The Institute of Chartered Accountants of India (Set up by an Act of Parliament) Goa Branch of WIRC AUGUST 2014 For Members only InsIde Chairman s Communiqué Branch Activity Report Important Notifications & Updates Forthcoming events Managing COMMITTEE Chairman: CA. Naveen G Daivajna Vice-Chairman: CA. Kiran Kharangate Secretary: CA. Yeshwant Kamat Treasurer: CA. Vinesh Pikale Members: CA. Kedar Kenkre CA. Anup Borkar EDITORIAL BOARD CA. Kedar Kenkre CA. Naveen Daivajna CA. Pooja Bandekar CA. Jovilyn Pereira e Dalgado 1
ChaIrman s communiqué Dear Colleagues and Student Friends, Coming together is a beginning, staying together is progress, and working together is success. It has been six months in my new role and I am constantly getting your love, support & cooperation in each and every branch activity. Last six months witnessed many new activities being organized with enthusiasm. The journey has been an exciting and remarkable one for me and I have seen this branch acquiring its own unique identity, while remaining rooted to the old traditions of commitment to knowledge, excellence, integrity and freedom. This also been a busy month for the branch with a host of programs being organised for members and students including investor awareness programs across Panaji and Margao, a 2 day workshop on Companies Act 2013 in Panaji, Certificate Course on the Concurrent Audit of Banks, Elocution contest for students at the branch and finally the keenly attended program on Revised Tax Audit Report at Panaji. Most of the provisions of The Companies Act, 2013 have been notified and many of them have been made effective from 1st April, 2014. Hence it is very much necessary to understand the concepts and provisions of the Act as the preparations for the proper compliance of the Act will have to be initiated in the current year. Further, there has to be an understanding by the professionals from the aspect of their association with the corporate entities and reporting requirements. In this regard, an extensive workshop designed under the guidance and support of Past Chairman WIRC, CA Manguesh Kinare, with an intent to unravel the finer aspects of the key provisions of the Companies Act, 2013 was organised at Hotel Fidalgo in Panaji on August 8 & 9,2014. The results of CA Final examinations conducted in May / June 2014 were declared recently. I heartily congratulate all those who passed. It is seen that from the last few terms CA results are showing gradual decline in pass percentage. I therefore appeal to all CA students to draw a balance between studies and extracurricular activities so as to remain in the race and put their focus mainly on the study material provided by our institute. The extension of the due date of filing TAR till 30th November was a welcome relief but it also left us baffled because we found that the due dates of filing of returns had not simultaneously been extended. The introduction of new utilities intermittently by the Income-tax Department is posing a lot of problems to Members. It leaves us with a lot of unanswered issues and calls for the Institute to step in and seek clarifications. 2
Goa branch was fortunate to have CA. Abhijit Kelkar, who for the second year consecutive year spoke on intricate issues on the extensive reporting under the revised Tax Audit Report to a packed audience. I hope the members may have been positively benefited from this talk and hope that they have got a grip on the broad implications of the changes and of the fact that a small-sized audit was now going to take at least one more day s labour. The month of August signals the start of the festive season with Ganesh Chaturthi being celebrated across the state with must pomp and vigor. May the blessings of Sri Ganesha continue to be upon all of you! May he remove all the obstacles that stand in your spiritual path! By the time you receive this Newsletter we will have already wished each other Ganpati Bapa Morya and would be preparing for the upcoming Navratri,Dussehra and Eid festivals. On behalf of the team at Goa branch, I wish you and your family a very happy Festive Season ahead. Happy Reading! CA Naveen G. Daivajna Chairman 3
