1) Tech Mahindra Ltd acquires UK-based BIO Agency Ltd.
- Tech Mahindra has snapped up digital transformation firm UK-based entity BIO Agency for 40 million pounds in an all-cash deal to expand its digital portfolio.
- The consideration is the enterprise value of 40 million pounds plus surplus cash not exceeding 5 million pounds as at the completion date. The payment of 22 million pounds and the surplus cash will be made upfront and the balance as deferred payments based on the company performance.
- Though it is a small acquisition for the fifth largest IT services player in the country, BIO is expected to help Tech Mahindra compete with larger global rivals, Accenture and Cognizant, who have been able to build strong digital portfolios largely driven by acquisitions of not just smaller IT firms but also buying digital agencies.
- BIO specializes in digital transformation and innovation, helping organizations change the way they engage with their customers. The company recorded revenues of 12.5 million pounds for the financial year FY16 and has a strong presence in the UK with 25-30 large clients, including Western Union, Coca Cola, BBC and Microsoft.
2) Government extends date for reporting accounts details under Foreign Account Tax Compliance Act (FATCA).
- The revenue department has extended the date for reporting details of accounts under Foreign Account Tax Compliance Act (FATCA) by six months to 2016, and excluded two types of entities from the purview of the Act.
- Under the amended rules, the reporting of the high value account as 2015, by foreign financial institutions based in India under FATCA should be completed by December 31, 2016, instead of June 30, 2016.
- In order to remove anomaly in the definition of "passive non-financial entity", the Central Board of Direct Taxes (CBDT) has excluded `withholding foreign partnership (WP) and withholding foreign trusts (WT)` from the purview of FATCA reporting norms.
3) AIIB approves first loans for projects in four countries.
- Pakistan, Bangladesh, Indonesia and Tajikistan will get the first set of loans totaling $509 million from China sponsored Asian Infrastructure Investment Bank (AIIB) in which India is a founding member.
- The Beijing based AIIB will disburse $509 million to finance four projects in the four countries.
- India is the second largest shareholder in the bank after China.
- AIIB was officially established in late 2015 with authorized capital of $100 billion. China is the largest shareholder with 26.6% voting shares. India is the second largest shareholder with 7.5% followed by Russia with 5.93% and Germany with 4.5%.
- Projects approved by the bank included a $165 million loan for a Power Distribution System Upgrade and Expansion Project in Bangladesh, $216.5 million loan for a National Slum Upgrading Project in Indonesia, expected to be co-financed with the World Bank.
4) InMobi faces $950,000 fine in US for ignoring privacy policies.
- Mobile ad tech firm InMobi, one of the earliest Indian unicorns, received a major blow as the US Federal Trade Commission asked the company to pay $950,000 in civil penalties on charges that it deceptively tracked the locations of hundreds of millions of consumers without their knowledge. InMobi acknowledged the violation, calling it a ‘technical error’.
- The FTC alleged that InMobi’s advertising software tracked consumers’ locations whether or not the apps using InMobi’s software asked for consumers’ permission to do so, and even when consumers had denied permission to access their location information.
- Experts believe the fine is too small for InMobi to worry about, but at the same time will set the benchmark for Indian companies, which often ignore privacy policies in their products.
- The FTC alleged that InMobi also violated the Children’s Online Privacy Protection Act (COPPA) by collecting this information from apps that were clearly directed at children, in spite of promising that it did not do so.
5) ADB extends $500 million loan for river bridge in Bihar.
- Asian Development Bank has approved $500 million (approximately Rs. 3350 crore) loan for constructing a bridge across Ganga.
- Once built, the 9.8 km road bridge in Bihar will be country’s longest river bridge. The bridge would provide vital transport links between the northern and southern parts of the state and with neighbouring country Nepal.
- The project will run for about 4 years and is expected to complete by the end of 2020.
- The bridge is expected to benefit over nine million or ninety lakh people looking for job opportunities on both the sides of bridge. ``The new bridge will make it easier for people to move between jobs and markets, particularly for poorer communities in the north wishing to travel to the state capital, Patna, just south of the river.
