10 bcasnewsletter · ca. gautam nayak ca. anil sathe ca. atul shah accounts & audit clinic the...

BCAS Newsletter I October 2011 1

Vice-President’s Communiqué

Harnessing Talent and Providing Quality Service

Vol. 14 n No. 7 n October 2011

n A Monthly Newsletter of the Bombay Chartered Accountants’ Society

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

BCASNewsletterDear Member,

After the Tax Audit season, all of you must be busy with the filing of TDS/TCS quarterly return, half-yearly & monthly MVAT return, and E-filing of Service Tax return which has become mandatory from this quarter.

Amidst the time spent for meeting the said deadlines, I am sure you would have started organising all your files and documents where the attest function has been carried out. This will help when the ‘Peer Review’ process gets underway.

At the Society, we believe a true professional is a student all his life.

With complexities of laws on the increase, programmes which focus on specific subjects seem to be gaining popularity. As always, the Society is striving to meet these needs of its members.

With said objective, the Third Residential Study Course has been devised by BCAS along with Indian Merchant Chambers, from 22nd to 24th December, 2011, to equip the members with relevant skills to embrace the change with confidence, during the journey of convergence with IFRS/Ind AS, which would assist the accounting fraternity to prepare the accounts compliant with the regulatory requirements.

BCAS recently initiated a programme on Integrated Security Management – Practice Approach on 8th October, 2011. I am also pleased to share that as part of its endeavour to introduce such new and interesting areas of practice for members, BCAS, has organised a two-day comprehensive workshop in December on Valuation, which will cover all aspects of valuation and various valuation techniques so as to familiarise members with this rather contemporary and upcoming area of practice.

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

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

Vice-President: Deepak Shah , 98201 48536; [email protected]

Hon. Jt. Secretaries: Nitin Shingala , 98200 57694; [email protected] Chetan Shah , 98202 23402; [email protected]

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

Study Group on International Economics ...................................... 21-10-2011....................... Gulmohar Hall, BCAS .......................................................................................... 3

Half-day Seminar on 'Authority of Advance

Rulings – Law & Procedure' ......................................................... 11-11-2011....................... Indian Merchants' Chamber, Churchgate, Mumbai ............................................... 3

Twelfth Intensive Study Course on Double

Tax Avoidance Agreement ............................................................ 12-11-2011 to 24-12-2011 H. R. College, Dinshaw Wachha Road,Churchgate,Mumbai – 400 020 ................ 3

Certificate course for Professional Accountant ............................ 22-11-2011...................... BCAS and HR College ........................................................................................... 11

Two Day Comprehensive Workshop on Valuation ........................ 9-12-2011 & 10-12-2011 Walchand Hirachand Hall, 4th Floor, IMC Building,Churchgate, Mumbai ............ 5

3rd Residential Study Course on IFRS/ Ind AS ............................ 22-12-2011 to 24-12-2011 Fountainhead Leadership Centre, Bamansure, Post Kihim, Alibaug, 402201 ........... 4

Lecture Meetings ........................................................................... 19-10-2011 & 16-11-2011 Walchand Hirachand Hall, 4th Floor, IMC, Churchgate, Mumbai - 400020 .......... 1

(Continued on page 2)

Lecture Meeting

Venue I Walchand Hirachand Hall, 4th Floor, IMC, Churchgate, Mumbai - 400020Day, Date & Time I Wednesday, 16th November, 2011, 6.15 p.m.*Speaker I CA. Sunil Gabhawalla Subject I Service Tax Amendments – Point of Taxation & CENVAT Credit (This is the lecture meeting which was earlier scheduled on 29th August, 2011 and postponed due to heavy rains)* Fellowship over a cup of tea at 5.45 p.m.

Venue I Walchand Hirachand Hall, 4th Floor, IMC, Churchgate, Mumbai - 400020Day, Date & Time I Wednesday, 19th October, 2011, 6.15 p.m.*Speaker I Shantanu Gawde, India’s Youngest Ethical Hacker Subject I Ethical Hacking

To avoid cancellation of BCAS Membership kindly renew your membership before 31st October, 2011. If you wish to renew your membership after 31st October, 2011 then you will have to pay the specified entrance fees again.

Renewal of Membership for 2011-12

BCAS Newsletter I October 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 office – 11 a.m. to 1 p.m.

The next RTI Clinic days accordingly are 22nd October and 12th, 19th and 26th November 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 November 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 DamanwalaCA. Shariq ContractorCA. Gautam NayakCA. Anil Sathe CA. Atul Shah

Accounts & Audit ClinicThe next Accounts & Audit Clinic will be held on Saturday, 5th November 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 PanditCA. Himanshu Kishnadwala CA. Jayesh Gandhi

(Continued from page 1)

To disseminate knowledge on XBRL, BCAS has conducted introductory Webinars and courses on XBRL in the past. As the filing deadline of 30th November 2011 or 60 days from the usual due date for filing financial statements, whichever is later, has been notified and made it mandatory for certain class of companies to file their Financial Statements in XBRL Form, members should be careful in selecting the software, and should not be guided by the low cost. Infact member should look at the credentials and experience of the software provider before selecting the software.

