Management Accountant April 2020

www.icmai.
in April 2020 - The Management Accountant 1

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www.icmai.in April 2020 - The Management Accountant 3
EDITORIAL
W
ith the growing complexities in transformation are not proactively identified and
the business environment and prevented. How to audit is also changing, albeit with a
business models, corporate have focus on catching up to digital developments. Internal
started seeing internal audit as an Auditing (IA) now needs to truly adopt the disruptions,
important function that provides the management and use all available technology to reinvent itself. As
and the Board of Directors an assurance on the mainstream business processes are transformed through
adequacy and effectiveness of internal financial RPA, machine learning and AI, IA needs to step up
controls. Internal audit helps the management and its game and leverage similar tools and techniques to
the Board in achieving organizational objectives. create a continuous audit framework that can quickly
Modern approach of internal auditing is designed to identify anomalies from full-population datasets.
provide assurance on the adequacy and effectiveness The professionals like CMAs should embrace the
of enterprise risk management system. Over the past digital disruption and use technology to assess true
decade, the scope of internal audit has widened to value to the company. It is this change of mindset that
cover operational audit and management audit. The will be the source of uplifting the profession and being
INTERNAL AUDIT: THE WAY FORWARD
Companies Act, 2013 has mandated appointment of a very vital component of the governance framework in
internal auditor in listed and certain other classes of safeguarding the shareholders and stakeholders’ general
companies. interest. They should assist management to focus on
The Institute of Internal Auditors defines Internal risk management and the implementation of more
Audit as – Internal auditing is an independent, stringent internal controls. In this way effective internal
objective assurance and consulting activity designed audits can enhance the organization’s capacity to build
to add value to and improve an organization’s value by enabling management personnel to take timely
operations. It helps an organization accomplish financial decisions, make immediate changes to how
its objectives by bringing a systematic, disciplined internal controls are operated – if required, and address
approach to evaluate and improve the effectiveness any areas of vulnerability.
of risk management, control and governance This issue presents a good number of articles on
processes. the cover story “Internal Audit: The way forward”
The scope of internal auditing within an written by distinguished experts. We look forward to
organization is broad and may involve topics such as constructive feedback from our readers on the articles
an organization’s governance, risk management and and overall development of the Journal. Please send
management controls over: efficiency/effectiveness your emails at [email protected]. We thank all the
of operations (including safeguarding of assets), the contributors to this important issue and hope our readers
reliability of financial and management reporting would enjoy the articles.
and compliance with laws and regulations. Internal Further, you must be aware that outbreak of pandemic
auditing may also involve conducting proactive COVID-19 is causing terrible human suffering across
fraud audits to identify potentially fraudulent acts; the world. This global health has created a unique
participating in fraud investigations under the challenge and almost imprisoned the world. Hence,
direction of fraud investigation professionals, and we need to come together, follow medical guidelines,
conducting post investigation fraud audits to identify government instructions and fight back this crisis. We
control breakdowns and establish financial loss. will definitely overcome this calamity soon.
Business processes are in flux, as people, Stay Home, Stay Safe!!!
processes, data and technology transforming. These
major changes present a threat that the overall
control environment may degrade if the risks of

PAPERS INVITED
Cover Stories on the topics given below are invited for ‘The Management Accountant’
for the four forthcoming months
• The New Education Policy (NEP) 2019: a Revolutionary Reform
• Inclusive and Equitable Quality Education: Lifelong learning opportunities for all
• Challenges & Opportunities of the New Education Policy and its implementation - Employability,
Entrepreneurship & Startups
National Education • Vocational Education and Skill Development – Importance & Relevance
Subtopics
May 2020
Theme
Policy - Changing • Integration of all Educational institutions & Technical Institutions & Industry – Industry & Academia
& its contribution
Contour of Indian • Role of Private Sector in improving Quality of Education
Education Eco-System • Moving towards a more imaginative and broad based liberal Education as a foundation for holistic
Development
• Educational excellence through AI and other emerging Technologies - Importance of Research &
Innovation
• From Pencils to iPads: Evolution in Instructional Technology
• Professional Education in the light of NEP
• Managing Information relating to Environment

• Structural Framework of Environmental Accounting
Environmental • Environmental Issues in Financial Accounting and Reporting
June 2020
Subtopics
• Methods of Environmental Cost & Management Accounting

Theme
Management • Ecological Accounting

Accounting - Issues • Natural Resource Accounting
and Practices • Benefits and Costs of Environmental Management Accounting (EMA) in the light of Sustainable
Development
• Corporate Environmental Strategies
• Environmental Accounting and Auditing - Role of CMAs
• GST Returns: Issues, Challenges and Controversies

• Misconception related to disclosure of Information in Annual Return Forms
Goods & Services Tax • E-Invoicing & E-Way bill under GST
Subtopics
July 2020
Theme
• Advance Ruling Mechanism in GST

(GST): Recent
• Input Tax Credit under GST: Practical Issues
Changes and • Applicability and Procedure for effective GST Audit
Emerging Issues • Rationalization of GST Rates once a year: Key to aFive Trillion Dollar economy
• Simplification of GST and preventing evasion to accelerate economic momentum and ease of living for
taxpayers: Role of CMAs
• An Overview of the Indian Economy: Policy, Reforms and Governance

• Ease of Doing Business (EoDB) score: Crucial for India to scale ambitious peak of $5 Trillion
• Transforming agricultural and doubling farmer’s income
August 2020
Subtopics
Driving India towards • Leveraging Technology to make India a global economic powerhouse
Theme
5 Trillion Dollar • Strengthening industrial competitiveness: Special emphasis to manufacturing sector

• Energy with focus on renewable energy
Economy • Infra Development: The way forward
• Health for all
• Skilling and Education: Critical for optimizing on India’s Demographic Dividend
• Mission 5 Trillion: Driving SDG through CMAs
** On 01st July 2017, the GST law came into force. So we have changed our theme of July 2020 issue to “Goods and Services Tax (GST): Recent Changes and
Emerging Issues”. Further, the theme “Driving India towards 5 Trillion Dollar Economy” to be considered for the August 2020 issue now.
The Above Subtopics are only suggestive and hence the articles may not be limited to them only.
Articles on the above topics are invited from readers and authors along with scanned copies of their recent passport size photograph
and scanned copy of declaration stating that the articles are their own original and have not been considered for anywhere else.
Please send your articles by e-mail to [email protected] latest by the 1st week of the previous month.
DIRECTORATE OF JOURNAL & PUBLICATIONS

CMA Bhawan, 4th Floor, 84 Harish Mukherjee Road, Kolkata - 700025, India
Board: +91 33 2454 0086 / 87 / 0184 Tel-Fax: +91 33 2454 0063
www.icmai.in

PRESIDENT’S
COMMUNIQUÉ
CMA Balwinder Singh
President
The Institute of Cost Accountants of India
through Demand Draft, Cheque, RTGS or

Online mode. Online Mode at : https://eicmai.in/
onlineApplication/ or Offline Mode: through Cheque/
DD should be in favour of “The Institute of Cost
Accountants of India”. RTGS/NEFT can be made
in following Bank A/c: Bank: PNB, New Market,
Kolkata, Account No.: 0093002109030025, IFS
Code: PUNB0009300
In this crucial time, the Institute continues to serve
the members, students and other stakeholders. The
employees of the Institute are working remotely at
home and providing all such services for which online
mechanism is possible. The institute has taken various
measures for the convenience of members, students
and other stakeholders in the present scenario of
lockdown. Such measures are enumerated below:
“Coming together is a beginning. Keeping
together is progress. Working together is Matters relating to students:
success.” 1. Students willing to apply for CMA Foundation,
– Henry Ford Intermediate, and Final June 2020 examinations
will now be able to fill their examination forms
till April 20, 2020. Candidates will not have to
My Dear Professional Colleagues, pay any late fee.
I
2. The Institute has started online classes for
hope you are safe and taking good care of your family. the students. All students are advised to
The Government of India has taken several necessary take maximum advantage of online learning
and timely decisions to combat the novel coronavirus support provided by the Institute. The detail of
COVID-19 pandemic, which has posed a unique challenge webinars is available at icmai.in/icmai/
that has impacted all of us. I would like to express my concern webinar.php. The student can login to the
and support for all the members, students and other stakeholder classes as per the schedule provided.
affected by this outbreak. This is a crisis that has affected
everyone, but we will get through it by working together. 3. Students have been exempted from mandatory
Computer training, CSS, IOTP and Practical
The Institute is committed to support every possible initiative Training requirements before appearing in
of the Government of India, and in furtherance of that, the June, 2020. Submission of postal test papers is
Institute has initiated various measures to support the nation. also exempted.
The Government of India has set up the Prime Minister’s Citizen
Assistance and Relief in Emergency Situations Fund (PM 4. Students who have cleared their Intermediate
CARES Fund). The fund has been set up in for expeditious and examination, the result of which was declared
collective action for alleviating the suffering of those affected, on 23rd February, 2020, were required to start
mitigation/control of damage to infrastructure and capacities practical training in February/March and file
etc. With the intent to support, we had appealed all our members the requisite Form T-1 or T-4, as applicable, for
and students to contribute towards the cause through the Institute. appearing in December 2020 examination. The
We feel extremely pleased to share that the Institute together students will be intimated of relaxations for
with financial support from its members and students, in the December 2020 examinations in due course.
first tranche, has decided to contribute a sum of Rupees Fifty 5. It may be noted that the CMA examinations
Lakhs to the PM CARES Fund. I extend my heartfelt thanks will be held as per the scheduled dates, i.e.,
and appreciation to all the contributors. from 11th June, 2020 to 18th June, 2020, without
The Members and Students are requested to make donations any change thereof.

