forums also, and some of the difficulties being expressed viz parity in respect of legal action/liability of Indian partners/firms vis-à-vis global/multinational and other similar aspects would evolve to match international practices.

NFRA RULESAs compared to the powers vested on the National Advisory Committee on Accounting Standards established as per section 210A of the erstwhile Companies Act, 1956 which was mainly constituted to advise the Central Government on the formulation and laying down of accounting policies and accounting standards for adoption by companies or class of companies under the said



ACTIONS BY SEC AGAINST THE AUDITORS

1

Sr.No.

Summary of the matter

act, the NFRA is endowed with widespread powers, ranging from making recommendations to the Central Government on accounting standards and auditing practices to be followed to taking actions, imposing penalties on auditors, audit firms and / or bodies corporate for any violations or negligence.

NFRA has been constituted as a quasi-judicial body with larger powers than National Advisory Committee on Accounting Standards. In a nutshell NFRA shall be responsible for recommending auditing and accounting standards, to monitor and enforce compliances with the said standards and oversee the quality of service and suggest measures for improvement unlike National Advisory Committee on Accounting Standards which only advised on accounting standards.

1) Applicability of the NFRA Rules The categories of entities to which the NFRA Rules are applicable, has been provided in Rule 3 (1) of the NFRA Rules, as follows:

1) Companies whose securities are listed on any stock exchange in India or outside India;

2) Unlisted public companies fulfilling any of the following criteria as on the 31st March of immediately preceding Financial Year:a) having paid-up capital of not less than Rs. 500 crores or;b) having annual turnover of not less than Rs. 1000 crores or;c) having, in aggregate, outstanding loans, debentures and

deposits of not less than Rs. 500 crores.3) Insurance companies, banking companies, companies

engaged in the generation or supply of electricity, companies governed by any special Act or bodies corporate incorporated by an Act in accordance clauses (b), (c), (d), (e) and (f) of section 1(4) of the Act;

4) Body Corporate/Companies/Persons or any class of them referred by Central Government to the Authority in public interest; and5) Body Corporate which is:a) Incorporated or registered outside India, which is a

subsidiary company or associate company of the company or body corporate registered in India as referred in point (1) to (4) above; and

b) Whose income or net worth exceeds 20% of the consolidated income or consolidated networth of such company or the body corporate.

Also, the companies and bodies corporate covered by the Rules shall continue to be governed by the Authority for a period of three years after it ceases to be listed or its paid-up capital or turnover or aggregate of loans, debentures and deposits falls below the limit stated therein.

2) Non-Applicability of the NFRA Rules Considering the provisions of applicability of the Rules, following companies shall not be governed by the NFRA:

1) Private Companies (unless referred by Central Government to the NFRA in public interest); and

2) Unlisted public companies with paid-up capital or turnover or aggregate of loans, debentures and deposits below the limit stated under Rule 3(1).

Note: The NFRA Rules however require all the existing bodies corporate, other than the companies governed by the NFRA Rules to inform NFRA the particulars of its auditors as on November 14, 2018 (date of commencement of NFRA Rules) within a period of 30 days from the date of commencement of the NFRA Rules.

3) Functions, duties and powers of NFRAThe NFRA has been cast with the responsibility inter - aliaof protecting the public interest and the interests of investors, creditors and others associated with the companies or bodies corporate governed under rule 3, as discussed above, by establishing high quality standards of accounting and auditing and exercising effective oversight of accounting functions performed by the companies and bodies corporate and auditing functions performed by auditors.

NFRA is also responsible for recommending accounting or auditing standards for the approval of the Central Government, after taking into consideration the recommendations and additional information received from ICAI for new accounting standards or auditing standards or amendment of the existing standards.

4) Jurisdiction of NFRANFRA has also been empowered to investigate into any matter of professional or other misconduct under section 132 (4) of the Act, either suomotu (after recording reasons in writing), or after receiving reference from the Central Government or on the basis of its compliance or oversight activities.

Further, actions in respect of professional or other misconduct against auditors of companies referred to in Rule 3 above, shall be initiated by NFRA only and no other institute or body shall initiate any proceedings against such auditors. Accordingly, on the commencement of these rules, no other institute or body can initiate or continue any proceedings in such matters of misconduct where the Authority has initiated an investigation.

Accordingly, the action in respect of cases of professional or other misconduct against auditors of companies or bodies corporate other than those referred to in rule 3 above, shall continue to be proceeded with by the ICAI as per provisions of the Chartered Accountants Act, 1949 and the regulations made thereunder.

Audit Failures: Maintaining Professional Skepticism

On October 18, 2016, Ernst & Young LLP (“E&Y”) agreed to pay more than $11.8 million to settle charges that it failed to adequately conduct an audit of its client, Weatherford International (“Weatherford”), permitting Weatherford to inflate its earnings and issue false financial statements in violation of

5U.S. Generally Accepted Accounting Principles (“GAAP”) .

The SEC alleged that E&Y did not follow audit and professional care standards established by the PCAOB and, as a result, failed to detect that Weatherford had overstated its earnings by use of deceptive non-GAAP intercompany tax accounting practices.

These standards required, as part of the planning and execution of an audit, that auditors continually exercise professional skepticism with “a questioning mind and a critical assessment of audit evidence”.

Despite these standards and regular reminders from E&Y’s own National Office that expanded procedures were necessary to comply with PCAOB standards for audits of income tax accounting, the E&Y audit team failed to question numerous suspicious tax adjustments that were brought to its attention and instead relied completely on the client’s explanation of them.



JURISDICTION OF SEBI ON AUDITORS

While the NFRA Rules have clearly addressed the issues relating to the jurisdiction of NFRA vis-à-visICAI with respect to the action against auditors for professional misconduct, an ambiguity which still persists is with respect to the jurisdiction of SEBI on the said misconduct.

In order to protect the interest of the issuers, intermediaries, pool investment vehicles, investors in the securities market, etc. who avail the services of the auditors inter - alia relating to issueof certificates or reports as required under the respective SEBI regulations, SEBI has released a consultation paper dated July 13,

102018 regarding SEBI (Fiduciaries in the Securities Market)(Amendment)Regulations. The recommendations made in the said consultation paper are yet to come into effect.

The said consultation paper is based on the recommendation of the Committee on Corporate Governance headed by Mr. UdayKotak, which is of the view that given SEBI’s mandate to protect the interests of investors in the securities market and regulating listed entities, SEBI should have clear powers to act against auditors and other third party fiduciaries with statutory duties under securities law, subject to appropriate safeguards. This power ought to extend to act against the impugned individual(s), aswell as against the firm in question with respect to their functions concerning listed entities. This power should be provided in case of gross negligence as well, and not just in case of fraud/connivance.

It may be recollected that Bombay High Court had affirmed the jurisdiction and powers of SEBI in Price Waterhouse & Co. vs. SEBI ((2010) 103 SCL 96 (Bom.) to act against auditors in cases where they were complicit in fraud.

In several cases, SEBI as a market watchdog, responsible for protecting the interest of the investors has taken actions against the auditor / audit firms as follows:

According to the SEC, E&Y’s blind acceptance of the client’s unrealistic explanations also violated the PCAOB’s principles of professional skepticism that warn that “an auditor should not be satisfied with less than persuasive evidence because of a belief that management is honest.”

Lack of Independence: Too Close for Comfort

About a month before the E&Y audit failure settlement related to Weatherford, E&Y also settled the first ever enforcement actions for auditor independence violations stemming from partner-client relationships. The SEC charged that the auditor-client relationships of two partners-one romantic-ultimately affected their independence. The SEC not only faulted the partners involved in the improperly close relationships but also the firm itself for failing to perform a reasonable inquiry or raise concerns about the relationships despite awareness of facts

6suggesting impropriety .

Two separate actions were filed against two separate engagement teams-both involving independence impeding conduct stemming from too-close client-auditor relations. The first action involved a romantic relationship between the engagement partner and the Chief Accounting Officer of the client. The SEC noted that their relationship was “marked by a high level of personal intimacy, affection and friendship, near-daily communications about personal and romantic matters (as well as work-related matters), and the occasional exchange of gifts of minimal value on holidays such as Valentine’s Day and birthdays.” The second action occurred because of a client-auditor relationship that the SEC deemed to be excessively friendly.The conduct involved the relationship partner and Chief Financial Officer of the client taking frequent, overnight out-of-town trips, sporting events and socializing to “an excessive degree.”

In both of the independence failure actions, the SEC highlighted the auditor’s role in protecting the public trust, and emphasized that it is the “auditor’s opinion that furnishes investors with critical assurance that the financial statements have been subjected to a rigorous examination by an objective, impartial, and skilled professional, and that investors, therefore, can rely on them.”

7E&Y in the said case agreed to pay $9.3 million to settle charges .

In 2001, the SEC charged Arthur Andersen LLP and four of its then current and former partners, including a regional practice director, with fraud in connection with Andersen’s audits of the annual financial statements of Waste Management, Inc. for the years 1992 through 1996. The Commission alleged that those financial statements, on which Arthur Andersen LLP issued materially false and misleading audit reports, overstated Waste Management’s pre-tax income by more than $1 billion.

To settle these allegations, Andersen agreed to entry of the first antifraud injunction against a major accounting firm in more than 20 years, and to pay the then largest-ever civil penalty

8against a Big Five accounting firm - $7 million .

In 2003, the SEC filed a civil injunctive action against KPMG LLP and five of the firm’s partners - including the head of the firm’s department of professional practice - in connection with the years 1997 to 2000 audits of Xerox Corp., alleging that they issued materially false and misleading audit reports on Xerox’s financial statements, which had used manipulative accounting practices to close a $3 billion “gap” between actual operating results and results reported to the investing public.

2

3

4

The firm agreed to settle the allegations two years later by paying $22 million and, later that year, and in the following year, the SEC announced settlements with the five partners that included penalties and suspensions from practice before the

9SEC of varying lengths for four of the partners .

1

Sr.No.

Summary of the matter

Ritesh Properties and Industries Limited

On discovering that the auditor - Shri Shashi Bhushan, Proprietor of M/s. Bhushan Aggarwal & Co. made false and misleading disclosures in the financial statements of Ritesh Properties and Industries Limited,detrimental to the interest of the investors, SEBI vide its order dated February 17, 2016 prohibited himfrom,directly or indirectly, issuing any certificate required under securities laws and the applicable provisions of the Companies Act 2013 - administered by SEBI for a period of one year.

WhatsApp Leak Case

SEBI began a probe in November 2017 after a media report surfaced with respect to circulation of unpublished price sensitive information in various private WhatsApp groups about certain companies before their official announcements.

2



In order to bring the auditors within the ambit of SEBI in the capacity of ‘fiduciaries’, SEBI amended the regulations relating to prevention of insider trading, which now requires such auditors in the capacity of fiduciary to adopt a separate code of conduct for prevention of trading based on unpublished price sensitive information which may be obtained during execution of work assignments. Further, amendments have also been carried out in the regulations relating to prevention of fraudulent and unfair trade practices, which now considers trades carried out by fiduciaries on behalf of their clients without such client’s knowledge or instructions or misutilizing or diverting funds or securities held in fiduciary capacity as fraudulent and unfair trade practice. Such amendments have been carried out pursuant to the recommendations of the Committee on Fair Market Conduct which was chair by Mr. T.K. Viswanathan.

As stated above, though SEBI has issued amendment in the prevention of insider trading regulations and prohibition of manipulative and unfair trade practices regulations in this regard, and also seems to be in the process of notifying other amendments to SEBI regulations, the question which really lies here isindealing with situations relating to overlapping of powers by various regulators, judicial and quasi-judicial authorities against the defaulting auditor(s) in the times to come.

LESSONS FROM THE NFRA’S AMERICAN COUNTERPARTThe establishment of the NFRA can benefit from a look at its US counterpart: the Public Companies Accounting Oversight Board. The PCAOB was established in similar circumstances, after the Enron and other audit scandals. The Sarbanes Oxley Act of 2002 relocated the mandate of oversight of audit firms of public companies from American Institute of Certified Public Accountants, in the same way as the ICAI, which no longer enjoys that mandate in India. One may observe this shift from self-regulation of accountants to an independent regulatory body and identify similar concerns behind such a move.

Given the similar circumstances, it could be of assistance to analyse certain practices of the PCAOB as a regulatory body:

1) CompositionThe NFRA Rules prescribe that the NFRA will be composed inter - aliaof representatives of SEBI, RBI and the ICAI. These are regulatory bodies often responsible for the discharge of various

In order to further investigate into the matter SEBI had also called for internal investigation report from these companies, besides carrying out its independent investigation and conducting search and seizure operations at various places, including on the premises of various market entities, as well as auditors of such companies.

Satyam Scam Case

SEBI, on finding Price Waterhouse guilty of making misstatements in the financial statements in collusion with the management of the scam tainted Satyam Computer Services Limited, vide its order dated January 10, 2018 barred its network entities from issuing audit certificates to any listed company and intermediaries in India for two years. Further, Price Waterhouse Bangalore and its two erstwhile partners-S. Gopalakrishnan and Srinivas Talluri - had been directed to jointly and severally disgorge the wrongful gains of Rs. 13,09,01,664 with interest.

3

statutory duties and in the midst of such regulation this may give rise to certainsituations leading to conflicts of interest. The Sarbanes Oxley Act therefore does not prescribe such a composition but merely states that members must be:

“from among prominent individuals of integrity and reputation who have a demonstrated commitment to the interests of investors and the public, and an understanding of the responsibilities for and nature of the financial disclosures required of issuers under the securities laws and the obligations of accountants with respect to the preparation and issuance of audit reports with respect to such disclosures” (Section 101)

While the United States model may not sound ideal, one may consider the possibility of having former members of these institutions which shall ultimately meet the objective with which NFRA is constituted at the same time also avoiding situations leading to conflicts of interest.

The number of members who are or have been certified public accounts have been limited to 2 members on the PCAOB by the US legislation. Such limit seems to be imposed with intent to ensure views of various experts belonging from various different fields are available at the disposal of the PCAOB. The NFRA’s objectivity is of prime concern in the given circumstances, and this limit may be prudent.

2) EnforcementThe NFRA can conduct investigations suomotu upon reference by the Government in cases where there is suspected misconduct. This mandate extends to imposing fines, penalties and suspension of audit firms; powers that were never granted to the ICAI. The PCAOB extends these powers further to debar individuals’ association with registered audit firms. This acts as a deterrent to individuals acting in violation of regulations, and may be considered when further legislating on the powers of the NFRA.

3) Audit InspectionsThe PCAOB enjoys complete discretion in selecting audits, and often question audit firms about potential issues identified in their work. These firms are given an opportunity to respond and in the case of an unsatisfactory response, the audit deficiency is included in the public parts of the PCAOB inspection report. This ensures that audit firms discharge their obligations with care inter - aliato protect their reputation. The NFRA may use a similar approach to have a significant regulatory effect, communicating audit deficiencies to all the relevant stakeholders in the market place.

4) DisclosuresAs mentioned above, the PCAOB publishes portions of the audit inspection reports, to underline negligent behavior on the part of audit firms. Certain non-public parts of the inspection reports, which contain quality control lapses, are published if the audit firm fails to address them within a period of 12 months. The

11PCAOB has also adopted a new standard (effective 2019), requiring auditors to report critical audit matters in which the auditors had to confront the management. Such practices must be adopted by the NFRA as well.

RegStreet is a boutique law firm based in Mumbai. The firm’s focus areas are Capital Markets& Commodities, General Corporate Commercial, Financial Regulatory Practice, Compliance & Investigation, Litigation & Dispute Resolution and

Policy & Advisory Practice. More details can be seen at www.regsla.com and they can be reached at [email protected].


BULLS & BEARSBulls & Bears the financial reporting process. The actions of SEBI, MCA and NFRA bring a renewed focus on this role of auditors. This move has the potential to strengthen the first line of defense against violations of securities laws and allied regulations.

JURISDICTION OF NCLT ON AUDITORSNCLT, in exercise of its powers under section 147 (3) of the Companies Act, 2013.vide its order dated February 06, 2019, barred Mr. Mukesh Choksi, proprietor of Mukesh Choksi& Company from being appointed as an auditor of any company for a period of five years. Such order comes subsequent to the statement ‘I don’t know’ made under oath by the auditor while replying to questions like whether he was aware when the last annual general meeting of Zen Shaving was held and where the company's factory is located. Mr. Mukesh Choksi has been held guilty of signing off on a company’s books without inspection and colluding with its promoters in a fraudulent manner. This is the first time the NCLT has passed an order barring an auditor in such a fashion.

CONCLUSIONOver the past decade, the scope of duties and responsibilities of auditors in listed companies and market intermediaries has expanded vastly. Auditors have a role to play in different spheres and in each of them, the regulatory authorities attempt to regulate and monitor the actions of auditors. While such bodies are necessary to safeguard the interests of investors and public at large, there is an increased likelihood of jurisdictions of these authorities overlapping.

There have been numerous instances of auditors indulging with the management of companies to defraud the public. The intention behind stringent laws is to deter auditors and audit firms from such negligence and professional misconduct.

Professional accountants and auditors have always been on the front lines in their roles as public watchdogs and gatekeepers of

References• http://egazette.nic.in/WriteReadData/2018/190358.pdf• http://egazette.nic.in/WriteReadData/2018/192907.pdf• https://www.moneycontrol.com/news/business/comment-the-pnb-

scam-questions-for-the-bank-the-auditors-the-rbi-and-the-government-2512503.html

• http://164.100.47.193/lsscommittee/Finance/16_Finance_37.pdf• https://www.lexology.com/library/detail.aspx?g=c1997e6a-94d7-

46dc-8f48-7d5353dad988• https: / /www.cadwalader.com/resources/c l ients - f r iends -

memos/enforcement-at-the-gates-sec-action-against-big-four-firm-and-new-international-standards-highlight-the-role-of-accountants-as-financial-gatekeepers

• https://www.sec.gov/news/pressrelease/2016-187.html• https://www.sec.gov/news/headlines/andersenfraud.htm• https://www.sec.gov/news/speech/ceresney-enforcement-focus-on-

auditors-and-auditing.html#_ftn21• https://www.sebi.gov.in/reports/reports/jul-2018/consultation-paper-

on-proposed-sebi-fiduciaries-in-the-securities-market-amendment-regulations-_39541.html

• https://pcaobus.org/News/Releases/Pages/auditors-report-standard-adoption-6-1-17.aspx

he importance of India’s in the global economy becomes increasingly Tevident in the larger context of

slowing down growth particularly in advanced countries and China. According to the World Economic Outlook report by IMF, October 2018 s growth rates in most advanced economies will slow down, although there has been a recovery of growth prospects and employment post crisis. The projection cited by the report is, ``among advanced economies, the subdued outlook for potential growth reflects, to a large extent, slower labour force growth due to population aging... While labour productivity growth is expected to improve in the medium term, the slight acceleration will only partially offset the slower increases in labour input.’’

For three decades one of the highlights of the world economy was the rapid expansion of the Chinese economy was the growth engine which powered a fair proportion of world economic growth. Undeniably the importance of China’s economy will continue, in accompaniment the resonant significance of India as possibly the world’s next growth engine is imminent. Therefore what happens in India will become increasingly important for the world economy during the ensuing years. According to the world economic outlook report by the IMF, (October 2018) global economic growth, “... growth in the emerging market and developing economy group is set to remain steady at 4.7 percent in 2018-19. Over the medium term, growth is projected to rise to slightly less than 5 percent. Beyond 2019, the aggregate growth rate for the group reflects offsetting developments as growth moderates to a sustainable pace in China, while it improves in India (owing to structural reforms and a still-favourable demographic dividend)...’’

