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5 References of the exhaustive evidences to establish the above
S. Description of Explanation in brief on How are Benefits Derived Back-ups available/
No. service the type of these Submitted on Sample Basis
services received services
received
Management
Services
1 Fostering and
developing
creativity
1)Providing - Assessee is provided E-mail and The appellant has got access to
assistance on access to case studies, website / ftp site research materials, presentations
how to foster reports and related material access, available on CMI facility. The
creativity which reflect creative presentations, Up to date news on global appellant has received services in
capability at a world wide research accounts and provision of case areas such as pharmaceutical and
level. materials studies and examples to market healthcare industry, information
- As and when requested, to clients, prospective clients on trend reviews which covered
Assessee receives reels of and media. This leads to consumer mood, shopping,
international work done decrease in the effort for local advertising, brand attitudes etc.
by the network, and case management initiatives relating All such research information has
studies on successful / to the creative direction and enabled the appellant in
award winning / pitch implementation of local understanding various trends
winning campaigns to pass creative strategies. prevailing in the market and thus
on to media and clients and Further, such information/ enabling it in presenting a better
an access to similar material expertise is not available with offering to its clients.
on the McCann World the assessee and in order to
Group worldwide site. serve its clients better, the This has helped the appellant in
assessee has to leverage the formulating creative strategies,
information/ details/ news/ developing competitive
updates from the McCann intelligence, thus adding value to
Group. the work done by the appellant
for its clients.
As provided on pages 643 to
662 of paperbook,
2) Providing Assessee employees get an Workshops/ The agenda of workshop /
regular training opportunity and platform Conferences conference and the
and skills to participate in global / presentations on Internal Audit
development regional brand meets, and Control process is attached.
workshops for creative brainstorming (Refer pages 372 to 410 of
creative directors workshops. paperbook)
'- McCann India's executive
director, MrPrasoon Joshi had
participated in conferences held
in cities like London and Manila
amongst others.
The appellant has benefitted
from these conferences by way
of receiving following services:
- These regular training and
skill development workshops
- Information on how to
provide Assessee's employees
maintain an effective internal
an opportunity to share ideas
audit process
and interact with creative
heads at a global level, and
- Update/ information on how
gain better understanding of
McCann India can benefit by
global ideas, which eventually
way of receiving IT services
assist in better adaptation.
from group company and how
to effectively utilize tools/
processes such as My project,
My timesheet, My workgroup
etc.
- IPG treasury services which
focus on effective management
of liquidity, capital structure,
cash and debt reporting etc.
- Such conferences/ seminars
were aimed at imparting them
with the latest insights in the
world of advertising and to help
the local McCann offices serve
their customers in a better
manner.
3) Providing The Assessee is provided Client e-mails - Local team obtains more - Presentation depicting the
assistance in with big ideas on foreign clarity on the larger picture print commercials received from
developing brands. Access to similar with assistance from the McCann World Group for
creative concepts case studies, brand idea group on developing L'oreal advertisements is
and ideas for use documents, creative creative concepts and ideas attached as pages 457 to 461
when servicing examples, enables quality of paperbook.
clients. sharing of common production, which is
creative or elements. sometimes, not affordable by
local clients or available
locally.
For example: Loreal creatives
were shared with the assessee
which were used in India with
very minor modifications/
customization to suit the
Indian market.
2 New Business
Targeting
Assistance
(1) Assistance on McCann World Group Emails The detailed presentations
targeting of creates template of E- shared by the group companies
potential mails communication, are attached as pages 412 to
multinational which Assessee localises 431 of paperbook.'- The
clients for targeting clients in appellant received client pitch
India. presentations for targeting Intel
and Barclays from its group
company.- Such presentations
were developed by its group
- Assessee has received
company specifically for
assistance on targeting of
McCann India chalking out
potential multinational
plans with respect to awareness,
clients such as Intel, Barclays,
engagement and national level
Compaq etc
promotion for such potential
clients. - Getting assistance by
way of sharing of work
methodologies such as
establishing demand chain and
how that leads to creation of
innovative ideas for McCann
India's clients.
(2) Provision of - Assessee is provided E-mails, Online During the relevant year, the
material for use access to global case access. appellant has downloaded
in targeting studies, credentials, reports focusing on retail
potential category information etc. industry and in particular the
business buying habits of consumers in
- Assessee participates in India and other Asia-
global business paccountries.Refer page 141
development meetings to 147 of paperbook.
which identify new areas - The appellant has downloaded
of opportunity which can research materials available
be applied to the Indian through the CMI. One of such
market. reports related to the fast
changing trends in that
- Access to global industry. Details of reports
information databases -enriching pitches for new downloaded are attached as
such as the Gun Report clients, better servicing of pages 201 to 431 of paperbook.
library, WARC, CMI on- existing clients, better '- The Assessee has access to
line and offline etc. understanding of trends in Center for marketing
the markets intelligence
- Case studies done by information(CMI)
brands in other countries, database. CMI facility
category information, provides access to McCann
research, studies are India with respect to
received by the Assessee. background research materials
regarding potential clients.