PRESIDENT’S COMMUNIQUE
Matters relating to members: Committee /
1. Extension up to 30th June 2020 has been granted to Date Topic
Department
complete the requirement of CEP Credit Hours for
renewal of COP for the year 2020-21. Managing Risk
& Uncertainty – Internal Auditing and
2. Member CEP learning through webinars has been Perspectives and Assurance Standards
enhanced. Since the announcement of lockdown, 07
Commonsense Board
number of webinars has been organized by different April
Approach for Survival
Committees/Departments of the Institute, the detail of 2020
which has been given in the committee wise activities COVID 19: Relief Tax Research
in subsequent paragraphs. Measures for Business Department
3. To have continuous learning activity, the Institute has
planned a series of webinars on topics of professional Guidelines for the
Internal Auditing and
interest. The detail of webinars scheduled for the Professional Practice
Assurance Standards
month of April, 2020 is as under: of Internal Auditing &
Board
Assurance Services
Webinars announced as on 3rd April, 2020
Innovations in finance
(For more announcements, Faculty & timing details, visit International Affairs
– An international
icmai.in/icmai/webinar.php) 08 Committee
perspective
April
2020 Challenging legality
Committee /
Date Topic of Section 16 of CGST Tax Research
Department
Act, 2017 with case Department
Global Economic law
International Affairs
Perspectives of the
Department Internal Auditing and
21stCentury Internal Audit – GST
Assurance Standards
Ind AS 21 - The Regional Councils Perspectives
Board
Effects of Changes & Chapters
03 in Foreign Exchange Coordination Leveraging Internal Internal Auditing and
April Rates Committee Audit for enhancing Assurance Standards
2020 organizational value Board
Tax Research 09
1000 days of GST April
Department Applicability of Taxes
2020
on Cross Border Tax Research
Vivad se Vishwas
Tax Research Transaction including Department
Scheme - A way
Department TDS
forward
Digitalization of Internal Auditing and Vivad se Vishwas
Tax Research
Internal Audit Process Assurance Standards Scheme - Opportunity
04 Department
& Reporting Board to reduce disputes
April 10
2020 Professional IPA (For CMA April Internal Audit
Opportunities under Members & IPA 2020 Standards - guiding Internal Auditing and
IBC Members) principle to carry Assurance Standards
Key Success out Internal Audit Board
05 Factors running a Internal Auditing and assignment
April FMCG Distribution Assurance Standards
2020 Perspective - An Board Risk Assessment
Assurance Perspective and Assurance – Internal Auditing and
Comprehensive Assurance Standards
Regional Councils Internal Audit Board
Ind AS 36 - & Chapters Approach
Impairment of Assets Coordination 11 April
06 Committee 2020 GST on Bank and Banking and
April Insurance Sector Insurance Committee
2020 Internal Audit Internal Auditing and
for Educational Assurance Standards Internal Audit – Internal Auditing and
Institutions Board An Operational Assurance Standards
Excellence Approach Board

Committee / Committee /
Date Topic Date Topic
Department Department
Audit of Health Banking and Regional Councils
20
Insurance Companies Insurance Committee Ind AS 19 - Employee & Chapters
April
Benefits Coordination
12 2020
Cyber Security and Committee
April
Governance Risk Internal Auditing and
2020 24
Control – New tools Assurance Standards Vivad se Vishwas Tax Research
in Internal Audit Board April
Scheme - Few Issues Department
Methodology 2020
Aligning Internal Ind AS 20 -

Internal Auditing and Accounting for Regional Councils
Audit with Top
Assurance Standards Government Grants & Chapters
Management and
Board and Disclosure Coordination
13 Stakeholders 27
April April of Government Committee
2020 Ind AS 37 - Regional Councils 2020 Assistance
Provisions, Contingent & Chapters
Liabilities and Coordination Appeal and Revision
Tax Research
Contingent Assets Committee in Income Tax Act-
Department
Role of CMA
Internal Audit 30
Internal Auditing and E- Assessment under Tax Research
Approach and Report April
Assurance Standards Income Tax Act Department
writing – Industry 2020
Board
specific approach
14
April Applicability of 4. More webinars will be announced for the current
2020 Income Tax deducted month, for which the information will made available
or Collected at source Tax Research at the website of the Institute at www.icmai.in/icmai/
on payment or Income Department webinar.php
to Non Resident or 5. Members not holding Certificate of Practice are being
Foreign Company informed that as per Regulation 7(3), the Membership
Fee (Associate and Fellow) becomes due on 1st April
15 Internal Auditing and each year. Further, Regulation 7(6) allows payment
COSO based Internal
April Assurance Standards of membership fee within six months from the date
Auditing
2020 Board on which it becomes due. Accordingly, the members
may pay their Annual Membership Fee for the year
Internal Auditing and 2020-21 within 30th September, 2020. I request all
Internal Audit 3.0 Assurance Standards members to avail the Institute’s online facilities
16 Board to pay such fees from the comfort of their place of
April
Abolition of Dividend convenience.
2020 Tax Research
Distribution Tax - An 6. Members holding Certificate of Practice are being
Department informed that as per Regulation 7(5)(a), the Annual
Impact Analysis
Fee for Certificate of Practice becomes due on 1st April
17 Vivad se Vishwas each year. Further, Regulation 11(1)(d) provides for
Tax Research
April Scheme - Process of cancellation of Certificate of Practice in case of non-
Department
2020 submission documents payment of fee till 30th June of the relevant year. It
may be noted that all applications for renewal of COP
Internal Finance
received till 30th June 2020 will be processed without
Control, Accounting
any break period. It is being ensured that applications
Standards, Cost
19 Internal Auditing and for Renewal of Certificate of Practice being received
Accounting Standards
April Assurance Standards online are being processed within 24 hours. You may
– a comprehensive
2020 Board login to online membership portal at www.icmai.in
approach towards
for applying online.
integrated Internal
Audit I am thankful to all my Council Colleagues for very
timely planning the measures for the benefit of members,
students and stakeholders at large and for extending
the financial support the Government. I am thankful