Activities organised by the Branch from 1 st to 31 st August, 2014 Branch Activity Report Date Programme / Venue Speakers No. of Participants CPE Hrs. 02.08.14 Workshop on MS Excel at Goa Branch Premises CA. Satyaprakash Kamath 60 Nil 02.08.14 Investor Awareness Programme at GCCI Hall, Panaji Mutual fund scheme & Systematic Investment Plans Mr. Santosh Dave Mandar Acharya 102 2 08.08.14 To 09.08.14 Two Day Workshop on Companies Act 2013 at Hotel Fidalgo, Panaji Introduction to New concepts, Key Definitions, Applicability, Incorporation of Companies, Drafting MOA/AOA, Issue of shares & securities, Compliance procedures, Annual Returns, Registration of charges, AGM CA. Abhay Arolkar 107 12 Appointment and Qualifications of Directors, Board Meetings, Acceptance of Loans and Deposits, Guarantees, Corporate Governance, CSR, Frauds and Management Responsibility CS. Anant Amdekar Related Party Transactions, Lending and Investments, Issues relating to Accounts and Financial Statements, Depreciation, Dividend and Managerial Remuneration, Consolidation of Accounts etc. (Action points for current year) CA. Sushrut Chitale Provisions relating to Audit and Auditors Rotation of Audit, Ceiling on Audits etc., Mandatory Internal Audit, Reporting on Frauds and Auditors responsibility, Auditor s focus areas compliances and responsibilities Action Points for existing Private Limited Companies CA. Anirudha Godbole 15.08.14 Elocution Contest at Goa Branch Premises 45 Nil 16.08.14 Workshop on MS Excel at Goa Branch Premises CA. Satyaprakash Kamath 23 Nil 19.08.14 CPE Programme on Revised Tax Audit Format at Institute Menezes Braganza Hall, Panaji CA. Abhijit Kelkar 231 3 4
Branch Activity Report Date Programme / Venue Speakers No. of Participants 22.08.14 To 24.08.14 Certificate Course on Concurrent Audit of Banks at Hotel Nanutel, Margao Audit in CBS Environment, Software Usage in Banks CBS Demonstration, Implementation of Basel Capital Regulatory Requirements in India.Disclosure Requirements. CA. Navin Khandelwal CPE Hrs. 50 36 Forex & Trade, Fraud Detection, Classification and Reporting, Discussion on Case Studies on Frauds Occurred in Banking Industries. Concurrent Audit Procedures Legal and Regulatory Frame work, KYC norms & Obligation of banks under Prevention of Money Laundering Act (PMLA 2002), Negotiable Instrument Act, 1881, Effective Concurrent Audit, Diligence Reports for Banks Loans and Advances, Book Debts an Stock Audit, Prudential norms on Income Recognition, Assets Classification and Provisioning pertaining to Advances Treasury and Investment Function- Part I, Treasury and Investment Function- Part II, 24.08.14 Investor Awareness Programme at Goa Branch Premises Investor Population & Perception Investor Protection Do s and Don ts Dr. P. S. R Prasad CA. Gagan Jhavar CA. Nayan R. Kothari CA. Uday Sathaye Mr. R. H. Danane CA. Satyaprakash Kamath CA. Yatish Pai Vernekar 104 2 5
IMPORTANT NOTIFICATIONS, UPDATES & ANNOUNCEMENTS Announcement of Company Law Settlement Scheme (CLSS), 2014 vide General Circular No. 34/2014 dated 12th One Time Opportunity for Defaulting Companies and Its Directors Companies Who Have Not Filed Their Annual Reports, Financial Statements and Related Documents Due For Filing on Or Before 30/06/2014 Can File These Documents Before 15/10/2014 And Avail Of The Following Pay Only 25% Of Payable Additional Fee, And Enjoy Immunity From Prosecution. Directors Will Also Not Be Disqualified Under Section 164(2) Of The Companies Act, 2013. Related Notification is as follows :- General Circular No. 34/2014 F. No. 02/13/2014 CL-V Subject: COMPANY LAW SETTLEMENT SCHEME, 2014 Dated. 12/08/2014 As you are aware, the Companies Act requires companies to file annual documents (Annual return and financial Statements) on the MCA21 electronic registry, within prescribed time limits. Sections 92, 137 and 403 of the Companies Act, 2013, which correspond to sections 159, 220 and 611 of the Companies Act, 1956 may be referred to in this regard. These annual documents are considered very important in context of an up-to-date Registry, it is observed that a large percentage of companies have not filed their statutory documents making them liable for penalties and prosecution for such non-compliance. 