This article for the Econ Buzz views an important aspect of India’s emerging growth narrative- the main trends underlying employment creation in the

This article for the Econ Buzz views

an important aspect of India’s emerging growth

narrative - the main trends underlying

employment creation in the

Indian economy.

THE UNDERPINNINGS OFEMPLOYMENT CREATIONIN INDIA: AN OVERVIEW

By Professor Piya MahtaneyEconomist / Author


INSIGHTS - ECOINSIGHTS - ECONBUZZ

Indian economy. During the recent weeks there has been some discussion and debate about the country’s unemployment rate, without delving into the numerical details and discrepancies of various calculations made this article focuses on the crux of the matter which is that creating more jobs is a challenge that confronts the Indian economy. According to the economic survey, 2017-18, “The other issue is the challenge of employment. The lack of consistent, comprehensive, and current data impedes a ser ious assessment... Even so, it is clear that providing India’s young and burgeoning labour force with good, high productivity jobs will remain a pressing medium term challenge. An effective response will encompass multiple levers and strategies, above all creating a climate for rapid economic growth on the strength of the only two truly sustainable engines-private investment and exports’’

to an industrial economy this has certainly not meant that agriculture was relieved of its role as an important provider of employment. This feature stands in veritable contrast to the experience of a number of advanced countries where the emergence of an industrial sector absorbed the surplus labour released from the agricultural sector.

Furthermore, as we have seen unlike in the developed world the transition(in terms of sectoral importance) made by the Indian economy and some other developing countries from an agricultural to an industrial and then to a services sector was certainly not fuelled by a generalized increase in per capita income across all socio-economic categories.

In essence the impetus that would come from a surge in demand for products of the agricultural sector and for those from the manufacturing and services sector will unequivocally propel an increase in employment creation. This was a sequence that occurred in a limited way and not as a generalized phenomenon in the Indian context.

Recapitulating a commonly cited axiom - 1the Engel’s law to understand changing

consumption and demand profiles as incomes rise could aid analysis about the link between sectoral transition and the shift in employment patterns. Simply stated, the basic principle of this law is that as incomes rise individuals tends to allocate a smaller proportion of their expenditure towards food. Income elasticity of demand for food declines when incomes rise.

According to the latest National Sample Survey Organization expenditure on food items accounted for 43 per cent of total consumption expenditures in urban India (during 2004-05). This represents a significant decline from the share of 64 per cent that food expenditures had in total expenditures of urban India over the 1972-73.

At this point it would be useful to describe the main underpinnings of employment in India. India is a highly industrialized country, and according to the precepts of conventional economic thought (many of which have been validated) this should have meant a receding importance of the agricultural sector. Although for all practical purposes we can say that India has made the transition from an agricultural


Piya Mahtaney completed her second Master’s in Development Economics from Leicester University in England she embarked on a career in journalism with the Times of India. She was an assistant editor in Metropolis on Saturday, subsequent to which she joined as senior feature writer in Economic Times. As an economist that reported, analyzed and wrote on a wide range of socio-economic issues, writing a book about economic development and the emerging trends of globalisation seemed almost inevitable

The books that she has authored are as follows:• India China and Globalization (2nd ed), Palgrave

Macmillan (England), December 2014• Globalization and Sustainable Economic

Development, Palgrave Macmillan (U.S), August 1st 2013

• Institute of South East Asian Studies (Singapore) published an edition (August 2010) of my book India China and Globalisation.

• The first edition of India China and Globalisation was published by Palgrave Macmillan (England, 2007)

• Globalisation Con Game or Reality was published by Alchemy Publishers, India (2004) 2004.

• The first book titled Economic Con Game, Development fact or Fiction was published by Pelanduk Publications (Malaysia) in 2002.

INSIGHTS - ECONBUZZINSIGHTS - ECONBUZZ

expansion of the country ’s vast unorganized sector. Herein we have an instance of compressed growth which arises from the deficiency of purchasing power and not from a natural decline of expenditure allocations towards food and related products. This accentuates the imperatives of achieving an expansion of income across an entire gamut of socio-economic categories in India. Given that it is likely that India will have an average growth rate of 7 to 8 per cent per annum over the next few years and in this context the imminent question that arises is whether this would result in employment or not. Even if one were to be cold bloodedly pragmatic a fundamental fact is that the Indian economy does cannot afford the option of jobless growth.

The next article will focus on institutional reform.

and it was not as competitive and efficient as it is in current times there was at some stage a declining demand for manufactures and an increasing one for the output of the services sector. Once again the transition to the services sector, in terms of its 50 per cent contribution to the GDP at this stage of the country’s per capital income growth is rather unusual. Economic experience has demonstrated that the emergence of the services sector as the most important one occurs at when a country’s per capita incomes are high. Undeniably India’s per capita incomes have increased significantly but it cannot be considered high. (At this point in time India is a middle- income country)

Expectedly in the higher income categories individuals would allocate a higher proportion of their incomes to services. Consonant with this, an increase in the employment absorption of those who comprise the skilled and educated segments of the population by the services sector is hardly surprising.

However what is rather unique is the importance that the service or the tertiary sector has had in providing employment to those in the lower income groups. The service sector has acted as a safety net of sorts; At the lower end this sector has provided an avenue of livelihood to millions (who would otherwise have been without any means of sustenance) and it consists of a fairly diverse spectrum of service providers that have little or no skill. As a matter of fact a sizable proportion of this segment constitutes the informal economy of the country. More often than not the wages that the labour force in country’s informal economy receives is highly inadequate and is more often than not lower than the minimum wage (for the same task in the organized sector). Constrained or compressed demand for products of the agricultural sector does place limits on the demands for manufactures.

When demand for food is low as a result of a lack of purchasing power it represents a potential for growth which will obviously remain untapped until incomes among the poor increase. Consequently employment growth has been far from satisfactory and it is this feature that has fuelled the

1. Engel’s law: Consequent to rising incomes, the share of expenditures for food declines It must be noted that Engel found, based on surveys of families' budgets and expenditure patterns, that the income elasticity of demand for food was relatively low. The resulting shift in expenditures affects demand patterns and employment structures. Engel's Law does not suggest that the consumption of food products remains unchanged as income increases. It suggests that consumers increase their expenditures for food products (in percentage terms) less than their increases in income

In rural India too, the proportion of spending on food in total expenditures has reduced from 73 per cent over 1972-73 to 55 per cent over 2004-05. Although the survey does indicate that the Engel’s law does apply in certain income groups of the country’s population, it also cites that 10 per cent of the India’s rural population lives on just Rs 9 per day and 10 per cent of its urban population subsist on a slightly higher Rs13 a day.

Furthermore the expenditure on food as a proportion of total consumption is lower in states with a higher per capita expenditure and vice versa.

Thus unlike in the advanced countries Engel’s law does not apply to a fairly significant proportion of the low income groups in developing countries. Although it would be convenient to describe a landless labourer who can barely afford two square meals as someone with a low elasticity of demand it would be outrageous to consider this to be the result of Engel’s law operating. By no means does the subsistence and small farmer comprise a small minority of India’s agricultural economy, as a matter of fact it constitutes a significant proportion of the rural population.

For those in the primary sector that are unemployed or employed at wages that are highly inadequate it would take sometime for Engle’s law to operate because incomes would have to increase by a certain extent before the proportion of expenditure allocated to food and other agricultural products declines. Those who currently live on the margins of subsistence will have a higher income elasticity of demand for food in the initial stages of a rise in income. When demand for food is low as a result of a lack of purchasing power it represents a potential for growth which will obviously remain untapped until incomes among the poor increase.

The story of compressed demand continues even as we view the manufacturing* and services segment*. Over the last four decades the strides notched by Indian manufacturing has been remarkable. Even as it traversed a phase during which its progress was dampened

Ved Malla is Associate Director, Product Management at S&P BSE Indices, responsible for managing Equity and Strategy Indices in India and its neighboring countries. His objective is to expand business in the region through identifying local market trends and ensuring new products and services are aligned to the market’s needs. In addition, he is responsible for compliance and corporate secretarial work.

He has over 11 years of experience in the financial services industry. Prior to joining S&P BSE Indices, he worked with the two leading Indian stock exchanges (NSE and BSE) for about 10 years, playing an integral role in the growth of their index and market data productions. Previously, Ved was associated with Birla Sunlife Mutual Fund, where he was part of the compliance department.

He has a Master of Business Administration in Marketing from the Narsee Monjee Institute of Management Studies (NMIMS), Mumbai. He also received his Company Secretary certificate from the Institute of Company Secretaries of India.

very year in India, the Finance Minister presents the Union Budget, which is perhaps the most important economic Eactivity in the country. “Budget Day” comes with a lot of

expectations, and it therefore has a bearing on the capital markets in both the pre- and post-budget sessions. The days before and after the budget session usually bring volatility to the capital markets.

With “Budget Day”just around the corner, attention is turning tothe Finance Minister as he gears up to announce the last budget of this administration on Feb. 1, 2019. This will be consideredan “interim budget” rather than a regular budgetbecause India will havenational elections in a few months, and the next finance minister gets to make the final decisions after a new administration is formed. The interim budget will be crucial for the government consideringthe recent debacle in the state elections in December 2018, whichmay have an impact on the sops that are rolled out in this budget; hence, the people have higher expectations than usual during this budget session.

The S&P BSE SENSEX’s total return index value increased from 27,648.13 on Jan. 31, 2014, to 52,335.86 on Jan. 31, 2019, and the highest close was at 55,975.53 on Aug. 28, 2018 (see Exhibit 1). This represents a five-year CAGR of 17.30% for the period.

INSIGHINSIGHTS


The budget may be the most important economic activity affecting capital markets in India, and its relevance is

captured by the movement of the S&P BSE SENSEX.

S&P BSE SENSEX DURING THE MODIADMINISTRATION’S BUDGET SESSIONS

By Ved MallaAssociate Director, Product Management,S&P BSE Indices

DISCLAIMER: The S&P BSE Indices (the “Indices”) are published by Asia Index Private Limited (“AIPL”), which is a joint venture among affiliates of S&P Dow Jones Indices LLC (“S&P DJI”) and BSE Limited (“BSE”). Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC. BSE® and SENSEX® are registered trademarks of BSE. These trademarks have been licensed to AIPL.

Past performance of an Index is no guarantee of future results. AIPL, S&P DJI and BSE (the “AIPL Cmpanies”) make no representation or warranty that investment products based on any Index will accurately track index performance or provide positive investment returns. The AIPL Companies do not make investment recommendations and do not sponsor, endorse, sell, promote or manage any investment fund or other investment vehicle that seeks to provide an investment return based on the performance of any Index. Performance returns for an Index do not reflect payment of charges or fees an investor may pay for investable instruments. AIPL Companies receive compensation in connection with licensing Indices to third parties. AIPL Companies. For more information on any of Indices please visit http://www.asiaindex.co.in/.

To conclude, we can say that the budget sessions tend to be volatile for capital markets in India. The pre-budget movement has historically been influenced by market participant expectations for the budget, while the post-budget movement tends to be based on the actual budget presented by the Finance Minister. The budget may be the most important economic activity affecting capital markets in India, and its relevance is captured by the movement of the S&P BSE SENSEX.

56000

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S&P BSE SENSEX...

S&

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SE

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Tot

al R

etur

ns

Exhibit 1: S&P BSE SENSEX Total Return

Source: S&P Dow Jones Indices LLC. Data from Jan. 31, 2014, to Jan. 31, 2019. Index performance based on total return in INR. Past performance is no guarantee of future results.Chart is provided for illustrative purposes.

PERIOD BUDGETDATE PRE-

BUDGET

RETURNS (%) VOLATILITY(MONTHLY) (%)

POST-BUDGET

PRE-BUDGET

POST-BUDGET

10-Jul-14

28-Feb-15

29-Feb-16

01-Feb-17

01-Feb-18

01-Feb-19

2014-2015

2015-2016

2016-2017

2017-2018

2018-2019

2019-2020

-0.28

-1.14

-6.88

3.88

6.39

0.02

-0.22

-5.88

7.86

4.36

-5.27

NA

3.97

3.81

5.96

2.51

1.99

3.28

3.68

3.92

5.01

2.41

3.92

NA

Exhibit 2: 30-Day Pre- and Post-Budget Day MonthlyReturns and Volatility of the S&P BSE SENSEX

Source: S&P Dow Jones Indices LLC. Data from June 9, 2014, to Jan. 31, 2019. Past performance is no guarantee of future results.Tableis provided for illustrative purposes.

In Exhibit 2, we can see that in most years, the S&P BSE SENSEX witnessed high volatility in the 30-day pre- and post-budget sessions. The highest 30-day pre- and post-budget volatility was observed in 2016. The lowest volatility in the 30-day pre-budget session was seen in 2018.

23

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Component:• Cloud tablet with streaming app.• Video management portal.• CDN streaming cloud.• Cloud or local device recording.

Benefits of Election Polling Booth Monitoring Via Cloud Tablet• No Compromise. The central authority

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• No scope of election being disturbed.• No chance of discontinuation of any

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booth.• Fully transparency in end to end

process.• Enable the central election commission

department to see each activity live whenever needed.

pitome’s cloud based surveillance and monitoring systems is easy to Euse, self-managed which don’t

required any dedicated manpower to use and operate. Just plug in the tablet and using available internet connectivity (2G/3G/4G or Wi-Fi) you are on secured mode of Go Live. Our tiny “Epitome Encoder” app is auto start, auto connect and redundant app which start sending stream on booting of the device. Back hand services will contentiously monitor the status and in any case of internet disconnect it will start offline recording and in case of reconnect of internet it will auto start sending live stream.

Epitome’s cloud based surveillance technology eliminate the use of dedicated system(s) or a dedicated server(s) or video recording system for any business. This is the most reliable system for online monitoring from anywhere to everywhere. Cloud based surveillance system allows the user to use an easy server process and be Online in the cloud in no time, and with the security & safeguards.

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ENTERPRISE SOFTWARE OPTIONS:LEGACY VS. CLOUD PART 2

By Jayesh ShahPromoter, Prism Cybersoft Private Limited

TECH-SPEAKTECH-SPEAK

With SaaS, a provider licenses an application to

customers either as a service on

demand, through a subscription, in a “pay-as-you-go”

model, or (increasingly) at no

charge. This approach to

application delivery is part of the utility computing model where all of the

technology is in the "cloud" accessed

over the Internet as a service.


n the last article we had discussed about Enterprise vs Saas a brief from Ithe last issue. Similarly, the business

you run is not the same as it was when you started it. There are lot of reasons to fix your legacy system . The real cost of running such software is the major one among them.

Legacy system also involves lots of updates and changes , Infrastructure maintenance and staff training . Regardless of the chosen approach and technique, software modernization is a complex, labor intensive and risky process. Yet, the results are well-worth the risk .SaaS allows for an economic shift to relatively low-cost subscriptions that include upgrades and maintenance (an operational expenditure).

Customer satisfaction: SAAS plays an important role in customer satisfaction.

By outsourcing the technological preconditions, we’re able to save time and focus on what customers really need. It’s axiomatic that great customer satisfaction drives customer loyalty . Today, all that has changed. Using the resources available in the cloud - virtually unlimited amounts of cheap storage, sophisticated analytics, and machine learning, to name a few - it’s now possible to gain detailed, actionable insights as never before. We can truly know our customers.

How is SaaS different from an ASP?: SaaS evolved from the application service provider (ASP) model. When ASPs sprang up in the 1990s, they offered essentially the same thing SaaS vendors offer today: hosted applications delivered over the Internet. The problem ASPs ran into was that they tried to be all things to all people, and they buckled under the weight of their own infrastructure. In trying to serve the

local area network or personal computer. With SaaS, a provider licenses an application to customers either as a service on demand, through a subscription, in a “pay-as-you-go” model, or (increasingly) at no charge. This approach to application delivery is part of the utility computing model where all of the technology is in the "cloud" accessed over the Internet as a service.

What is Software as a service? :It is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. It is sometimes referred to as "on-demand software", SaaS is typically accessed by users using a thin client via a web browser. Software as a service (SaaS) sometimes referred to as “software on demand,” is software that is deployed over the internet and/or is deployed to run behind a firewall on a

Cloud ClientsWeb Browser,

Mobile app, thin client

SAAS (Application)Emails, Games,Any application

Architecture: The vast majority of SAAS solutions are based on a multitenant architecture. With this model, a single version of the application , with a single configuration (hardware , network, operating system), is used for all customers(“tenants”). To support scalability the application is installed on multiple machines(called horizontal scaling)

Configuration and Customization: SaaS applications similarly support what is traditionally known as application configuration. In other words, like traditional enterprise software, a single customer can alter the set of configuration options that affect its functionality. Each customer may have its own settings (or: parameter values) for the configuration options. The application can be customized to the degree it was designed for based on a set of predefined configuration options.

Fas t Fea tu re De l i ve ry : SaaS applications are often updated more

unique needs of each of their customers, ASPs lost the economies of scale that were necessary for them to provide their services in a cost-effective manner.

TECH-SPEAKTECH-SPEAK


Jayesh Shah holds B.S. and M.S. in Computer Engineering from University of Bridgeport, USA. He has more than 25 years of experience in field of IT.

He promoted Prism in 1996 and as its MD and CEO provides Vision, Direction and also takes care of Strategic Affairs, Marketing and Commercials.

Prism has recently been awarded by STPI & CeBIT INDIA for Best IT Exhibitor of ‘Make in India’ Pavilion at CeBIT India 2014.

majority of cases, Saas clients are required to pay a monthly or annual subscription fee to the cloud services provider to continue using a particular software service. Saas delivery is the backbone of an emerging software model that eliminates the need for client organizations to incur the expense of purchasing or maintaining expensive application servers and software

Advantages of SaaS: The benefit is that user needn’t install anything. User doesn’t have to plug in a CD or download a file and then run an installation routine. User doesn’t have to hassle with configurations to ensure that it works properly on your computer. The same goes for upgrades. The end-user will never have to spend time upgrading the software application because the author of the software application does it for you. This also extends to other mundane chores that we all forget to do like making back-ups. User doesn’t have to because the software author is doing it for you.

Dynamics: Saas delivery uses a one-to-many model for software delivery, where a single Saas provider supplies software

services to multiple users. Under the Software Service Delivery model, clients are assessed fees based on the types and amount of services used, similar to the way a consumer of electric or water utility services is billed for usage. One key limitation of the Saas delivery model is that it is focused on delivering software applications that have the potential to reach a large market. In order to be profitable, Saas applications have to attract a large customer base, to offset the expenses associated with being a Saas provider in the cloud. Likewise, proprietary mission critical applications are unlikely candidates for the Saas delivery model.

frequently than traditional software weekly or monthly basis. The application is hosted centrally, so an update is decided and executed by the provider, not by customers. The application only has a single configuration, making development testing faster. The application vendor does not have to expend resources updating and maintaining backdated versions of the software, because there is only a single version.