On behalf of the Managing Committee, I take pleasure in wishing all our members and their families a happy and prosperous Diwali and New Year.

With warm regards

Yours truly,

CA. Deepak R. Shah

Study Group on International Economics With globalisation of Indian economy, events occurring on international front are directly impacting Indian economy and businesses. In order to keep track of major developments in the world economy and to study their implications, the Committee has started a “Study Group on International Economics”, wherein current developments and issues in international economics are discussed and debated.The fees for the study group is `1000

Details of the next meeting are as follows:

Day and Date : Friday, 21st October, 2011Time : 6.00 p.m. to 8.00 p.m.Venue : Gulmohar Hall, BCASTopic : Challenges before Chinese Economy and its likely Effects over World EconomySpeaker : CA. Hiren ShahTopic : Multi Disciplinary ThinkingSpeaker : CA. Abhay Bhagat

Members are welcome to join this group. The group will function on self-sufficient basis.

Enrolment form is printed on page 12.

International Taxation CommitteeChairman : CA. Kishor Karia Co-Chairman : CA. Rajesh Kothari Convenors : CA. Surin Kapadia CA. Dhishat Mehta CA. Gaurang Gandhi

Group Co-ordinators : CA. KK JhunJhunwala, CA. Chirag Vajani


BCAS Member ID Card is available for collection, for all members who have submitted their photos and received intimation to collect Member ID Card, from the BCAS Office during office hours.

Members are requested to please come in person or send an Authority Letter with their representative for collection of card. Upcountry members, who cannot collect their card in person or send their representative, can send by post an Authority Letter to the BCAS office, against which Membership card will be posted.

BCAS Member ID Card

Twelfth Intensive Study Course on Double Tax Avoidance AgreementThe 12th batch of the intensive Study Course on ‘Double Tax Avoidance Agreement’ (DTAA) would be held from November 12, 2011 to December 24, 2011.

This intensive course would be conducted in classroom style. There will be around 28 lectures in all, covering each article of DTAA with special emphasis on features like force of attraction, most favoured nation and triangular cases and a test thereafter. The UN Model Convention will form the basis of the course.

Faculty will comprise of senior professionals having expertise in the field of International Taxation. This may include the following persons.

Anil Doshi, Dhishat Mehta, Dilip Thakkar, Darpan Mehta, Geeta Jani, Girish Dave, Harish Motiwalla, Himanshu Parekh*, Keyur Shah, Kishor Karia, Jayesh Karia, Mayur Nayak, Naresh Ajwani, Paresh Parekh, Paresh Shah, Pinakin Desai, Radhakrishna Rawal, Sanjay Grover*, Mayur Desai, Sharad Jain, Sushil Lakhani, T. P. Ostwal, Vishal Gada, Vispi Patel and Yogesh Thar

*Confirmation awaited.

Dates : November 12, 2011 to December 24, 2011 Time : Saturdays — 9.00 am to 6.00 pmVenue : H. R. College, Dinshaw Wachha Road, Churchgate,Mumbai – 400 020Fees : `9,000 per participant (including `50 as contribution to BCAS Foundation).

Enrolment is restricted to 60 participants on first-come-first-serve basis. To give benefit of this course to a larger spectrum of members, enrollment would be restricted to a maximum of 7 members from the same organization and additional members from that organisation would be kept on waiting list. They would be enrolled if vacancy is available prior to one week before the commencement of the course.

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



Course Co-ordinators : CA. Gaurang Gandhi and CA. D. S. Sharma


Half-day Seminar on 'Authority of Advance Rulings – Law & Procedure' The International Taxation Committee is pleased to announce a half-day Seminar on “Authority of Advance Rulings – Law & Procedure” jointly in association with WIRC of Institute of Chartered Accountants of India and Indian Merchants’ Chamber. The particulars of the Seminar are as follows.

Day and Date : Friday, 11th November 2011Time : 09:30 a.m. to 01:30 p.m.Venue : Indian Merchants' Chamber, Churchgate, MumbaiFees : `600 (Fees included Seminar material and snacks)

Programme Outline

Sr. No Topics Speakers

1 Inaugural and Key-note Address

Mr. Justice P.K. Balasubramanyan, Chairman AAR

2 Practical Aspects and Expectations from Applicant

Mr. V.K. Shridhar – Member AAR and Shyama S BansiaSecretary AAR

3 Law and Procedures regarding Filing of Application of AAR including Practical Aspects

Mr. Girish Dave, Advocate

4 Recent Important Rulings of AAR

Mr Nishith Desai, Advocate


Member / Journal / Student subscribers are requested to inform 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 to serve you better.

The Trustees of BCAS Foundation acknowledge the following contributors who have contributed R5000 or more to the BCAS Foundation during the period of July 2011 to September 2011. We are thankful for the support.