6) Indiabulls Housing Finance to raise Rs. 300 crore via NCDs.
- Indiabulls Housing Finance Ltd is planning to raise Rs. 300 crore by issuing Unsecured Non-Convertible Redeemable Debentures (Tier II) in the nature of subordinated debt on private placement basis.
- The housing finance company informed the BSE that it will be issuing 30,000 debentures (of 10 years maturity) in the nature of subordinated debt with a face value of Rs. 1 lakh each aggregating Rs. 300 crores (plus greenshoe option).
- As per the terms of the issue, the debentures will carry a coupon rate of 9.30 per cent per annum.
7) JSW gets green nod for Rs. 35,000 crore Jharkhand plant.
- JSW Steel has received the environmental clearance for setting up an integrated steel unit and captive power plant in Jharkhand with an investment of Rs. 35,000 crore.
- The project would create up to 30,000 additional indirect jobs.
- The company will set up a 10 million tonnes per annum (MTPA) capacity integrated steel unit and a 900 mw captive power plant as well as a township spread across over 3,800 acres in seven villages near Sonahatu block in Ranchi district.
- The green clearance has been given subject to some conditions based on the recommendations of the government`s Expert Appraisal Committee (EAC).
- JSW has signed a pact with Jharkhand government for the project, which is estimated to cost Rs. 35,000 crore and generate additional 20,000-30,000 indirect jobs.
- During the first phase, the proposed plant would have a capacity of about 5 MTPA of liquid steel.
8) Tata, Starbucks launch new joint initiatives.
- In a bid to raise their partnership to a new level, Starbucks Coffee Company and the Tata Group have agreed to take a host of initiatives, including the inclusion of a single-origin coffee from India in its U.S. outlets, bringing the brand to Vistara airlines and taking Himalayan mineral water to Asia Pacific markets.
- For the first time, Starbucks will offer a single-origin coffee from India in the U.S., giving customers from outside the country a unique opportunity to experience a rare, small-lot coffee from Tata Nullore Estates.
- These announcements build upon the incredible success and shared values between Starbucks and Tata in our partnership in India.
9) IPL brand valuation rises to $4.16 billion: D&P.
- The Indian Premier League (IPL) has seen a definite increase in its brand valuation in its ninth season, as it drew attention of viewers as well as advertisers for all the right reasons a relatively controversyfree tournament and good on-field performances that brought the spotlight back to the game.
- According to global valuation and corporate finance advisor Duff & Phelps, the value of brand IPL has jumped to $4.16 billion after the 2016 edition, against $3.5.54 billion in 2015. The 19% jump is despite the fact that the US dollar to Indian rupee currency has depreciated by nearly 10%.
- Among the teams, Mukesh Ambani-owned Mumbai Indians (MI) has raced ahead of Shahrukh Khan-owned Kolkata Knight Riders (KKR) to claim top spot in terms of valuation. While MI`s valuation has increased 8% to $78 million from $72 million in 2015, KKR`s valuation declined 10% to $77 million.
10) CBDT clears the air on tax collection at source.
- The Central Board of Direct Taxes (CBDT) has made it clear that the 1 per cent tax collection at source (TCS) introduced in this year’s Budget will apply only to the cash component and not the entire sale consideration. This has been conveyed in a clarificatory circular issued by the CBDT.
- To curb the cash economy, Budget 2016 had introduced a provision in income tax law requiring the seller to collect 1 per cent tax at source from the purchaser on the sale in cash of certain goods or provision of services in excess of Rs. 2 lakh.
Q&A format
- The circular in the form of question and answer has been issued to clarify the applicability of the provision where the sale consideration received is partly in cash and partly in cheque.
- TCS will be applicable only on the cash component of the sales amount, and not on the whole of sales consideration.
- For instance, if goods worth Rs. 5 lakh are purchased for Rs. 2 lakh in cheque and Rs. 3 lakh in cash, 1 per cent tax will be levied only on Rs. 3 lakh.