Open Integration Protocol: Because SaaS applications cannot access a company's internal systems (databases or internal services), they predominantly offer integration protocols[25] and application programming interfaces (APIs) that operate over a wide area network. The ubiquity of SaaS applications which are lightweight t hat combine data, presentation and functionality from multiple services, creating a compound service.

SAAS Delivery Model: Saas delivery refers to a method of providing hosted software applications to clients in a cloud computing environment. In the

Key findings:

ASIA-PACIFIC MARKETSMONTHLY HIGHLIGHTS

AND INSIGHTS

• M&A Activity By Country, Sector

• Initial Public Offerings

• Private Equity Investments And Buyouts

• Venture Capital Investments

• Market Attributes: Index Dashboard

Contact Information: If you have any questions relating to the content featured in the publication, please contact [email protected]

Disclaimer: Copyright © 2019 by S&P Global Market Intelligence, a division of S&P Global Inc. All rights reserved.

These materials have been prepared solely for information purposes based upon information generally available to the public and from sources believed to be reliable. No content (including index data, ratings, credit-related analyses and data, research, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of S&P Global Market Intelligence or its affiliates (collectively, S&P Global). The Content shall not be used for any unlawful or unauthorized purposes. S&P Global and any third-party providers, (collectively S&P Global Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Global Parties are not responsible for any errors or omissions, regardless of the cause, for the results obtained from the use of the Content. THE CONTENT IS PROVIDED ON “AS IS” BASIS. S&P GLOBAL PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Global Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.

S&P Global Market Intelligence’s opinions, quotes and credit-related and other analyses are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P Global Market Intelligence assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P Global Market Intelligence does not act as a fiduciary or an investment advisor except where registered as such. S&P Global keeps certain activities of its divisions separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain divisions of S&P Global may have information that is not available to other S&P Global divisions. S&P Global has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

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S&P Global may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P Global reserves the right to disseminate its opinions and analyses. S&P Global's public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription), and may be distributed through other means, including via S&P Global publications and third-party redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees.


GLOBAL INSIGHTSGLOBAL INSIGHTS


M&A ACTIVITY IN ASIA PACIFIC: SELECTED COUNTRIESIn January 2019, M&A activity reached US$49.98bn across 836 deals. China had the most active M&A market, with 329 deals totaling US$19.9bn. In terms of YoY growth relative to the same period last year, aggregate deal value and deal volume decreased 10% and 20% respectively.

Source: S&P Global Market Intelligence as of February 1, 2019. Figures are based on M&A announcement dates. Includes both closed and

pending transactions as well as those without transaction values. Charts are provided for illustrative purposes.

Key Threshold (No. of Deals)

0 - 9

>9 - 66

>66 - 132

>132 - 197

>197 - 263

>263 - 329No. of Deals and Value YTD Activity (19’ vs. 18’)

No. of Deals and Value by Country (January’19)Country No. of Deals Value of Deals ($USDmm)

ChinaAustraliaJapanIndiaSouth KoreaMalaysiaHong KongSingaporeVietnamThailandNew ZealandIndonesiaTaiwanPhilippines

329631027668353242352391093

19,882.104,883.305,272.003,801.708,546.60280.20

2,094.302,641.00139.50

1,309.909.80

807.70215.0095.00


M&A ACTIVITY IN ASIA PACIFIC: SELECTED SECTORS

Source: S&P Global Market Intelligence as of February 1, 2019. Figures are based on M&A announcement dates. Includes closed and pending transactions as well as those without transaction values. NSD - No Sector Disclosed. Tables are provided for illustrative purposes. Data sorted by no. of deals and by

transaction value from highest (darkest green) to lowest (lightest green).

Overall deal activity in Asia Pacific has decreased YoY by 20% with utilities, energy and real estate showing the steepest declines. Overall deal value has also decreased YoY by 10%. Active sectors showing deal value increases are led by industrials and healthcare.

No. of Deals YTD Activity (19’ vs. 18’) Value of Deals (USDmm) YTD Activity (19’ vs. 18’)

No. of deals

'19 YTD '18 YTD YoY Growth

Industrials

IT

Discretionary

Materials

Real Estate

Healthcare

Staples

Teleco. Services

Financials

Utilities

Energy

NSD

Total

142

118

102

141

81

65

49

37

40

35

14

12

836

Jan 1, 2019 -31-Jan-19

Jan 1, 2018 -Jan 31, 2018

YoY ComparisonThrough

31-Jan-19

Sector

156

128

134

88

105

147

57

57

52

55

34

27

1040

-9%

-8%

-24%

-8%

-38%

-14%

-4%

-35%

-23%

-36%

-59%

-56%

-20%

No. of deals

'19 YTD '18 YTD YoY Growth

Industrials

Real Estate

Healthcare

Financials

Discretionary

IT

Energy

Materials

Teleco. Services

Staples

Utilities

NSD

Total

Jan 1, 2018 -Dec 31, 2018

Jan 1, 2018 -Jan 31, 2018


31-Jan-19

Sector

5,631

11,172

11,096

3,307

4,727

2,995

2,284

1,857

6,109

2,292

537

3,751

55,759

90%

84%

18%

14%

130%

-41%

-16%

3%

-80%

-71%

-33%

-4%

-10%

10,701

6,627

6,083

8,645

3,957

3,086

2,706

2,204

2,122

1,796

1,535

516

49,978

19 YTD 18 YTD YoY Growth 19 YTD 18 YTD YoY Growth

Jan 1, 2019 -31-Jan-19

Jan 1, 2018 -31-Jan-18


31-Jan-19

Jan 1, 2019 -31-Jan-19

Jan 1, 2018 -31-Jan-18


31-Jan-19

No. of deals Value of Deals ($USDmm)

China -2%Japan 102 119 -14% 5,272 5,285India 76 133 -43% 3,802 -68%South Korea 68 87 -22% 8,547Australia 63 113 -44% 4,883 3,933Singapore 42 32 2,641 2,184Malaysia 35 54 -35% 280 810 -65%Vietnam 35 52 -33% 140 353 -60%Hong Kong 32 48 -33% 2,094 2,758Thailand 23 16 1,310 944Indonesia 10 9 808 1,951 -59%New Zealand 9 18 -50% 10 154 -94%Taiwan 9 16 -44% 215 312Philippines 3 8 -63% 95 392 -76%Total 836 1,040 -20% 49,978 55,759 -10%

329 335 19,882 15,831 26%0%

11,8628,989 -5%

24%31% 21%

-24%44% 39%11%

-31%


INITIAL PUBLIC OFFERINGS BY COUNTRY

Source: S&P Global Market Intelligence as of February 1, 2019. Figures are based on public offerings offer date. Includes all closed transactions.

Tables are provided for illustrative purposes.

Key Threshold (No. of IPOs)

0

>0 - 4

>4 - 8

>8 - 11

>11 - 15

>15 - 19

In January 2019, over US$1.72bn in proceeds were raised across 43 IPOs in the Asia Pacific region. China led the region by raising US$1.33bn, and was followed by India. In terms of YoY growth, China IPO value declined 59%. Indonesia’s IPO market was relatively active YoY.

No. of IPOs and Value by Country (January’19)Country No. of Deals Value of Deals ($USDmm)

ChinaIndiaIndonesiaHong KongSouth KoreaMalaysiaVietnamSingaporeThailandAustraliaJapanNew ZealandPhilippinesTaiwan

194433332200000

1,332.7012.2063.8055.5048.3017.9014.5025.70150.600.000.000.000.000.00

No. of IPOs and Value YTD Activity (19’ vs. 18’)



0

>0 - 5

>5 - 10

>10 - 14

>14 - 19

>19 - 24

Source: S&P Global Market Intelligence as of February 1, 2019. Figures are based on M&A announcement dates. Includes both closed and

pending transactions as well as those without transaction values. Tables are provided for illustrative purposes.

In January 2019, the private equity market saw 80 deals totaling US$3.32bn in deal value, with China and South Korea having the largest deal values. Growth in the number of deals throughout the region declined by 52% YoY. Likewise aggregate deal value declined 62% YoY.

No. of Deals and Value by Country (January’19)Country No. of Deals Value of Deals ($USDmm)

IndiaChinaJapanSouth KoreaVietnamAustraliaMalaysiaSingaporeIndonesiaHong KongNew ZealandPhilippinesTaiwanThailand

241612125433100000

296.201,719.50

20.50850.00108.0077.401.60

200.7050.000.000.000.000.000.00

No. of Deals and Value YTD Activity (19’ vs. 18’)

PRIVATE EQUITY INVESTMENTS & BUYOUTS: SELECTED COUNTRIES


Jan 1, 2019 -31-Jan-19

Jan 1, 2018 -31-Jan-18


31-Jan-19

Jan 1, 2019 -31-Jan-19

Jan 1, 2018 -31-Jan-18


31-Jan-19

No. of deals Value of IPOs ($USDmm)

China 1 -17% -59%India 4 -69% 12 207 -94%Indonesia 4 1 64 3Hong Kong 3 -81% 56 260 -79%South Korea 3 3 0% 48 52 -7%Malaysia 3 2 50% 18 61 -71%Vietnam 3 6 -50% 14 440 -97%Singapore 2 4 -50% 26 53 -51%Thailand 2 2 0% 151 210 -28%Australia - 8 -100% - 41 -100%Japan - - NA - - NANew Zealand - - NA - - NAPhilippines - - NA - - NATaiwan - 1 -100% - 13 -100%Total 43 79 -46% 1,721 4,578 -62%

9 23 1,333 3,23813

300% 1944%16


Jan 1, 2019 -31-Jan-19

Jan 1, 2018 -31-Jan-18


31-Jan-19

Jan 1, 2019 -31-Jan-19

Jan 1, 2018 -31-Jan-18


31-Jan-19


India 27 -11% 296 1,046 -72%China -80% -64%Japan 24 -50% 20 141 -85%South Korea 12 11 9% 850 277Vietnam 5 2 108 54Australia 4 14 -71% 77 1,186 -93%Malaysia 3 1 2 181 -99%Singapore 3 4 -25% 201 53Indonesia 1 - NA 50 - NAHong Kong - 2 -100% - 905 -100%New Zealand - - NA - - NAPhilippines - - NA - - NATaiwan - - NA - - NAThailand - - NA - - NATotal 80 167 -52% 3,324 8,666 -62%

2416 82 1,720 4,82512

207%150% 100%

200%282%


VENTURE CAPITAL INVESTMENTS: NON BUYOUTS BY COUNTRYIn January 2019, the venture capital investments reached US$3.83bn across 153 deals, with India being the most active market in terms of the total deal count. China led the region in terms of deal value, generating US$1.93bn. Overall deal count and deal value growth declined 30% and 54% respectively.


0

>1 - 9

>9 - 19

>19 - 28

>28 - 38

>38 - 47

Source: S&P Global Market Intelligence as of February 1, 2019. Figures are based on transaction announcement dates. Includes both closed and pending

transactions as well as those without transaction values. Non-buyouts will include all features except for leverage buyouts ( LBO), management buyout

or secondary LBO. Tables are provided for illustrative purposes.

No. of Deals and Value by Country (January’19)

No. of Deals and Value YTD Activity (19’ vs. 18’)

Country No. of Deals Value of Deals ($USDmm)IndiaJapanChinaSingaporeSouth KoreaVietnamIndonesiaHong KongAustraliaMalaysiaNew ZealandThailandPhilippinesTaiwan

472819179987521100

841.8041.50

1,926.3011.20677.00106.5088.1060.6070.601.601.000.000.000.00


MARKET ATTRIBUTES: INDEX DASHBOARD

•Asia BMI gained 6% in U.S. dollar terms after global markets picked up gains at month end thanks to a dovish surprise from the U.S. Federal Reserve. Every sector contributed positively as did every country except for India.

• Chinese equities in particular had a strong month, as the S&P China 500 gained 7% on the heels of continued trade negotiations with the U.S. and despite continued fears about slowdowns in both global and domestic growth. Hong Kong equities also prospered in January, gaining 8%, while Korea took the top spot with 9%.

• Riding the coat tails of a commodity price boom and a global recovery in the technology and communications sectors, Australia’s S&P/ASX 200 index made its best start to a year since 2013, gaining 3.9% in January.

• Indian equities lagged their Asian counterparts; the S&P BSE SENSEX spent most of January in the red, but finished the month just positive in local terms with a total return of 0.5%.

• Volatility declined significantly amidst the bullish sentiment, with declines across the board in our volatility indicators in January.

• The S&P GSCI gained 9% in January, driven primarily by a jump in oil prices in response to production cuts from OPEC.

• Interest rates declined, leading most of our regional fixed income indices to gains on the month.

January was a banner month for most Asian equities. The S&P Pan

Summary

Source: S&P Dow Jones Indices LLC and/or its affiliates. Data as of January 31, 2019. Index performance based on total return. Numbers in brackets are closing price levels for the corresponding indices. Returns for single country indices and single country strategies are in local currency, otherwise USD. ~Sector contributions to the S&P Pan Asia BMI are calculated over the prior month. Charts and graphs are provided for illustrative purposes. Past performance is no guarantee of future results. For more information, please visit our website at www.spdji.com


Jan 1, 2019 -31-Jan-19

Jan 1, 2018 -31-Jan-18


31-Jan-19

Jan 1, 2019 -31-Jan-19

Jan 1, 2018 -31-Jan-18


31-Jan-19


India 12% -69%Japan -24% 42 222 -81%China -82% -62%Singapore 17 6 183% 11 24 -54%South Korea 9 9 0% 677 54 1145%Vietnam 9 3 200% 107 54 97%Indonesia 8 2 300% 88 0Hong Kong 7 1 61 5 1112%Australia 5 6 -17% 71 40 75%Malaysia 2 4 -50% 2 9 -83%New Zealand 1 1 0% 1 6 -84%Thailand 1 1 0% - 0 -100%Philippines - - NA - - NATaiwan - 1 -100% - 3 -100%Total 153 219 -30% 3,826 8,287 -54%

47 42 842 2,73428 3719 106 1,926 5,134

29169%600%

S&P Pan Asia BMI(6.32%)

-1.00% 0.00% 1.00% 2.00% 3.00%

Japan

China

South Korea

Australia

Hong Kong

Taiwan

Thailand

Singapore

Indonesia

Philippines

Malasiya

New Zeland

Pakistan

India

S&P Pan Asia BMI Country ContributionJanuary 2019

2.35%

1.52%

0.77%

0.76%

0.40%

0.18%

0.15%

0.15%

0.13%

0.06%

0.03%

0.03%

0.01%

-0.21%

Segment Particulars Due Date

FORUM VIEWS - MARCH 2019

Kamlesh P. Mehta B.Com. FCA, DISA (Post qualification course in information system audit from ICAI) is a practicing Chartered Accountant by profession having an experience of 24 years in the field of capital market compliance consultancy, depository services audit, management consultancy, system audit and Commodity market compliance consultancy.

He is a Proprietor of CA firm M/s. KAMLESH P. MEHTA ASSOCIATES & Partner of MEHTA SANGHVI & ASSOCIATES located at Borivali, Mumbai.

He along with his associated concerns specializes in Audit and Assurance Services of various compliance areas related to Capital Market Operations and system audits of broking industry.

He is also providing compliance calendar to BSE brokers forum and ANMI regularly and same is published in their journal. Recently he and his team had drafted compliance manual for commodity brokers published by BSE brokers forum.

He is a regular speaker of the various seminars for broking and DP compliances organized by WIRC (Western India Regional Council of ICAI) and study circle group.

COMPLIANCE REQUIREMENT FORTHE MONTH OF MARCH - 2019

Compiled by CA Kamlesh P. Mehta(B.Com, FCA, DISA)M/s. Kamlesh P. Mehta Associates

COMPLIANCE COMPLIANCE CALENDAR

30

BSE

All Exchanges

PMS

All Exchanges

NSE

Income Tax

Stamp Duty

Depositary

Income Tax

All stock exchanges

BSE

All Equity & Commodity

Exchanges

All Stock Exchanges

BSE- Uploading of margin funding file for the month of February 2019

Contingency Drill / Mock Trading Session (Subject to circular from respective exchanges)

PMS- Uploading of activity report on SEBI Portal

Uploading clients’ fund balance and securities balances by the stock brokers on stock

exchanges system as per SEBI circular of Enhanced supervision.

NSE- Uploading of margin funding file for the month of February 2019

TDS Payment for the Month of February 2019 for Corporate and Individual

Payment of Stamp duty: - Security and Commodity Exchanges

Submission of Investor Grievances Report • CDSL & • NSDL

Advance payment of Income Tax

Migration of sub-broker to Authorized person

No. of STR filed with FIU-IND for the month of February, 2019. (Including NIL STR)

Uploading of Clients’ Funds, collateral and other details lying with the member broker

within 3 trading days of subsequent week

Applicability of uploading of day-wise Holding statement in the specified standard format

to exchange within 4 trading days of subsequent week

1/3/2019 to

7/3/2019

2/3/2019

5/3/2019

7/3/2019

7/3/2019

7/3/2019

10/3/2019

10/3/2019

15/03/2019

31/03/2019

Before

31/03/2019

Weekly Basis

Weekly Basis

31

Disclaimer :The newsletter is not in the nature of alegal opinion or advice. Copyright reserved.

Courtesy: Finsec Law Advisors A financial sector law firm which provides regulatory advice and assistance focusingon the securities, investments and banking industry. www.finseclaw.com

Disclosure: Finsec Law Advisors is representing Kirloskar Chillers Private Limited.


REGULATORY PUREGULATORY PULSE

SEBI amends the PFUTP RegulationsSEBI has recently amended the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (PFUTP Regulations) which has come into effect from February 01, 2019. The amended PFUTP Regulations incorporates several recommendations laid down in the Committee on Fair Market Conduct Report, published on August 08, 2018 (Report). One of the changes in the PFUTP Regulation includes expansion of the definition of “dealing in securities” The scope of “dealing in securities” has been broaden to include acts which are knowingly designed to influence trading decisions of investors or any activities undertaken to assist such acts. Further, for greater clarity, the PFUTP Regulations has also been amended to modify the list

of activities that can be deemed to be manipulative, fraudulent or an unfair trade practice under Regulation 4(2). For instance, with respect to “Dealing in counterfeit securities”, the proviso added to Regulation 4(2)(h) will now safeguard innocent investors who may deal in counterfeit securities or fraudulently issued securities in a bonafide manner. Such acts of purchase/sale cannot be equated to manipulative, fraudulent or unfair trade practices. The PFUTP Regulations have also been amended to incorporate the word ‘knowingly ’ in Regulation 2(1)(b), 4(2)(a), 4(2)(f), 4(2)(r), and 4(2)(s). As recommended in the Report, the inclusion of the word “knowingly” will now allow the possibility of excluding inadvertent or accidental trades of innocent investors from being

classified as manipulative, fraudulent or an unfair trade practice.

The amendments have broaden the scope of individuals and entities that will now be covered under the provisions of the PFUTP Regulations and at the same time, provisions have been inserted into the PFUTP Regulations to protect the bonafide actions of innocent investors which should not be equated to manipulative and fraudulent practices. However, the interpretation of the word ‘knowingly’made by the courts will also determine the fate of the securities fraud jurisprudence in India. Overall, the amendments are a move in the right direction for the development and promotion of the securities market.