1. Mr. K.C. Narang R10,0002. Lala Sant Ram Tirath Ram Public R5,000 Charitable Trust

Our Contributors


The International Financial Reporting Standards (IFRS) are fast emerging as the globally accepted accounting framework with more than 100 countries having adopted or permitting use of IFRS and several other countries adopting IFRS from 2012 onwards. In line with this emerging global trend, though the Ministry of Corporate Affairs (MCA) had announced convergence of Indian GAAPs with IFRS and a phased implementation thereof from April 2011 onwards, the same has been postponed mainly due to several implementation issues (especially) . Towards this end, MCA has already notified 35 Ind AS. The Institute of Chartered Accountants of India (ICAI) has also been pro-active in issuing Exposure Drafts for several new Ind AS. As per the latest news reports, Ind AS are likely to be made applicable from 1st April 2013 onwards. This may also require companies to compile comparative financials for the year ended 31st March, 2013 as per the applicable Ind AS.

To be in line with the IFRS / Ind AS, the MCA also announced the Revised Schedule VI. The revised Schedule VI is mandatory for financial year 2011-12 and applicable to all companies.

With the convergence fast approaching due to the impending deadline, as well as there being issues to be addressed to while preparing accounts as per revised Schedule VI, how many of us are really equipped to embrace the change with confidence?

Realising the importance of the journey of convergence with IFRS/Ind AS and to assist the accounting fraternity to prepare the accounts compliant with the regulatory requirements, we at BCAS have devised Third Residential Study Course to equip the professionals with relevant skills and to be the catalyst of the change process. The 3rd Residential Study Course (RSC) is in continuation of the successful completion of 1st and 2nd RSC on IFRS in December 2009 and 2010. The 3rd Residential Study Course is scheduled on 22nd, 23rd, & 24th December 2011. This Study Course is organised jointly with Indian Merchant Chambers.

The exclusive course on IFRS/Ind AS will cover Case studies on application, implementation & in depth study on Issues relating to Business Combinations / Consolidation, Revenue Recognition issues (in various industries), Property Plant & Equipment, Borrowing Costs, Intangible Assets and Impairment. There will also be a paper on issues on Revised Schedule VI.

It is an important event not to be missed by the accounting professionals from practice and industry.

Details of the programme are as under:

Enrolment will begin from 20th, October 2011

Dates : December 22nd to 24th 2011 Venue : Fountainhead Leadership Centre, Bamansure, Post Kihim, Alibaug, Maharashtra 402201. (Fountainhead is spread over 6 acres at Alibaug. The centre has state-of-the-art facilities combined with its easy accessibility from Mumbai. It has fully equipped conference rooms and open air, wi-fi facility, and well maintained rooms, having facilities viz. swimming pool, recreation & fitness centre, amphitheatre etc .

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

3rd Residential Study Course on IFRS/ Ind ASJointly with Indian Merchants’ Chamber

Subjects:

Sr No. Papers for Group Discussion Paper Writers

1 Case Studies on Business Combinations / Consolidation

Paritosh Basu/Sanjay Chauhan

2 Case Studies on Property Plant & Equipment / Borrowing Costs/

Intangible Assets and Impairment

N.Venkatram

3 Case Studies on Revenue Recognition (In various industries)

Rakesh Agarwal

4 Issues on Revised Schedule VI Vijay Maniar/Paresh Clerk

Sr No. Paper for Presentation Faculty1 Impact of IFRS/IndAS on Corporate

GovernanceParitosh Basu

Fees (per Participant): (Amount in Rupees)

Members Non MembersEarly Bird (upto 12th November,

2011)

From 13th November,

2011

Early Bird (upto 12th November,

2011)

From 13th November,

2011

Double Occupancy

10,750 12,250 12,750 15,250

Single Occupancy

15,000 17,500 17,500 20,000

The Fees include course material, stay and all meals from 22nd December, 2011 afternoon to 24th December, 2011 afternoon.

Transport cost - `650 (optional):The transportation arrangement is made for travel by catamaran from Gateway of India to Mandva beach & by Non-A.C.Bus from Mandva Beach to the venue and back. On the way to Alibaug, light packed breakfast will be provided on the catamaran. The delegates who are not opting for transportation arrangement have to reach the venue by 11.00 AM.

Delegate substitution:In the event of inability of the registered delegate to attend the Study Course for any reason, he/she should promptly inform the Committee by email indicating the “subject” as “IFRS RSC 2011– INABILITY TO ATTEND” with a copy marked to and At its discretion, BCAS/IMC may permit substitution. The substitute too needs to be a member of BCAS/IMC if he/she is replacing a member of BCAS/IMC. The Committee reserves the right not to admit any substituted person to the Study Course in the event a delegate substitutes him/her in his/her place without the prior written consent of the Committee.

Refund:Once enrolled, requests for refunds will not be entertained.