2. The Companies Act, 2013 lays down a stricter regime for the defaulting companies with higher additional fees. The quantum of punishment has been enhanced under the above mentioned provisions of the Act vis-avis the earlier Act i.e. Companies Act, 1956. A specific provision for enhanced fine in case of repeated default also been included in the form of section 451 of the Act. Additionally, the provisions section 164(2) of the Act, inter alia, providing for disqualification of directors in case a company has not filed financial statements or annual returns for any continuous period of three financial years has been extended to all companies. 3. The Ministry has received representations from various stakeholders requesting for grant of transitional period/one-time opportunity to enable them to file their pending annual documents to avoid attraction of higher fees/fine and other penal action, espescially disqualification of their Director prescribed under the new provisions of the Act. 4. in order to give such an opportunity to the defaulting companies to enable them to make their default good by filing these belated documents, the Central Government in exercise of powers conferred under section 403 and 460 of the Companies Act, 2013 has decided to introduce a Scheme namely Company Law Settlement Scheme 2014 [CLSS-2014] condoning the delay in filing the above mentioned documents with the Registrar, granting immunity for prosecution and charging a reduced additional fee of 25% of the actual additional fees payable as per section 403 read with Companies (Registration Offices and Fee) Rules, 2014 for filing those belated documents under the Companies Act, 1956/2013 and the Rules made thereunder. 5. In addition, the scheme gives an opportunity to Inactive companies to get their companies declared as dormant company under section 455 of the Act (Chapter XXIX) by filing a simple application at reduced fees. The said provision enables Inactive companies to remain on the Register of Companies with minimal compliance requirements. 6
6. The details of the Scheme are as under:- (i) The scheme shall come into force on the 15th and shall remain in force up to 15th October, 2014. (ii) Definitions In this Scheme, unless the context otherwise requires, (a) Act means the Companies Act, 2013 and Companies Act, 1956 (where ever applicable); (b) Company means a company as defined in clause of 20 of section 2 of the Companies Act, 2013 ; (c) defaulting company means a company defined under the Companies Act, 2013, and which has made a default in filing of annual statutory documents. (d) designated authority means the Registrar of Companies having jurisdiction over the registered office of the company. (e) immunity certificate means the certificate referred to in sub-paragraph (vi) of the Scheme; (f) inactive Company means as defined In Explanation (i) to sub-section (1) of section 455(1) of Companies Act, 2013. (iii) Applicability: - Any defaulting company Is permitted to file belated documents which were due for filing till 30th June 2014 In accordance with the provisions of this Scheme: (iv) Manner of payment of fees and additional fee on filing belated document for seeking Immunity under the Scheme - The defaulting company shall pay statutory filing fees as prescribed under the Companies (Registration Offices and fee) Rules, 2014 along with additional fees of 25% of the actual additional fee payable on the date of filing of each belated document. (v) Withdrawal of appeal against prosecution launched for the offences: If the defaulting company has filed any appeal against any notice Issued or complaint filed before the competent court for violation of the provisions under the Companies Act, 1956 and/or Companies Act, 2013 in respect of which application is made under this scheme, the applicant shall before filing an application for issue of Immunity certificate, withdraw the appeal and furnish proof of such withdrawal along with the application. (vi) Application for Issue of Immunity in respect of document(s) filed under the Scheme - The application for seeking immunity in respect of belated documents filed under the Scheme may be made electronically in the e-form CLSS-2014 annexed, after the document(s) are taken on file, or on record at approved by the Registrar of Companies as the case may be. The e-form for filing application to obtain such a certificate will be available on the MCA21 portal from 1 st September, 2014 and may be filed thereafter but not later than three months from the date of closure of the Scheme. There shall not be any fee payable on this Form. Provided that this immunity