Monitoring the use of AI and ML technologies by market participantsOn January 04, SEBI through a circular mandated quarterly reporting by stock brokers and depository participants who use applications and systems based on artificial intelligence (AI) and machine learning (ML) technologies with effect from quarter ended March 2019 to stock exchanges and depositories. The concerned stock exchanges and depositories are thereafter required to share the said information with SEBI.

The objective of this reporting regime is to inter alia i) collate information on AI and ML technologies used in the financial markets, ii) confirm whether the AI and ML technologies used by the market participants will be compliance with SEBI’s cyber security framework and iii) to ascertain the safeguards that have been implemented to prevent data breach and system failures with respect to AI and

ML technology based applications and systems. Further, on January 31, SEBI through another Circular expanded the scope of AI and ML technologies to include those technologies that are related to compliance activities and Fin-tech and Reg-tech activities of market infrastructure institutions such as stock exchanges, clearing corporations and depositories.

With the passing of time, more and more financial intermediaries are adopting the use of AI and MI basedapplications and systems to provide inter alia investment advice and trading services to their clients. However, as information on the functioning of such applications and systems are currently opaque, it is the need of the hour for SEBI to acquire a deeper understanding of the latest technologies in the field of AI and ML. The

possibility of system crashes and investors being misled through the use of such application and systems have not been studied/analysed sufficiently by SEBI. The aforesaid circulars will now allow SEBI to collect the necessary information required to frame appropriate policies and lawsin the future,to regulate the use of AI and ML technologies by market participants to protect the interest of the investors. Currently, the information sought by SEBI under the aforementioned circulars also does not impinge upon the intellectual property rights of concerned market participants. Further, for the development of the securities market, SEBI in the futuremay also explore the possibility of mandating other market participants, including investment advisors to comply with the aforesaid circulars.


REGULATORY PUREGULATORY PULSE

SEBI amends the Insider Trading RegulationsIn the light of various incidents involving issues related with insider trading and fraudulent trade practises in the securities market and increasing role of technology, SEBI had constituted a committee on Fair Market Conduct under the Cha i rmansh ip o f Sh r i T.K . Viswanathan. In August 2018, the Committee submitted its report suggesting several amendments to inter alia the SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations).

Acting upon the recommendations of the Committee, SEBI has now notified several amendments to the PIT Regulations which will come into effect from April 01, 2019. Some of these are discussed below:

Communication of UPSIRegulation 3 prohibits communication, allowing access to and procurement of unpublished price sensitive information (UPSI). However, communication done for ‘legitimate purpose’ is permitted. The new amendment has provided an indicative meaning to the term and provides that information shared in the ordinary course of business with customers, lenders, auditors, etc. will be covered under the term legitimate purpose. Besides this, the listed entities are also required to make a policy on the determination of legitimate purpose.

Trading while in possession of UPSIRegulation 4 prohibits an insider from trading in securities while in possession of UPSI. The new amendment has added an explanation to this clause which states that all trades undertaken while in possession of UPSI will be presumed to be ‘motivated’ by UPSI. Earlier, under the 1992 PIT Regulations, insider trading ‘on the basis of’ UPSI was prohibited (till the provision was amended in 2002). It seems that by way of this explanation, the intent behind the earlier provision has been brought back.

Besides this, certain additional defences have been added to Regulation 4 to bring consistency with international laws and incorporate various clauses provided

under the guidance note which was issued in 2016 by SEBI. These include: extension on the exemption of inter setransfer to all ‘insiders’, the exercise of stock options, and transactions carried pursuant to statutory or regulatory obligations.

Code of ConductRegulation 9 provides that a code of conduct is to be formed by all persons who deal with UPSI. This provision has now been amended and it is now provided that listed entities, intermediaries and f iduc ia r ies ( inc lud ing aud i to rs , accountancy f i rms , l aw f i rms , consultants, banks, etc.) are required to separately form such code. In fact, listed entities which are also SEBI-registered intermediaries are required to form two separate codes.

Designated PersonsDesignated Persons are such persons who are privy to UPSI on the basis of their role and function and are designated as such. An indicative list of designated persons has been provided and it will now include: (i) promoters of listed entity, (ii) employees of material subsidiaries of listed entity, (iii) designated persons, CEO, employees up to two-levels below CEO, and support staff (such as, IT and secretarial staff) of - listed entity, intermediaries and fiduciaries.

Besides this, all designated persons will now be required to disclose their material financial relationships which refers to receipt of certain money by way of loan / gift, during immediately preceding 12 months which is at least 25% of the payer’s annual income. However, all transactions done on arms’ length basis will not be considered as material financial relationships. Although PIT Regulations does not define “arms’ length relationship”, however, in accordance with Regulation 2(2) the meaning of the term can be attributed from Section 188(1) of the Companies Act, 2013, which states that transaction between two related parties that is conducted as if they were unrelated, so that there is no conflict of interest, is an arm’s length transaction.

Other major changes for listed entitiesInformation forming a part of the material disclosure list under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 will not be considered as deemed UPSI anymore. This change is made with a view to differentiate between ‘material’ and price sensitive information, as every material information such as, vesting of ESOPs, may not be price sensitive.

Besides the above stated amendments, listed entities are now required to mandatorily formulate a whistle blower policy. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 already provides for maintaining a mechanism for whistle blowers. All such policies will now have to be modified to include whistle blowing on matters connected with UPSI.

Similarly, the listed entities are now required to formulate an internal control system wherein a digital database containing details of designated persons, UPSI, persons having access to various UPSI, etc. is maintained. Further, a confidentiality agreement is to be executed with all such persons with whom the UPSI is shared.

Additionally, the listed entities are also required to form additional policies on: (i) how and when people will be brought ‘inside’ on sensitive matters, (ii) the manner in which any leakage of UPSI will be dealt with by the listed entity.

Our ViewIn our view, while many of the changes bring subtleties and improvements in terms of the distinction between listed entities and intermediaries. However, the amendments can also be seen as an outsourcing of enforcement by SEBI to listed companies and intermediaries. This is troublesome because it will increase cost of compliance and also cause a large chilling effect on genuine corporate communication for the fear that some of it may be mis-used. This would have an adverse effect on the effectiveness of management.


CIRCULARSCIRCULARS

SEBI Cyber Security and Cyber Resilience framework for Mutual Funds / Asset Management Companies (AMCs) -->> MF/AMCs to have robust cyber security and cyber resilience framework for services and perform critical functions .Hence based on recommendation of SEBI’s High Powered Steering Committee - Cyber Security and given SEBI circular, framework for MFs / AMCs to comply with same effective April 1, 2019. ~~Framework includes measures, tools and processes to prevent cyber-attacks and improve cyber resilience,which gives an ability to prepare and respond to a cyber-attack and to continue operation during, and recover from, a cyber-attack .Further providing provision for compliance given regarding Governance, Identification, Protection, Physical Security, Network Security Management , Security of Data, Hardening of Hardware and Software, Application Security and Testing , Patch Management, Disposal of systems and storage devices and Vulnerability Assessment and Penetration Testing (VAPT), Monitoring and Detection- Entities should establish appropriate security monitoring, Response and Recovery, Sharing of Information, Training and Education, Systems managed by Vendors or Service Providers and Periodic Audit.

SEBI Portfolio Concentration Norms for Equity Exchange Traded Funds (ETFs) and Index Funds -->>Norms given to manage risk related to portfolio concentration in ETFs and Index Funds: Index to have at least 10 stocks and a single stock to have max 35% weight and 25% weight and sectoral and for other indices respectively.~~Additionally weight of top 3 stocks to be maximum 65%.~~Also trading frequency of an individual stock should be greater than or equal to 80% with an average impact cost of 1% or less over previous six months. ~~Any ETF/ Index Fund tracking equity indices that seeks to replicate a particular Index to ensure compliance with the given norms at the end of every calendar quarter.~~Updated constituents of Indices (for all its ETFs/ Index Funds) should be available on the issuer website at all times.~~Norms applicable to all existing Equity ETFs/ Index Funds in the market within a period of three months and for funds where SEBI has issued final observations and funds yet to be launched, need to ensure compliance prior to issue launch

SEBI Committees at Market Infrastructure Institutions (MIIs) -->> SEBI held a meeting on June 21, 2018 and decided to rationalize the constitution of existing regulatory committees at MIIs considering that the scope of work of some of the committees at MIIs were inter-related and overlapping. This is to ensure an effective oversight of functioning of such entities by giving more powers to public interest directors (PID).~~Considering the committees at MIIs have been rationalised into aforementioned seven committees namely, 3 functional i.e. Member Selection, Investor Grievance Redressal Committee (IGRC), Nomination & Remuneration and 4 oversight namely, Standing Committee on Technology, Advisory, Regulatory Oversight, Risk Management, based on consultation with MIIs . Functions and detailed composition of each committee shall be as provided at Annexure A.~~SEBI has also detailed functions of these seven committees, along with the detailed composition of each committee.~~

The objective of such meetings will include reviewing the status of compliance with SEBI directions, reviewing the functioning of regulatory departments including the adequacy of resources dedicated to regulatory functions.~~Further, PIDs will identify important issues which may involve conflict of interest for the MII or may have significant impact on the market and report the same to the regulator from time to time.~~Regarding independent external persons on these committees, these need to be persons of integrity, having a sound reputation and not having any conflict of interest. They shall be specialists in the field of work assigned to the committee, but cannot be associated in any manner with the relevant MII and its members.

SEBI/BSE/CDSL Reporting for Artificial Intelligence (AI) and Machine Learning (ML) applications and systems offered and used by Market Infrastructure Institutions (MIIs) -->>SEBI is conducting a survey and creating an inventory of the AI/ML in Indian Financial Market and ensure preparedness for any AI / ML policies that may arise in the future.~~Scope of survey covers any application, operation, activities, compliance operation where AI / ML is used is included, further it also covers Fin-Tech and Reg-Tech initiatives undertaken by MIIs that involves AI and ML~~ Technologies that are considered to be categorized as AI and ML technologies in the scope is mentioned in circular.~~All MIIs shall fill in the AI / ML reporting form in respect of the AI or ML based applications/systems offered and submitted at link provided by SEBI on a quarterly basis within 15 days of the expiry of the quarter, with effect from quarter ending March 31, 2019..

SEBI SEBI PIT Regulations, 2015 (Last amended on January 21, 2019) -->>Board has made the incremental amendments to PIT Regulations vide circular Dt 21-Jan-2019 and place the same in framework for prohibition of insider trading in securities and to strengthen the legal framework which will be applicable from April 1, 2019.The incremental amendment is as follows.~~New clause is added regarding Provision under which promoter group would be adhered is inserted and further Regulation regarding Initial disclosure and continual disclosure will be applicable to member of the promoter group as well.

SEBI/BSE/NSE Alignment of Trading Lot and Delivery Lot size-->> Defining the term “trading lot size” and “delivery lot size”.Further to place an adequate mechanism to ensure participant is not put to disadvantageous position on account of keeping differential “trading lot size” and “delivery lot size” of some commodity derivatives contracts by having a uniform trading and delivery lot size for the commodity derivatives contract and thus does not constitute a barrier to delivery or otherwise prevent the physical delivery of the commodity.~~Further with respect to existing contracts with different trading lot and delivery lot size, exchanges to submit their proposal for alignment/exemption to SEBI within one month from January 23, 2019.

SEBI SEBI (FPI) Regulations, 2014 [Last amended on December 31, 2018] -->> The SEBI (FPI) Regulations, 2014 shall come into force on the date of their publication in the Official. Gazette. https://www.bseindia.com/static/fpi/Regulatory FrameworkandFPINorms.aspx

SEBI/BSE Guidelines for public issue of units of InvITs /REITs- Amendments -->> Providing amendments Regarding extending the bidding period disclosed in the offer document in case of force majeure, banking strike or similar circumstances.~~Period of announcement of the floor price or price band by investment manager on behalf of the InvITs/REITs is being revised to two working days instead of earlier five working days.~~Provision regarding Acceptance of Payment and submission of Bid-cum-application form,Role of intermediaries, Stock Exchanges and Blocking of funds on account of revision of Bid under“Bidding process”.~~Submission of compliance certificate by merchant banker in respect of news reports appearing for the period between the date of filing the draft offer document with the Board and the date of closure of the issue.

SEBI Revised Monthly Cumulative Report (MCR) -->>MF scheme is permitted to invest certain percentage of its AUM in schemes of same MF or other MFs. In order to avoid such investments being considered by both the investee and investing scheme, it is clarified that the investing of its AUM in schemes of same MF scheme to be excluded while reporting the data on AUM in the MCR. Further AMCs shall submit the MCR to SEBI in the revised format by the 3rd working day of each month w.e.f April 2019

SEBI Clarifications in SEBI (DPs) Regulations, 2018 -->> In order to bring clarity regarding applicability of Regulation 24 (9) and Regulation 24 (10) of SEBI (D&P) Regulations 2018,CC will not be considered as a DP.~~Further in addition to Directors, employees of the entities mentioned in Regulation 24 (10) will also not be considered as DP or their associate.

SEBI-PRESS Grant of Qualifying Central Counterparty (QCCP) status to CCPs operating in GIFT IFSC -->> India International Clearing CorporationRELEASE (IFSC) Limited and NSE IFSC Clearing Corporation Limited are granted the status of QCCP as these CC are regulated by SEBI under SEBI Act

1992, SCRA 1956 and are also subjected, on an on-going basis, to rules/regulations that are consistent with Principles for Financial Market Infrastructures (PFMI) issued by the Committee on Committee on Payments and Market Infrastructures - CPMI and IOSCO.

ANALYZING CIRCULARS (06 JANUARY TO 02 FEBRUARY 2019)

CIRCULARSCIRCULARS


Regulator Important Circular's Title For The Period

SEBI SEBI (PIT) Regulations, 2015 (Last amended on December 31, 2018) -->> Board has incorporated amendments made to PIT Regulations vide circular dt 31st Dec 2018 and place the same in framework for PIT in securities and to strengthen the legal framework which will be applicable from April 1, 2019 and the major highlights of amendments made are as follows. Providing definition of financially literate and included a new clause relating to inclusion of unlisted company under proposed to be listed. Further BOD make a policy for determination of “legitimate purposes” as a part of “Codes of Fair Disclosure and Conduct” and further elaborating the term Explanation under sub-regulation2A and including sub regulation dealing with terms “insider in case of legitimate purpose compliance with PIT regulations. New regulation regarding maintenance of digital database providing list of person with whom information is shared along with the PAN or any other identifier authorized by law. New provision inserted relating to Trading when in possession of UPSI regarding non obtaining of UPSI, Reporting of Off market trades, Transaction carried through block deal window mechanism.~~Modification of provision of Trading Plan by adding the clause regarding non requirement of pre clearance of trades .~~Specified modification in regulation relating to Code of conduct~~Explanation regarding Listed intermediaries to formulate a code of conduct to regulate, monitor and report trading by their designated persons is added .Addition of New regulation “9A” under “Institutional Mechanism for PIT.”~~ Insertion of new clause under Minimum Standards for Code of Conduct to Regulate, Monitor and Report Trading by Insiders regarding disclosure of Names, PAN and other identifier details of persons with whom designated person(s) shares a material financial relationship.~~ Introduction of new clause regarding awareness of the duties and responsibilities attached to the receipt of Inside Information, and the liability that attaches to misuse or unwarranted use of such information.”~~ Introduction of New schedule regarding “Minimum Standards for Code of Conduct for Intermediaries and Fiduciaries to Regulate, Monitor and Report Trading by Designated Persons”.

SEBI SEBI (PIT) (Amendment) Regulations, 2019 - Dated January 21, 2019 -->> New clause regarding Provision under which promoter group would be adhered is inserted and further Regulation regarding Initial disclosure and continual disclosure will be applicable to member of the promoter group as well.

SEBI Consultation paper on design of commodity indices and product design for futures on commodity indices -->>Issue of draft norms for commodity indices, proposing a maximum weightage of 20% for a constituent and public comments expected by Jan 16, 2019

• Proposed rules for product design for future on indices to help deepen the improve participation of institutions.~~•Design of Index includes namely 1.Underlying,2.Name, 3.Eligibility criteria, 4.Re-balancing, 5.Weight of constituents, 6.Computation and roll over, 7.Real time dissemination, 8.Dissemination of methodology and 9.Only contracts that are compliant with certain conditions would be allowed to be part of the indices.~~• Product Design of Futures on Index which includes 1.Trading Hours, 2.Size of the Contract, 3.Tenor of the Contract, 4.Available Contracts, 5.Position Limits, 6.Daily Price Limit, 7.Settlement Mechanism, 8.Final Settlement Price, 9.Expiry and 10.Application~~• Exchanges shall adopt risk management framework compliant with the CPMI-IOSCO Principles for Financial Market Infrastructures.~~• Risk Management Framework:1.Margining model and quantum of initial margins. 2.Margining at client level. 3.Real time computation.~~• Exchanges to make necessary disclosures oftop largest participants in index derivatives to the public

SEBI Norms for investment and disclosure by mutual funds in derivatives -->> SEBI has allowed MFs to write call options subject to certain conditions.~~Currently, MF schemes are permitted to undertake transactions in FNO but cannot write options or purchase instruments with embedded written options.Now MF schemes (except Index Funds and ETFs) can write call options only under a covered call strategy for constituent stocks of Nifty 50 and Sensex indices subject to given conditions.~~In Case of sell securities on which a call option is written under a covered call strategy, it must ensure compliance with limits given and encumbrance related provisions.~~In no case, a scheme shall write a call option without holding underlying equity shares. Also call option can only be on shares which are not hedged using other derivative contracts. ~~The exposure on account of the call option written under the covered call strategy shall not be considered as exposure and call option written shall be MTM daily and the respective gains or losses factored into the daily NAV of the respective scheme(s) until the position is closed or expired.~~Schemes intending to use covered call strategy, the risks and benefit of the same, must be disclosed in the SID, and for existing schemes, writing of call options shall be permitted subject to appropriate disclosure and compliance with SEBI MF Regulation.