- Through CMI, McCann India
has access to research materials
with respect to particular
industries/ sectors which help
in targeting potential clients and
serving the existing clients
better.
(3) Provision to Assessee is provided with E-mail and - Enriches business and The name of personnel who
assessee of constant training through online access. category understanding travelled during the year is
training/ E-mail, online access, new which is invaluable in new attached as page 434 of
techniques on techniques which enrich business acquisition. paperbook.
new business both new business and - For example: Roll out of '-The employees of appellant
development. existing client activity. new planning toolkits. Series attended series of workshops/
of workshops and training training programmes during the
programmes were conducted financial year 2006-07.
for local employees that
facilitated in adding value to
the new business process.
3 Strategic
Planning
Assistance
(1) Provision of - Assessee is provided Online web - The reports shared by McCann
background access to centralised access Group/ downloaded from the
research Online web access database on the retail and
materials for use marketing intelligence - This background research tourism sector on a sample basis
in targeting online. material on potential clients are attached as pages 153 to
potential new - This includes helps Assessee to have 371 of paperbook.
clients information, background superior consumer, industry
and knowledge research and trends understanding. - The appellant has received
on companies, industry, - For example: Assessee was research materials on medical
consumer trends, reports provided research material on tourism industry in India which
and white papers. the local and regional retail, highlights the good growth
tourism, health markets etc prospects of that industry.
for customers like Dabur, LG Refer pages 192-195 of
etc paperbook. Such research
materials have helped the
appellant in targeting
2) Provision of - Research material on Online web clients which benefit out of
research industries like access and growth prospects in this
materials related ad/marketing, apparel, emails - Availability of such material industry.
to particular beverages, drugs, finance, helps Assessee to have
industries and food, home products, superior consumer industry - Further, McCann Group
markets to leisure, personal care, and trends understanding. has developed several
facilitate retailing, technology, - It also enables Assessee unique proprietary tools,
targeting of travel and other are done to gain information from some of them being
potential clients by the group and are made vendors such as 'McCann Demand Chain',
in those available to the group eMarketer, Forrester, 'Demand Health Check',
industries and members including Gartner, IDC 'Brand Clout', 'Demand
markets. Assessee. &Euromonitor etc. at Dashboard', 'Media in
discounted rates. mind', 'McCann Pulse',
'Fusion 3.0 ' etc.
- Online access to global Online access
- McCann World group provides
case studies across the
access to the aforementioned
McCann offices in order to
tools to its group companies
illustrate the application - Understanding of different around the world including
and approach of high value approaches and learning from McCann India. The tools help
ideas & high value works. high value ideas assist the the Indian team in developing
This covers different Assessee to service its clients appropriate creatives and other
categories and varying in accordance with global materials which would have
marketing problems that standards. persuasive impact on consumers
can be solved by
and in creating customer
communication.
demand in a cohesive, effective
and optimized manner etc.
- World Advertising Online access
Research Centre- Online
access to WARC portal.
Provides access to a fully
searchable archive of
specific advertising and - Helps Assessee learn form
marketing related other companies' mistakes
material. through research reports and
provide better
- The content includes recommendations to its
over 25,000 articles, clients.
case studies, research - This enables Assessee to
reports and have better understanding of
summaries covering target audience, global trend
all areas of marketing etc.
communications
drawn from more than
30 leading content
sources worldwide.
4 Media Support
Services
(1) Development - Assessee receives tools - Assessee's - Medialab which is a media
and provision of and guidance on their employees have planning software helps
planning and implementation and been provided McCann India in organising
research tools usage.- For example: username and media spends for its clients.
and information Media and strategic password to These unique proprietory tools
about media in planning tools (Awareness access the help McCann India in coming to
the Assessee's Planning Software). This website to an estimate for the advertising
target markets. software allows to do download the - Better media planning for budgets for its clients and also
mathematical modelling of tools. - After existing clients helps in helps in measuring the market
the input media installation, the getting new clients by response to such advertisment
investment and the market users get the showcasing the advanced spends.
response in terms of the license from tools.
consumers awareness these sites via Screen shots of website
parameters. This aids in email. enclosed as pages 136 to 138
establishing the return on of paperbook.
investments of clients'
media investments and
deciding on the investment
levels in the future.