to my Council Colleagues and Chairman of respective and Chairman, Internal Audit & Assurance Standards Board
committees for planning the series of webinars for for the initiatives in the direction.
continuous learning of members and to ensure study at
home for the students of the Institute. I am thankful for Draft Companies (CSR Policy) Amendments Rules,
the staff of the Institute who are supporting the activities 2020
of the Institute as a work from home in a very efficient
The Ministry of Corporate Affairs has released the Draft
manner. I extend my heartful thanks and appreciation
Companies (CSR Policy) Amendment Rules, 2020 proposing
to all the members and students for their understanding.
amendments to Companies (Corporate Social Responsibility
Policy) Rules, 2014 for public comments. The draft policy is
Relaxations by the Government hosted at MCA website at http://feedapp.mca.gov.in
At the outset, I on behalf of the Institute would like to thank You are requested to provide your valuable comments as
the Government for announcing relief several measures per details hosted at website of the Institute www.icmai.in/
for the stakeholders, relating to Statutory and Regulatory ProfessionalDevelopment/Notice-for-Comments.php so that
compliance matters during the crisis situation in India which the collated and the consolidated suggestions/ comments can
arises due to the outbreak of the COVID-19 pandemic. be submitted by the Institute to the Ministry of Corporate
The Institute appreciates the decisions in Taxation, Affairs before the last date of 10th April, 2020.
Customs, Finance, Commerce, Health, Transport, Fisheries
etc. as announced by the Government. During this lockdown CMA Womennovator Conclave 2020
period of 21 days since 25th March, 2020, all Companies,
I am pleased to inform that the Institute has successfully
sectors, professionals are abiding by restrictions imposed
organised “CMA Womennovator Conclave 2020” on 7th
by the Govt. of India for safety and health security of the
March 2020 at New Delhi. The event was organized under
citizens of this country by observing social distancing and
Chairmanship of CMA H. Padmanabhan, Council Member
staying back at their homes except for emergency services.
and Chairman, Regional Councils & Chapters Co-ordination
This situation makes it very difficult to comply with Committee. The event provided an opportunity to recognise
statutory and legal Provisions which may require face to the achievers among the leaders from the Cost Accounting
face interactions and commute. The relief measures like profession. The Conclave had also conferred CMA
extending the date of Income Tax Return for FY 2018- Womennovator Awards, 2020 to recognize CMA Women
19, GST Returns, PAN Aadhar Linking date, availing the who have made a positive impact on the profession, society,
benefit of Vivad se Viswas Scheme and Sabka Viswas life through their exemplary zeal and achievements.
Legacy Dispute Resolution Scheme, extending Tax saving
The distinguished Chief Guest of the event, Smt. Mukulita
Investment schemes and other relaxations in taxation have
Vijayawargiya, WTM Insolvency and Bankruptcy Board of
been announced. Easing the statutory compliance burden
India shared her views that women should not depend on
on companies by waiving of additional fee for late filling
outside factors for empowerment and should progress on
of MCA 21, relaxing the mandatory requirement of holding
their own zeal and Enthusiasm. Shri Ram Mohan Mishra,
board meetings, deferment of Applicability of Companies
IAS, Special Secretary to the Government & Development
(Auditor’s Report) Order, 2020 and others are surely a sigh
Commissioner - MSME said that women are making a
of relief to businesses.
tremendous impact in all spheres and with this in view,
The “Companies Law Fresh Start Scheme 2020” gives the government schemes intend to fully unleash this
one time opportunity to corporates to complete their latent potential of women by introducing various schemes
pending compliances by filing necessary documents MCA- exclusively to promote Women entrepreneurs.
21 registry, irrespective of its due date, which will not only
CMA Biswarup Basu, Vice President of the Institute
reduce the compliance burden, including financial burden on
had given the welcome address followed by my address.
Companies/LLPs at large, but also enable long standing non-
Dignitaries on the Dias, Ms. Tripti Shinghal Somani,
complaint companies/LLPs to make a fresh start.
Founder Womennovator, Smt. CMA Baldev Kaur Sokhey,
Director Finance, NBCC (India) Ltd.; Smt. CMA Harjeet
Internal Audit Month Kaur Joshi, CMD Shipping Corporation of India Ltd.; Smt.
I am pleased to inform that month of April 2020 has been Vijayanta Arya, IPS, DCP North West; Ms. Ira Singhal,
planned as “Internal Audit” month to create awareness, IAS DC, North MCD and CMA H. Padmanabhan, Council
train the members and professionals in the domain of internal Member and Chairman of CMA Womennovator Conclave
auditing and Assurance. The domain of Internal Auditing & 2020 also shared their thoughts in the inaugural session.
Assurance Services travels beyond the business functions This was followed by a panel discussion on “Life at the
and drives into the arena of performance measurement & Top”, The panelists include Mr. Vijay Kumar Joshi, CFO,
Decision Making. In this context, the Internal Auditing & India Gas Solutions Pvt. Ltd.; Ms. Meeta Sen Gupta Founder
Assurance Standards Board would be delivering a series of Centre of Education Strategy; Ms. Garima Bhagat, Income
of webinars by the experts, sharing of knowledge resources Tax Commissioner; Dr. Shikha Sharma, Founder, Shikha’s
through e-content deliveries and other possible e-training Nutrihealth; Ms. Khair Ull Nissa Shah, Executive Director,
measures. I congratulate CMA P Raju Iyer, Council Member World Trade Centre India; Ms. Vinita Bakshi, Author &

Social Entrepreneur; Ms. Sapna Khandelwal, Owner, RE- Southern India Students Fest “PRAGATHI 2020” at
DO Jewellery and CMA D.C.Arya, Former Chairman, Kochi
NIRC of ICAI. Special thanks to Council Colleagues, RC I am pleased to inform that Southern India Students
& Chapter ERs for their presence and support in excellent Fest “Pragathi-2020” was organized by Cochin Chapter
organisation of the event. My thanks to CMA V Murali, of the Institute on 6th March, 2020 at Kochi, Kerala. I had
CMA Chittaranjan Chattopadhyay and CMA P Raju Iyer, the opportunity to attend the event alongwith CMA H
my Council Colleagues and Chairperson CMA Jyothi Padmanabhan, Council Member and Chairman, Regional
Satish, SIRC and CMA Lavanya, CMA Nisha Habi MCM Councils & Chapters Co-ordination Committee. The event
Trivandrum Chapter for motivating the participants by their was graced by CMA Jyoti Satish, Chairperson, SIRC.
presence and thoughts. Student’s involvement provided them an opportunity to
This was followed by the “WE Pitch Competition” interact, enhance interpersonal and communication skills
in which the Lady Cost Accountants were given a pitch and preparing them for the real world.
opportunity and highlighted their success stories, challenges
and achievements. The Jury dignitaries included Mr. Pramod Members’ Meet at Ahmedabad Chapter
Kumar Sinha - Additional General Manager SCOPE,
I am happy to inform that the Ahmedabad Chapter of
Ms. Sumita Dutta - Executive Director SAIL, Prof. Aman
the Institute organized a members’ meet on 13th March,
Agarwal - Indian Institute of Finance, Mr. Dhirendra Pratap
2020 at Ahmedabad. I along with CMA Biswarup Basu,
Srivastava - Sr. Advocate, Supreme Court of India; Ms. Sudha
Vice President, CMA Neeraj D. Joshi, Council Member
Midha, ISS and Dr. Babu Lal, Former Executive Director,
& Chairman WIRC, CMA Ashwin G. Dalwadi, Council
BHEL; The event concluded with the award ceremony. I
Member and CMA Chittaranjan Chattopadhyay, Council
alongwith CMA Biswarup Basu, Vice President ICAI, and
Member had the opportunity to meet with members of the
CMA H Padmanabhan, Council Member & Chairman of the
Institute in Ahmedabad and deliberated on the various issues
Conclave conferred the awards to all the awardees.
& matters of their concern related to the profession. I had the
I on behalf of the Council of the Institute congratulate the opportunity to meet and address the newly qualified CMA
Awardees and express thanks to the Chief Guest, Guests participants of Campus placement orientation program at
of Honour, Panelists & Participants for making it a grand Ahmedabad Chapter on 14th March, 2020.
success.
Pre-placement Orientation Program
PHD Global Rail Convention 2020
With an objective to provide adequate domain knowledge
I am delighted to inform that the Institute participated as to the newly qualified CMAs and preparing them for
knowledge partner at the 7th PHD Global Rail Convention forthcoming Campus Placements, the 12-days Pre-placement
-2020 on the theme “Indian Railways Future Growth on Fast orientation program was started from 12th March, 2020 at 11
Track” held on 5th March, 2020 at PHD House, New Delhi. locations across India by the Institute. However, the same
The knowledge report prepared by the Institute was released were suspended within a week considering the advisory
by the Chief Guest, Shri Vinod Kumar Yadav, (IRSEE), by various State Governments in view of COVID-19.
Chairman, Railway Board, Ministry of Railways, Dr. D.K. Consequently, the Campus placements scheduled in the
Aggarwal, President, PHDCCI, CMA Biswarup Basu, month of April 2020 stands deferred.
Vice President of the Institute and other dignitaries. CMA
B.B. Goyal was one of the panellists in an interactive panel
I now present a brief summary of the activities of various
discussion sessions. The convention was attended by a large
Departments of the Institute, in addition to those referred
number of participants including foreign delegates.
above:
PHD Conference on Vivad se Vishwas Scheme

DIRECTORATE OF ADVANCED STUDIES
The Institute associated with PHD Chamber of Commerce
I am pleased to share that the Directorate of Advanced
& Industry for a Conference on Vivad se Vishwas Scheme
Studies of the Institute organized a day long Workshop on
on 6th March 2020 at New Delhi.
“Application of Data Analytics in Finance and Costing” at
J.N. Bose Auditorium of the Institute Headquarters, Kolkata
Meeting with Govt. of Assam at Guwahati on 14th March, 2020. Around 275 participants including
I am pleased to inform that CMA Biswarup Basu, Vice students, members, faculty members and research scholars
President and CMA Chittaranjan Chattopadhyay, Council of different colleges, universities and institutes attended
member attended the brainstorming meeting organized the interactive workshop. The workshop was inaugurated
by Principal Secretary to Govt. of Assam to improve by CMA Biswarup Basu, Vice President, CMA Debasish
performance of Assam PSEs. The presentation made by the Mitra, Chairman, Board of Advanced Studies and CMA
Institute and the discussions by CMA Biswarup Basu, Vice Chittaranjan Chattopadhyay, Chairman, Banking &
President and CMA Chittaranjan Chattopadhyay, Council Insurance Committee. The Institute will shortly launch
member have been well applauded by the Govt. of Assam. Advanced Studies Certificate Course on Data Analytics.