SEBI/BSE SEBI PIT (Amendment) Regulations, 2018 - Dated December 31, 2018 -->> • The PIT Amendment Regulations come into force on April 1, 2019.~~ Major changes in PIT Amendment Regulations are as follows:- Major concepts related clarification.1. ‘Financially literate’, ‘proposed to be listed’, etc., has been explained. Principle that all material information may not necessarily be price sensitive has also been confirmed through an amendment to the definition of UPSI. ~~2. An important development is step towards clarification of a grey area of concept of ‘legitimate purpose’, as a valid ground for communication of UPSI. Currently, the PIT Regulations prohibit communication of UPSI other than in furtherance of legitimate purpose, performance of duties or discharge of legal obligations.~~ Disclosure During Due Diligence ~~1. Regulation 3(3) of the PIT Regulations, which dealt with disclosure of UPSI for due diligence exercises, has been amended that the board of listed company should approve such disclosure after assessing whether the sharing of UPSI is in the best interests of the company.~~2. Important additions to Insider Trading-which will not be considered as violations.~~3. off-market trades between insiders with the same UPSI (earlier limited only to promoters); (ii) trades executed on the block trade window, between persons who possess the same UPSI; (iii) trades undertaken pursuant to exercise of stock options at a pre-determined exercise price, etc.~~4. An explanation has been added to reiterate that trades by a person in possession of UPSI would be presumed to have been motivated by such information, the inclusion of the varied defences provides multiple channels to rebut such a presumption and will certainly grant relief to employees exercising stock options as well as facilitate large transactions.~~ Code of Conduct and Institutional Compliances~~1. Amendment requires the board of a listed company to ensure that a structured digital database is maintained with details of persons who receive UPSI pursuant to a due diligence exercise. Also, periodic shareholding disclosures have been limited to designated employees only.~~2. The primary change from a compliance standpoint is separate codes for listed companies and intermediaries. Unified model code in PIT Regulations 2015, had difficulties for market participants, such as maintenance of a restricted/grey list by listed companies, and applicability of the trading window to intermediaries, etc. Now, Amendment reverts to the pre-2015 practice of stipulating two separate codes for listed companied and intermediaries and also lists categories for qualification as ‘designated persons’.~~3. Additionally, in what may be because of leaks of UPSI using social media and messaging platforms, the amendment emphasizes on institutional responsibility for implementing and periodically monitoring internal controls and processes to prevent insider trading. Formulation of written policies including whistleblower policy by listed companies and to ensure inquiry in the case of leaks of UPSI. Responsibility on boards / audit committees to ensure compliance and verify the systems/ controls implemented.~~ Introduction through amendment is about designated persons to provide details of persons with whom they share a ‘material financial relationship’, i.e., where one person is a recipient of any kind of payment (other than arms’ length transactions) in the preceding 12 months, equivalent to at least 25% of the payer’s annual income.

SEBI/BSE/ Uniform membership structure across segments -->> SEBI detailing timelines as well as conditions for the implementation of uniformNSE membership structure in equity and equity derivatives segment.~~The membership structure (TM, SCM, PCM) applicable in the equity

derivatives segment would also be implemented in the cash segment from April 1 2019.


CIRCULARSCIRCULARS

SEBI-PRESS SEBI constitutes ‘Research Advisory Committee (RAC)’ -->> SEBI constituted a Research Advisory Committee (RAC) comprisingRELEASE prominent financial economists and market practitioners in order to strengthen its research function and enhance its linkage to policy making.

SEBI-PRESS Public Notice in the matter of PACL Ltd. -->>Details of around 29,000 properties of PACL, as received from the authorities, are alreadyRELEASE available for viewing on www.auctionpacl.com.,and additional 13,863 properties from the authorities in compliance of the aforementioned

order of the Hon’ble Supreme Court. The same have been made available for viewing onhttps://www.sebipaclproperties.com.

SEBI- Informal Guidance in the matter of Jindal Steel & Power Limited -->> As per Reg 78(6) of the ICDR Regulations the entire pre-preferentialINFORMAL allotment shareholding of the allottees, if any, shall be locked-in from the relevant date upto a period of six months from the date of "tradingGUIDANCE approval", if the requirement of trading approval is not applicable to the warrants (if listing not done within 18 months) lock-in period shall

commence from the relevant date and end on the expiry of six months from the date of allotment of the warrants. Hence as requirement of listing is not applicable in given case, lock-in period shall commence from the relevant date and end on the expiry of six months from the date of allotment of the warrants

SEBI- Informal Guidance in the matter of GMR Infrastructure Limited -->> Regulation 70(1) clearly specifies that it shall not apply whereINFORMAL preferential issue of equity shares is made pursuant to option attached to convertible debt instruments sub-section (3) and (4) of section 62 ofGUIDANCE the Companies Act, 2013.Since Preferential issue of OCDs in terms of sub-section 3 of section 62 of Companies Act, 2013 is not covered in the

exemptions provided in Regulation 70(1) of SEBI (ICDR), 2009. the provisions of Chapter VII of SEBI (ICDR) Regulation, 2009 will be applicable to the proposed issue of OCDs by GIL.~~Though Chapter VII would not be applicable at the time of issue of equity shares on preferential basis, but will applicable to proposed issue of OCDs by GIL and thus the tenure of OCDs cannot be beyond 18 months and since OCDs being specified securities need to comply with lock-in requirements as specified under Regulation 78 of ICDR. ~~Provision of Regulation 70(1) (a) of ICDR Regulation would not apply in accordance to conversion of option attached to convertible debt instruments in terms of sub-section (3) of Section 62 of the Companies Act. However If GIL issues equity shares pursuant to conversion of OCDs in compliance with sub-section (3) of Section 62 of the Companies Act, the provisions of Chapter VII of ICDR would not be applicable at the time of issuance of Equity Shares.

SEBI- Informal guidance in the matter of M/s. Shreevatsaa Finance and Leasing Limited under SEBI (SAST) Regulations, 2011 and SEBI (PIT)INFORMAL Regulations, 2015. -->> As per SAST Regulation acquisition in pursuant to inter-se transfer of shares among the existing promoters who areGUIDANCE enlisted in the Promoter Category in the target company's shareholding pattern for a period of more than 3 years then the proposed acquisition is

exempted from the open offer obligations.~~Further as per PIT regulation off market inter-se transfer of shares between the promoters of the company are mandated to furnish a trading plan as stated in provisions of Regulation 5 of PIT regulations as it provides an opportunity to prove his innocence by demonstrating the existence of certain circumstances which includes off-market inter se transfer between 'promoters' who were in possession of the same UPSI and that both the parties had made a conscious and informed trade decision and thus it is not an exemption from complying with regulation..

SEBI- Informal Guidance in the matter of AIF JM Financial India Trust II -->> As per AIF regulation Un-invested portion of the investable funds tillINFORMAL deployment of these funds as per the investment objective.~~SEBI registered AIFs can invest investment income/investment proceedsGUIDANCE arising from sale/transfer of the investments or returns from the investment in liquid mutual funds or bank deposits or other liquid assets of

higher quality such as Treasury bills, CBLOs, Commercial Papers, Certificates of Deposits, etc. before remitting it back to investors subject to adherence to transparency and disclosure requirements as specified in AIF Regulations.~~Hence provisions of Regulations 15(1) (c) shall remain applicable to all funds including investable funds and investment income/investment proceeds.

SEBI- Informal Guidance in the matter of Prime Focus Limited regarding SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2009INFORMAL -->> As per ICDR regulation pre preferential allotment shareholding of the allottees should be lock in from the relevant date upto a period of sixGUIDANCE months from the date of "trading approval" and in case where trading approval is not required (warrant holders do not intend to list within 18

months of allotment), securities will be locked in from the relevant date upto a period of six months from the date of allotment. "Relevant date" as per Reg 71 of ICDR for preferential allotment is defined as 30 days prior to the date on which EOGM of shareholders is held for approving the issue and allotment of warrants on the preferential issue.

SEBI- Informal Guidance in the matter of KellyGamma Fund -->> As per AIF Regulation, Category III AIF can invest not more than ten percent of theINFORMAL investible funds in one investee company where 'investible funds' means corpus of the AIF net of estimated expenditure for administration andGUIDANCE management of the fund.~~Thus maximum amount of investment that KellyGamma Fund One can make in any portfolio companies (including

existing portfolio companies) is 10% of net of (investible funds - management fee as per private placement memorandum).

BSE/NSE Cyber Security & Cyber Resilience framework for Stock Brokers / DPs -->> SEBI have designed a framework on cyber security and cyber resilience which would be required to be complied by all SEBI registered Brokers and DPs ~~Governance of Cyber Security and Cyber Resilience policy encompassing framework.~~Identification & protection of data .~~Broker/DPs should establish appropriate security monitoring systems and processes to facilitate continuous monitoring of security events /alerts/ unauthorised or malicious activities.~Response and recovery plan should incorporate timely restoration of systems affected by incidents of cyber-attacks or breaches, for instance, offering alternate services or systems to Customers.~The DP and Type I Brokers to ensure annual systems audited by a CERT-IN empanelled auditor or an independent CISA/CISM qualified auditor within three months of financial year.

BSE Number of partitions to be reduced from 8 to 4 in equity and equity derivatives segment -->> Exchange has reduced the number of partition from 8 to 4, detailed information provided in equity segment’s scrip master file (SCRIP_DDMMYYY.txt) under the column 5 (Partition ID and Product ID). Similarly, the same information is provided in equity derivatives master file (EQD_CODDMMYY.csv) under column 13(Partition ID).~~All ETI and IML based applications will have to make necessary changes to query for 4 partitions only,before reducing the number of partition to 4, the Exchange would move the products from those partitions to other partitions.~~The movement of product will not have impact on the existing EOBI/EMDI stream as products that are part of one stream today will continue to be part of same stream.

BSE Circular for Securities Transaction Price Index (STPI) -->> Existing data format which is used for submission of historical STPI data for the previous quarters also to be retained for the ensuing quarters also i.e. January-March quarter of 2019 onwards upto 16th of April ,2019.~~However members to ensure that they provide the Data on a regular basis by 16th of month immediately following the quarter end in a excel file with the name bearing a combination of member code and quarter in the prescribed format and send the same through email at [email protected] with subject line ‘Data meant for STPI’.

BSE/NSE/ FATF Statements dated October 19, 2018 -->>FATF in its on-going efforts to identify and work with jurisdictions with strategic AML / CFTCDSL/NSDL deficiencies, has released fresh statements titled ‘FATF Public Statement - October 19, 2018’ where Jurisdictions to take necessary measures

to close existing branches, subsidiaries and representative offices of DPRK banks within their territories and terminate correspondent relationships with DPRK banks, where required by relevant UNSC resolutions and Iran is being added to list applicable for enhanced due diligence measures proportionate to the risks arising from the jurisdiction and will remain on the FATF Public Statement until the full Action Plan has been completed.~~ Providing ‘Guidance for a Risk Based Approach for Securities Sector.

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CIRCULARSCIRCULARS

BSE Master Checklist for listing requirements -->> In order to enable issuers/stakeholders to have access to all the applicable checklist/requirements for listing/further listing/forfeiture etc., of securities at one place, the Exchange compiles all the checklists into a single Master Circular and displays this on an annual basis on the website athttps://www.bseindia.com/corporates.html, as a service to our esteemed corporate clients and investors at large.

BSE Revised Guidelines for Bidding in Offer for Sale (OFS) Segment -->> Providing revised detailed operational instructions and guidelines for participation in OFS segment which also includes requirements to be complied by Seller(s) i.e. Promoters/Promoter Group entities/ Non-Promoter Shareholder intending to select the Exchange (BSE) as Designated Exchange. TMs and Custodians are also required to refer to the above SEBI circular and Comprehensive guidelines on sale of shares through OFS mechanism.

BSE Master Circular - Surveillance (Equity Derivatives, Currency Derivatives and IRD, Equity Segment) -->>Circular is consolidation of all the previous circulars issued by the Surveillance in respective department.

BSE SEBI SAST (Third Amendment) Regulations, 2018 -->> SEBI has modified SEBI (SAST Regulation) 2018- modified the regulation related to Disclosure of acquisition and disposal, ~~ disclosures requirement for acquisition and disposal of shares shall also not apply for a HFC or a NBFC-SI

BSE SEBI (Issue of Capital & Disclosure Requirements) (Amendment) Regulations 2018 -->>SEBI modified SEBI (ICDR Regulation) 2018:- SEBI has modified SEBI (ICDR Regulation) 2018:- New regulation is inserted which deals in the allocation procedure in the net offer category for an issue made other than through the book building process and also there is an amendment in case of filing of a fresh offer document is required for any increase or decrease in the estimated issue (new) size by more than 20 per cent and In case of an OFS, where there is a change in the number of shares offered for sale, or in the estimated issue size, by more than 50 per cent.

BSE Filing Of Financial Results In Xbrl Mode By Insurance Companies -->>Filing in respect of Financial Results (Regulation 33) should be filed by all listed insurance companies (both General and Life), through XBRL mode in addition to the filing in PDF mode.~~Financial Results in PDF mode shall be submitted within 30 minutes of conclusion of the Board Meeting and the financial results in XBRL format shall be submitted within 24 hours of submission of the submission in PDF mode.

BSE Disclosures by Stock Exchanges for commodity derivatives -->> As per SEBI Circular dated on January 04,2019 "Disclosures by Stock Exchanges for commodity derivatives" in Annexure II related to Commodity wise format of disclosure for top participants, members and market wide position limits which dealt in Disclosure of top participants/members at commodity level Disclosure of market wide OI available on Exchange website under Markets - Commodity Derivatives Segment.

BSE Unique Identifier for Algorithms -->> All Algorithmic orders need to be tagged with a unique identifier provided by the Exchange from time to time, on account of this TM are advised to adhere with circular and ensure that all Algorithmic orders are tagged with the unique identifier allocated by the Exchange, further also ensure that only ALGO orders are tagged with Algo Id.~~ In case of any deviation from the same, appropriate action shall be initiated which includes penalty of Rs 5000 / to Rs. 15,000/- per day.

BSE/NSE SEBI Single Registration for Uniform membership structure -->> As per SEBI Circular darted January 11, 2019, timelines as well as conditions for the implementation of uniform membership structure in equity and equity derivatives segment for different entities.~~For TM , single registration is required for uniform membership across segments by April 01, 2019, hence TM are requested to complete formalities for the same immediately.~~Members who have not obtained SEBI single registration will face difficulties during the process of changing the membership status of CM segment, further TM to apply for SEBI single registration by February 28, 2019 to avoid any inconvenience at a later date as the uniform membership structure shall be effective from April 1, 2019.

BSE Enhancements in Trading System APIs in Commodity Derivatives segment -->>New API versions shall be rolled out as optional version release - ETI API ver.1.6.3, IML API ver.7.13 & IML exe ver.11.20 with enhancements on new message on ‘Quote Cancellation, New reason code to identify order cancellation /client going in RRM in a contract, Near month contract identifier added in risk alerts generated for member going in position limit RRM in a contract.~~Enhancements to be live w.e.f February 11, 2019 (mock trading, February 9, 2019).

BSE Registration of Authorised Person in new / additional segment and cancellation of Sub Broker registration -->> Registered Sub Brokers have time till March 31, 2019 to migrate to act as an AP and / or TM. The Sub-Brokers who do not choose to migrate into AP and /or TM, shall deemed to have surrendered their registration with SEBI as Sub-Broker from the effective date. ~~ TM to submit application through BEFS for migration of Sub Brokers affiliated with them to AP and also submits the original SEBI Sub Broker RC along with the attached application letter (for migration of Sub Broker to AP) on letter head of the TM as per Annexure-IA. ~~ Sub Brokers, already registered as AP with the existing TM in the derivative segments, may apply through BEFS for addition of segment/s and TM required to submit the original SEBI Sub Broker registration certificate along with the attached application letter on letter head of the trading member as per Annexure-IB.~~Procedure f cancellation or change in affiliation given in the circular

BSE SEBI directions w.r.t. listed Shell Companies - Update -->> Exchange has provided a process for dealing with suspected shell companies not having any operation for a long period.~~ companies shall be given a time of 1 year to review their operation, based on their performance respective action like moving out from respective GSM , Appoint Independent Auditor to conduct Forensic Audit taking place.

BSE Amendment in Existing Eligibility criteria of Listing on SME Platform -->> Criteria of Net Tangible Assets will now be applicable for Rs 3 Cr which was earlier not applicable.~~Criteria of Track Record will now be also applicable company or the partnership/proprietorship/LLP firm or the firm not completed its operation for three years and been funded by way of loan/equity by Banks or Financial Institutions or Central or State Government or its undertaking, or its Group Company should have been listed for at least two years either on the Main Board or SME Board of the Nationwide Exchange to have combined positive cash accruals (earnings before depreciation and tax) from operation and its net worth should be positive.~~Revised Eligibility criteria for listing in BSE SME platform will now be applicable with effect from February 01, 2019 instead of January 10, 2019.

BSE/CDSL Acceptance of Probate of Will or Will for Transmission of Securities held in dematerialized mode -->>Procedures for transmission of securities in dematerialized mode with that of transmission of securities in physical mode currently requires documentation like succession certificate or probate of will or will or letter of administration or court decree, in terms of Indian Succession Act, 1925 as per SEBI LODR Regulations, 2018.~~However currently for demat mode, same is dealt in terms of bye laws of the Depositories.~~To harmonize such procedures for transmission of securities in dematerialized mode with that of transmission of securities in physical mode, transmission in dematerialized mode shall be dealt in line with SEBI (LODR) (Sixth Amendment) Regulations, 2018.

BSE Change in EMDI/ EOBI multicast IP of certain products in equity and equity derivatives segment -->> EOBI/ EMDI multicast IP and ports for those products will change on account of change in partition ID of certain products. ~~ Market data for product moved from one partition ot another will not be available from the multicast stream of the partition where it originally belonged but will be available from the multicast stream of the new partition where it has been moved.~~Further Details of schedule of product movement along with the existing and new partition ID is mentioned in Annexure.


CIRCULARSCIRCULARS

BSE BSE Direct platform - Direct access to retail investors through Mobile Application and Web-based Platform -->>Exchange to launch direct access to retail investors in BSE-Direct for participation in non-competitive bidding of G-sec and T-bill auction through Mobile application as well as web based platform under BSE-Direct from February 1, 2019 and available in play stores for downloading for android phones.

BSE Transaction Charges for trades done in Interest Rate Derivative contracts -->> Exchange to levy transaction charges of Rs.10/-per crore of Turnover i.e. on (price X quantity X Contract Multiplier) (active/passive side transactions) for trades done in Interest Rate derivatives contracts with effect from January 01, 2019.

NSE Trade Execution Range (Commodity Derivative)-->> Trades would be executed only if trade price is within the trade execution range based on the reference price of the contract where reference price would be computed at Market open using rate of interest as 10%,Trading hours and for other contracts as specified for each scenario.~~ Execution range under Future Segment will be 50% of initial daily reference price limit of the contract.

NSE Trade Execution Range(Currency Derivative) -->> Trades would be executed only if trade price is within the trade execution range based on the reference price of the contract where reference price would be computed at Market open which further includes that reference price will be base price of the Contract in case of FUTIRC ,Trading hours and for other contracts as specified for each scenario which further include reference price shall be the base price of the Contract throughout the day in case of FUTIRC. ~~Execution range is given for future contracts and separately for option contract reference price slab wise . Further trade execution range in case of FUTIRC is 0.50% of Reference Price.

NSE Trade Execution Range in F&O Segment -->>Trades would be executed only if trade price is within the trade execution range based on the reference price of the contract where reference price would be computed at Market open which now additionally specifies that if underlying price not available at the time of computation, base price of the contract will be underlying price, Trading hours and for other contracts as specified for each scenario.~~Execution range is given for future contracts and separately for option contract reference price slab wise ~~Trade execution will not be applicable to long term Option contracts on NIFTY.

NSE Market Data - Consolidated Circular -->>Exchange provides market data (price and volume related) to its TM as Market by Price (MBP) and Market by Order (MBO) for Auction market. Some related data is also provided in the form of Trade Ticker, Open Interest (OI), Open High Low (OHL), Auction Inquiry broadcast, Master Updates, Market Open/Close Status message broadcast, Trade Execution Range (TER) etc. Market data broadcast is refreshed either at fixed time interval or are event driven. The Exchange also provides tick by tick order and trade information.~~Annexure along with access details and set up required to receive such broadcasts enclosed with circular

NSE Interactive Connectivity Parameters - Consolidated Circular -->> Members may refer the summarised annexure for details on the IP and Ports of the Capital Market (CM), Futures & Options (FO), Currency Derivatives (CD) and Commodities Derivatives (CO) segments of the Exchange for Interactive connectivity parameters for trading and Trade Drop Copy facility.

