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BCAS Newsletter I January 2011 1

Vice-President’s Communiqué

7, Jolly Bhavan No. 2, New Marine Lines, Mumbai-400020. Tel. Nos. : 61377600; fax: 61377666 Email : [email protected]; Website : www.bcasonline.org

PROGRAMMES AT A GLANCE

Dear Members,

The year 2011 commenced with a chill in the air. The pleasant weather must have been a respite from the heat of time-barring income tax assessments. Many of you would have had similar experiences from the department, high-pitched assessments, irrational additions and the non-acceptance and non-appreciation of documents presented. This year apart from the normal travails that a professional experiences the additions on account of TDS differences was an aspect which enhanced their woes. The responsibility of reconciling the TDS information has been shifted to assesseses. Errors on part of the deductors have resulted in addition to assesses incomes which is uncalled for. This is unjust and the problem needs to be addressed urgently by the department.

Many of you will be agitating all these issues in appeal and hoping that some relief is granted to your clients. While a plethora of amendments seeks to shift the burden to assessees, there appears to be no corresponding accountability for the gross errors committed by the officers in the field. If the diminishing faith of the public in tax administration is to be restored, then the powers that be must act fast.

The Society continues in its pursuit of knowledge and the effort to ensure that its members are abreast of the latest developments in the professional arena. The Accounting and Auditing Committee of the Society organised a residential study course on IFRS which was attended by 87 delegates. The lecture meeting on the subject of IFRS by N.P. Sarda at the K.C. College on 8th December 2010 received good response from members. In its endeavour to collaborate with other associations outside the city, the society jointly with the Chartered Accountants Association of Ahmedabad organised a seminar on the various aspects of the Direct Tax Code. More than 600 participants benefitted from the program.

As a part of contribution to society at large, BCAS became instrumental in organising an eye camp at Vansda, Dist. Valsad at the Sant Shri

Harnessing Talent and Providing Quality Service

Vol. 13 n No. 10 n January 2011

n A Monthly Newsletter of the Bombay Chartered Accountants’ Society

For Members only. For Private Circulation only. Price: ` 10

BCASNewsletterLecture Meetings

Venue I Walchand Hirachand Hall, 4th Floor, IMC, Churchgate, Mumbai- 400020.Day, Date & Time I Wednesday, 19th January 2011, 6.15 p.m.*Speaker I Advocate V. SridharanSubject I Recent Important Decisions in Service Tax* Fellowship over a cup of tea at 5.45 p.m.

President: Mayur Nayak, 93242 71980;[email protected]

Vice-President: Pradip Thanawala, 98200 45632; [email protected]

Hon. Jt. Secretaries: Deepak Shah, 98201 48536; [email protected] Nitin Shingala, 98200 57694; [email protected]

Hon. Treasurer: Raman Jokhakar, 98208 77976, [email protected]

Effective Communication and Public Speaking Course................. 06-02-2011................ BCAS Conference Room ..................................................................................... 3Internal Audit Studies Foundation Course ................................... 07-02-2011................ Parle International Hotel, B.N. Agarwal Market, Vile Parle(E) ............................. 6Orientation Workshop specially designed for Articled Students..................................................................... 25-02-2011................ BCAS Conference Room ..................................................................................... 3Practical Aspects of Five Important Articles of DTAAs ................. 26-02-2011................ J. W. Marriott, Juhu-Tara Road, Juhu, Mumbai .................................................. 2Concurrent Audit of Banks .......................................................... 26-02-2011................ Walchand Hirachand Hall ................................................................................... 8Workshop on Valuation under Indirect tax laws .......................... 19-03-2011................ J. W. Marriott, Juhu-Tara Road, Juhu, Mumbai .................................................. 4Workshop on Fair Value of Financial Instruments ........................ 25-03-2011................ BCAS Conference Room ..................................................................................... 4Industry Specific Issues in Accounting and Auditing ................... 14-04-2011................ J. W. Marriott, Juhu-Tara Road, Juhu, Mumbai .................................................. 11Lecture Meetings.......................................................................... 19-01-2011, 31-01-2011, 16-02-2011 & 23-02-2011 ............................................................................... 1

Venue I Walchand Hirachand Hall, 4th Floor, IMC, Churchgate, Mumbai- 400020.Day, Date & Time I Monday, 31st January 2011, 6.15 p.m.*Speaker I Ms. Delnaz Mistry, Manager, National Securities Depository Ltd.Subject I Electronic Tax Payments and Quarterly TDS Returns – recent updates and issues* Fellowship over a cup of tea at 5.45 p.m.

Venue I BCAS Conference HallDay, Date & Time I Wednesday, 16th February 2011, 6.15 p.m.*Speaker I CA. Rashmin SanghviSubject I Currency Wars * Fellowship over a cup of tea at 5.45 p.m.

Venue I Walchand Hirachand Hall, 4th Floor, IMC, Churchgate, Mumbai- 400020.Day, Date & Time I Wednesday, 23rd February 2011, 6.15 p.m.*Speaker I Mr. Porus DoctorSubject I Challenges and Opportunities for Internal Auditors in the coming Decade * Fellowship over a cup of tea at 5.45 p.m.

Due to sad demise of Shri Haribhai Kothari the lecture meeting on the

subject of (Non-Possessiveness) on 31st January 2011

stands cancelled and in place the above lecture meeting is organized.