DIRECTORATE OF STUDIES that on the Institute’s request, Deposit Insurance and Credit
Due to unprecedented happening of spread of COVID-19 Guarantee Corporation (DICGC) included Cost Accountants
across the globe, the human civilization is at stake and we Firm for carrying out GST Audit.
have confined ourselves at our home. All establishments SJVN Limited, National Health Mission Chhattisgarh,
including educational institutions are completely closed Kochi Metro Rail Limited, Gujarat Urja Vikas Nigam
down. Students are abstained from having live classroom Limited, Maharashtra State Electricity Distribution
sessions and academic interaction with the faculties. Company Limited, National Seeds Corporation Ltd., West
Now, students are all sitting at their home and preparing for Bengal State Electricity Transmission Co. Ltd., Nepa Ltd.,
forthcoming June 2020 Examinations. In view of the above The Mumbai Metro Rail Corporation Limited, Mineral
situation, the Directorate of Studies has taken an initiative Exploration Corporation Limited, Airports Authority of
to guide the students with online e-learning study sessions India, National Safai Karamcharis Finance And Development
through its existing Webinar platform to provide academic Corporation, Chhattisgarh State Power Holding Company
inputs and guidance on core subject areas as per CMA Ltd., Bharat Electronics Ltd., Narmada Hydro-electric
Course Curriculum. Best of our Resource pool and mentors Development Corporation, BEML Limited, Infrastructure
are reaching our students online every day in different Development Authority (IDA) Bihar, Narmada Hydro-
virtual classroom sessions and students may interact with electric Development Corporation (NHDC) Limited, Bharat
them directly through chat option. The online study facility Pumps & Compressor Limited, Punjab & Sind Bank, Eastern
is operational since 30th March, 2020. Students are advised Coalfields Limited, India Trade Promotion Organisation
to take maximum benefit of this online study facility offered (ITPO) have included Cost Accountants in their Tenders/
by the Institute through eminent faculty members. EOIs during the month of March 2020.
I am grateful to all faculty members who are guiding our During the month, Regional Councils and Chapters
students during this difficult situation. I congratulate CMA organized more than 50 programs, seminars and discussions
Biswarup Basu, Vice President and Chairman, Training & on various topics of professional relevance and importance
Education Facilities and Placement Committee for a very for the members including, Finance Bill 2020 Analysis,
timely initiative after lockdown effective from 25th March, Companies Auditor Report Order, (CARO) – 2020, Value
2020 and launching online classes through eminent faculty Addition through cost accounting system & other statutory
members, in a very short span of time. I also congratulate compliances, Goods and service tax - new returns, e -
CMA Dr. Debaprosanna Nandy, Sr. Director and his entire invoicing and recent changes, Role of CMA’S in Sugar
team for making it happen in a very timely manner. Industry, Recent Change under Insolvency and Bankruptcy
Code, Professional Opportunities for CMA under SME
Sector, ERP in Microsoft Dynamics, Women in Management
INFORMATION TECHNOLOGY COMMITTEE
Challenges & Opportunities, Analysis of Ind-AS Financial
Information Technology is the backbone of any Statement and Statutory Compliances under Companies
organisation. May it be online classes for students, webinars Act 2013, E-Commerce Operator & E Invoicing under
for members, online application for membership, certificate GST, Public Private Partnership (PPP) in Urban Sector,
of practice, payment of fee, student admission, etc., the strong Excel Macro Introduction to User Forms, Macros aspects
Information Technology support is necessary. I am thankful of Dashboards & Macro Protection, The Social, Economic,
to the CMA Ashwin G Dalwadi, Chairman of Information Cultural and Political Achievements of Women and so on.
Technology Committee for extending continuous support, I hope our members have been immensely benefited with
specifically since the lockdown. I appreciate Shri Ashish these programmes.
Tiwari, HoD of IT Department, for working day and night
to ensure continuous support to the initiatives of various
COST AUDITING AND ASSURANCE STANDARDS
departments of the Institute.
BOARD (CAASB)
To have robust mechanism, the Information Technology
The CAASB of the Institute has released Exposure Draft
Committee has taken up an ambitious project of Digitalization
of Frequently Asked Questions (FAQs) on the Standards on
of Institute’s Activities. The committee has worked out
Cost Auditing (SCAs 101 – 104) for public comments. The
a broad plan to achieve the goal of digital transformation
last date of sending the comments has been extended up to
of the Institute in a phased manner. Presently, the Institute
30th April 2020. Please offer your suggestions on the same
is working on different software programs for different
for further improvement and send through email to caasb@
activities, i.e., standalone programs. I take this opportunity to
icmai.in. The ED FAQs is available at https://icmai.in/icmai/
request you to share your experiences of interacting with the
caasb/SCA.php
Institute through online platform and suggest improvements.
INTERNAL AUDIT & ASSURANCE STANDARDS

PROFESSIONAL DEVELOPMENT & CPD
BOARD
COMMITTEE
IAASB organized a webinar on “Changing dimensions of
Professional Directorate sent representation letters to
Internal Audit in emerging business scenario” on 8th March,
various organizations for inclusion of cost accountants for
2020, “Internal Audit – What the Board of Directors Expect”
providing professional services. I am happy to inform you

