Definition of Fraud 

The term ‘fraud’ commonly includes activities such as theft, corruption, conspiracy, embezzlement, money laundering, bribery and extortion. 

Even in a rapidly changing business environment with emerging technologies and constant challenges, at the core of every organization is its employees — those carrying out operations, executives, administrative personnel, and even the board. Employees are faced with an increasing pressure to meet the bottom line at work and at home, and they can be exposed to a variety of ethical dilemmas. These dilemmas can tempt employees to commit fraud against their employer. 

The cost of occupational fraud can be minimized with fraud prevention. Depending on the size and complexity of an organization, internal audit can be called on to recommend improvements or evaluate an organization’s controls and commitment to fraud prevention. An organization’s internal controls are not always specifically designed to prevent fraud; however, often there are fraud prevention components inherent in internal controls related to the control environment, segregation of duties, and monitoring activities.

Read more: Fraud - Prevention, Detection & Control

In continuation of its thrust on liberalizing the economy, bringing more funds into India and creating employment, the Central Government has announced key amendments in the FDI policy by Press Release dated 12th November, 2015 followed by Press Note No. 12/2015, dated 24th November, 2015 (“Press Note”)[Please refer detailed coverage of Press Note No. 12/2015 published in our Wiki for December 2015 (Volume No. 17)] 

Post issue of the said Press Note, the necessary amendments have been carried in Foreign Exchange Management (Transfer of Issue of Security by a Person Resident Outside India) Regulations, 2000 (Notification No. 20/2000, dated 3^rd May, 2000), (“FDI Regulations”) vide Notification No. FEMA 361/2016-RB, dated 15th February, 2016 

In continuation of the above, the RBI vide AP (DIR Series) Circular No. 6, dated 20th October, 2016 has advised all the Authorised Dealers to take note of the changes made in the Principal Regulations, inter alia, permitting the Foreign Direct Investment into Limited Liability Partnership Firms under Automatic Route subject to the conditions stated in the Regulations.

Read more: Overview Of Converting Companies Having FDI INTO LLPS

The Finance Act, 2001 introduced Transfer Pricing Regulation in India by substituting existing Section 92 of the Act and introducing new sections 92 to 92F w.e.f April, 2001 (from AY 2002-03). Rule 10A to 10E with reference these sections 92 have been notified subsequently. Transfer pricing provisions were earlier restricted to international transactions only. With effect from 1.4.2013 , the scope of transfer pricing provisions gets extended to specified domestic transactions (SDT) exceeding Rupees five crore in value. (later the limit was increased to 20Crore from FY 15-16)

Section 92E - Every person who has entered into an international transaction or SDT during a previous year shall obtain a report from an accountant and furnish such report on or before the specified due date (November 30^th) in the prescribed form duly signed and verified in the prescribed manner by such accountant and setting forth such particulars as may be prescribed.

Read more: Transfer Pricing - Form 3CEB

Non Banking Financial Company (“NBFC”) in generally is a financial institution that provides banking services without having the banking license. These companies are regulated by the Reserve Bank of India (“RBI”).NBFCis a company (either public or Private) registered under the Companies Act, 2013 (or 1956)which is engaged in the business of giving loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property.

Read more: An Overview on Classification of NBFC's and its Registration