(Continued on page 2)

BCAS Newsletter I January 20112

Right to Information ClinicBCAS Foundation operates a Right to Information (RTI) Clinic on regular basis. RTI Clinic is operated by Mrs. Hema Sampat, a research scholar on the subject of RTI, Mr. A. K. Asher, Adv. & RTI activist and CA. Narayan Varma, Past President, BCAS.

The Clinic provides help and guidance to BCAS members as also to non-members, i.e., all citizens, for making applications under the RTI Act and also assists in resolving any related difficulties on the subject of RTI.

The RTI Clinic operates on every 2nd, 3rd and 4th Saturday from BCAS’s office – 11 a.m. to 1 p.m.

The next RTI Clinic days accordingly are 22nd January 2011 and 12th, 19th and 26th February 2011. Please call the Society’s office (Ms. Shernaaz: 61377600) to obtain a prior appointment.

Charitable Trust ClinicThe next Charitable Trust Clinic will be held on Friday, 4th February 2011 from 5 p.m. to 7 p.m. in the library room of BCA Society at New Marine Lines.

Chartered Accountants and Trustees interested in having their queries solved are requested to call the Society’s office (Mrs. Mistry: 61377620) and obtain a prior appointment, latest by noon on the day of the Clinic. Querists are also advised to bring along relevant papers like trust deeds, audited accounts, etc.

Panel of Advisors:CA. Ratanshaw Damanwala,CA. Shariq Contractor,CA. Gautam Nayak,CA. Anil Sathe CA. Atul Shah

Accounts & Audit ClinicThe next Accounts & Audit Clinic will be held on Saturday, 5th February 2011, from 10.30 a.m. to 11.30 a.m. in the library room of BCA Society at New Marine Lines.

Persons interested in having their queries pertaining to accounting and auditing issues solved, are requested to send the queries by e-mail to [email protected] one week in advance and call the Society’s office (Mr. Rajaram: 61377613) to obtain prior appointment, at least a day before the day of the Clinic. Please note that the Panel will not answer any queries pertaining to tax issues.

Panel of Advisors:CA. Sanjeev Pandit, CA. Himanshu Kishnadwala CA. Jayesh Gandhi

Ranchoddasji Bapu Eye Hospital where 72 tribals were operated for cataract. Most of us in our professional lives keep running for our clients. The Standard Chartered marathon which will take place on 16th January will give us an opportunity to run for a social cause. Many of our members will be participating in various categories of the race.

I wish all of them a happy running experience!

With warm regards, Yours truly,

CA. Pradip Thanawala

(Continued from page 1)

Workshop on Practical Aspects of Five Important Articles of DTAAs

International Taxation CommitteeChairman : CA. Pinakin Desai Co-Chairman : CA. Rajesh Kothari Convenors : CA. Gaurang Gandhi CA. Dhishat Mehta CA. Sushil Lakhani

Course Co-ordinators : CA. Tarunkumar Singhal and CA. Anil Doshi

The purpose of this workshop is to deal at an advanced level focussing on practical aspects and case studies of the five important Articles of DTAAs. This workshop would be useful for professionals practising in the field of International Taxation as also to tax professionals in industry. Day & Date : Saturday, 26th February, 2011 Time : 9.00 a.m. to 6.00 p.m.Venue : J. W. Marriott, Juhu-Tara Road, Juhu, Mumbai-400049.Fees (each) : `2,000 for members `3,000 for non-members (limited seats) (inclusive of course material, tea, coffee & lunch and `50 towards contribution to BCAS Foundation)

Topic Faculty

Article 4 i.e. Residence and Place of Effective Management

CA. Rajendra Nayak

Articles 5 and 7 i.e. Permanent Establishments and Business Profits

CA. Shefali Garodia

Article 8 i.e. Shipping and Aircraft CA. Sushil Lakhani

Article 11 i.e. Interest and Tax Treatment of Finance Products

Eminent Faculty

Article 12 i.e. Royalty, Fees For Technical Services and Fees For Included Services

CA. Padamchand Khincha

Enrolment restricted to 125 participants on first-come-first-served basis. Please enrol early to avoid last minute disappointment.

Enrolment fees are non-refundable.

Enrolment form is printed on page 12.


Effective Communication and Public Speaking CourseEffective communication will strengthen your existing relationships and help you form positive bonds in future interactions.

As a baby, you quickly discovered that crying brought your beloved Mom or Dad dashing to rock you in your cradle, feed you or even change your diaper.

You discovered that the louder and more often you cry, the faster they will show up at your crib ! As a child, the more you are willing to discuss where you were going with your parents, the better chance you have of receiving a few extra bucks as your pocket money. As a teenager, you develop special bonds with friends after spending countless hours talking to them on your mobile phones or in person discussing every aspect of your life.

As an adult, you understand that communicating effectively will bring you closer to your child, colleague, friend or parent. Public speaking skills are not only used in situation where you have to address a large group of people. Communication skills and public speaking skills are interrelated, hence, if you improve your public speaking skills, you also invariably improve your interpersonal communication skills with your peers and family.

Therefore, if you are ever presented with an opportunity to practise public speaking or learn public speaking skills, don’t shy away from it. Whether you are in the class, in the office or in any kind of setting that requires you to deliver a message to an audience, pick up your courage and go for it. Public speaking is a skill and the more you use it and practise it, the better you will become.