on 15th March, 2020, “Role of Internal Audit in Corporate REGIONAL COUNCIL AND CHAPTERS
Governance” on 26th March, 2020 and “Risk and Process COORDINATION COMMITTEE
based Internal Audit” on 29th March, 2020 which were The Regional Council and Chapters Co-ordination
addressed by CMA Dr. S K Gupta. The IAASB has planned Committee organized series of webinars for the benefits
the month of April 2020 as Internal Audit month and will be members and students fraternity at large. The webinars
conducting a series of webinars by the experts and sharing of sessions for members addressed by CMA Dr. Gopal Krishna
knowledge resources through e-content deliveries and other Raju include: “Direct Taxes Vivad se Vishwas Bill (Act)
possible e-training measures. I congratulate CMA P Raju Bill, 2020” on 2nd March 2020, “Ind AS 15 – Revenue
Iyer for his efforts in the direction. from contracts with customers” on 9th March 2020, “Ind
AS 116 – Leases” on 16th March 2020, “Ind AS 113 –
BANKING & INSURANCE COMMITTEE Fair value measurement” on 26th March 2020 and “Latest
The Banking and Insurance Committee with the objective developments in CSR” on 1st April, 2020. The webinars
to fulfill the need of the members have started a series of sessions for members addressed by CMA Rammohan Bhave
webinars which will help the members to update their include: “Ind AS 101 – First time adoption” on 4th March
knowledge in BFSI sector. The committee has completed 2020, “Ind AS 109 Financial Instruments: recognition
four webinars which has all being conducted by Banking and measurement” 11th March 2020, “Ind AS 102 – Stock
Experts who had longstanding experience in Banking Options” on 18th March 2020 and “Ind AS 32 Financial
field. Webinars on “Role of CMAs in Banking Sector” on Instruments: presentation” on 25th March 2020. The webinar
9th March, 2020 which was addressed by CMA Mohan B session for members addressed by CMA Harshad Deshpande
Tanksale, “Overview of Credit Management of Commercial on the topic “Independent Director – New Avenues for
Banks” on 11th March, 2020 which was addressed by Sh. CMAs” on 29th March, 2020
Prabir Kumar Dutta, “Trade Receivables Discount Scheme I congratulate CMA H Padmanabhan, Council Member
(TReDS) on 12th March, 2020 which was addressed by CMA and Chairman, Regional Councils and Chapters Committee
Dr. P Siva Rama Prasad, Former AGM, SBI, “Enterprise for continuously organizing webinars for the benefit of
Risk Management – A strategic imperative for organizational members which are definitely a comfort of attending at their
sustainability” on 28th March, 2020 which was addressed by own location, the series of webinars for the month of March
CMA Delzad D Jivaasha were organsied by the Committee. was announced at the beginning of month, without any
I congratulate CMA Chittaranjan Chattopadhyay, Chairman anticipation of the situation we are facing. Such continuous
of the Banking and Insurance Committee for taking such webinars, well before forced situation, has led to ease of
initiative which was a long pending demand of the members. operation of IT systems by the members for attending the
CMA Chittaranjan Chattopadhyay, Chairman, Banking webinars.
and Insurance Committee along with CMA Vinayak The Regional Council and Chapters Co-ordination
Kulkarni, RCM of WIRC met Shri Atanu Kumar Das, MD Committee organized webinar series for CMA students on
and CEO of Bank of India on 29th February, 2020 at Mumbai GST in the month of March. Sessions on “TDS & TCS under
and apprised him about the role of CMAs in Banking Sector GST” on 10th March, 2020, “Job work under GST” on 17th
and the need of the Sector to utilise the services and expertise March, 2020, “Input Tax Credit under GST” on 24th March,
of CMAs in banking activities for public interest. 2020, “Place of supply under GST” on 30th March, 2020 and
CMA Chittaranjan Chattopadhyay, Chairman, Banking Foreign Trade Policy on 31st March, 2020 were addressed by
and Insurance Committee also met various academic CMA Dr Gopal Krishna Raju. The series on GST continue
officials including Professor Ranjit Tamuli, Vice-Chancellor with more sessions scheduled on 7th April, 2020 – E way
of Dibrugarh University at Dibrugarh, Assam on 11th March, bill under GST, 14th April, 2020 – Exports Imports & refund
2020 for opening Support Centre of CMA course at the under GST, 21st April, 2020 – Accounts & Records under
University and also to associate with the University for a GST and 28th April, 2020 – Registration under GST to be
MOU which will cater to the needs of the students in the addressed by CMA Dr Gopal Krishna Raju.
coming days at Assam. I congratulate CMA H Padmanabhan, Council Member
CMA Chittaranjan Chattopadhyay, Chairman, Banking and Chairman, Regional Councils and Chapters Committee
and Insurance Committee along with CMA Harijiban for his efforts towards the enhancement of knowledge of
Banerjee, Past President of the Institute met Padmabhushan students’ fraternity at large.
Dr. Swapan Dasgupta, Hon’ble Member of Parliament,
Rajya Sabha at Kolkata on 15th March, 2020. DIRECTORATE OF CAT
CMA Chittaranjan Chattopadhyay, Chairman, Banking • Establishment of New ROCCs
and Insurance Committee had a meeting with CMAs of I congratulate CMA H. Padmanabhan, Chairman
eminence and experts from Banking fraternity on 17th of CAT Committee for establishment of four new
March, 2020 at Headquarters, Kolkata for development Regional Oral Coaching Centres (ROCCs), viz.
of the Monograph on utility of Cost Information for credit ECLAT International (S-212) in Calicut (Kerala),
decision by the Commercial Banks and preparing a revised Masters Education Trust (S-213) in Davangere
monograph on Role of Cost and Management Accountant in (Karnataka), Academy for Commerce Aspirants
Banking Sector.

(N-241) in Lucknow (Uttar Pradesh) and CA Ankit Further, I also wish to inform the Committee conducted
Singhal Classes (N-242) in Faridabad (Haryana). The a Webinar on “Doing Business in Singapore” on 6th March
aspirants of CAT course from these cities and nearby 2020 by CMA Dinesh Makani, which was well appreciated
places will also be benefitted by these ROCCs. by members.
• Association with BFSI Sector Skill Council of INSOLVENCY PROFESSIONAL AGENCY (IPA) OF
India INSTITUTE OF COST ACCOUNTANTS OF INDIA
I am pleased to inform that the CAT Directorate The Insolvency Professional Agency of the Institute
is regularly following up with BFSI Sector Skill has taken various research initiatives for the professional
Council of India and Ministry of Corporate Affairs development of its members such as compilation of
for recommending the alignment of CAT Curriculum synopsis of landmark judgments under IBC during January
of the Institute under National Skills Qualifications to December 2019, Compilation of a Guidance Note on
Framework (NSQF). Verification of Claims under IBC 2016, Performance
analysis of companies - Pre, during and Post CIRP, Release
TAXATION COMMITTEE of Au Courant - Daily updates on IBC 2016 and Compilation
of Case Books analysing various settled cases under IBC.
The last one month had been pro-active for the Tax
Research Department and they have continued with the A webinar on “The Insolvency Bankruptcy Code,
knowledge building of our members and stakeholders. (Amendment) Act, 2020” was organized on 31st March, 2020
Activities including Webinars by eminent resource persons and on “How to read a Valuation Report” was organized on
- CMA Abhijit Khasnobis on the topic ‘Online processing 1st April, 2020 for the benefit of members of the Institute.
and submission of refund reissue request to Income tax
department’ on 31.03.2020, CMA Harish Joshi on the topic I once again wish you and all your loved ones health and
‘Section 286 applicability on domestic companies & forms safety during these uncertain times. Let’s move forward with
to be filed’ on 26.03.2020, CMA Vishwanath Bhat on the resolve and overcome this common threat together.
topic ‘Interest on delayed payment-gross liability (or net
Liability)-section-50(1) & related issues and preparedness Stay Indoor, Stay safe.
for the new returns under GST’ on 13.03.2020 and CMA B.
Mallikarjun Gupta on the topic ‘Steps for E-invoicing rollout
With warm regards,
in GST’ on 06.03.2020 have been conducted successfully
with active participation of huge number of candidates. The
59th and 60th Tax Bulletin has been published successfully
in the month of March 2020. The 61st Tax Bulletin has been
released yesterday. Representations to the Government
has been submitted requesting for maintaining threshold
limit for GST Annual Return and Audit, Inclusion of Cost
Accountants (CMA) in Notification No. 09/2020-Central CMA Balwinder Singh
Tax dated 16th March 2020 and requesting to provide April 3, 2020
opportunity to Cost Accountant Firms to perform GST
Audit for Financial Year 2018-19 to the Cotton Corporation
of India Ltd. The Crash Course on GST for Colleges and
Universities are being conducted at two esteemed colleges
in Mysore. The other courses, i.e., the Certificate Course
on GST, Advanced Certificate Course on GST, Certificate
course on filing of returns and Certificate Course on TDS
are continuing seamlessly. Though at some locations where
offline course is being conducted, the classes have been
withheld for the pandemic of COVID 19.
INTERNATIONAL AFFAIRS COMMITTEE

I wish to inform you that with the aim of expanding the
opportunities for Cost Accountants in foreign jurisdictions,
the Institute has taken up with NARIC, UK, the task of
benchmarking study of CMA qualification in the context of the
UK and UAE education systems. The National Recognition
Information Centre for the United Kingdom (NARIC, UK)
is a renowned UK national agency responsible for providing
information and expert opinion on qualifications and skills
worldwide.