11) GAAR to apply on income from transfer of investments only after April 1, 2017.
- In a bid to provide clarity to investors, the General Anti-Avoidance Rules (GAAR) will not apply to any income earned or received from transfer of investments before April 1, 2017.
- The move will bring the anti-abuse rules that will be applicable from assessment year 2018-19 in line with the reworked India and Mauritius Double Taxation Avoidance Agreement that will grandfather all investments till April next year.
- To this end, the Central Board of Direct Taxes (CBDT) has also amended Rule 10 of the Income Tax Rules, 1962. However, GAAR will apply to any arrangement, irrespective of its date, if there has been any tax benefit from it prior to April 1, 2017.
- Investors have been worried about the impact of GAAR on investments routed through Mauritius, as the new tax treaty allows India to impose capital gains tax on shares sold in Indian companies post-April 2017.
- The CBDT also plans to bring in a similar provision in the tax avoidance pact with Singapore.
12) IMF clears payment of USD 501 million to Pakistan.
- The International Monetary Fund cleared payment of USD 501 million for Pakistan taking the total amount given to the country to USD 6.1 billion in the last few years.
- This brings the total disbursements to USD 6.01 billion. In 2013, the IMF had approved the 36-month extended arrangement under the EFF in the amount of about USD 6.64 billion at the time of approval of the arrangement.
13) IFC, Wadhawan Global Capital to invest Rs. 60 crore in Aadhar Housing Finance.
- The World Bank`s private sector funding arm International Finance Corporation (IFC) and Wadhawan Global Capital Pvt Ltd are going to raise their investments in Aadhar Housing Finance by putting in Rs. 60 crore between them to help the housing loan provider to lower income families double its business.
- The exercise would be completed in a month or two and would prelude its proposed merger with DHFL Vysya Housing Finance, another entity owned by the Wadhawan family.
- IFC holds 20 per cent in the company set up in 2011 with Wadhawan Global Capital (WGC) having around 62 per cent interest. Dewan Housing Finance Corporation, which is 33 per cent, owned by WGC, holds 14.5 per cent in Aadhar while the balance remains with Wadhawan family members.
- Housing finance companies are barred from owning more than 15 per cent in each other.
14) Ola to invest Rs. 350 crore in Haryana over 5 years.
- Taxi hailing app Ola has signed an agreement with Haryana government to create over 10,000 entrepreneurs in the state with an investment of Rs. 350 crore over the period of five years.
- Ola will work with the Haryana government to introduce innovative and customized mobility solutions like Ola Auto, Ola Bike, Ola Share and Ola Shuttle across the state.
- Ola`s commitment to building mobility for citizens, by using mobile technology and by enabling entrepreneurship and skilling, will be invaluable for the state`s growth.
15) Power sector sees $1.6 billion deals in Jan-May: EY.
- Reflecting increased deal-making activities, Indian power sector saw merger and acquisition transactions worth USD 1.6 billion in the first five months of 2016.
- The domestic power sector saw "significant traction" with M&A activities during January-May 2016 period.
- The deal volume and disclosed deal value in the sector stood at 17 deals and USD 1.6 billion, respectively (in January-May 2016) compared to 15 deals and USD 601 million for the corresponding period last year.
- At current exchange rate, USD 1.6 billion translates to more than Rs. 10,800 crore.
- Five deals, having disclosed value of USD 1.4 billion, were in the thermal power segment during the five months ended May 2016.
16) ITC to invest Rs. 4,000 crore to set up to 9 plants.
- FMCG major ITC will invest Rs. 4,000 crore over the next 2-3 years to set up 8-9 factories across the country for manufacturing of food products.
- ITC`s branded packaged foods division grew by around 11 per cent to clock a turnover of Rs. 7,097.49 crore in 2015-16.
- Food is the second largest business for ITC after cigarettes.