Enrolment FormName: ………………………………………………………………................BCAS Membership No.: ……………………………………….....................Address: ………………………………………………………………….........………………………………………………………………………………......Age: ………. Tel (O): ……………………….. Tel (R): ……………………..Mobile: ……………………………………. Email: …………………………..Room Partner: 1. …………………………. 2. …………………………….Group Leader ……………………………………………………….Transport Option: Yes: ……………... No: ……………...Food Choice: NonVeg: Veg: Jain Veg:

The decision of the Committee will be final in case of allotment of room & room partners.Enrolment forms will be accepted at BCAS office from 20th October 2011 from 10.30 a.m. to 5.30 p.m. on first-come-first-served basis.


As professionals, today we are expected to meet all our clients’ needs and valuation of their businesses is one of them. Mergers and acquisitions have become the order of the day. Small businesses are being acquired and large organizations are acquiring. M&A activity is not only restricted to India. Global MNC are having partnerships, JVs or are purchasing a stake in Indian companies and Indian enterprisers are looking at global buy outs. A timely exit or entry at the correct value could ensure a better price for the existing business and also eliminate critical losses.

It is a common myth that the process of valuing a business is carried out only at the point of buying or selling a business. But valuation is a versatile tool and can have a profound effect on the actions of entrepreneurs. Business valuation is used as a business performance indicator that can demonstrate the direction in which the business is heading. It can identify when strategies are working and when not.

Valuation can be an important management focus and motivation tool. Accounting forecasts, profit/loss statement and balance sheet can sometimes give a misleading view of the success of the business as they can incorporate components which may have little realisable worth. Managers relying on these could be unaware that they are leading the firm into trouble. Here, valuation is a useful ‘checking mechanism’ if used in addition to conventional formats.

The main aim of any business is to create wealth and not to earn profits. But how would you measure wealth? The answer is by applying various valuation techniques.

The infotech & 4i committee of the BCAS felt the need to have a comprehensive and detailed program which covered all the aspects of valuation so that our members could be familiarized with this, rather contemporary and upcoming area of practice. With an aim to help the members in initializing, setting up and developing a new lucrative are of practice this Two Day Comprehensive workshop on Valuation has been designed. Eminent professionals from the field will be speakers and further details of this workshop are as under:

Workshop details:Day and Date : Friday, December 9, 2011 and Saturday, December 10, 2011Time : 9.00 am to 6.00 pm. (on both days)Venue : Walchand Hirachand Hall, 4th Floor, IMC Building, Churchgate, Mumbai Fees : `3,050 for members; (inclusive of contribution of `50 to BCAS Foundation) `4,550 for non-members. (inclusive of contribution of `50 to BCAS Foundation)

Sr. No. Topic

1 Overview of Valuation as a Topic

2 Introduction to various methods of valuation

3 Importance of Analysis of Historical results & Issues in

4 future projections

5 DCF Method of Valuation

Infotech & 4i CommitteeChairman : CA. Ameet Patel Convenors : CA. Nandita Parekh CA. Nikunj Shah

Two Day Comprehensive Workshop on Valuation

6 Industry Case Studies

7 Art of report writing and disclaimers

8 Important Case Laws in Valuations

9 Valuation as a Practice Area- Opportunities and challenges

Please await further announcement on this workshop.


The Reserve Bank of India has issued the following 18 Circulars

A. P. (DIR Series) Circular No. 10, dated September 07, 2011Deferred Payment Protocols, dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR

The Rupee value of the special currency basket, with effect from August 23, 2011 is `66.9682 as against the earlier value of `64.7004.

A. P. (DIR Series) Circular No. 11, dated September 07, 2011External Commercial Borrowings – Simplification of Procedure

Presently, RBI approval is required for change of lender for existing External Commercial Borrowings (ECB).

This Circular has delegated the powers for approving change of lender for existing ECB to AD Category – I banks in cases where the original lender is an international bank or a multilateral financial institution (such as IFC, ADB, CDC, etc.) or a regional financial institution or a Government owned development financial institution or an export credit agency or supplier of equipment and the new lender also belongs to any one of the above-mentioned categories, subject to the following: - (i) The new lender is a recognised lender as per the extant ECB norms;(ii) There is no change in the other terms and conditions of the ECB;

and(iii) The ECB is in compliance with the extant guidelines.However, RBI approval will have to be obtained, as at present, where change in the recognised lender is due to change of foreign equity holder and foreign collaborator.

A. P. (DIR Series) Circular No. 12, dated September 15, 2011Savings Bank account maintained by residents in India – Joint holder - Liberalisation

This Circular permits resident in India to include their non-resident close relative(s) (relatives as defined in Section 6 of the Companies Act, 1956) as joint holder(s) in their resident bank accounts on ‘former or survivor’ basis. However, such non-resident Indian close relatives are not permitted to operate the said bank accounts during the lifetime of the resident account holder.

A. P. (DIR Series) Circular No. 13, dated September 15, 2011NRIs PIOs holding NRE / FCNR(B) accounts jointly with Indian resident close relative - Liberalisation

This Circular permits Non-Resident Indian (NRI), as defined in FEMA Notification No. 5, to open NRE / FCNR(B) account with their resident close relative (relative as defined in Section 6 of the Companies Act, 1956) on ‘former or survivor’ basis. The resident close relative is permitted

From RBIContributed by : CA. Gaurang Gandhi


to operate the account as a Power of Attorney holder during the lifetime of the NRI / PIO account holder.