To improve your public speaking skills, even if you are a beginner, the Human Resources Committee of the Bombay Chartered Accountants’ Society has organised a workshop, under the auspices of Amita Memorial Trust, for the students on Public Speaking and Effective Communication. In this workshop we will cover the basic process of communication and some of the most difficult communication issues students and members face while interacting with other people. This workshop would provide constructive and effective feedback along with personal performance appraisal.

The details are as follows :

Members & Students

Day & Date Sunday 6th, Wednesday 9th & Sunday 13th February 2011.

Time 9.00 a.m. to 5.30 p.m.

Venue BCAS Conference Room, 7 Jolly Bhavan no. 2, New Marine Lines, Mumbai 400 020.

Faculty Murli Mehta and Vivek Patki

Fees `1550/- for Students `2050/-for Members {including `50 for BCAS Foundation}

Enrolment is restricted to 30 in both batches on first-come-first-served basis.


Human Resources CommitteeChairman : CA. Rajesh Muni Convenors : CA. Manish Sampat CA. Aliasgar Kherodawala CA. Ashish Fafadia

Two-day Orientation Workshop specially designed for Articled Students‘Our Articled Students are our greatest asset and we must put our time, effort and money into training, grooming, and encouraging our greatest asset.'

At the outset, kudos to each one of you for clearing two levels of traumatic examinations in the quest to become Chartered Accountants. Nervousness, excitement, the feeling of being lost in a crowd, fear of failure, are the many thoughts that every new articled clerk goes through. Now, is the time to apply all that you have learned, you can move from theory to practice. In other words . . . from books to computers ! . . . from pocket money to stipend !

The intention of this articleship period is to develop and sharpen all round skills of aspiring individuals to be a Chartered Accountant. Considerable time is spent by our members in the training and guidance of articled clerks.

To overcome the difficulties faced by our members in training the students and to boost the confidence of these students, the Human Resources Committee of the Bombay Chartered Accountants’ Society has organised a two-day Orientation Workshop specially aimed and targeted for the students. This workshop is specifically designed to give an introductory insight to the participants on a variety of topics which will assist them in their articled period and sharpen their skills to perform their duties in a more meaningful and responsible manner.

This orientation workshop will introduce the students to various aspects of practice; from technical areas (like audit, taxation, etc.) to behavioural aspects at office or interacting with clients. Details of the workshop are as under :

Day & Date : Friday, February 25, 2011 and Saturday, February 26, 2011.Time : 9.00 a.m. to 5.30 p.m. Venue : BCAS Conference Room, 7 Jolly Bhavan no. 2, New Marine Lines, Mumbai-400020. Fees : `1,050 for students (including `50 for BCAS Foundation)

Enrolment is restricted to 30 on first-come-first-served basis.

Topics to be covered would be as follows :

Topics

1 Introduction to Accounting Standards

2 Introduction to Direct Taxes

3 Introduction to Service Tax

4 Introduction to MVAT

5 Introduction to Auditing

6 Introduction to Internal Audit

7 Importance of Communication and Inter-personal Skills

8 Code of conduct for articled students and ICAI regulations relating to students


Human Resources CommitteeChairman : CA. Rajesh Muni Convenors : CA. Manish Sampat CA. Aliasgar Kherodawala CA. Ashish Fafadia


Indirect Taxes constitute more than 60% of the government revenue. Typically, each type of Indirect Tax is governed by its own Statute, Rules and Procedures. Each one of these have its own peculiarities, complexities and disputes. Additionally, there are several instances of overlaps within the triumvirate of central taxes of customs duties, excise duties and service tax as also between the central and state taxes of service tax and VAT.

While the central challenge is, of course, between goods taxation and service taxation, an important yet often neglected dispute pertains to the Valuation of these goods and services. Simply put, the manner in which the goods and services are valued and ultimately taxed under indirect tax legislations is fraught with pitfalls and controversies. Any business decision, without clarity on the above aspect would not only be disastrous but may also lead to unwarranted financial losses. The basis of inclusion or exclusion of various components in the value which is ultimately taxed needs to be understood very clearly.

This workshop aims to help you achieve this goal. BCAS has brought together a team of domain experts who will present their views on:

• Introductiononthevaluationprovisions–needandhistory• Criticalissues–keyrules/clausesthathavebeenthesubject

matter of dispute• Practicaldifficulties• Recentdevelopmentsandcontroversies.

Day & Date : Saturday, 19th March 2011Time : 10.00 a.m. to 5.00 p.m.Venue : J. W. Marriott, Juhu-Tara Road, Juhu, Mumbai - 400049

Indirect tax law Speaker

Customs Act Solicitor Rohan Shah

Maharashtra Value Added Tax Act CA. Parind Mehta

Service tax CA. A. R. Krishnan

Excise Act Eminent faculty

Fees : `2,400 for a member `3,600 for a non-member (including contribution of `50 to BCAS Foundation, cost of study material, if any, tea and snacks)


Full-day Workshop on Valuation under Indirect tax laws

Indirect Taxes And Allied Laws CommitteeChairman : CA. Govind Goyal Convenors : CA. Sunil Gabhawalla CA. Toral Mehta CA. Suhas Paranjpe

Price is what you pay. Value is what you get. — Warren BuffetThe convergence of Indian GAAPs with IFRS for all public interest entities which is expected to be effective from April 1, 2011 will mark a paradigm shift from historical cost accounting to fair value accounting. Despite the fact there are both advantages and disadvantages of adopting fair value accounting, we have to accept that fair value is here to stay and we have to learn how to deal with it.