FROM THE DESK OF
THE CHAIRMAN
- IT COMMITTEE
CMA Ashwin G. Dalwadi

Chairman
IT Committee
I am sure you will appreciate that any ambitious plan can’t

be successful unless and until all stakeholders contribute
towards the goal to their level best. For Us, Members and
Students are also our major stakeholders and they shall be
major beneficiaries of the Institute’s functioning.
I am sure that many of us have encountered difficulties
during interactions with the Institute. I take this opportunity
Dear Sir/Madam to invite you share your good/ bad/worst experiences with
reference to technology in place at Institute along with you
suggestion, if any along with any new idea to be included in
W
Greetings for the New Financial Year 2020-21! the ambitious digitization project being undertaken by the
e are passing through the lockdown era on Institute.
account of Covid-19. I wish you and all Any idea leading to excitements for stakeholders and
your near and dear a safe, healthy and a improving convenience and experience of Stakeholders is
prosperous new financial year. welcome.
With support of all my council colleagues along CMA Please do help us. Send your suggestion to –
Balwinder Singh - President and CMA Biswarup Basu -Vice [email protected].
President of the Institute, I was fortunate to head two council
committees Viz. Committee on Management Accounting and
Committee on Information Technology. The Committee of
Management Accounting has been created in the recent past
“Being in time is always
to focus on the necessity and importance of Management
Accounting. I will discuss about other initiatives mooted by
wonderful……………”
Announcement on board INDIGO FLIGTS
the Institute at a later date.
The Management Accounting Committee had organized a
We are keenly awaiting your response by 15th May, 2020.
global summit 2020 with a theme “Mission 5 Trillion – CMA
as a Cryogenic Force”. This summit met with a landmark Please do feel free for any clarification. I am phone call
success with your support, blessings and untiring efforts of away!
all council members, staff and all CMAs, well-wishers.
Now, the Committee of Information Technology has
taken up one big and ambitious project of Digitalization of
Institute’s Activities. The committee has worked out a broad
plan to achieve the goal of digital transformation of the
Institute in a phased manner.
The Institute is working on different software programs
for different activities e.g. Studies Department, Examination
Department, Membership Department have their standalone
CMA Ashwin G. Dalwadi
programs. Some of these pragmas were designed quite a
few years ago and they not interlinked which is the need April 3, 2020
of hour. Over a period time, several process defined at the
time of software development have undergone changes
but it has not been possible to change such processes due
to certain limitations. Further, due to such legacy systems,
the Institute is also not in a position to leverage the current
technological advances.

FROM THE DESK OF
THE CHAIRMAN
- INTERNAL AUDITING &
ASSURANCE STANDARDS BOARD
CMA P. Raju Iyer
Chairman
Internal Auditing & Assurance Standards Board
through e-content deliveries and other possible e-training

measures.
“By virtue of exchange, one man’s prosperity is beneficial
to all others.” Frederic Bastiat. Keeping in mind above,
let us exchange the knowledge resources to prosper in our
profession and life.
W
We have received overwhelming response for the earlier
ishing You All Happy New Year, Shree webinars organized by the IAASB and this clearly indicates
Rama Navami and Vasantha Navarathiri, the commitment of our members and their readiness
Traditional New year Celebrations. May towards the Internal Audit function. We are in the process
the blessings of Lord Rama fill our life with of preparing guidance notes on internal audit by our expert
happiness, prosperity and success, May all be blessed with team members in sectors such as Petroleum, Education,
all the happiness you desire and deserve. Helathcare & Hospitality, Process based internal audit etc.
I would like to share my happiness and pleasure with you Soon we shall be delivering the resource guidance notes to
all as a Chairman of the Internal Auditing and Assurance the members, stakeholders and society at large.
Standards Board of Institute. We have declared the Month I take this opportunity to thank CMA (Dr.) K Ch A V
of April 2020 as “Internal Audit” month and to create S N Murthy, CCM & Chairman, Journal & Publications
awareness, train the members and professionals in the Committee for his endeavor in dedicating this April 2020
domain of internal auditing and Assurance. month journal for Internal Audit. This is a new beginning in
SRIMAD RAMAYANAM of Valmiki, known as the era of Internal Audit for our members. My Sincere thanks
ADIKAVYA – the oldest epic of India- tells us a lot about to CMA Balwinder Singh, President & CMA Biswarup
administering the State including its finances. Basu, Vice President for the continuous support to the Board
in all its activities to reach us to greater heights. I express
my sincere thanks to the CMA Kushal Sen gupta, Additional
Director & Secretary, IAASB, Officials of the Directorate of
Journal & Publications, Directorate of IT and other support
departments of the Institute for the staunch support in all our
Oh dear Brother, are your revenues (Ayaha) large enough activities. I am grateful to CMA B B Goyal for his untiring
to cover the expenses of the State? (meaning that budgetary advice and motivation to perform.
deficit is avoided) I hope, as regards expenses, the same At this juncture, let us extend our sincere gratitude to
are well within the approved limits (vyayah alpataraha) i.e. medical-welfare administrative comrades who striving their
Administrative Heads of the departments are exercising best to make of us to be safe and free from the COVID-19.
proper control while incurring actual expenditure against We need to appreciate the services of the service bees in
the sanctioned limit. I hope you are ensuring that no part making their hard efforts to ensure the availability of
of your Treasury (Kosha) is spent on undeserving objects necessaries at our doorstep, maintain cleanliness and to the
or purposes (apaathreshu) i.e. in our current terminology – community at large.
avoiding infructuous expenditure.
Are they not the cardinal principles of Budgets and “Profession is not a label you give yourself. It’s a
Budgetary Control?! description you hope others will apply to you”
Wishing all professionals a prosperous way ahead…..
It is imperative that the need and existence of an Jain Hind.
independent review / a system of reporting –i.e. audit in our Thank You very much. Best Regards
today’s terminology- has been cited by Sri Rama.
The domain of Internal Auditing & Assurance Services
travels beyond the business functions and drives into the
arena of performance measurement & Decision Making
[PM & DM]. In this context, we would be delivering a series CMA P. Raju Iyer
of webinars by the experts, sharing of knowledge resources April 3, 2020

ICAI-CMA SNAPSHOTS
Glimpses of CMA Womennovator Conclave 2020 organised by the Institute in association with Womennovator on 7th
March, 2020 at New Delhi
CMA Balwinder Singh, President along with CMA

Ashwin G Dalwadi, Council Member of the Institute during
Pre-Placement Orientation Training Programme held on
14th March 2020 at Ahmedabad
Inauguration of Workshop on Applications of Data

Analytics in Finance & Costing held on 14.03.2020 at J. N.
Bose Auditorium, CMA Bhawan, Kolkata

ICAI-CMA SNAPSHOTS
An Interactive session on GST Law related issues, Pre-placement Orientation Program organised by the
GSTN problems and other issues related to GST organised Hyderabad Chapter of the Institute inaugurated by CMA
by the Hyderabad Chapter of the Institute on 2nd March Dr. P.V.S.Jagan Mohan Rao, Advisor and Immediate
2020 at Hyderabad. Seen in the picture CMA Dr. K Ch A Past President of SAFA, as the Chief Guest and CMA G.
V S N Murthy, Council Member, CMA Lavanya KVN, Narayana Rao director NRDC as the Guest of Honour on
Chairperson Hyderabad Chapter and Dr. D. Purushotham, 12th March 2020. Also seen in the picture, CMA Dr. K Ch
Pr. Commissioner GST Telangana A V S N Murthy, Council Member, CMA Lavanya KVN,
Chairperson Hyderabad Chapter
CMA Chittaranjan Chattopadhyay,Council Member of CMA Debasish Mitra, Chairman - Board of Advanced
ICAI greeted Professor Ranjit Tamuli, Vice-Chancellor of Studies of the Institute addressing Students and Members in
Dibrugarh University on 11th March 2020 at Dibrugarh, the Workshop on Applications of Data Analytics in Finance
Assam & Costing on 14.03.2020 at Kolkata
CMA Chittaranjan Chattopadhyay,Chairman of Banking

and Insurance Committee felicitating Shri Atanu Kumar
Das, MD and CEO of Bank of India along with CMA
Vinayak Kulkarni, Regional Council Member of WIRC at
Mumbai
CMA Harijiban Bandyopadhyay , Past President of the

Institute and CMA Chittaranjan Chattopadhyay,Council
Member of ICAI greeted Padmabhushan Dr. Swapan
Dasgupta, Honb’le Member of Parliament, Rajya Sabha at
his residence at Kolkata on 15.03.20