A. P. (DIR Series) Circular No. 14, dated September 15, 2011Foreign Investments in India – Transfer of security by way of gift - Liberalisation

Presently, a person resident in India can transfer, by way of gift, to a person resident outside India any security including shares/convertible debentures up to the value of US $25,000 during a calendar year after obtaining prior approval of RBI.

This Circular has increased the said limit from US $25,000 to US $50,000. As a result, a person resident in India can now transfer, by way of gift, to a person resident outside India any security including shares/convertible debentures up to the value of US $50,000 per financial year after obtaining prior approval of RBI.

A. P. (DIR Series) Circular No. 15, dated September 15, 2011Exchange Earners Foreign Currency (EEFC) Account and Resident Foreign Currency (RFC) account – Joint holder - Liberalisation

This Circular permits resident in India to include their non-resident close relative(s) (relatives as defined in Section 6 of the Companies Act, 1956) as joint holder(s) in their EEFC / RFC bank accounts on ‘former or survivor’ basis. However, such non-resident Indian close relatives are not permitted to operate the said bank accounts during the lifetime of the resident account holder.

A. P. (DIR Series) Circular No. 16, dated September 15, 2011Credit of sale proceeds of Foreign Direct Investments in India to NRE / FCNR (B) accounts - Clarification

Presently, in terms of Schedule 3, 4 and 5 of the FEMA Notification No. 20/2000-RB, dated May 3, 2000, sale proceeds of Foreign Investments in India are eligible for credit to NRE / FCNR (B) accounts, where the purchase consideration was paid by the Non-resident Indians / Persons of Indian Origin out of inward remittance or funds held in their NRE/FCNR (B) accounts and subject to applicable taxes, if any.

This Circular has extended the said facility of credit of sale proceeds of Foreign Investments in India to NRE / FCNR (B) accounts, where the purchase consideration was paid by the Non-resident Indians / Persons of Indian Origin out of inward remittance or funds held in their NRE/FCNR (B) accounts and subject to applicable taxes, if any, to NRI / PIO under Regulation 11 of the said Notification.

A. P. (DIR Series) Circular No. 17, dated September 16, 2011Gift in Rupees by Resident Individuals to NRI close relatives

This Circular permits a resident individual to make a rupee gift to a NRI / PIO who is a close relative of the resident individual [close relative as defined in Section 6 of the Companies Act, 1956] by way of crossed cheque / electronic transfer. The amount should be credited to the Non-Resident (Ordinary) Rupee Account (NRO) account of the NRI / PIO.

The gift amount must be within the overall limit of US $200,000 per financial year as permitted under the Liberalised Remittance Scheme (LRS) for a resident individual. The resident donor will have to ensure that the gift amount being remitted is under the LRS and all the remittances under the LRS during the financial year including the gift amount have not exceeded the limit prescribed under the LRS.

A. P. (DIR Series) Circular No. 18 dated September 16, 2011Loans in Rupees by resident individuals to NRI close relatives

This Circular permits a resident individual to give an interest-free loan with a minimum maturity period of one year under the Liberalised Remittance Scheme (LRS) to Non-Resident Indian (NRI) / Person of Indian Origin (PIO) close relative [means relative as defined in Section

6 of the Companies Act, 1956] by way of crossed cheque /electronic transfer. The loan is subject to the following conditions: -

1. The loan amount must be within the overall limit under the LRS of US $200,000 per financial year. The lender has to ensure that the amount of loan is within the LRS limit.

2. The loan can be utilised for meeting the borrower's personal requirements or for his own business purposes in India.

3. The loan must not be utilised, either singly or in association with other person(s), for any of the activities in which investment by persons resident outside India is prohibited, namely: -

(a) The business of chit fund, or (b) Nidhi Company, or (c) Agricultural or plantation activities or in real estate business, or

construction of farm houses, or (d) Trading in Transferable Development Rights (TDRs). Explanation: For the purpose of item (c) above, real estate

business shall not include development of townships, construction of residential / commercial premises, roads or bridges.

4. The loan amount must be credited to the NRO account of the NRI / PIO.

5. The loan amount must not be remitted outside India.6. Repayment of the loan must be made by way of inward remittances

through normal banking channels or by debit to the Non-resident Ordinary (NRO) / Non-resident External (NRE) / Foreign Currency Non-resident (FCNR) account of the borrower or out of the sale proceeds of the shares or securities or immovable property against which such loan was granted.

A. P. (DIR Series) Circular No. 19, dated September 16, 2011Repayment of loans of Non-resident close relatives by residents

Presently, a close relative, resident in India, can repay the housing loan availed by his Non-Resident Indian (NRI) relative.

This Circular permits a resident close relative (relative as defined in Section 6 of the Companies Act, 1956), of the NRI to repay the loan availed by the NRI by crediting the borrower's (NRI) loan account through the bank account of such relative.