After the success of the 2nd Residential Study Course on IFRS which was held in December 2010, the Accounting & Auditing Committee is pleased to announce a 2-day intensive workshop on fair value of financial instruments with a view to equip the participants with the practical tools and methods which are essential for a deeper understanding and implementation of the concepts.The programme will cover the following aspects :

1. Overview of Fixed Income Markets and Concepts.2. Interest rates basis and related excel functions.3. YTM and its computation using Excel capabilities.4. Various interest rates methods and migrating from one to another

using built in proprietary model of Excel.5. Interpolating interest rates from yield curve.6. Introduction to zero curve.7. How to derive swap curve from swap prices.8. Introduction to basic derivatives and their pricing.9. Understanding the concept of intervening income and its impact

in pricing a forward contract on a bond.10. Pricing FRA and creating a model for FRA and understanding why

FRA is important in swap pricing.11. Understanding swaps and their pricing.12. Understanding options and using options pricing model and

binomial model to price options.13. Applying theory to practice by valuing debt structures and their

accounting under IFRS, valuing forward structures and valuing swap and option structures.

Details of the programme are as under:Days & Dates : Friday/Saturday,25thto26thMarch2011.Time : 9.30 a.m. to 6.00 p.m.Venue : BCAS Conference Room, 7, Jolly Bhavan No. 2, Ground Floor, New Marine Lines, Mumbai 400 020.Faculty : CA. Ramesh LakshmanFees : Members : `7,800 Non-Members: `9,300 (Fees include course material, working lunch and tea on both the days and contribution of `50 towards BCAS Foundation)Enrolment is restricted to 25 participants on first-come-first-serve basis. To give benefit of this programme to a large spectrum of members, enrolment would be restricted to a maximum of 3 members from the same organisation and additional members from that organisation would be kept on waiting list. They would be enrolled if there is a vacancy prior to 3 days of the commencement of the programme.

Participants would be expected to carry their own laptops for working through the practical exercises throughout the programme.

Enrolment fees are non-refundable, non-transferable and as per Society’s policy, a participant is not permitted to substitute another person.


Accounting & Auditing CommitteeChairman : CA. Himanshu Kishnadwala Convenors : CA. Mukesh Trivedi CA. Abhay Mehta CA. Suril Shah

2 – Day Workshop on Fair Value of Financial Instruments

Course Co-ordinators : CA. Samir Kapadia, CA Udayan Choksi

Member / Journal / Student subscribers are requested toinform any change of address of correspondence by e-mail to [email protected] on or before 20th of every month. Intimation received after 20th of the month will be effective from the next month onwards. Please help us serve you better

Announcement


Sr. No. Name of the Publication - Books / CDs / Papers Price ` Postage `

1 Harmful Tax Competition An Emerging Global Issue 100 25

2 CD on the discussions conducted at the 39th RRC 2006 by various paper writers 100 20

3 Right to Know The Right to Information Act, 2005 (Pack of 10 booklets)(Cheque to be drawn in favour of ‘BCAS Foundation’ in case of Sr. no. 3 only)

50 15

4 Challenges of Change - Always ahead Diamond Jubilee Conference Paper 125 25

5 Service Tax Import and Export of Services (Revised and updated up to December 2008) 55 30

6 International Tax & Conference 2009, Lavasa Members

Non-Members700800

100100

Recent Publications

7 Taxation of Charitable Trusts Revised & updated up to July, 2010 170 100*

8 Laws & Business – A Compendium (3rd Edition 2010) 240 100*

9 Video DVD of the Panel Discussion held on 7.8.2010 on Service Tax on Builders and Developers 350 20

10 Papers discussed at the International Tax & Finance Conference 20101) Cross-Border Taxation of Partnership – CA. Hitesh Gajaria2) Intellectual Property Rights – Structuring and Taxation – CA. Pranav Sayta3) Case Studies on International Taxation – Panel Discussion – CA. Vispi T. Patel4) Concept of Beneficial Ownership – CA. Nitin Karve5) Foreign Tax Credit….. time to make some choices – CA. Ketan Madia6) Transfer Pricing – CA. Shikha P. Gupta7) Case Studies on International Taxation – Panel Discussion – CA. Mukesh Butani

MembersNon-Members

500600

100100

11 CD of Study Material of Seminar on NBFCs (Including audit aspects) 350 20

12 BCA Journal CD from April 2000 to March 2008Members

Non-Members400500

2020

13 Service Tax (Revised and updated up to November 2010)Basic Concepts and Procedures

Goods Transport Agency ServicesBusiness Auxiliary Services

Construction Related ServicesCombined cost of 4 books

505035120230

30303040100

* Postage Within Mumbai `60

BCAS Publications for Sale

“Yourannualmembership/subscriptionwillexpireon31stMarch,2011” You are requested to renew your subscription now. The hard copy and soft copy of the renewal notice have already been sent to you. Please send your renewal fees to: Bombay Chartered Accountants’ Society Office. Now, you can renew your membership online through the Payment Gateway. Kindly log on to www.bcasonline.org for more details on renewal of membership.