REPORT ON
WIRC REGIONAL COST
CONVENTION 2020
R
egional Cost Convention 2020 of the Western Chairman of WIRC and WIRC Chapter Representatives
India Regional Council conducted at Surat on from various Chapters in the region were present on the
15th& 16th February 2020 and hosted by Surat occasion. Chapter Meet was also organised on the occasion,
South Gujarat Chapter of Cost Accountants. which was chaired by CMA Balwinder Singh, President of
Theme of RCC 2020 was “Withstanding Economic the Institute, CMA Biswarup Basu, Vice President of the
Challenges – Role of CMAs”.Convention was inaugurated Institute and CMA H Padmanabhan, Chairman, Students,
by Chief Guest, Hon. Shri. C. R. Patil, Member of Parliament, Members, Chapter Region Coordination Committee along
Government of India. CMA Balwinder Singh, President of with CMA Neeraj Joshi, Chairman WIRC, CMA Ashish
the Institute, CMA Biswarup Basu, Vice President of the Bhavsar, Hon. Secretary, WIRC.
Institute, CMA Dhananjay V Joshi, Chairman, Technical
committee, Former President of the Institute, CMA Neeraj
Joshi, Chairman WIRC and CMA Ashish Bhavsar, Hon.
Secretary WIRC, CMA Brijesh Mali, Chairman Surat South
Gujarat Chapter and CMA K.C. Gupta, Vice Chairman,
Surat South Gujarat Chapter were on the dais.Colourful
Souvenir was released at the hands of Chief Guest Hon. Shri.
C. R. Patil, Member of Parliament, Government of India on
the occasion.In the 1st Technical Session on ”Industry &
Economy” Dr. Aditya Shrinivas, Chief Economists & Chief
Operative Officer, Bombay Stock Exchange Broker’s Forum,
CMA Ramkrishna Kashelkar, Corporate Communication,
RIL & CMA Dr. Ashish Thatte, CCM were the speakers.
In 2nd Technical Session on “Service Sector”, Padmashri
Mathurbhai Savani, Founder, Saurashtra Jaldhara Trust, Mr.
Jaynarayan Vyas, Past Minister, Government of Gujarat &
CMA Balwinder Singh, President ICAI felicitating Hon.
Thinker & Economists, CMA NileshLathiya, Chief Finance
Shri C. R. Patil, Member of Parliament, Surat during the
Officer, Dahod Smart City Development Ltd, and CMA
Inaugural session of WIRC Regional Cost Convention held
Amit Apte, Immediate Past President of the Institute were
at Surat on 15th & 16th February 2020. Also seen CMA
the speakers.In 3rd Session on “Regulatory Reforms” Ms.
Biswarup Basu, Vice-President-ICAI, CMA Dhananjay V.
Anupama Singla, Joint Commissioner, Income Tax, Mr.
Joshi, Past President-ICAI, CMA Neeraj Joshi, Chairman
Sanjay Saraswat, Superintendent, National Academy of
WIRC and CMA Ashish Bhavsar, Hon. Secretary-WIRC.
Indirect Tax, Customs & Narcotics (NACEN), CMA Ajay
Joshi, Practising Cost Accountant & IP & CMA Sanjay
Bhargave, Practising Cost Accountant were the speakers.
On 2nd day in the 4th Technical Session on ‘Industry 4.0”
CMA Chaitanya Mohrir, Associate Manager, Accenture
& Regional Council Member, WIRC, Ms.Kruti Shah,
representing IT Firm Pure IETS Ltd, Dr. Rajesh Babu,
associate Professor, Gujarat Forensic Sciences University
were the speakers.Valedictory session was chaired by Hon.
Sou. Darshana Jardosh, Member of Parliament, Government
of India. In her speech she emphasised on the role of CMAs
in public sectors and the role of Cost and Management
accounting in coming times. In the summing up Session,
Secretary of Surat South Gujarat Chapter CMA Nanty
Shah, thanked all the members and students participated in
Convention, CMA Neeraj Joshi, Chairman WIRC, CMA Hon. Shri C. R. Patil, Member of Parliament, Surat, CMA
Dinesh Kumar Birla, Vice Chairman WIRC, CMA Ashish Balwinder Singh, President ICAI along with Central Council
Bhavsar, Hon. Secretary WIRC, CMA Mahendra Bhombe Members, Regional Council Members, & Surat South
- Treasurer WIRC, CMA Harshad Deshpande, RCM and Gujarat Chapter Office Bearers during WIRC Regional Cost
CMA H Padmanabhan, CMA P. Raju Iyer, CMA (Dr.) V Convention held at Surat on 15th& 16th February 2020.
Murali, CMA (Dr.) Ashish Thatte , CMA Ashwin Dalwadi
& CMA Debasish Mitra, CCMs, Past Presidents and Past

41st COST CONFERENCE - 2020 ORGANISED BY ICAI-EIRC
ON THE THEME “SUSTAINABLE DEVELOPMENT THROUGH
INCLUSIVE GROWTH – RISING FROM THE EAST”
ON 28th & 29th FEBRUARY, 2020 AT SWABHUMI, KOLKATA
T
he Institute of Cost Accountants of India – Eastern resource persons, CMA Ashish Banerjee, RCM –EIRC offered
India Regional Council had organised the 41st the vote of thanks.
Cost Conference2020 on the theme“Sustainable Technical Session III was on Banking & Insurance - Health
Development through Inclusive Growth – Rising & Forensic Audit. CMA C.R.Chatterjee, CCM-ICAI was the
from the East” on 28th& 29th February 2020 at Swabhumi, Chairman of the session, CMA C Veeraraghavan , Proprietor,
Kolkata. Hon’ble Governor of West Bengal His Excellency C V RAGHAVAN & ASSOCIATES –addressed on Health
Shri Jagdip Dhankar had graced the occasions Hon’ble Chief Insurance, Shri Jyoti Prakash Gadia, Managing Director-
Guest and inaugurated the Conference by lighting the Resurgent India Limited addressed on Health Insurance, CMA
Inaugural Lamp. The First Lady of the State Ms Sudesh Alok Bardhan, Assistant Director, Serious Fraud Investigation
Dhankar had also graced the occasion. CMA A.K.Tiwari, Office (SFIO), MCA addressed on Forensic Audit, Shri Umesh
Director Finance – GAIL, CMA Sanjiv Soni, Director Finance, Kumar Singh, Chief Vigilance Officer, Allahabad Bank
Coal India Limited, CMA R H Juneja, Director Finance, addressed on Forensic Audit, Shri Diptendu Moulik , Senior
Mecon Limited, CMA Balwinder Singh, President, ICAI, Manager - Multi Commodity Exchange of India Ltd addressed
CMA Biswarup Basu, Vice President, ICAI, CMA Pallab on Opportunities & Risk Management in Commodity Market.
Bhattacharya, Chairman, EIRC, CMA Uttam Nayak, Secretary CMA Abhishek Kr. Singh, RCM-EIRC offered the vote of
– EIRC were also present during the Inaugural session. thanks.
Technical Session IV was on Expectation of Industry:
A way forward. CMA Debasish Mitra-CCM-ICAI was the
Chairman of the session, CMA Asim Mukherjee –VP & Head-
Business Finance Tata Motors Ltd., Mr. Debi Prasad Patra,
IAS (Retd.), Whole-time Director, MCPI Private Limited ,
Dr. Saurav Khemani, Chairman MSME (Bharat Chamber Of
Commerce) were the Guest of Honour. CMA Abhishek Kumar
Singh, RCM, EIRC.
Session on NPS: Shri Saurabh Das, Sr Manager (Operations
& Marketing), NSDL was the resource person on NPS.
Smt Mala Ray, Hon’ble Member of Parliament, Lok

Sabha, Kolkata South Constituency had also graced the
occasion as our Special Guest of Honour. During the Occasion
Former Presidents of the Institute and Former Chairmen of
EIRC were felicitated by Smt Mala Ray, Hon’ble Member of
Parliament, Lok Sabha, Kolkata South Constituency for their
immense contribution towards the Institution and the Profession
as a whole.
There were five technical Sessions. Technical Session I was Technical Session V was on GST : A Game Changer. CMA
on Cost Governance – Key to Success. CMA Kunal Banerjee, Niranjan Mishra-CCM-ICAI was the Chairman of the session,
Former President- ICAI was the Chairman of the session.CMA Shri Devendra V. Nagvenkar, Commissioner, CGST & Cx
B. B. Goyal Adviser (ICWAI) MARF and CMA Somnath Kolkata was the Special Guest of Honour. CMA Timir Baran
Mukherjee, Former Central Council Member-ICAI were the Chatterjee, Chairman Indirect Taxation Bengal Chamber of
Guest of Honour, CMA Kishore Bhatia,Founder and Partner Commerce, Shri Amit Kr. Sarker, Senior Director (Partner)
of Kishore Bhatia & Associates, Cost Accountants was the - Indirect Taxation, Deloitte Haskins & Sell, LLP were the
resource person.CMA Arundhati Basu , RCM-EIRC offered the resource persons. CMA Ashish Banerjee, RCM –EIRC offered
vote of thanks. the vote of thanks.
Technical Session II was on Direct Taxation : Value Around 300 participants from the Corporates, PSUs,
addition by CMAs. CMA Niranjan Swain , Former Chairman Practicing Cost Accountants participated in the 41st Cost
of the EIRC-ICAI was the Chairman of the session, Shaikh Conference 2020. Both Print & News Media covered the whole
Shamsher Alam- Commissioner, Income Tax was the programme and published the same in various News Paper
Chief Guest of the session, CMA Mrityunjay Acharjee-Vice and also telecast the same in the News Channels. The 41st Cost
President, Balmer Lawrie & Co.Ltd. (A &F), Shri S.K.Tulsiyan Conference 2020 was a grand success and end with a formal
, President of Income Tax Bar Association Calcutta were the vote of thanks.

