FEMA STUDY CIRCLE MEETINGS
In October, 2020, the FEMA
Study Circle of the BCAS organised three meetings, details of which are
as follows:
1. Downstream investments
The virtual meeting was led
by Kartik Badiani, Aarti Karwande and Sneh Bhuta and was held on
17th October, 2020.
The speakers started by
explaining the basics of Foreign Direct Investment and Indirect Foreign
Investment. Next, they delved into the types of entities that are eligible to
undertake Indirect Foreign Investment and the manner of calculating Direct as
well as Indirect Foreign Investment. This was followed by a detailed
explanation on the various compliance and reporting requirements – as well as
consequences of non-compliance.
The presentation was
replete with case studies that not only made it interesting but also evoked
questions from members.
2. Amendments to the Foreign Contributions
(Regulation) Act, 2010
This virtual meeting was
held on 19th October and was led by Isha Sekhri.
It was
held in light of the recent amendments to the Act that came into force on 29th
September. Isha discussed various amendments pertaining to the
restriction on acceptance of foreign contributions by public servants,
prohibition on transfer of funds and the cap on administrative expenses at 20%,
amongst others, in a very crisp, eloquent manner.
The session was indeed
helpful as members felt they were better equipped to handle queries from their
clients on the manner in which they need to adapt to the recent amendments.
3. Structuring of
investments in Startups
Ganesh
Ramaswamy led this meeting which was held on 31st October.
The
speaker explained the concept of a Startup and the various facets associated
with it, viz., investments by Foreign Venture Capital Investors (FVCI), issuance of Convertible Notes, FDI in Startups, amongst others.
He
explained in detail tax aspects pertaining to various jurisdictions, viz.,
Germany, Switzerland, the United Kingdom, the United States of America and the
Netherlands to name a few. The presentation was made more interesting with
anecdotes about his experiences with clients of different countries and the
people there.
COVID IMPACT ON ECONOMY AND CAPITAL MARKETS
A virtual panel discussion
on ‘Post-Covid Impact on Economy and Capital Markets’ was organised on 28th
October. The panellists were Dr. B.K. Bhoir (ex-RBI and an Economist), T.N.
Manoharan (Past President of the ICAI) and George Joseph (CEO of an
ITI AMC). The panel was moderated by Dipan Mehta.
President
Suhas Paranjpe welcomed the panellists and spoke about the devastating
impact of the Covid-19 pandemic on industries, businesses – small and large,
the financial markets and the speculation about the V/U/L/H-shaped recovery in
the economy post the devastating contraction in the Indian economy. Speaking
about the expectations of stimulus packages, he also discussed the need for a
direction as to where the economy was headed and said that this was the theme
for the lecture meeting.
Vice-President Abhay
Mehta introduced the panel members and handed over the proceedings to
moderator Dipan Mehta.
Each of the panellists gave
a brief overview. In his presentation, Dr. Bhoir pointed out that the
public at large is only discussing the impact of Covid on the GDP; however, its
impact had been far more devastating and far-reaching. It had impacted the
social fabric and the personal and mental well-being of the people at large.
He also noted the GDP
forecasts being made by various agencies and contrasted the same with his own
forecast and the reasons for the same. He also gave his prescription for the
way forward and the challenges that the government is likely to face in the
coming days.
T.N.
Manoharan highlighted the positives from the pandemic and how virtual
webinars were helping increase the spread of knowledge. At the same time,
despite the pandemic, several sectors had been growing, such as telecom,
healthcare, drugs and pharma, financial services, agriculture, food processing,
agricultural implements like tractors, automobiles, power generation, etc.
He pointed out how some
sectors had adapted to the scenario and grown despite the challenges – a case
in point being resorts. He ended his talk by hoping that the worst was over and
prayed that the vaccine would be available soon.
George
Joseph started his overview by pointing out that there were no
precedents to the current situation and the closest he could cite was in the
1820s; he remarked that it was surprising that 100 years later the manner in
which the extreme situation was being dealt with was strikingly similar.
Covid-19 had been a traumatic experience for the people at large but now they
were venturing out.