Kind Attention: Members


The Accounting & Auditing Committee is pleased to announce a full programme to explore how as concurrent auditors we can better deliver to the satisfaction of the Banks.

Day & Date : Saturday, 26th February 2011Venue : Walchand Hirachand Hall, 4th Floor, IMC, Churchgate, Mumbai – 400020Timing : 9.30 a.m. to 6.30 p.m.Fees : `1,500formembers/studentmembersand `2,250 for non-members (includes contribution of `50 to BCAS Foundation, lunch and snacks during the session)Our topics and panel of speakers is indeed impressive which include:

Topic Speaker

Introduction to Concurrent Audit in Banks and evolution thereof. Representative from Reserve Bank of India*

Activities of Centralised Processing Centre – Retail Assets Focus :

Areas to be covered includes - Completeness of loan application forms and supporting documentation, Review of the Credit approval process based on - applicable policies and procedures and sanction letter , Review of legal and technical report, CIBIL verification, Review and storage of PDCs, Disbursements, File movements and safe custody of mortgage documents etc., Hypothecation, Registration of charge, Compliance to regulatory requirements

Mr Hemant Shah – Kotak Mahindra Bank

Activities of Centralised Processing Centre – Liabilities focus

Areas to be covered includes - Account Opening and modification, Account Closure, Masters Verification, Custody and physical verification and destruction of secured stationary and Debit and ATM cards, Suspense Account monitoring, Review of Regulatory Returns, Monitoring of control reports etc., Compliance to regulatory requirements

Eminent Speaker from Industry

Activities of Treasury – Foreign Exchange -

Areas to be covered includes - Dealing Room activities – Merchant and Interbank Desk, Monitoring of client exposure limits, Rate scan, Monitoring of NOP, Control on Nostro balances, Booking of forward contracts and related controls, IGL, AGL, Front Office – Back office reconciliation, VaR limits,Compliance to regulatory requirements

Eminent Speaker from Industry

Activities of Corporate Lending and Trade Operations

Areas to be covered includes operation pertaining to - Bills discounting, Letter of credit, Inward and Outward remittances, Pre and post shipment packing credit, etc., Terms Loans, short term loans, Bank Guarantees, Compliance to regulatory requirements

Mr Suhas Supekar - Experienced Banker


Concurrent Audit of Banks – A programme especially for all those who undertake concurrent audit of banks


Course Co-ordinators : CA. Himanshu Vasa, CA. Aruna Shah & CA. Neesha Samant

Concurrent Audit of Banks is an age old service which firms of Chartered Accountants have been providing for over almost 2 decades. The businesses scenario in which the banks in general have been operating have changed significantly. From undertaking accounting records manually to core banking solutions a lot has changed. Customer expectation has changed. Similarly the focus of concurrent audit has changed and will continue to change from providing simple assurance of basic accounting and record keeping requirements to value added services. Keeping this changing environment a need was felt to enrich members on how to audit key and high risk areas coupled with regulatory environment and discuss way in which concurrent auditors can add value.


CUT HERE

ENROLMENT FORMName :...................................................................................................................................................................................................Registration Number : ..........................................................................................................................................................................

Course in which admission is desired : I.P.C.C ( ) FINAL ( ) (Please tick appropriately)

Residential Address : .........................................................................................................................................................................

...................................................................................................... Tel. No. (M) : ........................... E-mail : ....................................

Details of Articleship : Date of Joining ................................... Estimated date of Completion ................................................Name of the Principal : .....................................................................................................................................................................Name and address of Firm where articleship is being done : ........................................................................................................ ...........................................................................................................Tel. No. (O) : ............................ Fax No. (O) ..........................Cash/Draft/Cheque No. ........................................................................................................ drawn on ......................................Bank,dated ......................................................... for an amount of 1500 is enclosed.

..............................................................erutangiS ............................................... : etaD ..

Notes : 1. Please send the above form along with cash/cheque/draft drawn in favour of ‘‘BOMBAY CHARTERED

ACCOUNTANTS’ SOCIETY’’, to the Society’s offi ce, at the address mentioned above. 2. We propose to have multifarious activities like Elocution Competition, Public Speaking, Self Development Education Courses,

Orientation Courses, etc. for interested Students. 3. Members are requested to keep the proforma of this sheet and send the same duly fi lled in by new articled trainee after his/

her enrolment in their offi ce.

Bombay Chartered Accountants’ Society ,7 Jolly Bhavan No. 2, New Marine Lines, Mumbai-400 020.