shall not be applicable in the matter of any appeal pending before the court of law and in case of management disputes of the company pending before the court of law or tribunal. (vii) Order by designated authority granting immunity from penalty and prosecution - The designated authority shall consider the application and upon being satisfied shall grant the immunity certificate in respect of documents filed under this Scheme. (viii) Scheme not to apply in certain cases (a) This scheme shall not apply to the filing of belated documents other than the following: a. Form 20B Form for filing annual return by a company having share capital. b. Form 21A - Particulars of Annual return for the company not having share capital. c. Form 23AC, 23ACA, 23AC-XBRL and 23ACA-XBRL Forms for filing Balance Sheet and Profit & Loss account. d. Form 66 Form for submission of Compliance Certificate with the Registrar. 7
e. Form 238 Form for Intimation for Appointment of Auditors. (ix) This Scheme shall not apply a. to companies against which action for striking off the name under sub- section (5) of section 560 of Companies Act, 1956 has already been initiated by the Registrar of Companies or b. where any application has already been filed by the companies for action of striking off name from the Register of Companies or c. where applications have been filed for obtaining Dormant Status under section 455 of the Companies Act, 2013; d. to vanishing companies (x) After granting the immunity, the Registrar concerned shall withdraw the prosecution(s) pending if any before the concerned Court(s); (xi) Scheme for Inactive Companies: The defaulting inactive companies, while filing due documents under CLSS-2014 can, simultaneously, either: a. apply to get themselves declared as Dormant Company under section 455 of the Companies Act, 2013 by filing e-form MSC-1 at 25% of the fee for the said form; OR b. apply for striking off the name of the company by filing e- Form FTE at 25% of the fee payable on form FTE. (xii) Applicability of clause (a) sub-section (2) of Companies Act, 2013 In case of companies availing the Scheme:- In case of defaulting companies which avail of this Scheme and file all belated documents, the provisions of clause (a) of subsection (2) of section 164 of the Companies Act, 2013 shall apply only for the prospective defaults, if any, by such companies. 7. At the conclusion of the Scheme, the Registrar shall take necessary action under the Companies Act, 1956/ 2013 against the companies who have not availed this Scheme and are in default in filing these documents in a timely manner. Yours faithfully, (KMS Narayanan) Assistant Director 23387263 8
INCOME TAX Source: www.incometaxindia.gov.in Notification no. 34 dated 5th August, 2014 Whereas, the Agreement and the Protocol (hereinafter referred to as the said Agreement and the Protocol) was entered into between the Government of the Republic of India and the Government of Malta, for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.entered into between the Government of the Republicof India and the Government of Malta, for the avoidance of double taxation andthe prevention of fiscal evasion with respect to taxes on income. 2. And whereas, the date of entry into force of the said Agreement and the Protocol is the 7thday of February, 2014, being the date of later of the notifications of completion of the procedures as required by the respective laws for entry into force of the said Agreement and the Protocol, in accordance with paragraph 1 of article 29 of the said Agreement. 3. And whereas, sub-paragraph (a) of paragraph 3 ofarticle 29 of the said Agreement provides that the provisions of the said Agreement shall have effect in India in respect of income derived in any fiscal year beginning on or after the first day of April next following the calendar year in which the said Agreement enters into force; 4. Now, therefore, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that all the provisions of said Agreement and the Protocol between the Government of the Republic of India and the Government of Malta for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, as set out in the Annexure hereto, shall be given effect to in the Union of India with effect from 1st day of April, 2015. Notification no. 35 dated 12th August, 2014 Agreement