Referring to the historical
data, he said that by 2010 the economy had started to slow down; various
factors had contributed to that; and then there were a series of steps taken by
the government such as demonetisation, GST implementation, etc., which had
their impact on the economy – all these followed by a series of crises such as
the NBFC and other crises. But despite these negatives he was optimistic that
the Indian economy would rise and start growing since the protracted down-cycle
had ended and he expected a boom considering that the manufacturing cycle was
gathering momentum, and both the Chinese and the American economies were showing
positive indications. He expected the Indian economy to grow at a phenomenal
pace in the foreseeable future. If a stimulus package came through, it would
further assist in the growth of the economy.
Dipan
Mehta then proceeded with questions to each of the panellists. These
ranged from aspects such as interest rates, thrust of the stimulus, impact of
moratorium on loans on the banks, increase in bank deposits and slowing down in
the investment cycle, recognition of NPAs, restructuring of failing businesses,
how to attract fresh investments, need for a fiscal stimulus, movement in
interest rates, likelihood of a second wave of Covid-19 and its impact, and the
way forward.
Joint Secretary Mihir
Sheth proposed the vote of thanks.
ARTIFICIAL INTELLIGENCE – DEVELOPMENTS IN FINANCE,
ACCOUNTING & AUDITING
An unusual Zoom meeting was
organised on 4th November. It was a
virtual lecture on ‘Artificial Intelligence – Developments in Finance,
Accounting & Auditing’. The faculty was Mr. Rohit Gupta who
delivered his talk live from the USA.
In his opening remarks,
President Suhas Paranjpe presented an overview of the increasing
prevalence and growing importance of Artificial Intelligence in the finance
world in general and in the field of financial accounting in particular.
Mr. Gupta
covered the following areas of interest:
- What is AI and why is it
relevant today?
- The opportunities with AI
in corporate finance;
- The journey to AI-driven
Digital Transformation; and
- Practical approaches to
adopting AI-driven Digital Transformation
for Finance.
In the course of his
lecture, he discussed various concepts such as Natural Language Processing,
Computer Vision, Machine Learning and Deep Learning.
At the end of his talk, Mr.
Gupta answered the queries of the participants such as the first steps to
learning and adopting AI, various avenues for learning about AI, the
opportunities and so on.
The virtual lecture meeting
was attended by 250 participants (both on Zoom and on YouTube).
PRIMARY FINANCIAL STATEMENTS (PFS) PROJECT
Another virtual lecture
meeting, this time on the Primary Financial Statements (PFSs) Project of IASB,
was held on 11th November.
The
keynote speaker was M.P. Vijay Kumar (ICAI Council Member) and the faculty
comprised Ms Aida Vatrenjak (Member of the Technical team and leader of
the PFS project) and Ms Nili Shah (Executive Technical Director).
President Suhas Paranjpe
gave the opening remarks and presented an overview about the PFS, including the
fact that the initiative aimed at reducing the variations in financial
reporting by standardising the presentation and the form of the reports and
making financial statements more comparable.
Immediate Past President Manish
Sampat, giving the background of the subject, highlighted the hurdles faced
by various stakeholders while reading financial statements and the pressing
need for conformity.
M.P. Vijay
Kumar started his keynote address by acknowledging the efforts of
various contributors to the project. He emphasised that he was a firm believer
in the dictum that the concept of accounting was to be accountable and
financial reporting was all about communication.
Financial reporting had to
focus on the three Cs – it had to be Clear, Complete and Candid, he added.
On her
part, Ms Nili Shah introduced the project and said that it had resulted
in the exposure draft on general presentation and disclosures. She also spoke
about the developments leading to the project and its current stage.
Ms Shah
stressed on the need for interaction and discussion on the subject since this
would assist in framing the standard. She spoke in detail about the project,
the terms used and their relevance in financial reporting.
Ms Aida Vatrenjak, on the
other hand, discussed the need for having rules related to sub-totals and
categories that would help in achieving consistency and how the lack of such
rules was a disadvantage. The importance of various categories such as
operating profits, income and expense from integral associations and joint
ventures, profit before financing and tax, application to financial entities,
unusual expense, management performance measures, etc., were also highlighted
by her.
The lecture meeting was attended by several seniors in the
profession and members in practice.