A. P. (DIR Series) Circular No. 20, dated September 16, 2011Meeting of Medical expenses of NRIs close relatives by Resident Individuals

Presently, a resident can make payment in rupees for meeting expenses on account of boarding, lodging and services related thereto or travel to and from and within India of a person resident outside India who is on a visit to India.

This Circular has expanded the meaning of “services related thereto” as stated in Regulation 2(i) of Notification No. FEMA 16 /2000- RB, dated May 3, 2000 by including medical expenses therein. As a result, a resident individual can now pay for the medical expenses incurred in India by his NRI close relative (relative as defined in Section 6 of the Companies Act, 1956).

A. P. (DIR Series) Circular No. 21 dated September 19, 2011Anti-Money Laundering (AML) standards/Combating the Financing of Terrorism (CFT) Standards - Money changing activities

This Circular informs that the: -1. Financial Action Task Force (FATF) has issued a Statement on June

24, 2011 calling its members and other jurisdictions to apply counter-measures to protect the international financial system from the ongoing and substantial money laundering and terrorist financing (ML / FT) risks emanating from Iran and Democratic People’s Republic Korea (DPRK). However, Authorized Persons are not precluded from entering into legitimate trade and business transactions with Iran.

2. FATF has also identified the following countries – Bolivia, Cuba, Ethiopia, Kenya, Myanmar, Sri Lanka, Syria and Turkey – as


Jurisdictions with strategic AML / CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies and calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction. Authorised Persons are advised 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. 22, dated September 19, 2011Anti-Money Laundering (AML) standards/Combating the Financing of Terrorism (CFT) Standards - Cross Border Inward Remittance under Money Transfer Service Scheme

This Circular informs that the: -1. Financial Action Task Force (FATF) has issued a Statement on

June 24, 2011 calling its members and other jurisdictions to apply counter-measures to protect the international financial system from the ongoing and substantial money laundering and terrorist financing (ML / FT) risks emanating from Iran and Democratic People’s Republic Korea (DPRK). However, Authorised Persons (Indian Agents) are not precluded from entering into legitimate trade and business transactions with Iran.

2. FATF has also identified the following countries – Bolivia, Cuba, Ethiopia, Kenya, Myanmar, Sri Lanka, Syria and Turkey – as Jurisdictions with strategic AML / CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies and calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction. Authorised Persons (Indian Agents) are advised 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. 23, dated September 19, 2011Anti-Money Laundering (AML) standards / Combating the Financing of Terrorism (CFT) Standards – Money changing activities

This Circular requests Authorized Persons to consider the information contained in the Statement issued by FATF on June 24, 2011 calling upon certain jurisdictions to complete the implementation of their action plan within the timeframe.

A. P. (DIR Series) Circular No. 24, dated September 19, 2011Anti-Money Laundering (AML) standards/Combating the Financing of Terrorism (CFT) Standards - Cross Border Inward Remittance under Money Transfer Service Scheme

This Circular requests Authorised Persons (Indian Agents) to consider the information contained in the Statement issued by FATF on June 24, 2011 calling upon certain jurisdictions to complete the implementation of their action plan within the timeframe.

A. P. (DIR Series) Circular No. 25, dated September 23, 2011External Commercial Borrowings (ECB) for the Infrastructure Sector – Liberalisation

Presently, repayment of existing Rupee loans is not a permissible end-use for ECB. This Circular permits, under the Approval Route, Indian companies in the infrastructure sector, to utilize 25% of the fresh ECB raised by them towards refinancing of the Rupee loan(s) availed by them from the domestic banking system, subject to the following conditions:-(i) At least 75 per cent of the fresh ECB proposed to be raised must

be utilised for capital expenditure towards a 'new infrastructure' project(s), where “infrastructure” is as defined in terms of the extant

guidelines on ECB.(ii) In respect of remaining 25 per cent, the refinance shall only be utilised

for repayment of the Rupee loan availed of for 'capital expenditure' of earlier completed infrastructure project(s); and

(iii) The refinance shall be utilised only for the Rupee loans which are outstanding in the books of the financing bank concerned.

Companies desirous of availing such ECBs may submit their applications in Form ECB through their designated Authorised Dealer bank with the following documents:(i) Details of the project(s) completed duly certified by the designated

AD Category I bank;(ii) Certificate from the Statutory Auditor as well as from the domestic

lender bank(s) regarding the utilisation of Rupee term loans with respect to 'capital expenditure' for the completed infrastructure project(s);

(iii) Certificate from the designated Authorised Dealer bank mentioning the outstanding Rupee loans ; and

(iv) Details of the proposed end-use of the new infrastructure project.

A. P. (DIR Series) Circular No. 26, dated September 23, 2011External Commercial Borrowings (ECB) – Bridge Finance for Infrastructure Sector

This Circular permits, under the Approval Route, Indian companies which are in the infrastructure sector, to import capital goods by availing of short term credit (including buyers’ / suppliers’ credit) in the nature of 'bridge finance', subject to the following conditions:-(i) The bridge finance must be replaced with a long-term ECB;(ii) The long-term ECB must comply with all the extant ECB norms; and(iii) Prior approval must be obtained from RBI for replacing the bridge

finance with a long-term ECB.