for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income between the Government of Republic of India and the Government of the Republic of Fiji Service Tax Source: www.cbec.gov.in http://www.servicetax.gov.in/st-circulars-home.htm Notification No.17/2014 - Service Tax dated 20th August, 2014 Amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.25/2012-Service Tax, dated the 20th June, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide G.S.R. 467 (E), dated the 20th June, 2012, namely: In the said notification, (i) in the opening paragraph, after entry 5,the following entry shall be inserted, namely:- 5A. Services by a specified organisation in respect of a religious pilgrimage facilitated by the Ministry of External Affairs of the Government of India, under bilateral arrangement; ; (ii) in paragraph 2 relating to definitions, after clause (zf),the following clause shall be inserted, namely:- (zfa) specified organisation shall mean,- (a) Kumaon Mandal Vikas Nigam Limited, a Government of Uttarakhand Undertaking; or (b) Committee or State Committee as defined in section 2 of the Haj Committee Act, 2002 (35 of 2002);. Notification No. 18 /2014-Service Tax dated 25th August, 2014 In exercise of the powers conferred by clauses (A), (B) and (C) of section 114 of the Finance (No.2) Act, 2014 (25 of 2014), the Central Government hereby appoints the 1st day of October, 2014 as the date on which the provisions of clauses (A), (B) and (C) of the said section of the said Act shall come into force. Notification No. 19/2014-Service Tax dated 25th August, 2014 In exercise of the powers conferred by sub-section (1) read with sub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules further to amend the Service Tax Rules, 1994, namely: 9
1. (1) These rules may be called the Service Tax (Second Amendment) Rules, 2014. (2) They shall come into force on the 1st day of October, 2014. 2. In the Service Tax Rules, 1994, after rule 10, the following rules shall be inserted, namely:- 11. Determination of rate of exchange. The rate of exchange for determination of value of taxable service shall be the applicable rate of exchange as per the generally accepted accounting principles on the date when point of taxation arises in terms of the Point of Taxation Rules, 2011. 12. Power to issue supplementary instructions. The Board or the Chief Commissioners of Central Excise may issue instructions for any incidental or supplemental matters for the implementation of the provisions of the Act.. Company Law http://www.mca.gov.in/ CIRCULARS Reference No General Circular No. 35/2014 General Circular 34/2014 Date 27-08-2014 12-08-2014 Description Clarification Accounting Standards(AS) 10- Capitalization of Cost Company Law Settlement Scheme, 2014 RULES Year Categories Description 2014 12.09.2014 Rules dated 12th Sept 2014: Companies (Corporate Social Responsibility Policy) Amendment Rules, 201 2014 14.08.2014 Rules dated 14th Aug 2014: Companies (Meetings of Board and its Powers) Second Amendment Rules, 2014 publication of this notification in the Official Gazette namely:- (1) In Schedule II of the Companies Act, 2013 (a) in Part 'A' in paragraph 3, for sub-paragraph(i), the following sub-paragraph shall be subsituted, namely:- (i) The useful life of an asset shall not ordinarily be different from the useful life specified in Part C and the residual value of an asset shall not be more than 5 percent of the original cost of the asset: "Provided that where a Company adopts a useful life different from what is specified in Part C or uses a residual value different from the limit specified above, the financial statements shall disclose such a difference and provide justification in this behalf duly supported by technical advise" (b) (i) After Part 'C', under the heading Notes, for paragraph 4, the following paragraph shall be substituted namely: - "4(a) Useful life specified in Part C of the Schedule is for the whole of the asset and where the cost of a part of the asset is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of the significant part shall be deterimined separately. (b)the requirement under sub-paragraph (a) shall be voluntary in respect of the financial year commencing on or after the 1st of April, 2014 and mandatory for financial statements in respect of the financial years commencing on or after the 1st April, 2015." (c) in paragraph 7 in sub-paragraph (b) for the words "shall be recognised" the words "may be recognised" shall be substituted. Note: Schedule II of the Companies Act, 2013 came into force w.e.f. 1st April, 2014 and was ammended (with effect from 1st April, 2014) vide notification number S.O.237 E dated 31st March, 2014 Notification G.S.R. 627 (E) dated 29th August, 2014: In exercise of the powers conferred by subsection(1) of section 467 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following further amendments in ScheduleII of the said Act w.e.f. the date of 10