Phone 61377600 / Fax : 61377666 E-mail : [email protected] Web : www.bcasonline.orgHuman Resources Committee

Chairman : CA. Rajesh R. Muni Convenor : CA. Manish Sampat, CA. Aliasgar Kherodawala,

"We had joined the Revision Course, which has proved very much helpful to us. We cleared both groups in First Attempt"Miss Janhavi Thatte & Miss Komal Jain

I.P.C.C. & FINAL C.A. STUDENTS’ EDUCATION CRASH COURSES (Jointly with Western India Regional Council of The Institute of Chartered Accountants of India )

For May & November 2011 Examinations 1. Courses for :

laniF .A.C .C.C.P.I .A.C gnitropeR laicnaniF — gnitnuoccA decnavdA / gnitnuoccA —

tnemeganaM laicnaniF cigetartS — swaL ynapmoC & ssenisuB — gnitiduA decnavdA — .M.F & gnitnuoccA tsoC —

swaL deillA & setaroproC — noitaxaT — ycnatnuoccA tnemeganaM decnavdA — ecnarussA & gnitiduA —

— Information Technology & Strategic Management — Information Systems Control and AuditsexaT tceriD —

sexaT tceridnI — 2. Course Co-ordinators : CA. Chandrakant Ruparelia, CA. Neel Majithia 3. Fees : 1500 per student for I.P.C.C or Final (Total, and not per Subject, Including cost of Study Materials) 4. Timings & Venue : 6.15 p.m. to 8.30 p.m. on weekdays (Monday to Friday) at Sydenham College, ‘B’ Road,

Churchgate. 5. Duration : From January 17 to March 31, 2011. 6. Enrolment from : October 15, 2010 7. Faculty : Eminent personalities possessing rich experience in their respective fi elds.

For further information kindly contact Ms. Shernaaz or Mr. Rajaram on Phone 61377600 and 61377613 respectively during offi ce hours.

CA. Ashish Fafadia


The Reserve Bank of India has issued the following 10 Circulars.

A.P. (DIR Series) Circular No. 23, dated December 10, 2010Exim Bank’s Line of Credit of USD 42 million to the Government of the Democratic Republic of CongoExim Bank has made available, subject to certain terms and conditions, to the Government of the Democratic Republic of Congo a Line of Credit of US $ 42 million for financing eligible goods and services including consultancy services from India for the Kakobola Hydroelectric Power Project in Congo. Eligible goods and services including consultancy services of the value of at least 85% of the contract price have to be procured from sellers in India, while the remaining 15% of the goods and services (other than consultancy services) may be procured from sellers outside India.

The last date for opening of Letters of Credit and Disbursement for project exports will be 48 months from the scheduled completion date of the contract and August 4, 2016 in case of supply contracts.

A.P. (DIR Series) Circular No. 24, dated December 13, 2010A.P. (FL/RL Series) Circular No. 5, dated December 13, 2010Prevention of Money-laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Second Amendment Rules, 2010-Obligation of Authorised PersonsThe Government of India has vide Notification No. 10/2010-E.S./F.No.6/8/2009-E.S.,datedJune16,2010,amendedthePreventionofMoney-laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005. A copy of the Notification is attached to this Circular.

The highlights of the amendments are :(a) in Rule 2 in sub-rule (1), after clause (g), the following Explanation

shall be inserted, namely :Explanation : Transaction involving financing of the activities relating

to terrorism includes transaction involving funds suspected to be linked or related to, or to be used for terrorism, terrorist act or by a terrorist, terrorist organisation or those who finance or are attempting to financing of terrorism.

(b) in Rule 9, for sub-rule (1A), the following sub-rule shall be substituted, namely :

(1A) Every banking company, financial institution and intermediary, as the case may be, shall determine whether a client is acting on behalf of a beneficial owner, identify the beneficial owner and take all reasonable steps to verify his identity.

(c) in Rule 9, for sub-rule (1B), the following sub-rule shall be substituted, namely :

(1B) Every banking company, financial institution and intermediary, as the case may be, shall exercise ongoing due diligence with respect to the business relationship with every client and closely examine the transactions in order to ensure that they are consistent with their knowledge of the client, his business and risk profile and where necessary, the source of funds.

From RBIContributed by : CA. Gaurang Gandhi

(d) in Rule 9, for sub-rule (1C), the following sub-rule shall be substituted, namely :

(1C) No banking company, financial institution and intermediary, as the case may be, shall allow the opening of or keep any anonymous account or account in fictitious names or account on behalf of other persons whose identity has not been disclosed or cannot be verified.

(e) in Rule 9, after sub-rule (1C), the following sub-rule shall be inserted, namely :

(1D) When there are suspicions of money laundering or financing of the activities relating to terrorism or where there are doubts about the adequacy or veracity of previously obtained customer identification data, every banking company, financial institution and intermediary shall review the due diligence measures including verifying again the identity of the client and obtaining information on the purpose and intended nature of the business relationship, as the case may be.

(f) in Rule 10, after sub-rule (3), the following Explanation shall be inserted, namely :

“Explanation : For the purpose of this rule : (i) the expression ‘records of the identity of clients’ shall include

records of the identification data, account files and business correspondence.

(ii) the expression ‘cessation of the transactions’ means termination of an account or business relationship.

A.P. (DIR Series) Circular No. 25, dated December 22, 2010A.P. (FL/RL Series) Circular No. 6, dated December 22, 2010Know Your Customer (KYC) norms/Anti-Money Laundering (AML) Standards/Combating the Financing of Terrorism (CFT)/Obligation of Authorised Persons under the Prevention of Money Laundering Act, (PMLA), 2002, as amended by the Prevention of Money Laundering (Amendment) Act, 2009 — Money changing activitiesAttached to this Circular is a Statement dated June 25, 2010 issued by the Financial Action Task Force (FATF). This Statement divides the strategicAML/CFTdeficientjurisdictionsintotwogroupsasunder:

(a) Jurisdictions against whom countermeasures are required to be applied to protect the international financial system from the ongoing and substantial money laundering and terrorist financing (ML/TF)risks—Iran.