A. P. (DIR Series) Circular No. 27, dated September 23, 2011External Commercial Borrowings (ECB) – Rationalisation and Liberalisation

This Circular rationalizes and liberalises ECB guidelines as follows: -(i) Enhancement of ECB limit under the automatic route

(a) Eligible borrowers in real sector-industrial sector-infrastructure sector can now avail of ECB up to US $750 million or equivalent per financial year under the automatic route as against the present limit of US $500 million or equivalent per financial year.

(b) Corporates in specified service sectors viz. hotel, hospital and software, can avail of ECB up to US $200 million or equivalent during a financial year as against the present limit of US $100 million or equivalent per financial year, subject to the condition that the proceeds of the ECBs should not be used for acquisition of land.

(ii) ECBs designated in INR

(a) 'All eligible borrowers' can now avail of ECB designated in INR from foreign equity holders under the automatic / approval route, as the case may be, as per existing ECB guidelines.

(b) NGO engaged in micro-finance activities can continue to avail of ECB designated in INR, as hitherto, under the automatic route from overseas organisations and individuals as per existing guidelines.

(iii) ECB for Interest During Construction (IDC)

Interest During Construction (IDC) will be considered as a permissible end-use for Indian companies which are in the infrastructure sector, under the automatic / approval route, as the case may be, subject to the following conditions:-(a) That the IDC is capitalised; and(b) Is part of the project cost.


Bombay Chartered Accountants' Society

InfoTech & 4i Committee&

Membership & Public Relations Committee present

BCAS Web TV

Lecture Meeting on E-filing of Returns for Assessment Year 2011-12 – Practical issues by CA. Ameet Patel held on 14th September 2011 is available on BCAS Web TV.

Other videos on the BCAS Web TV are:Half–day Workshop on How to Conduct a Tax Audit by CA. Himanshu Kishnadwala and CA. Anil Sathe

Lecture Meeting on Taxation of Shares and Securities – Current Developments by CA. Pradip Kapasi

Lecture Meeting on Taxation of Cross-Border Transactions – Recent Trend in India by CA. Pinakin Desai

Lecture Meeting on Overview of XBRL by CA. Atul Bheda

Lecture Meeting on Filing of Income-tax returns for A. Y. 2011- 12 by CA. Mukesh Trivedi and CA. Vipul Gandhi

Lecture Meeting on Recent Amendments in Schedule VI of the Companies Act, 1956 by C.A. P. R. Ramesh

Lecture Meeting on Direct Tax Provisions of the Finance Bill, 2011 by Senior Advocate Mr. S. E. Dastur

Lecture Meeting on Electronic Tax Payments and Quarterly TDS Returns – Recent updates and issues by Delnaz Mistry

* Free VideoTalk on How to Prepare for and Write CA Exams by Mr. T.N. Manoharan

Lecture Meeting on issues in Bank Audit by Akeel Master

Lecture Meeting on Recent Developments in TDS by Mahendra Sanghvi

Lecture Meeting on FDI Policy plus Industry-Specific Issues (Real Estate, NBFC and Training Sectors) by Anup Shah

Title BCAS Web TVFormat Internet Television Live Streaming ServiceWhat do you need A computer with an internet connection or a cell phone with 3G connectivity and BCAS membershipMechanism of working Pay the subscription charges for BCAS TV and you will be emailed a user id and password, then log on to www.bcasonline.tv and view the videos or hear the audios of select events conducted by BCAS Features You can see videos or hear audios recordings on the move on your mobile or on your laptop. The website has been designed for enabling: • Live Streaming Service and • Search for specific videos from multiple videos hosted on the site Discipline Videos/Audios of selected Lecture Meetings, Workshops, Study Circles, Seminars, etc.Who can benefit Life and Ordinary Members of BCASHow to subscribe By cheque/DD/Credit Card: Payment Counter: BCAS, 7, Jolly Bhavan No.2, New Marine Lines, Mumbai - 400020 Imprest: If you are a BCAS member and if you have an imprest account, then you can give instructions to adjust the subscription through the imprest account Cheques/Pay orders/DDs should be payable at Mumbai in the name of "Bombay Chartered Accountants' Society"

For more Information: Call +91-22-61377600 or write to [email protected] charges `600 per annum applicable till March 2012

Subscribe Now!!!

BCAS Recent Publications for Sale

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

1 Reporting under CARO 2003, A CompilationRevised and updated

MembersNon-Members

225275

100100

2 Comparative Analysis of the Indian Tax Treaties (with CD) 245 150

3 A Hands-on Approach to XBRL and Revised Schedule VI Filing, Assurance, Taxonomy and Business Rules (with CD).

* This book has been published by CCH, a Wolters Kluver business. List price of the book `695, special price for BCAS members is `425.