- Assessee is provided CDs, DVDs and
access to McCann training
Planning CDs and - There is a significant value
training. addition to the process of
brand media analysis with
- Toolkits - A set of tools help of McCann Planning
to address various brand Toolkits.
strategy issues.
- Assessee is provided - Assessee's
access to infocentre employees have
website proprietary been provided
information. with username - This enables Assessee to
address international client
- This website is a global and password
repository of media to access this requests for data and
planning related site and information with the help of
information and is a portal download all study tools manuals and
updates.
of access to the documents information
on all available tools. required.
5 Financial
Administration
Services
(1) Assistance on Assessee is provided E-mails, - The employees of Assessee
general templates for overall presentations, have attended several work-
accounting control of all revenues and meetings, shops during the year.
methods, cost expenses. These include phone
accounting conferences, - On sample basis, a detailed
methods, - Centralised capital workshops and itiniary of the work-shop
preparing and expenditure budgeting online access. attended by Manoj Singh, the
monitoring system and monitoring of CFO of the assessee company is
periodic expenses against budget. attached on pages 372 to 373 of
profitability stay petition paperbook.
analyses, - Forward Plan calendar
budgeting and year budget & three - Further, certain emails
business revisions are there to take substantiating the receipt of
planning cognizance of change in services has also been attached
methods,capital the environment & its as pages 660 to 710 of
expenditure effect on the business plan. paperbook.
requirements,and Centralised extensive
financial annual budget preparation
forecasts exercise for each calendar
year, including manpower
numbers & updating the
same. - This assistance helps
Assessee in improving
- Monthly & quarterly corporate governance,
accounting information transparency and effective
directly into Hyperion. reporting systems along with
assisting in aligning with
- Comparison with budgets international accounting
and seeking sensible standards.
commentaries on
variations.
- Assisting & examining
accounts receivable based
on data submitted &
raising queries where
amounts are substantially
old.
- Input of unit profitability
data for each Assessee
division into Khalix on a
monthly basis.
- Preparing client
profitability as per the
Khalix format for
Hyperion clients.
- Prescribing a COA &
SP&P reduces leeway for
unit managers in reporting
their results.
- Local management uses
IPG policies to inculcate
proper corporate
governance. Internal audit
compliance & test on our
internal control system
through Regional
Monitoring Control (RMC
team representative from
the Asia Pacific)
- Mandatory
monthly/quarterly
statement book close
checklist.
- Monitoring on a monthly
basis all client contracts.
- Discipline enforce to the
entire organisation as
senior management has to
sign off detailed quarterly
management
representation letters.
- New system for recording
WIP & aging analysis.
- Revenue recognition
concepts examine in
depth.
- Conference calls with US
& Asia Pacific
controllers/RMC Team to
comprehend requirements
& comply with the same.
- Coaching through web
conference.
(2) Arrangement - McCann World Group Corporate - During the said period the
of financing provides McCann India Guarantee/ guarantee provided to McCann
facilities with treasury support in the financial - Guarantee given by McCann India amounts to INR 8.8
banks and other form of credit lines, assistance Group to CitiBank for the Crores with respect to Citibank's
institutional and guarantees etc as and credit facility availed by Overdraft facility being availed.
governmental when needed. McCann India Refer pages 436 to 440 of
bodies paperbook.
3) Assistance on - Advice and direction are Conference MEM and IPG assisted Treasury Management
treasury provided to Assessee for calls & visit by Assessee in the following: presentation attached on
management monitoring and investing MEM/IPG pages 404 to 410 of
procedures and surplus funds. teams • Met with two multinational paperbook.
techniques banks, Citibank and HSBC to
- For this support, see what capabilities and
Assessee team enters into services they could provide to
discussions with Assessee
IPG/MEM Treasury &
various investment • Met twice with their Merrill
advisors in India. Lynch investment advisor
and reviewed the investment
portfolio for appropriate risk,
conformity to IPG policy and
duration.
• Provided portfolio
information and valuation
data to PwC for annual audit
(4) Financial Assessee personnel are Web "Closing Process" Presentation
awareness/ provided education conference, Assessee employees are attached as pages 443 to
education of through web conference & training provided ongoing training 446 of paperbook.
personnel personnel sent abroad for and understanding on
training. financial issues.