- The company, which recently expanded its new Sunfeast Farmlite biscuits portfolio catering to health conscious consumers, is looking at tapping this fast growing consumer segment.
- Health segment of the biscuit market is about one per cent of industry right now but it is growing the fastest. Key approach is to have a full portfolio across segments.
17) Paytm ties up with Suzuki Motorcycle for easy booking of two-wheeler models.
- India`s largest mobile payment and commerce platform Paytm announced its strategic partnership with Suzuki Motorcycle India Pvt. Ltd. to offer its customers the largest assortment of bike and scooter models across all transactional platforms in India.
- With over 400+ Suzuki dealers on-board, the Paytm marketplace will now enable booking of all Suzuki two-wheeler models on its platform across India.
- As part of the association, Suzuki will also have a brand store on Paytm for higher consumer engagement guaranteeing an enhanced consumer experience. With the alliance, Paytm projects registering sales of more than 10,000 units to be sold on the platform within this calendar year.
- Paytm will also enable vehicle financing to provide higher degree of assistance to consumers while buying a Suzuki product.
18) Quality analysis: CIMFR, power developers, coal miners ink MoU.
- Stat-run coal miners and power developers signed a tripartite memorandum of understanding (MoU) with Central Institute of Mining and Fuel Research (CIMFR) for the quality analysis of coal supplied to coal-based generating companies. As reported by FE earlier, this mechanism could bring down power cost by as much in R1.5 per unit.
- CIMFR, based in Dhanbad, Jharkhand, and a constituent laboratory of the Council of Scientific and Industrial Research (CSIR), will test the grade of coal at both the loading and unloading points of a power station. If grade slippage is detected, the generators will be compensated by the coal suppliers for the difference in gross calorific value (GCV) of the dry fuel. The lower cost of coal will then be passed through to the consumers, resulting in less expensive power.
19) EPFO aims to cover all workers under provident fund, pension by 2030.
- EPFO aims to cover all the workers in the country under provident fund (PF), pension and life insurance by 2030.
- The vision document prepared by EPFO mentions objectives such as ``universal social security coverage on mandatory basis by way of provident fund, pension and life insurance for all workers of the country``.
- The vision also talks about online services for all EPFO benefits with state-of-the-art technology and best service delivery practices.
20) Maharashtra, Tata Power to ink pact for 1,000 MW for Mumbai.
- Keeping in mind the future power requirements of the Mumbai region, the Maharashtra government plans to sign a MoU with Tata Power for sourcing 1,000 MW from the upcoming Dherand Thermal Project.
- The tie-up with Tata Power is a step in that direction. Since the present State government came to power, the transmission capacity for Mumbai city has increased by 1300 MW.
21) World Bank, ISA sign agreement for collaboration in solar energy.
- The World Bank announced plans to provide more than $1 billion to support India’s solar initiatives. An agreement to this effect was signed.
- The World Bank-supported projects under preparation include solar rooftop technology, infrastructure for solar parks, bringing innovative solar and hybrid technologies to market and transmission lines for solar-rich states.
- An agreement was signed for a $625 million grid-connected rooftop solar programme. The project will finance the installation of at least 400MW of solar photovoltaic installations that will provide clean, renewable energy and reduce greenhouse gas emissions by displacing thermal generation.
- The World Bank Group will also collaborate with the 121 member International Solar Alliance, headquartered in India, with the aim of attracting $1 trillion in investments by 2030 to promote solar energy worldwide.
22) CCEA nod for Rs. 6,000 crore road projects.
- The Cabinet Committee on Economic Affairs approved implementation of three highway projects entailing a cost of almost Rs. 6,000 crore.
- These include Aurangabad-Telwadi (Rs. 2,029 crore), Angul-Sambalpur (Rs. 2,491 crore) and Phagwara-Rupnagar (Rs. 1,444 crore). These projects will be implemented in three different modes – Aurangabad-Telwadi on a BOT (toll) basis, Angul Sambalpur on an EPC basis and Phagwara-Rupnagar on hybrid annuity basis.