NSE Direct Pay-out of units to client account for MFSS Subscription orders -->> Exchange has implemented the facility of Direct Pay out of units to client account for MFSS Subscription orders.~~ Explain features of DPS Facility.~~Units for the subscription orders where direct payout to client account is marked by the participant while placing the order, shall be considered for this facility.~~Direct Client pay out (DPC) shall be operational from January 31, 2019.

NSE Updation of PAN details of KMP and Directors -->> Members to upload PAN copy against each and every Director under Directors Details module on ENIT New Compliance along with updation of KMP(s) details by April 30, 2019 and if failed will be treated as non-compliance and attract a penalty of Rs. 5000. The functionality to upload the same is mentioned in Annexure I.Further any change in the aforesaid information/details has to be updated within 7 days of such change. Failure to adhere will be treated as non-compliance.

NSE Submission of intention requests and settlement at additional delivery centres -->>Member to specify the quantity and expected premium/discount per lot size quoted at absolute amount per delivery lot for Gold, Gold Mini and Silver.~~The intention request for additional delivery center may not be backed by delivery. However, for the matched intention request, the delivery pay in need to be provided on T + 1 day by 11.00 a.m. at requested delivery centre and Shortage if any will be subject to action as stated in circular dt Oct 10, 2018.~~Members can enquire the intention dissemination summary across market and matched intention requests as explained in circular

NSE New ENIT - Pro Trading Module -->>Existing Pro Trading Module along with other modules like Pro Trading Request, Pro Activity Report, Pro Trade Status Report, Default Location Status Report, Default Location Activity Report shall be migrated to new technology which can be accessed at ENIT-NEW-TRADE > Trade > Pro Trading.~~Existing users having access to Pro Trading Module in existing ENIT-Trade tab shall have access to the new modules by default.~~Circular shall be effective January 25, 2019

NSE Cyber Security Advisory -->>Members are notified and requested to undertake appropriate actions as applicable to their environment as per the advisory attached herewith as Annexure- A. (http://www.cert-in.org.in).

NSE Settlement through Additional Delivery Centres in Commodity Derivatives Segment -->> In order to facilitate Pan India delivery mechanism, NSE Clearing shall start with additional delivery centres at the cities of Delhi, Mumbai and Chennai with effect from 25th January, 2019.Process of accepting / giving delivery at the additional centres is completely optional and NCL shall carry out settlement only when both the buyers and sellers intentions match on the defined parameters. Further explaining the process for provision of intentions and settlement at additional delivery centre and details of Vault and charges for additional delivery centres are provided in Annexure.

NSE Unique Identifier for Algorithms -->> Member must ensure compliance with Exchange circular dated on September 28, 2012, Dec 14, 2010, April 26, 2018 to take care that all Algorithmic orders are tagged with the unique identifier allocated by the Exchange.~~In case of any deviation from the same, appropriate action shall be initiated which includes penalty of Rs. 10,000/- per day.

NSE Transaction charges for Commodity Derivatives Segment -->> No transaction charges will be levied on all the transactions done in Commodity Derivatives Segment of the exchange for the period of further three months from January 12, 2019 to April 11, 2019.

NSE Additional Surveillance Measure (ASM) framework- Update-->> SEBI inserted an additional criteria for stocks under the Short Term ASM framework based on parameter like limits of market capitalization, High Low Variation on a one month basis and Average unique PANs trading in the scrip in last one month w.e.f January 21, 2019.

NSE Automated operating price range flexing for option contracts -->> To bring more efficiency in trading of options, Exchange introduced additional flex mechanism for options operating price range, where movement in prevailing underlying price by a defined set percentage then operating range of all the option contracts will be recomputed provided revised range should be more than the current range on the respective side.~~New range will be broadcast on terminals and all orders beyond new operating range will be cancelled.

NSE Review of Risk management framework for Equity Derivatives Segment -->> NCL to provide parallel SPAN parameters and Exposure limit files only at EOD with the revised parameters to enable members to estimate the applicable revised margins effective January 11, 2019.


CIRCULARSCIRCULARS

Compiled by Rekha Shah, Analyze N ControlThe firm specialises in helping Broking houses in Operational process set up and also has softwares focussed on compliances - regulatory search engine - www.circularsnorders.com and has a state of the art client screening product duly integrated with Anti Money Laundering and Surveillance product.

NSE De-centralization of Membership Compliance Activities -->> Exchange has decided to de-centralize the activities namely Voluntary Disablement Request, Trade through other member, Margin Trading Facility (Approval/Withdrawal), Issue of Membership Certificate, Change in Registered Office Address, Additional Segment Registration, Change in Name in order to provide better member experience and ease of access w.e.f. February 1, 2019.~~Member needs to submit their applications pertaining to the activities at their respective Regional Offices w.e.f February 01, 2019

NSE Connectivity - POP network changes -->> Since the project implementation date is being extended upto February 28, 2019, no application processing fee will be applicable for any connectivity request received through ENIT during the period February 01, 2019 to February 28, 2019.~~ Process of surrender and new commissioning is being detailed in Circular.~~To ensure timely and efficient commissioning of new leased lines under migration, members to ensure adherence to given schedule and also confirm site readiness,internal cabling and relevant access to service provider personnel for link delivery

NSE NOTIS Application -->> NOTIS API is introduced in Capital Market, Equity and Currency derivatives segment in order to enhance trading experience, enable customisation, improve efficiency and provide choice to members.~~Further NOTIS EXE in Capital Market and Equity derivatives segments shall be discontinued w.e.f. January 01, 2020 and will be available in other Segments.

NSE Review of Risk management framework for Equity Derivatives Segment -->> NCL to provide client/constituent level margins (only at EOD) with the revised parameters with effect from January 15, 2019 on the extranet in addition to parallel SPAN parameters and Exposure limit files.~~Further Details of file name location of the same is mentioned in circular.

CDSL Minor Correction In Name Of The BO -->>Providing procedures to be adopted in case of minor correction of name of an individual in a demat account.~~Due diligence required for such requests and to satisfy that desired name indeed belongs to same person and there is no change in name.~~ DPs can make such correction through on-line as well as upload mode by selecting reason code 6 for Minor Correction in the name of the BO, further to maintain internal records for minor correction cases effected.~~DPs to update new reason code for minor name correction in the DPM system.

CDSL/NSDL 2019-0002-Policy-SEBI circular on change of name in the Beneficial Owner (BO) Account with Depository -->> Application for name change of individual in BO account for reason other than marriage has to be submitted alongwith Request Letter , KYC in change name , Paper Publication in local and national news paper and Sworn affidavit mentioning the reason for change of name and his complete address executed before the Notary Public/ Magistrate of First Class/ Executive Magistrate, Thereafter DPs will collect the self-attested copies of documents and maintain the same in their records after verifying with the original documents. ~~Depositories to implement the process of name change of Individual in BO account within three months from circular date.

NSDL 2019-0004-Policy-Amendments to Bye Laws and Business Rules of NSDL -->> Participant is being Struck off under Bye Law and in clause 15 of agreement between DPs and NSDL .Deletion of Bye Laws regarding Contingency Funds , Investor Protection Reserve and its utilization regarding indemnifying the BO under section 16 of the Depositories Act, 1996.Deletion of Business Rule Regarding Investor Protection Reserve containing clauses like Sources Of IPR , Nature Of Claims , Claims Not To Be Admitted , Procedure For Making Claims , Procedure For Making Claims , Claim Not To Affect Legal Proceedings, Alteration of Procedure. Renumbering of various specified clauses.

NSDL 2019-0005-Policy-Amendment to Business Rules -->> In addition to opening a new demat account in case of death of one of the holders in joint demat account, surviving account holders, can continue the existing account by deleting name of deceased account holder(s) from the account by making an application to the DP under FORM 41 for deletion of deceased account holders alongwith a copy of death certificate duly attested by a Notary Public or by a Gazetted Officer. Thereafter Participant shall verify the documents submitted and the signature of surviving Clients and if satisfied deletion of name would be effected.~~Further New Form 41- NAME DELETION IN JOINT ACCOUNT UPON DEATH is inserted and enclosed as Annexure.

NSDL 2019-0007-Policy-Increase in timelines for processing of Dematerialisation Requests -->>SEBI granted a relaxation in timelines for processing of Dematerialisation Requests by the Issuer or its Registrar & Transfer Agent, to 30 days till June 30, 2019 from the current 15 days as specified in Regulation 74(5) of SEBI (Depositories and Participants) Regulations, 2018.

NSDL 2019-0003-Policy-Bank account details in case of Demat Account for nominee shareholders in joint names of an individual and a body corporate -->> Participants to facilitate capturing the bank account of the joint holder in the demat account for such nominee holdings after obtaining an undertaking from the client in the specified format in case of opening of depository account of nominee shareholders in joint names of an individual and a body corporate.

NSDL 2019-0001-Policy-Simplification of Client on-boarding process on SPEED-e -->> SPEED-e Application Form is modified by including a declaration that client has agreed with terms & conditions prescribed by NSDL, Further agreement between DP and client is no longer required in case of on-boarding clients on SPEED-e facility.

The development of financial services and products in

IFSCs would require focussed and dedicated regulatory

interventions. Hence, a need for a unified financial

regulator for IFSCs in India to provide world class regulatory

environment to financial market participants.

This is our twelfth releasein the series of

awareness articles on IFSC


FEATUREFEATURE

UNIFIED REGULATORY AUTHORITYFOR IFSC - INTERNATIONAL FINANCIALSERVICES CENTRES AUTHORITY

By Niraj Kumar HarodiaDirector, JPNR Corporate Consultants Private Limited

1.0 Synopsis of the previous releaseIn our last release, we had discussed the online module titled Service Export Reporting Form (“SERF”) which has been developed and made effective from September, 2018 to formulate a process for reporting of all Service Exports being performed by SEZ entities. In proper understanding, this is a mechanism which facilitates and ensures collection of structured, comprehensive information in a timely manner from SEZ entities and to formulate a process for reporting of all Service Exports being performed by SEZ entities.

2.0 Coverage in the current releaseIn the current release, we shall discuss the International Financial Services Centres Authority Bill, 2019 which indicates of setting up of a unified authority (herein after referred to as ‘Authority’) for regulating all financial services in International Financial Services Centres (IFSCs) in the country. The Union Cabinet has approved International Financial Services Centres Bill, 2019 which seeks to establish a unified authority for regulating all financial services in International Financial Services Centres (IFSCs) in India.

3.0 International Financial Services Centres Authority Bill, 2019

3.1 Background• Currently, the banking, capital markets and insurance

sectors in IFSC are regulated by multiple regulators, i.e. RBI, SEBI and IRDAI.

• The dynamic nature of business in the IFSCs necessitates a high degree of inter-regulatory coordination. It also requires regular clarifications and frequent amendments in the existing regulations governing financial activities in IFSCs.

• The development of financial services and products in IFSCs would require focussed and dedicated regulatory interventions. Hence, a need for a unified financial regulator for IFSCs in India to provide world class regulatory environment to financial market participants.

• Further, this would also be essential from an ease of doing business perspective. The unified authority would also provide the much needed impetus to further development of IFSC in India in-sync with the global best practices.

The Union Cabinet chaired by the Prime Minister Narendra Modi has approved much awaited establishment of a unified authority for regulating all financial services in International Financial Services Centres (IFSCs) in India through International Financial Services Centres Authority Bill, 2019.

The objective of this move seems to be towards offering business and regulatory environment that is comparable to other leading international financial centres in the world like London and Singapore. It would provide Indian corporates easier access to global financial markets. IFSC would also compliment and promote further development of financial markets in India.

3.2 Salient features of the Authority are detailed below:• Composition: The Authority shall consist of a

Chairperson, one Member each to be nominated by the Reserve Bank of India (RBI), the Securities Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority of India (IRDAI) and the Pension Fund Regulatory and Development Authority (PFRDA), two members to be dominated by the Central Government and two other whole-time or full-time or part-time members.

• Functions: The Authority shall regulate all such financial

Taking into account the regulatory requirements of IFSCs and the provisions of the existing laws of financial sector, the Department of Economic Affairs (DEA), Ministry of Finance (MoF) has prepared a draft Bill to set up a separate unified regulator for IFSCs.

For more information & queries, please contact JPNR Corporate Consultants Private Limited 10, Bow Street, Near Central Metro, Kolkata - 700012.

Email ID: [email protected] / [email protected] Mobile No: +91 8017467202 / 9903271562

Niraj Kumar Harodia (FCA, ACS, B. Com)

He is a Director in JPNR Corporate Consultants Private Limited which is a business advisory and Consultancy Company, incorporated under Companies Act, 2013. The company is engaged in providing services related to Goods and Services Tax, advisory services to International Financial Service Center [Gujarat International Finance Tec-City (GIFT)]. During his association with Deloitte earlier, he has gained expertise in Banking and Real Estate Industries.

He is proficient in Direct and Indirect Taxation and he has been rendering advisory services in GST Impact Assessment in various industries namely Hotel, Construction, Real Estate, Coal, Agro Chemicals etc.

He is also a visiting faculty of GMCS, ICAI and is also the Chairman of Editorial Board of Direct Taxes Professional Association.


FEATUREFEATURE

services, financial products and Financial Institutions in an IFSC. It may also recommend to the Central Government such other financial products, financial services and financial institutions which may be permitted in the IFSCs.

• Powers: All powers exercisable by the respective financial sector regulatory (viz. RBI, SEBI, IRDAI, and PFRDA etc.) under the respective Acts shall be solely exercised by the Authority in the IFSCs in so far as the regulation of financial products, financial services and FIs that are permitted in the IFSC are concerned.

• Processes and procedures: The processes and procedures to be followed by the Authority shall be governed in accordance with the provisions of the respective Acts of Parliament of India applicable to such financial products, services or institutions, as the case may be.

• Grants by the Central Govt.: The Central Govt. may, after due appropriation made by Parliament by law in this behalf, make to the Authority grants of such sums of money as the Central Government may think fit for being utilized for the purposes of the Authority.

• Transactions in foreign currency: The transactions of financial services in the IFSCs shall be done in the foreign currency as specified by the Authority in consultation with the Central Govt.

3.3 Functions of the Authority:• To regulate all such financial services, financial products

and FIs in an IFSC which has already been permitted by the Financial Sector Regulators for IFSCs.

• To regulate such other financial products, financial services or FIs as may be notified by the Central Government from time to time.

• To recommend to the Central Government such other financial products, financial services and financial institutions which may be permitted in the IFSCs.

3.4 Powers of the Authority:All powers exercisable by the respective financial sector regulatory (viz. RBI, SEBI, IRDAI, and PFRDA etc.) under the respective Acts shall be solely exercised by the Authority in the IFSCs in so far as the regulation of financial products, financial services and FIs that are permitted in the IFSC are concerned.

4.0 ConclusionFor IFSCs to attain its objectives there is a need for inter-regulatory coordination. The establishment of a unified financial regulator for IFSCs will result in providing a world-class regulatory environment to market participants from the ease of doing business perspective.

Neha Ahuja, Advocate

• Working as an Advocate in the field of Tax, Intellectual Property, Capital Markets & Securities, Anti-Corruption, Investigation, Manufacturing, Consumer Products, Industrial Products & Durables, Communications (Telecom & Broadcasting), Energy (Power, Coal, Oil & Gas),Mining, Civil and Criminal litigation. Specialized in Criminal Litigation.

• Working at Prompt Legal, which is one of India’s leading independent law firms.• Regular faculty at Jai Hind College of Commerce and Science for the subject of Law. Lectures given on the following Acts and Bills:

Contract Law, 1872, Companies Act, 2013, Reserve Bank of India Act, 1934, Banking Regulation Act 1949, Negotiable Instruments Act 1881, Indian Insurance Act 1938, IRDA Act 1999, Consumer Protection Act, 1986, Ombudsmen Act 1975,Indian Stamp Act 1899, Indian Registration Act 1908, Lokpal and Lokayukta Bill.

• Worked as a Constitutional expert on several books published by Lexis Nexis namely “India Needs GST” 3rd Edition. Also, written textbooks at college level on the subject of IPR & Cyber Law published by Vipul Prakashan.

• Editor for Law Textbooks on the subject of Contract Law, 1872 and Negotiable Instrument Act 1881 published by Reliable Publication.• On the panel as a Legal Committee member to social clubs such as the Cricket Club of India.• Completed her Bachelors in Banking and Insurance (BBI). There after obtained a Masters degree in Commerce (Mcom) and then completed Legum Baccalaureus (LLB).

BUDGET- ARE WE GETTINGRICH OR POOR?

By Neha Ahuja Advocate


FEATUREFEATURE

Finance Minister Piyush Goyal on Friday presented the much awaited Union Budget. Mr. Piyush Goyal was appointed as an interim Finance Minister on 23rd of January, 2018 as Mr. Jaitley was undergoing treatment in the United States.

A quick glance of the Budget is stated herein under-

The Budget has been neutral at most aspects and aims at achieving better economic and financial results in the current year.

RELIEFS TOPICS

Income Tax Relief

Tax ExemptionOn Investment

Other Tax Benefits

Farmer

SOPS for Workers

Rural Allocation

GST

Protection forFilmmakers

Defence Budget

Railways

• No income tax for earnings up to ₹5 lakh

• Standard tax deduction for salaried persons raised from ₹40,000 to ₹50,000

• Individuals with Gross income upto 6.5 Lakh Rupees will not need to pay any tax if they make investment in Provident Funds and Prescribed equities

• TDS threshold for home rent increased from Rs. 1.8 lakh to 2.4 lakh

• Interest income up to Rs. 40,000 in post office and banks made tax free

• Capital Gains tax exemption u/s 54 to be available to Rs. 2 Crore. Capital Gains exemption to be available on 2 House Properties.

• Income Tax relief as a notional rent from unsold houses extended to 2 years from 1 year

• Income Tax returns to be processed within 24 hours and refunds will be paid immediately

• Within nearly two years, almost all assessment and verification of IT returns will be done electronically by an anonymised tax system without any intervention by officials

• Package of ₹6000 per annum for farmers with less than 2 hectares of land. Scheme to be called Pradhan Mantri Kisan Samman Nidhi.

» INTEREST FOR FARM LOAN TAKERS

• 2% interest subvention for farmers pursuing animal husbandry, fisheries jobs through Kisaan Credit Cards.

• Kamdhenu Scheme for animal husbandry.

• All farmers affected by severe natural calamities to get 2% interest subvention and additional 3% interest subvention upon timely repayment

• Mega pension scheme for workers in the organised sector with an income of less than ₹15,000. They will be able to earn 3000 after the age of 60. The scheme will be called Pradhan Mantri Shramyogi Maan Dhan Yojana.

• Gratuity limit increased for workers to Rs. 30 Lakh

• Rs. 60,000 Crore for MNREGA

• RS. 19,000 allocated for construction of rural roads under Gram Sadak Yojana

• Group of Ministers to suggest way to reduce GST for house buyers

• Direct Tax collections increased from Rs.6.38 Lakh Crore in 2013-14 to almost Rs. 12 Lakh Crore; The tax base is up from Rs.3.79 crore to Rs.6.85 crore

• Indian Customs to fully digitised exim transactions and leverage RFID for logistic.