425 150

4 Namaskaar ki Bhet 100 50

5 Study Material CD on Seminar on NBFC (including Audit Aspects) 350 50


Lecture Meeting on issues in Bank Audit by Akeel Master

Lecture Meeting on Recent Developments in TDS by Mahendra Sanghvi

Lecture Meeting on FDI Policy plus Industry-Specific Issues (Real Estate, NBFC and Training Sectors) by Anup Shah

Title BCAS Web TVFormat Internet Television Live Streaming ServiceWhat do you need A computer with an internet connection or a cell phone with 3G connectivity and BCAS membershipMechanism of working Pay the subscription charges for BCAS TV and you will be emailed a user id and password, then log on to www.bcasonline.tv and view the videos or hear the audios of select events conducted by BCAS Features You can see videos or hear audios recordings on the move on your mobile or on your laptop. The website has been designed for enabling: • Live Streaming Service and • Search for specific videos from multiple videos hosted on the site Discipline Videos/Audios of selected Lecture Meetings, Workshops, Study Circles, Seminars, etc.Who can benefit Life and Ordinary Members of BCASHow to subscribe By cheque/DD/Credit Card: Payment Counter: BCAS, 7, Jolly Bhavan No.2, New Marine Lines, Mumbai - 400020 Imprest: If you are a BCAS member and if you have an imprest account, then you can give instructions to adjust the subscription through the imprest account Cheques/Pay orders/DDs should be payable at Mumbai in the name of "Bombay Chartered Accountants' Society"

For more Information: Call +91-22-61377600 or write to [email protected] charges `600 per annum applicable till March 2012

Subscribe Now!!!

BCAS Recent Publications for Sale

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

1 Reporting under CARO 2003, A CompilationRevised and updated

MembersNon-Members

225275

100100

2 Comparative Analysis of the Indian Tax Treaties (with CD) 245 150

3 A Hands-on Approach to XBRL and Revised Schedule VI Filing, Assurance, Taxonomy and Business Rules (with CD).

* This book has been published by CCH, a Wolters Kluver business. List price of the book `695, special price for BCAS members is `425.

425 150

4 Namaskaar ki Bhet 100 50

5 Study Material CD on Seminar on NBFC (including Audit Aspects) 350 50


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. 68365/98Regd. No. MH/MR/South-88/2009-11Posted at Mumbai Patrika Channel Sorting Office, Mumbai-1Published on 8th of every month

Please fill in the above form and send the same to the Society’s office along with 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 timings 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.

Combined Enrolment Form

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/ Cheque no. .................. Drawn on ............................................................................................. Bank,Dated ......................... for an amount of r........................................................ is enclosed.

Date : ................(Signature)

SEMInAR : Half-day Seminar on 'Authority of 11-11-2011 r600 ........................

Advance Rulings – Law & Procedure'

STUDY COURSE : Study Group of International Economic 21-10-2011 r1,000 ..................... Twelfth Intensive Study Course on 12-11-2011 r9,000 .................... Double Tax Avoidance Agreement to 24-12-2011

WORKSHOP : Two Day Comprehensive Workshop 09-12-2011 r3,050 for members .......... on Valuation & 10-12-2011 r4,550 for non-members ....

All members, journal subscribers and students can take advantage of Imprest scheme. We have kept this scheme open for non members also. The modalities of the scheme are as under: `2500 to be kept with us as Imprest cash in your account till you

desire. There is no validity period for the same. (In case of non-member, `250 extra to be paid for account handling charges.)

The base level would be `250, which needs to be replenished again to `2500 by the person opting for the scheme.

Any publication, conference papers or CDs costing ` 250 or less than `250 would be sent to you by default as soon as they are published. This would also include one set of English edition of the Budget Publication (a set of 5 books).

For outstation members, the requisite amount of postage would also be adjusted from the said Imprest account.

For subscribers to the scheme in Mumbai, we need to be intimated in advance about the mode of delivery of the said publication. It can be sent either by courier (whereby the courier charges would also be adjusted from the imprest account) or it could be collected by your representative from the BCAS office. In case you opt for the latter option, then the delivery of the publication must be effected within 15 days of the receipt of the mail notifying the release of the

Imprest System for Publications

publication, failing which, we would courier the publication to you, and debit the charges to your account.

For premium publications like BCAS Referencer, Calendars and other topic specific publications, we would send an email to all the subscribers and would send these publications only on receipt of intimation from the subscriber. An email needs to be sent to [email protected] specifying the relevant details, such as quantity and the type of publication, etc. (e.g., in the case of the Referencer — whether Premium, Refill or Super Saver)

An intimation showing the account balance would also be sent to the subscriber every time along with the publication.

For exit options, if a subscriber intends to exit within six months of joining the scheme, then an exit load of `100 would be deducted and the balance would be returned to him/her. In other cases, the entire balance would be returned without any exit load, upon receipt of the exit intimation.

So, what are you waiting for? Pick up your cheque books, sign a cheque for `2500 and send it to us at the BCAS office and relax . . . .

Please visit BCAS Website www.bcasonline.org for Imprest System form.

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