(b) Jurisdictions with strategic AML/CFT deficiencies that have notcommitted to an action plan developed with the FATF to address key deficiencies as of June 2010 – Democratic People’s Republic of Korea (DPRK), Sao Tome and Principe.

This Circular advices Authorised Persons to take into account risks arising from the deficiencies in AML/CFT regime of these countries,while entering into business relationships and transactions with persons (including legal persons and other financial institutions) from or in these countries/jurisdictions.

A.P. (DIR Series) Circular No. 26, dated December 22, 2010A.P. (FL/RL Series) Circular No. 7, dated December 22, 2010Know Your Customer (KYC) norms/Anti-Money Laundering (AML) Standards/Combating the Financing of Terrorism (CFT)/Obligation of Authorised Persons under the Prevention of Money Laundering Act, (PMLA), 2002, as amended by the Prevention of Money Laundering (Amendment) Act, 2009 — Cross-Border Inward Remittance under Money Transfer Service SchemeAttached to this Circular is a Statement dated June 25, 2010 issued by the Financial Action Task Force (FATF). This Statement divides the strategicAML/CFTdeficientjurisdictionsintotwogroupsasunder:

(a) Jurisdictions against whom countermeasures are required to be applied to protect the international financial system from the ongoing and substantial money laundering and terrorist financing (ML/TF)risks—Iran.


(b) Jurisdictions with strategic AML/CFT deficiencies that have notcommitted to an action plan developed with the FATF to address keydeficienciesasofJune2010—DemocraticPeople’sRepublicof Korea (DPRK), Sao Tome and Principe.

This Circular advices Authorised Persons to take into account risks arising from the deficiencies in AML/CFT regime of these countries,while entering into business relationships and transactions with persons (including legal persons and other financial institutions) from or in these countries/jurisdictions.

A.P. (DIR Series) Circular No. 27, dated December 22, 2010A.P. (FL / RL Series) Circular No. 8, dated December 22, 2010Know Your Customer (KYC) norms/Anti-Money Laundering (AML) Standards/Combating the Financing of Terrorism (CFT)/Obligation of Authorised Persons under the Prevention of Money Laundering Act, (PMLA), 2002, as amended by the Prevention of Money Laundering (Amendment) Act, 2009 — Money changing activitiesAttached to this Circular is a Statement dated June 25, 2010 issued by the Financial Action Task Force (FATF) which identifies certain jurisdictionswhichhavestrategicAML/CFTdeficiencies.TheStatementcalls upon the identified jurisdictions to complete the implementation of their action plan within the time frame.

This Circular advices Authorised Persons to consider the information contained the said Statement.

A.P. (DIR Series) Circular No. 28, dated December 22, 2010A.P. (FL/RL Series) Circular No. 9, dated December 22, 2010Know Your Customer (KYC) norms/Anti-Money Laundering (AML) Standards/Combating the Financing of Terrorism (CFT)/Obligation of Authorised Persons under the Prevention of Money Laundering Act, (PMLA), 2002, as amended by the Prevention of Money Laundering (Amendment) Act, 2009 — Cross-Border Inward Remittance under Money Transfer Service SchemeAttached to this Circular is a Statement dated June 25, 2010 issued by the Financial Action Task Force (FATF) which identifies certain jurisdictionswhichhavestrategicAML/CFTdeficiencies.TheStatementcalls upon the identified jurisdictions to complete the implementation of their action plan within the time frame.

This Circular advices Authorised Persons to consider the information contained the said Statement.

A.P. (DIR Series) Circular No. 29, dated December 22, 2010Use of International Debit Cards/Store Value Cards/Charge Cards /Smart Cards by resident Indians while on a visit outside IndiaPresently, Banks are required to submit a yearly statement on December 31 every year containing details of International Debit Card holders who spend more than US $ 100,000 in a calendar year.

This Circular informs RBI decision to discontinue the submission of this Statement. Hence, Banks need not submit the said Statement for the year ending December 31, 2010.

A.P. (DIR Series) Circular No. 30, dated December 23, 2010Asian Clearing Union (ACU) Mechanism — Payments for import of Oil or GasPresently, all eligible current account transactions as defined by the Articles of Agreement of the International Monetary Fund and the export/import transactions between the ACU member countries ondeferred payment terms respectively are to be routed through the ACU mechanism.

This Circular provides that henceforth payment for import of oil or gas must be settled in any permitted currency outside the ACU mechanism.

A.P. (DIR Series) Circular No. 31, dated December 27, 2010Asian Clearing Union (ACU) Mechanism — Indo-Iran TradeThis Circular provides that all eligible current account transactions

including trade transactions with Iran should be settled in any permitted currency outside the ACU mechanism until further notice. This has beendonetomitigatethedifficultiesbeingexperiencedbyimporters/exportersinpaymentsto/receiptsfromIran.

A. P. (DIR Series) Circular No. 32 dated December 28, 2010Comprehensive Guidelines on Over the Counter (OTC) Foreign Exchange Derivatives and Overseas Hedging of Commodity Price and Freight Risks

Annexed to this circular are Comprehensive Guidelines on Foreign Exchange Derivatives and Overseas Hedging of Commodity Price and Freight Risks. These guidelines will come into effect from February 01, 2011. In addition, the Comprehensive Guidelines on Derivatives issued vide Circular DBOD.No.BP.BC. 86/21.04.157/2006-07 dated April 20,2007 and subsequent amendments thereto would continue to apply to foreign exchange derivatives.