• Govt. abolished duties on 36 capital goods.

• Anti-camcord regulations to be introduced in the Indian Cinematograph Act to prevent piracy and contact theft of Bollywood films.

• Single window clearance for Indian filmmakers.

• Govt. increases defence budget to over Rs. 3 Lakh Crore. Govt. will provide for additional funds if needed.

• Vande Bharat Express, an indigenously developed semi high-speed train, to be launched


By Ramesh L. SoniManagement Consultant andAdvisor on Labour Laws

ARTICLE ON: EMPLOYEESPROVIDENT FUND

Societies, Employing 50 or more employees’ and working without the aid of power.

v) The Employees’ Provident Fund act is applicable to the cinema theatre employing 5 or more workers.

FEATUREFEATURE

If an establishment consists of different

departments / branches, whether located in the same place or in different

places, all such departments or branches are

treated as part of the same

establishment. The Act continues to apply even if the

number of employees falls

below 20 employees.

p.m. and optionally covered where salary exceeds Rs. 15000/- p.m. (w.e.f. 1st Sept., 2014)

2. Any person who is classified as disabled employee under new para 82 of the Employees Provident fund Scheme, 1952 and working in the private sector, with monthly wages uptoRs. 25000/- p.m. provided they are appointed on or after 01.04.2008

3. Any person who is classified as International Worker under new para 83 of the Employees Provident Fund Scheme, 1952.

A contribution of P.F is to be deducted on:1. On Basic Wages.2. Dearness Allowances. (Special

Allowance in Maharashtra).

To Compute 20 or more Employees Following Employees are Counted: The permanent, temporary, full time, part time, casual, time - rated, piece - rated employees, contract employees, persons employed in various departments, head office, branches, sales offices, godowns or any other different places etc. and sales representatives are counted for computing the employment strength. Apprentices engaged under the Apprentices Act. 1961 are not counted for the purpose of applicability.

Contribution rates w.e.f 1st April 2017: Employee’s Contribution 12% and Employers Contribution 12% plus 1.00% = 13.00%

From employers contribution out of 12% contribution 8.33% is deposited in the Employees’ Pension Fund subject to a ceiling that the contribution payable by the employer be limited the amount payable on his pay of Rs. 15000/-pm hence maximum contribution under Employees Pension Fund will be Rs. 1250/-. And balance 1.00% includes administrative charges and EDLI Contribution.

Employees Provident Fund Act/ Scheme:1) Employees’ Provident Fund is set up

under the Central Act viz. Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, in the year 1952

2) It is applicable throughout the country (except Jammu & Kashmir)

3) It is applicable to almost al l establishments falling under the industries / class of establishments, wherein 20 persons are employed

4) In the case of cinema theatres workers it is applicable to such establishments wherein 5 persons are employed.

5) Benefits to an employee are provided through the schemes framed under the Act.

6) Provident Fund benefits are provided under the Employees’ Provident funds Scheme, 1952

7) Pensions benefits are provided under the Employees’ Pension funds scheme, 1952

8) Insurance benefits are provided under the Employees’ Deposit Linked Insurance Scheme, 1976 (Minimum Benefit Rs. 2,50,000/- & maximum benefit upto to Rs. 6,00,000/-)

9) A member of Employees’ Provident fund is automatically eligible for pension and Insurance benefits without paying any additional amount of contribution.

Applicability:i) Every establishment which is a factory

engaged in any industry specified in Schedule 1 and in which 20 or more persons are employed and

ii) Any other establishment employing 20 or more persons which Central Government may by notification, specify in this behalf (Infancy period of 3 yrs has been withdrawn by ordinance, w.e.f. 22-09-1997)

iii) Any establishment employing even less than 20 persons can be covered voluntarily u/s 1(4) of the Act.

iv) Any establishment registered under Co-operative Societies Act, 1912, or any State Act of Co-operative

A. If an establishment consists of different departments / branches, whether located in the same place or in different places, all such departments or branches are treated as part of the same establishment.

B. The Act continues to apply even if the number of employees falls below 20 employees

Eligibility:1. Any person who is employed for work

of an establishment or employed through contractor in or in connection with the work of an establishment where salary is less than Rs. 15000/-


FEATUREFEATURE

Penal Provision:Liable to be arrested without warrant being a cognizable offence

Defaul ts by employer in paying contributions or inspection/ administration charges attract imprisonment up to 3 years and fines up to Rs. 10000/- (S.14)

For any retrospective application, all dues have to be paid by employer with damages up to 100% of arrears. Contribution payment liability upon the employer for both the shares payable, but for restrictive provisions contained in para.32 of the EPF scheme 1952 , the emp loye r i s RESTRAINED from recovering “EMPLOYEE SHARE” of contribution for the past period.

Rules & Regulations for Loan, Advance & Withdrawal from Employees’

Provident Fund Scheme

Minimum Service Limit for EPF LoanDid you find yourself eligible for partial withdrawal of EPF? Do you have one of the above reasons? Yes? Still, you may not get the PF money. There is minimum service condition for each cause.

No Minimum Service Limit • Medical Treatment • Calamity• Pre Retirement

Minimum 5 Years of Service • Home or Plot Purchase • Construction of House • Alteration or Addition in Home

Minimum 7 Years of Service• Marriage• Education

Minimum 10 Years of Service• Home Loan Repayment • Home Repair

Rules of PF withdrawal before Leaving the Job

A/c. No. Employers Contribution Employee Contribution Total Contribution

I

II***

X

XXI

Total

Contribution

3.67%

0.50%***

8.33%

0.50%

13.00%

12%

----

----

----

12%

15.67%

0.50%***

8.33%

0.50%

25.00%

Provident Fund Challans Consist following Accountants and Rate of Contribution w.e.f 1st June 2018:

You can take the non refundable Loan from the EPF account. But it does not mean that you should prefer this option. Never try to touch the retirement fund.

You can withdraw the PF money if you leave the job and remain unemployed for 2 months. Even in some circumstances you can get PF money just after leaving the job. But to withdraw amount from EPF during the job, you have to fulfill many conditions.1. You have to fulfill the minimum service

need. The best part is the duration of the service is total. Duration of each job is added to this calculation, given you have transferred your PF accounts to the new job. Now you can transfer the PF amount easily with the introduction of UAN.

2. There is a limit on the amount you can withdraw. It can be up to 36 times of your wages (basic+DA). The maximum amount for withdrawal depends upon the reason of PF withdrawal.

3. You need to give proof of the reason you have mentioned.

Let us see the conditions of partial PF withdrawal for each purpose.

PF Withdrawal for Marriage• You can withdraw from the EPF

account on the occasion of marriage. The marriage can be of yourself, sister, brother, son or daughter.

• The minimum service period for this advance is 7 years.

• You can withdraw up to 50% of the total employee contribution. You can use this reason 3 times in your life.

• Marriage invitation card along with the application should be submitted through the employer.

PF Withdrawal for Education• You can withdraw fund for the

education of self and children. • You should have completed a total

service of 7 years.

• You can get up to 50% of the employee contribution.

• This option can be used 3 times in a lifetime.

• You should attach bonafide certificate duly indicating the fees payable from the educational institution.

PF Advance for Medical Treatment• You can take an advance from PF

account for the treatment of self, spouse, children and parents.

• There should be hospitalization for more than a month. If the claimant is an employee, he should have taken leave from the organization.

• You can avail advance in case of TB, leprosy, paralysis, cancer, mental derangement or heart ailment without the hospitalization.

• You have to give the certificate from the doctor stating the hospitalization need. In case of above mentioned disease you need to give the certificate from specialist doctor.

• You can take 6 times of wages (basic+DA) or total employee share, whichever is less.

• There is no limit on the frequency.

Purchase Home or Construction Using PF Money• Buying home or plot is one of the most

important decisions of life. We invest most of our savings on this. But do you want to compromise with your retirement years. Think about this before applying for PF withdrawal.

• You can withdraw from PF for the purchase of a home or construction of the house only once.

• You must have completed 5 years in service.

• Property should be registered in the name of self or jointly with spouse

• There should not be any joint owner of property other than the spouse.

• You can get 36 times of wage (basic+DA) for this purpose.

• You need to give a filled declaration form with the application.

EPF Loan for Buying a Plot• PF money can be also used for buying a

plot.• You can avail the withdrawal facility for

purchase of plot only once. • You must have completed 5 years in

service.• There should not be any co-owner of

the property other than the spouse.


FEATUREFEATURE

Ramesh L. Soni, Management Consultant and Advisor on Labour Laws

Executive Profile:• Qualified as M.B.A. (HR), B.Sc. (Hons.), LL.B., D.L.L.

& L.W. , D.P.M. & I.R., A.I.I.I, M.P.M. (H.R), DMS • Providing consulting services in the field of Labour

Laws since last 35 years• Providing services in this field on retainer ship basis

to more than 350 clients • Contributed articles on Labour Laws• Visiting Faculty at Bharatratna Dr. Ambedkar

Institute of Management & Legal Research, Mumbai.

• You can get 24 times of wages (Basic +DA).

• You need to give a copy of the purchase agreement.

• You should give a declaration with the application.

Alteration or Addition in the House• You must have completed 5 years in

service.• At least 5 years after the construction

of house. • You can get 12 times of wages.• Property should be owned by you or

jointly with the spouse. Only once in service.

• Alteration proof is required.• Repair of House• All the condition is similar to the

alteration of house except you have to wait at least 10 years after the construction of house.

Lockout of the Company• If you are not getting wage for last two

months and your company is locked out or closed for at least 15 days, you can take a loan from EPF.

• You can get the amount equal to your unpaid wages.

• There must have balance in employee contribution.

• You can check your PF balance through various methods.

• If closure has been for more than 6 months, you can also use the employer’s contribution. (Do you wait for such a long time)

The best thing about this form is that it does not require the approval from the employer. Yes! You can directly submit this form to the regional PF office. But to use this easy facility, you need UAN activated and KYC done.

Option 2If you can’t get advance through the first method, you can apply through the employer.

You should use form 31 for the advance through the employer. You can download this form from the EPFO website.

Time to Get the PF AdvanceThe application submitted through the first method would take less time. You can expect money within a week. But the second method can take up to one month. It depends upon your employer ’s promptness. Some regional PF offices take more time.

Withdrawal Prior To Retirement• You must have completed 57 years of

age• Retirement should be after one year.• You can get up to 90% of the total

provident fund balance.• You need to give a certificate from the

employer stat ing the date of retirement.

In Case of Calamity• There is no condition of minimum

service.• You have to give certificates of damage

from competent authority. You can get up to 50% of the employee share.

• No other condition.

The Form and Process of Applying for PF AdvanceTo get the partial amount of EPF you have two ways to apply. The first way is the preferred one. In both the method you need to attach a declaration form with the application if you are taking advance for the following purposes.

• Flat or plot purchase • House construction • Alteration or addition • Repair of the house

Option 1Now, you have very easy way to partially withdraw the EPF amount. The EPFO has come with a simple new EPF withdrawal form 31 (new). This form requires very few information

FEATUREFEATURE


After discussing emotional awareness and emotional management in the previous articles, let us now discuss the importance of the core

competence of Social Intelligence, i.e. Empathy for leaders and how to nurture it.

CEO 4.0 EMPATHY : KEY TO FULFILLINGRELATIONSHIPS - PERSONALOR PROFESSIONALBy Prof. Vipul VyasHR Facilitator and Life CoachDirector, Mann - The Mind, Mumbai

Resolve to be tender with the young, compassionate with

the aged, sympathetic with the striving and tolerant with the weak and wrong. Sometime

in your life, you will havebeen all of these.

- Gautama Buddha

Here is a classic example of huge business cost wherein a leader lacks empathy. “One of the worst corporate gaffes in the view of Christopher and Jeff of Bloomberg, is when a physician was dragged off a plane to empty his paid seat for an employee of United Airlines. United CEO’s first and sadly inadequate statement was “I apologies for having to re-accommodate these customers,” seriously missed the mark in attempting to relate to his customer’s experience. On the other hand we know as to how Shri Ratan Tata, Chairman, Tata Group, connected with the customers of Taj Hotel and with hawkers nearby, post 26/11 Mumbai terror attacks.

Our behaviuor and communication is a function of our interpretation of the context. Interpretation is a function of our perception about the situation or people. So the important question is - accuracy of our perception depends on what? If, perception is right, our interpretation and therefore behaviour and communication will be in sync with the context, or it willmis-fire, causing serious damage to personal and professional relationships. One of the most important factor to arrive at error-free perception is - Empathy. It is an ability to connect with others, to experience the emotions the other person is experiencing now but more importantly, offering the support required to the person.

Sexual harassment tsunami in the corporate world is a clear indication of lack of empathy. If an offender is able and willing to put himself in her shoes and understand how she would feel when subject to his actions, he would be far less likely to comment on her body or to grab her.

Empathy is not a touchy-feely skill but it means being able to understand the needs of others. That leads us to being aware of their feelings and thinking. It is not possible to develop a team or second line of leadership without empathy. We all have our story of life, which has shaped our mind-set and tendencies. Similarly, others also have reasons - why they behave and say; the way they have behaved and said. Empathy becomes easy when we consciously try to live the life of the other person about which we are usually unaware. Hence, it is imperative to seek information and ask specific questions to seek explicit answers about the ‘treatment’ the other person has received in the previous years.

Only through empathy can a leader know, if the team you are trying to reach is actually reached. A leader can also safely anticipate the impact his/her decision would have on the stakeholders and can adapt to it. As popularly described, empathy is the ability to put yourself in the other person’s shoes. But the difficult part is - make sure you are evaluating how THEY would feel in their shoes, not how YOU would feel in their shoes. This is the reason, why it is critical in the making of a leader, that s/he must undergo basic exposure and training of all the functions of business management. Only after having such an exposure, the new generation of leaders would be able to understand how the other person might feel in his/her shoes and not how they would feel it. For example, while

Empathy is going beyond one’s body-mind complex and by using the power of conscious and active compassion, reaching out to the other person’s experiences, with a purpose to help.

FEATUREFEATURE


Empathy is often misunderstood as being goody-goody, always. How ever, it is not. Empathy can also be reflected while being strong and aggressive, depending on the context. For example, showing empathy to a team member smoking in the fire-sensitive area is a huge error, of not showing empathy to entire workforce in the factory. In such a case, conveying strong objection with a purpose to correct the behaviour is - empathy, and not otherwise.

Following are few myths about empathy:• Empathy is about connecting emotionally, has nothing to do

with physical fitness: Without physical fitness, it would be very difficult to go beyond your body-mind comfort to understand others’ comfort.

• Empathy cannot be learned: Not true. It is a half-truth. Empathy can be learned intellectually.

How do we know, that, we are empathetic or not? If your answers to the following questions are ‘Yes’, you are empathetic person:• Apart from expressing concerns, do you offer support and

help?• Do you listen people actively and with a purpose to

understand them, rather with a purpose to reply them?• Can you grasp person’s true intentions easily, while

conversing with him / her?• Does your colleagues and relatives say that you are a

friendly person?• When you meet new people, can you make them feel free to

talk about themselves?• Can you understand someone’s emotions even if s/he don’t

talk about it?

discussing with employees in the finance team the application of empathy would totally focus on return on investment, but while with marketing team, the focus would be on brand positioning in the market.

“Expanding emotional intelligence challenge resolved.” - Prof. Vipul Vyas, Ph.D. (EI), MBAwww.drvipulvyas.com | [email protected]

Next two articles in CEO series will be focussed on developing the remaining two domains of Emotional Well-Being, in the self and in others. Article By: Prof. Vipul Vyas, HR Facilitator and Life Coach, Director, Mann - The Mind, Mumbai

Like us, an organisation is also a living entity, reflected in its work culture, emotional climate, values, and sense of success or failure. Empathy is applicable not only in-house but with all other stake holders of the business, i.e. investors, suppliers, market, industry, society, government, security forces, and so on. Empathy through its power to connect, can reach to non-human species also. This expansion is unlimited and can result in unprecedented growth in compassion and unconditional love for all. In my view, empathy is essential not only for successful leadership or business, but also for the fulfilling life.

Sexual harassment tsunami in the corporate world is a clear indication of lack of empathy. If an offender is able and willing to put himself in her

shoes and understand how she would feel when subject to his

actions, he would be far less likely to comment on her body or to grab her.

• Empathy is about experiencing others’ feeling: Empathy is about understanding what other person might be experiencing in the situation.

• Being emotional is being empathic: Being over emotional is in fact a sign that you are not able to regulate your own emotions. Sometimes, being strong is also being kind and empathic.

• Empathy means sharing values and beliefs: It is not. Empathy is about understanding others thought processes and why those processes are, but one doesn’t need to share those views or beliefs.

• Empathy is inappropriate in the workplace, for being tagged as overly emotional: The ability to empathise with co-workers, team members, superiors, and customers is a powerful way to build shared meaning and strong bonding.

SEMINARS & EVENTS CONDUCSEMINARS & EVENTS CONDUCTED BY BBF FOR THE PROGRESS OF


Seminar on INTEROPERABILITY AMONG CLEARING CORPORATIONS(With Indian Clearing Corporation Ltd.) on 24th January

Kutch Saurashtra Productivity Council | Talk on Indian Economy(Rajkot | February, 12th)

Gathering

Gathering


TED BY BBF FOR THE PROGRESS OFSTAKEHOLDERS OF CAPITAL MARKETS (JANUARY - FEBRUARY 2019)

All India Seminar on Surveillance Measures including GSM/ASM(With BSE Ltd.) (Mumbai | February, 13th)

Gathering

BBF Camp for Single Registration on 15th & 18th February (With BSE Ltd.)


SCULPT YOUR FUTURE

By Jaya RowFounder, Vedanta Vision &Managing Trustee, Vedanta Trust

PHILOSOPHY & PHILOSOPHY &SELF MANAGEMENT

Jaya Row, Articulate, effective and engaging, Mrs. Jaya Row brings alive the wisdom of the Vedas in a modern context. Combining her experience in corporate life with 40 years of study and research of Vedanta she provides useful insights to life.

Charming oration which transforms complex Vedic principles into brilliant management mantras is the hallmark of her discourses. Her clarity, wit and zeal have captivated audiences far and wide and inspired people from all walks of life.

She has the rare gift of being able to connect with and address the concerns of a wide range of people from varied walks of life - from CEOs, corporate executives and policy makers to industrialists, scientists & doctors, lawyers, academicians, homemakers and university students.

Apart from her popular discourses in India, she is a well loved speaker in the United States, UK, Europe and other countries for the last several years. She has been invited to speak at prestigious organizations such as:

• World Economic Forum Davos • Google, California• Intel, California• MasterCard, New York• World Bank, Washington DC• Deutsche Bank, New York• Stockholm School of Economics• Princeton University, New Jersey• Shell UK, London• Coca Cola Company, Atlanta• Young Presidents’ Organization• Maersk Liner Graduate Programme

She has specially designed world-class educational programs on basic human values for school children and the youth. She has published books on life values for 5 to 8 year olds.

obody can predict your future. Only you can create it - with your Nthoughts. One thought can change

the pattern of your life. Sometimes society, nation, the whole world can transform with just a thought.