6 Human
Resource
Management
1) Providing - Assessee is provided Conference call, - This enables Assessee to - Presentation on McCann
assistance for assistance when recruiting on line standardise and have Worldgroups' objectives to
recruiting new new personnel by demonstration consistent evaluation develop strong talent and
personnel providing Assessee's of the tool, parameters for every provide them with various
human resource team access to the candidate through multiple trainings through seminars and
access to job portal, which website with rounds of interviews e-learning programs is
help in understanding the multiple user attached as pages 447 to
job requirements and ids and 456 of paperbook.
establishing the candidates passwords.
ability to match the - It provides people
requirement. management skills programs,
- The access to this portal better negotiation skills, project
helps in Recruitment management etc.
Architect where users can
view, create, download and
use the interview guides -
interview prompts,
appropriate evaluation
questions etc.
(2) Providing - Assessee is provided with Conference Additional protection from
assistance with draft contracts on code of Calls employee misconduct and
structuring and conduct which all subsequent liability thereof.
implementing employees need to sign.
employment These contracts abide the
contracts employees to a superior
code of conduct.
Explanation in brief Back-ups available/
Description of on the type of How are these Submitted on Sample
service services received services received Benefits Received Basis
Coordination
Services
Providing
Assessee with the
opportunity to
service McCann
Group's
multinational
clients in its
local market.
(1) Client specific - In the case of many E-mails, - The appellant received
strategies and global brands, appellant presentations, assistance from global
account plans is provided a strategy for meetings, phone, account teams for
the Indian market for conversations, servicing its international
adaptation / execution. conferences, clients. These services
- Appellant also receives workshops etc. helps the appellant in
strategic guidelines, - This helps appellant to discussing with the global
templates, direction and have a better account team, various
guidance to build client understanding of what issues faced by
specific strategies. is likely to work / not international clients in
work for the brand India and any remedial
leading to ease of measures that need to be
operations, synergy in taken.
strategy along with - The appellant has also
efficiency in operations. received guides for its
- The examples are global client Nestle. This
information received for helps the appellant in
L'Oreal brands, GM communicating the
brands , Coca Cola and benefits of Nestle
Maybelline. products better in its
advertisements.
Email on sample basis
submitted before the TPO
vide Submission dated
September 21, 2010.
Refer pages 746 to 756
of paperbook.
(2) Worldwide - Some of the brands are Links, e-mails, - Monthly status report
account globally run, for which, presentations, on the work carried out - The global account
management the account management meetings, phone, for these clients by the management team of
team of McCann India conversations, group is shared within L'oreal shared certain
report to the regional or conferences, the network. These advertisements with the
global account workshops etc. services are good appellant which were
management team. 'thought starters' for used by it in releasing
Hence, the global creative development of advertisment prints for
account management Assessee. Additionally, L'oreal in India.
team is a single point of it helps in generating Such presentations are
contact for all revenues, improving attached as pages 457
information on these agency ratings, helps in to 461 of paperbook.
brands all over the world. providing good
- Assessee leverages on exposure and growth to
the brand work done in Assessee staff and
other regions. This brings in efficiency in
information is sourced operations.
from the global account - Examples: Print, radio
management team and and television
other group companies. commercials were
Strategic guidelines, shared with Assessee for
templates, direction, the above mentioned
discussions with senior global clients.
level clients is carried out
by the global account
management team.
(3)Providing - Assessee works with E-mails, - There is increase in - The appellant benefits
centralised teams in London, Paris, presentations, revenues, agency by getting access to
creative direction New York and Bangkok meetings, phone, ratings, exposure and global contracts
and creative co- who provide inputs and conversations, growth of the Assessee entered by McCann
ordination to direction in the conferences, staff, ease of operations, Worldgroup with its
facilitate the development of strategy, workshops etc. synergy in strategy, international clients. It
provision of creative guidelines, efficiency in operations. helps the appellant in
cohesive, direction etc. - For example- Assessee finalising the terms of
coherent and worked with McCann contracts with such
consistent teams in other regions international clients in
creative content for L'Oreal, Nestle, GM India.
in a and Coca Cola.
multinational Sample attached as
client's pages 462 to 465 of
worldwide paperbook.
advertising
strategy
(4)Performing - Global client fee E-mails, meetings, - Better negotiation Sample attached as
centralised structure, information on phone conversations, platform and increase in pages 462 to 465 of
commission and total hours / resource etc. revenue for Assessee. paperbook.
fee negotiations allocation on clients is Example: Nestle fee
disclosed. Such structure in other
information helps to markets is made
build the basis of fee available to Assessee.
negotiations. - The L'Oreal-McCann
Fee is discussed and
agreed between L'Oreal
Paris and McCann Paris
and the same is
subsequently rolled out
to all the McCann
offices.