CA. Kiran Kharangate welcoming Mr. Santosh Dave, Faculty for the Investor Awareness Programme held on 2 nd at GCCI Hall, Panaji, Goa. Mr. P. Sridhar, Registrar of Companies Goa, Daman and Diu, lighting the traditional lamp at the inaugural session of the 2 days Workshop on Companies Act 2013 held on 8 th & 9 th at Hotel Fidalgo, Panaji, Goa Standing from left to right - CA. Kedar Kenkre, Managing Committee Member, Goa Branch, CA. Abhay Arolkar, Faculty, CA. Vinesh Pikale, Treasurer, Goa Branch, CA. Naveen G. Daivajna, Chairman, Goa Branch, CA. Mangesh Kinare, Imm. Past Chairman, WIRC, Mumbai, CS. Anant Amdekar, Faculty, CA.Yeshwnat Kamat, Secretary, Goa Branch Mr. P. Sridhar, Registrar of Companies Goa, Daman and Diu, addressing the participants at the 2 days Workshop on Companies Act 2013 held on 8 th & 9 th at Hotel Fidalgo, Panaji, Goa. CA. Abhay Arolkar, Faculty, addressing the participants at the 2 days Workshop on Companies Act 2013 held on 8 th & 9 th at Hotel Fidalgo, Panaji, Goa. CS. Anant Amdekar, Faculty, addressing the participants at the 2 days Workshop on Companies Act 2013 held on 8 th & 9 th at Hotel Fidalgo, Panaji, Goa. CA. Sushrut Chitale Faculty, addressing the participants at the 2 days Workshop on Companies Act 2013 held on 8th & 9th at Hotel Fidalgo, Panaji, Goa. Seated on the dais - from left to right CA. Parimal Kulkarni & CA. Venkatesh Shenai 11
Participants at the 2 days Workshop on Companies Act 2013 held on 8 th & 9 th at Hotel Fidalgo, Panaji, Goa CA. Vinesh Pikale, Treasurer, Goa Branch, welcoming the participants at the Elocution Contest held on 15 th at Goa Branch Premises. Seated on the dais from left to right CA. Kiran Kharangate, Vice Chairman & WICASA Chairman Goa Branch, CA. Satyaprakash Kamath. Elocution Contest held on 15 th at Goa Branch Premises, Panaji, Goa. Seated on the dais from left to right CA. Swati Naik, CA. Vishwanath Bhobe, & CA. Amruta Pikale, Judges, CA. Kiran Kharangate, Vice Chairman & WICASA Chairman, Standing left CA. Anup R.S. Borkar, Immd. Past Chairman, Goa Branch, along with the Winners & participants Goa Branch Chairman, CA. Naveen G. Daivajna welcoming the delegates and inaugurating the CPE Programme on Revised Tax Audit Format held on 19 th at Institute Menezes Braganza Hall, Panaji, Goa., Goa. Seated on the dais CA. Abhijit Kelkar, Faculty. CA. Abhijit Kelkar, Faculty, addressing the participants at the CPE Programme on Revised Tax Audit Format held on 19 th at Institute Menezes Braganza Hall, Panaji, Goa. CA. Satyaprakash Kamath, Faculty, addressing the participants at the Investor Awareness Programme held on 24 th at Goa Branch Premises, Panaji, Goa. 12
CA. Yatish Pai Vernekar, Faculty, addressing the participants at the Investor Awareness Programme held on 24 th at Goa Branch Premises, Panaji, Goa. FORTHCOMING EVENTS Sr. No. 1. Programme Inter Regional Joint Residential Refresher Conference' organised Jointly by WIRC & SIRC on October 10, 11 & 12, 2014 at 'The Byke Old Anchor Resort, Varca, Goa. CPE - 10 hours Please register your name at Goa Branch office Goa Branch of WIRC 201/202, Kamat Towers Patto Plaza, Panaji Goa 403001 Tel: +91 832 2438516 Email: goa@icai.org Views expressed in this Newsletter are those of the individual contributors and not necessarily those of the Goa Branch of WIRC of ICAI. While every effort is made to reproduce ADVERBATIM, Government and/or ICAI references, notifications and other information, readers are well advised to ensure themselves of prior to further deliberation. The publication is distributed with the understanding that authors/editors and publishers are nor responsible for the result of any action taken on the basis of this work nor for any omission or error to any person, whether a purchaser of this publication or not. 13