Thoughts are like bacteria. They multiply fast and change the fabric of your life. A thought pops up in your mind. If you identify with it and invest in it, you get caught up with it and it imprisons you. Thereafter you cannot think any other way, however bizarre and unreasonable the thought may be.

Shakespeare’s Othello had no doubt that he was right and strangled his wife Desdemona to death! Macbeth thought there was no other way of becoming King than by killing King Duncan. Similarly we are all locked on to a particular way of life, not realising there are better alternatives.

The law is - As You Think So You Become. Your thoughts are the blueprint which pan out as your personality and circumstance. A happy mind creates a happy world; an ill-tempered person has an angry world. A small mind is focussed on petty, insignificant things. A mature mind sees beauty and grandeur in the universe. If your environment is not conducive, you cannot go out into the world to change it. Change your thoughts. Miraculously, the situation begins to change.

You cannot achieve greatness with a small mind. You have to first think big, beyond yourself. But you have desires to fulfil, money to earn, family to look after and you get bogged down with just this. To achieve excellence you do not need more degrees, better skills or enhanced connections. All you need is better thoughts! This is easier said than done. You need guidance to bring about this change.

India is blessed with a galaxy of great thinkers who left a rich legacy of wisdom that transforms ordinary mortals to extraordinary immortals. One such e n l i g h t e n e d M a s t e r w a s A d i

One thought can change the pattern

of your life. Sometimes society, nation, the whole

world can transform with just a thought.

Jaya Row will speak on Bhagavad GitaCh 3 - Karma Yoga

at G. D. Birla Sabhagar, Kolkata, from 7 to 10 March daily 6.30 to 8 pm.

www.vedantavision.org | All are welcome

Shankaracharya who lived in the 8th century AD. His writings fall in three categories - commentaries on Upanishads, Bhagavad Gita and other texts, original compositions which serve as introduction to the Bhagavad Gita, and devotional pieces. The BhajaGovindam is an introductory text. It focuses on the twin motivations that drive all humans - acquisition of wealth and enjoyment of the objects acquired. It presents the world from a different perspective.

ample measure and you will have amazingly satisfying relationships.

Life is as uncertain as a drop of water on a lotus leaf. Even during your life you are consumed by disease, sorrow and arrogance. Upgrade your feelings and thoughts. Keep the company of good people, loving and uplifting thoughts.

As the mind expands to accommodate the higher, you get disengaged from the lower. You grow into a towering personality, independent of the world. Ultimately, you take that giant leap into the realm of the Infinite!

B h a j a G o v i n d a m d i s p e l s t h e misunderstanding that spiritual life entails shunning of wealth, family and goodliving. Do not renounce wealth. Give up the greed that comes in the way of acquiring wealth. Be content with what you have. With a calm mind the intellect can aspire for more. Fix a higher ideal. Work dedicatedly for the welfare of others. Prosperity and happiness will come to you!

The whole world is in a frenzied chase after enjoyment. The more you indulge the less you enjoy. The way out is regulated contact with sense objects. So that the thrill of the first contact continues till the last day of life!

You have conflict with the people you love most because of attachment. Attachment is love polluted by selfishness. Attachment springs from insecurity and lack of self sufficiency. The law is - Attach you suffer. Attach you lose. The way out is ‘detachment’ or true love. Love people for what they are. Have no expectations, make no demands. Your love will be returned in

WELLNESS Q&WELLNESS Q&ABY NAMITA JAIN

OSTEOPOROSIS

By Dr. Namita JainManaging Director, Kishco Limited


Q: My bones are weak, and I have osteoporosis. I have been advised to exercise by my doctor. What kind of exercises do you recommended for osteoporosis? What are other ways to ensure that my bones stay strong?

Exercise helps develop and maintain healthy bones. It builds strength and stamina and increases bone density. People who exercise regularly are less likely to suffer from fractures or bone injuries - and ailments such as arthritis, osteoporosis and back pain can be reduced or prevented with regular exercise.

The two types of exercise that helps strengthen bones are weight bearing and resistance training exercises.

Weight bearing exercises are those in which the bones and muscles work against gravity. Any exercise where the feet and legs bear the body’s weight while exercising is called a weight bearing exercise. Examples are walking, jogging, stair climbing, dancing, tennis, golf and soccer.

Resistance training exercises are those exercises that use resistance to strengthen the bone and muscles. Examples are weight training exercises using machines, free weights or body weight.

Myths

1. The more exercise you do the stronger your bones will be.Over exercise can cause wear and tear of bones and actually weaken the bones. In women, over exercising can lead to amenhorrea, a condition in which the number of yearly menstruation cycles decrease, leading to brittle and fragile bones.

2. Regular exercise alone is adequate to increase bone strength.Bone strength depends on consistent weight bearing exercise in addition to regular intake of adequate calcium. Both these elements play a vital role in increasing bone density and strength.

3. You can never know when your bones gain strength.Though you cannot see your bones becoming stronger, you will certainly realize the increase in strength of your bones when you exercise or play a game. For example, when you play a

Namita Jain, MD Kishco Ltd. has been actively involved in the wellness space for over 25 years. She is qualified from the American College of Sports Medicine, the American Council of Exercise, the Aerobic and Fitness Association of America, the Reebok and the Pilates UK institute. She has authored over 10 best-selling health and wellness books. In the field of rehabilitation, she offers consultations at Bombay Hospital. This column addresses concerns faced by many and her insights for facing the challenge. Learn the powers and perils of lifestyle changes through this Q &A column.

For information and registration on specialized workshops conducted by Namita Jain, contact prism healing institute at - [email protected].

game of tennis you will realize the increase in bone strength when you can easily handle the impact of the game.

4. Weight bearing exercises are for those who are fit and athletic.Weight bearing exercises are for all fitness levels and ages. A simple weight bearing exercise, such as walking is one of the best exercises for bone development.

5. All types of exercises help increase bone strength.Weight bearing exercises are specifically recommended to improve bone strength. They not only improve calcium absorption in the bone but they also stimulate bone formation and improve balance and coordination to reduce the risk of falls or injuries.

Taking chargeYou may be unable to do anything about your genes, menopause and hereditary factors predisposing you to fragile bones, but you can do much to change your lifestyle to improve the strength and density of your bones. Consider these factors:

WeightAim for healthy body weight. Evidence suggests that if you are too slim or too thin you could run an increased risk of developing osteoporosis.

Exercise and nutritionRegular exercise and adequate nourishment is essential for healthy bones. Vitamins and minerals, especially calcium and vitamin D, play a vital role in developing strong bones.

Caffeine, smoking, alcoholExcess caffeine, alcohol and smoking increase the loss of calcium, resulting in brittle bones.

Food for the bonesCalciumInadequate calcium contributes to the development of brittle bones. Research shows that many women consume less than half the amount of calcium to maintain healthy bones. Depending on your age, an appropriate calcium intake falls between 1000 and 1200 mg per day.

Calcium-rich foods: Milk, yogurt, orange juice, cheese, sardines, oysters, green vegetables, beans and broccoli.

Vitamin DVitamin D is needed to absorb calcium. The early morning rays of the sun are gentle and will provide you the valuable vitamin D for healthy bones. However, exposure to the sun for long periods is not recommended. A daily intake of recommended intake of vitamin D is 1000 ug.

Foods containing vitamin D: Milk, egg yolk, tuna and salmon.

Bone strengthening recipes

Fruit milkshake (Calcium, Vitamin D, Vitamin A, B12, C, Potassium)

Serves: 2 Preparation time: 5 minutes

Ingredients» 1 glass skimmed milk» 1-cup mixed fruit (washed and cut)» 1 tablespoon honey

Method: Blend in a blender.

Cottage cheese spread (Calcium, Vitamin A, B12, D, iron, magnesium, phosphorus)

Serves: 2Preparation time: 10 minutes

Ingredients» 1/2 cup crumbled cottage cheese (low-fat)» 2 tablespoons yogurt (hung)» 2 tablespoons chopped coriander» 1/2 tablespoon chopped spring onions

(option)» Salt to taste» Freshly ground pepper

Method: Mix the ingredients. Spread on whole grain bread, crackers or use as a dip.

CILANTRO: THE 'SUPER HERB’

Priti K. ShroffFounder and Managing DirectorPRISIM - The Healing Temple

HEALING TEHEALING TEMPLE

Often referred to as a “Super herb,” cilantro packs a pretty big

punch considering its size. Cilantro contains vitamins A and K, as well as high levels of vitamin C and the

trace mineral manganese.


or many thousands of years, people across the globe have enjoyed the fresh, citrusy flavor and bright, zesty aroma of one Fof the world’s oldest and most beloved herbs, cilantro.

Commonly known as Coriander leaves, cilantro is a favourite of many in the culinary world, boasting a rich history of food pairing that’s almost as old as time itself. Often used in Mexican, Asian, and Caribbean cooking, and rich in minerals, vitamins, and antioxidants, cilantro can provide a healthful boost to many a meal.

But did you know that cilantro is well known for its medicinal properties as well? Hailing from the Apiaceae family of herbs, which includes about 3,700 plant species, cilantro is abundant in therapeutic elements that scientific studies suggest may help keep the body robustly nourished and free of toxins. Because it’s loaded with vitamins, minerals, and antioxidants, cilantro is a top pick when it comes to perking up foods with a little extra nutrition as well as taste.

metals like aluminium and lead. But the good news is that science has uncovered some powerful substances that may be able to help, cilantro potentially being among these. Numerous studies have shown that regular consumption of cilantro may help to cleanse the body. It does this by aiding the body in its natural elimination of heavy metals by binding to and eliminating them from both the digestive tract and any other tissues where they may have accumulated.

Often referred to as a “Super herb,” cilantro packs a pretty big punch considering its size. Cilantro contains vitamins A and K, as well as high levels of vitamin C and the trace mineral manganese. Cilantro also contains an impressive line-up of other vitamins and trace minerals such as B vitamins, calcium, iron, zinc, phosphorus, potassium, and magnesium.

Cilantro is such a powerful antioxidant that it’s often used as a natural preservative, its oil helping to inhibit oxidation and prevent spoilage in food. There are also antibacterial elements within cilantro that studies have shown can help prevent various bacterial infections.

Researchers from the University of California, Berkeley, published a paper in the Journal of Agricultural Food Chemistry back in 2004 that showed inhibition of many different varieties of bacterial infections using cilantro extracts. A major constituent of cilantro, referred to in the study as “dodecanal,” was found to be twice as effective at killing Salmonella compared to common antibiotic drugs.

Cilantro for Detox: Flush Out Those Toxic Heavy MetalsIt’s an unfortunate fact that our world is polluted, and we inadvertently ingest all sorts of chemicals, including toxic heavy

There are many reasons why it’s so important to keep your body free of heavy metal toxins. If you don’t, they could end up negatively affecting your brain, muscle tissue, endocrine system, and even bone structure. Toxic metals that get into these areas can lead to impaired organ function, hormone imbalances, and oxidative stress, which can lead to chronic inflammation and other damage.

According to Dr. Yoshiaki Omura, MD, Director of Medical Research at the Heart Disease Foundation in New York, people who take antibiotic drugs are actually worsening their chances that heavy metals will build up inside their bodies and cause long-term harm. Research that Dr. Omura helped author revealed that cilantro can help undo this damage and help those with chronic health problems caused by antibiotics to recover.

Keep Your Tummy Happy with CilantroBeyond its heavy metal busting abilities, cilantro has long been used as a natural remedy for upset stomach, including bloating and gas, heartburn, and stomach cramps. Cilantro also has another leg up on many other herbs: it may aid in the body’s natural production of digestive enzymes - helping to speed up the breakdown of food, as well as support its rapid and thorough assimilation into the digestive tract. When eating spicy foods (as most Indians are fond of doing), cilantro can also help “cool” them down and make them more digestible. (In this case “cooling” referring to flavor temperature, not the actual physical temperature of food.) This simple mechanism of helping to “neutralize” the impact of spices on the body while at the same time supporting and enhancing their benefits suggests that cilantro really is something of a class act when compared to its peers.

Those who suffer from chronic bloating, cramps, and generalized abdominal pain may also benefit from consuming more cilantro, as might those who’ve recently developed food poisoning. Many of these conditions could be a factor of not eating enough natural produce with detoxifying elements, of which cilantro ranks among the most densely packed. Even when compared to other similar herbs like dill and eucalyptus, not a one of them was found to be anywhere near as potent or effective as cilantro.


HEALING TEMPLEHEALING TEMPLE

DirectionsFirst you need to peel off the chickpea skins. In a food processor blend the chickpeas until they are a coarse grain. Now add the tahini, garlic, ginger, lemon juice, cilantro and salt. Blend for a full minute or two. Now with the processor still running drizzle in the oil and then the water. For an even smoother, thinner consistency add more water.

olive oil and blend until a paste begins to form. Add remaining olive oil and Almonds (Optional).

2. Taste, season with salt and pepper, and add pine nuts, garlic, salt or pepper as needed. Toss with pasta or serve on toasted bread.

Cilantro and Ginger Hummus

Ingredients

• 1 can (15 ounces) chickpeas (you can use dry and cook your own too)

• 1/2 cup tahini• 1 tablespoon minced garlic• 1 tablespoon grated fresh ginger• 1/4 cup cilantro• Juice from 1/2 a lemon• 1/4 cup water (or reserve the chickpea cooking water if you use

dry beans)• 1/4 cup olive oil• 1 teaspoon sea salt

Prisim Healing Institute is an alternative health center that believes in healing one individual at a time.

We have various complementary therapies that help an individual to reach to their optimal health.• 10 Day Detox Programme• Brahma Satya Energy Healing• Aura Scan & Analysis• Aura Cleanse & Chakra Alignment• Crystal Healing Workshops & Crystal Grid• Yoga & Zumba• Sujok & Acupuncture• Sound Therapy• Art Therapy & Zentangle• Emotional Catharsis• Fairy / Angel Card Reading• Healing Meditations - Chakra Meditation, Naadabrahma etc.• Numerology• Hypnotherapy / Past Life Regression• Clearing of Spaces• Reconnective Healing & The Reconnection• Heartlight Ascension• Raw & Vegan Foods by Prana Kitchen

There have been various studies done on this simple domestic herb, all showing that everything from neurological inflammation and skin problems to urinary tract infections and cardiovascular disease may be improved by consuming enough cilantro. Even cancer has a link to cilantro, with research suggesting that consuming more of this powerful herb may help to ward off or protect against colon cancer.

As you can see, this versatile herb has an awe-inspiring array of potential health benefits, many of which have been lost or overlooked over the years.

Here are our top 10 uses for cilantro:1. Add cilantro into a stir-fry, toward the end of cooking to maintain

the fresh flavor and oils that can stimulate digestion and minimize gastric distress.

2. Chop and toss into some of the fresh herb into guacamole. 3. Dab it. Essential oil of cilantro can be used topically to minimize

skin inflammation. To use, add a small amount (a couple of drops) to your favorite cold sesame oil or almond oil for a light, soothing massage.

4. Throw a handful into a smoothie. 5. Stew a coconut curry. There’s nothing like a warming, ginger-

cilantro curry to nourish and soothe.6. Chop it like salad and eat a whole bunch! Make it tasty with

chopped peanuts, mango, and crisp green lettuce to boost gastrointestinal processes.

7. Season your dishes.8. Finish sesame noodles with fresh, chopped peanuts and cilantro.9. Garnish all your dishes with this nutritious herb. 10. Add cilantro to a fresh-pressed juice for a cooling effect for pitta

doshas. According to Ayurveda, fresh cilantro is especially good for cooling down pitta in the digestive tract as well as topically for hot, itchy skin issues.

Simple Cilantro Recipes

Cilantro PestoMakes: about 2 cups

Ingredients• 1 bunch cilantro• 4 cloves garlic• 1 1/2 ounces pine nuts• 1/4 cup olive oil• Salt and pepper• Almonds (Optional)

Directions1. Put the cilantro in a food processor and pulse until chopped. Add

the garlic and pine nuts and pulse to combine. Add about half the

Tobacco use can increase blood

sugar levels and lead to insulin

resistance. And the more you smoke or chew tobacco, the greater you are at

risk of getting diabetes. Heavy smokers - those who smoke more

than 10 cigarettes a day - almost

double their risk of developing

diabetes, when compared with nonsmokers.

TOBACCO & DIABETES:AN UNDERCOVER RELATIONSHIP?

By Parth AdhyaruFitness Fundamentalist & Wellness Consultant


FITNESS CLINICFITNESS CLINIC

tissues. It is as if insulin is “knocking” on the door of muscle. The muscle hears the knock, opens up, and lets glucose in.

Parth Adhyaru is a fitness fundamentalist & wellness consultant. He is an M.D. in Alternative Medicine & relies on herbs & phyto-compounds extensively for weight loss, control & prevention of lifestyle induced diseases & conditions. He is an active participant in the ESPEN (European Society of Clinical Nutrition) & a former newspaper columnist featuring ‘Fitness Fundas’.

e all knew Tobacco was harmful. Smoking has been Wlinked with lung cancer &

other several diseases, chewing tobacco has been linked with oral & other cancers; why aren't people by & large aware about Nicotine's (almost) direct relationship with Diabetes (type II)? Is it an undercover relationship?

Believe it or not, Tobacco use can increase blood sugar levels and lead to insulin resistance. And the more you smoke or chew tobacco, the greater you are at risk of getting diabetes. Heavy smokers - those who smoke more than 10 cigarettes a day - almost double their risk of developing diabetes, when compared with nonsmokers.

How this happens?

Nicotine inhibits the release of insulin from the pancreas, a hormone that is responsible for removing excess sugar from a person's blood. This leaves the smoker in a slightly hyperglycemic condition, meaning he has more sugar in his blood compared to normal level. High blood sugar acts as an appetite suppressant, which may be why smokers often observe post-smoking hunger suppression.

Through research it is evident for decades now, that Nicotine initially disturbs & eventually may disrupt body's Insulin mechanism - leading to a medical condition called 'Insulin resistance' . Insul in resistance (sometimes also referred to as pre-diabetes) is the diminished ability of cells to respond to the action of insulin in transporting glucose (sugar) from the bloodstream into muscle and other

keep up, blood glucose starts to rise, initially after meals, eventually even in the fasting state; Apparently, type II diabetes!

A study funded by the National Institute of Health (USA) has uncovered why cigarette smokers often die from cardiovascular disease: Nicotine promotes insulin resistance, a condition considered to be a risk factor (also) for cardiovascular disease. Other studies have also shown that nicotine and cigarette smoking cause the levels of the stress hormone, cortisol, to rise - that may further induces disturbances in body's insulin mechanism.

Sad news for the Coffee-lovers as well: Researchers at three different universities at Ontario, Canada studied the link between caffeine and type 2 diabetes, the most common form of diabetes in Canada. They concluded that consumption of caffeine (active ingredient of coffee-beans) induces insulin-resistance in patients with and without diabetes.

However, a couple of cups of coffee a day should not be a matter of risk.

But with insulin resistance, the muscle cannot hear the knocking of the insulin (the muscle is "resistant"). The pancreas makes more insulin, which increases insulin levels in the blood and causes a louder "knock." Eventually, the pancreas produces far more insulin than normal and the muscles continue to be resistant to the knock. As long as one can produce enough insulin to overcome this resistance, blood glucose levels may remain normal. Once the pancreas is no longer able to

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NL Mar 2019 - BBF India