The guidelines are divided into the following seven sections: -I. Section A – Overview of the guidelines II. Section B – Guidelines for persons resident in India (other than AD

Category I banks) III. Section C – Guidelines for persons resident outside India IV. Section D – Guidelines for Authorised Dealers Category I V. Section E – Guidelines for Commodity Derivatives VI. Section F – Guidelines for Freight Derivatives VII. Section G – Reports to the Reserve Bank

Day & Date : Thursday & Friday , 14th &15th April 2011Venue : J. W. Marriott, Juhu-Tara Road, Juhu, Mumbai-400049.

The seminar will cover issues relevant to industry viz: Banking & Finance, Construction and real Estate, Infrastructure, Hospitality, Health care, forex & Derivatives etc.

Eminent faculties from the profession and industry will give their views on the above. There will also be a Panel discussion on a relevant topic to cover industry and audit perspective.

Members from the Industry and Profession including auditors, CFO, Senior accountants will find seminar extremely useful and relevant.Detailed announcement will follow.

Two day seminar on Industry Specific Issues in Accounting and Auditing.



Please fill in the above form appropriately and send the same to the Society’s office along with the requisite payment.Please mention your name and membership number on the reverse side of the local cheque/at par cheque/Demand Draft.Kindly note that the cash counter timing are from 10.30 a.m. to 5.30 p.m. on Monday to Friday and 10.30 a.m. to 1 p.m. on Saturday. The lunch time is 1.30 p.m. to 2 p.m. Members are requested to co-operate in this regard. Cancellation Policy: Kindly note that no refund will be given in case of cancellation for any reason and no substitute will be allowed, once the enrolment form is submitted.

(Signature)

Name : ..................................................................................................................................................................................................................Address : ..............................................................................................................................................................................................................E-mail :..................................................... Mobile : .................................................... Tel. : ..................................... Fax : ..................................BCAS Memb. No. : .................................. Tel. (O) : ................................................... Tel. (R) : ............................... Fax : ...................................Choice of food (wherever applicable) .......... Jain Non-Jain Cash/Draft/Chequeno...................Drawnon.............................................................................................Bank,Dated ......................... for an amount of r........................................................ is enclosed.

Date : ................

STUDY COURSE : Effective Communication and 6-02-2011 r1,550 for students........................ 2 – Day Workshop on Fair 25-03-2011 r7,800 for members................. Public Speaking Course r2,050 for members....................... Value of Financial Instruments r9,300 for non-members..........

WORKSHOP : Orientation Workshop 25-02-2011 r1,050............................................ Workshop on Practical Aspects of 26-02-2011 r2,000 for members.................

for Articled Students Five Important Articles of DTAAs r3,000 for non-members..........

Full-day Workshop on Valuation 19-03-2011 r2,400 for members........................ Concurrent Audit of Banks 26-02-2011 r1,500 for members/students... under Indirect tax laws r3,600 for non-members................. r2,250 for non-members .........

Combined Enrolment Form

CUT HERE CUT HERE CUT HERE

Edited, printed & published by Narayan Varma on behalf of Bombay Chartered Accountants’ Society, Mumbai-400020. Printed at Spenta Multimedia, Mumbai-400013.

Registered with the Registrar of Newspapers for India under R.N. 68365/98 Licensed to post without prepayment : Licence no. MR/Tech/WPP-158/South/09-11.

Regd. No. MH/MR/South-88/2009-11Posted at Mumbai Patrika Channel Sorting Office, Mumbai-1

StudyCircle/Group Indirect Tax Laws*

Day, Date & Time Friday, 28th January 2011, 6.15 p.m.

Subject Recent issues under Import of Service

Group Leader CA. Girish Raman

Chairman Advocate Bharat Raichandani

Convenors • CA. Rajkamal Shah• CA. Suhas Paranjpe

* Restricted to members of that particular Study Circle only.

StudyCircle/Group Internal Audit Studies

Day, Date & Time Friday, 18th February 2011, 6.15 p.m.

Subject Estimation of Fees for New Internal Audit Assignments

Speaker CA. Nandita Parekh

Convenors • CA. Kinjal Shah• CA. Smita Acharya

* Restricted to members of that particular Study Circle only.

Forthcoming Study Circle MeetingVenue: Gulmohar Hall, BCAS

BCAS Suburban Study Circle

Date Day Topic Speaker

19-02-2011 Saturday Issues in CENVAT credit

CA. Sunil Gabhawalla

19-03-2011 Saturday Important Judgements under Transfer Pricing

CA. Nihar Jambusaria

Venue : Directi Internet Solutions Pvt. Ltd., Direct-I-Plex, Old Nagardas Road, Opp. Wilson Pens, Near Andheri East Subway, Andheri (East), Mumbai – 400069

Time : 5.00 p.m. to 7.00 p.m.

Let us all take more responsibility, not only for ourselves and our families but for our communities and our country.

—Bill Clinton

Your best teacher is your last mistake.—Ralph Nader

You can't build a strong corporation with a lot of committees and a board that has to be consulted every turn. You have to be able to make decisions on your own.

—Rupert Murdoch

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