Release of Souvenir Dignitaries on the Dais.
(L-R) CMA Biswarup Basu-Vice President, ICAI, CMA
Sanjiv Soni D (F),Coal India Ltd., CMA Pallab Bhattacharya,
Chairman, ICAI-EIRC, Smt. Sudesh Dhankar-First Lady, Shri
Jagdeep Dhankar His Excellency Hon’ble Governor of W.B,
CMA Balwinder SinghPresident, ICAI, CMA A.K.Tiwari D (F),
GAIL (India) Ltd., CMA R .H .Juneja D(F),Mecon Ltd., CMA
Uttam Kumar Nayak Secretary, ICAI-EIRC
CMA Balwinder Singh President , ICAI Presenting Memento

to Smt. Mala Roy Member of the Lok Sabha Parliament.
CMA Biswarup Basu-Vice President, ICAI & CMA Pallab
Bhattacharya, Chairman, ICAI-EIRC also seen.
Technical Session I
Technical Session II Technical session III
Technical Session IV Technical Session V

COVER STORY
IMPORTANCE OF AUDIT
PLANNING FOR
PROCESS BASED INTERNAL
AUDIT
A
1. DEFINITION OF INTERNAL AUDIT
s per Institute of Internal Auditors (IIA),
Internal Auditing is an independent, objective
assurance and consulting activity designed
to add value and improve an organization’s
operations. It helps an organization accomplish its objectives
by bringing a systematic, disciplined approach to evaluate
and improve the effectiveness of risk management, control,
and governance processes.
CMA C Veeraraghavan
IA & AS (Retd)
2. NEED FOR PROCESS BASED INTERNAL AUDIT
Practising Cost Accountant
With the opening of economy in late 1990s and early Chennai
2k years, the business size, operations and structure of the
organisations become complex. Many organisations have Abstract
different business verticals and units in different parts of our
country and even some have transnational branches. They
also have foreign investors to report. Most organisations For successful completion of audit
felt that they did not have adequate and appropriate controls assignment, one of the basic need is proper
in place to achieve in full their strategic objectives. The
management of these businesses found it impossible to
audit planning. A detailed audit plan would
visually supervise all of the operating areas in their respective cut the time in field work and reporting.
field of responsibility or to have sufficient personal contact Due to a well thought out plan, the Internal
with individuals, who directly or indirectly reported to them. Auditor knows which areas are more risks
Therefore, to alleviate, these new problems, managements are
appointing special staff/ professionals to review and report on to be concentrated in audit and also have
what is happening and to probe for the “why” it was happening. a subject expert to guide the team. This
These persons are called ‘Internal Auditors.’ Most of these adds value to the audit assignment and
internal auditors were not employees of the organisations but would immensely beneficial for both the
external accounting professionals. Most of these professionals
though have adequate knowledge on financial matters, may not auditor as well as the audit customer. In
possess the required adequate knowledge on the domain which this article, it is explained the need for
they have to audit. Therefore it is suggested that they should process based internal audit, importance
have adequate domain expert or subject matter expert to guide of audit planning and the steps of planning
them for successful conduct of audit and report. For successful
conduct of audit, the planning for it, is a primary step. In this process.

COVER STORY
article, it is stressed how the planning from beginning is more B. RISK ASSESSMENT AND APPOINTMENT OF
important for a successful audit. EXPERT:- Performing an audit based on the organisations
internal documents, data and information are helpful to
3. PLANNING FOR AN INTERNAL AUDIT 1 assess the operating effectiveness of the processes controls
to the internal audit team. However, the team has to keep
The modern outlook of Internal audit is not just doing
players with the businesses changing landscape and to ensure
compliance auditing at stores, consumption, contracts,
key processes and controls are also designed correctively by
productivity, capacity utilization, efficiency in utilization of
seeking external information collected from the media on
resources, wastages, pilferages, thefts, frauds etc., but also
the publications about the business, industry in which the
aimed on performance based audit. For any successful audit,
organisation functions, blogs and posts by key personal,
there should be a successful planning. How the audit plan to
industry norms and information from trade association, etc.,
start from scratch?
to have a detailed risk profile of the organisation and the
Apart from assurance on financial statements, the Internal subject process/ product/ business vertical/unit/branch etc.,
Audit team has to check the functional areas which often Apart from this, the audit team should seek the assistance
include processes that support an organisation’s strategy and from a subject matter expert who he is possessing a vast
key objectives. Many times, the internal audit teams neither experience in the field. Once the internal audit team leverage
have the domain knowledge of the subject matter to which they both internal and external resources to identify the risk areas
have to handle during the course of audit nor have a subject then the team can build up a suitable audit program to test
matter expert in their team to oversee their work to provide the risks.
assurance for areas that never before audited. Usually in such
scenario, the audit team would search for the items to be
C. ASSESSING INTERNAL CONTROL
checked from Web. This is a normal approach. But, what is
FRAMEWORK:- The internal audit team has to assess the
required in such a situation would be to test several controls.
effectiveness of the internal control systems established in
Therefore, this normal approach not only affects the internal
the organisation. For this it is to test the control activities
audit performance and reputation but also not useful to the
to identify and test the effectiveness of the well-controlled
audited organisation. Hence, the following is the solution in the
process. For this, the team can adopt COSO’s internal
audit planning i.e. planning from the beginning. An internal
control components, principles and points of focus.
audit program from the beginning is better equipped to perform
audits over areas that are not routinely audited. When Internal
Audit can spend more of its time and resources aligned with D. INITIAL DOCUMENT REQUEST LIST. On
the organisation’s strategy and key objectives, the benefits can acceptance of audit assignment, the audit team should make
multiply. The procedure or steps to be taken for an effective the following requests before commencement of audit
audit plan is explained below planning in order to gain an understanding of the process/
unit/the areas to be audited.
A. INITIAL PLANNING - The Audit team should have • All policies, procedures, documents and organisation
adequate knowledge of the areas to be audited in any Internal charts
Audit assignment. The team should understand the purpose • Key reports use to manage efficiency and effectiveness
for which that particular process/activity/department was and process success
to be audited. Hence the team should address the following • Access to key applications used in the process
issues before starting the field work and get reasonable
• Description and inventory of master data for the
answers and they should be documented.
process being audited, including all data fields and
attributes.
• The reasons or purpose for which particular processes/
After gaining an understanding of the process to be audited
activities/units/ departments were approved to be
through the initial document request, the audit team should
audited
request access to master data for the process to be audited to
• How they support the organisation in achieving its analyse the trends before making sample selections
goals and objectives
• What are the enterprise risks the audit should address E. PREPARING FOR A PLANNING MEETING:- The
• Whether this particular issue was previously audited following steps should be performed to prepare a planning
and if so what are the findings? Whether those meeting business stakeholders.
findings were addressed? • Outline key process steps, highlighting information
• Whether there was any significant recent changes in flows and internal control components.
the processes/activities of that particular department/ • Validate draft narratives and flowcharts with subject
unit to be audited matter experts within bracket, if any.
• Create an initial pre-planned questioner with internal
audits wrapped answers to facilitate a preplanning
1
Some planning processes were referred from CAG’s compliance audit meeting with the chaotic customers.
manual as well as COSO’s framework.

COVER STORY
Preparing the questioner after performing the initial penetration testing with vendors, business continuity
research sets a positive tone for the audit and illustrates that plans, employee information security training.
the internal audit is adequately informed and prepared. Once B. CULTURE AND ETHICS:- The organisation’s
this research is completed. The internal audit team should gender and racial discrimination, succession planning
meet with their key business stakeholders to conform their and digital ethics like how the customer/ consumer
understanding of the process to be audited. information was managed and protected across the
enterprise.
F. PREPARING THE AUDIT PROGRAM. C. DATA PRIVACY:- which include the General Data
Once internal audit team had confirmed their understanding Protection regulation and Consumer consent
of the process on the risks involved in the process, they D. DATA GOVERNANCE:- which include data
would prepare to create an audit program, which should quality, data migration procedure, data management
detail the following information. procedure, and data quality standards and data
• Process objectives. analytics which include policies and procedures of
• Process risks. data analytic functions, proper storage and ownership,
controls around data repositories and data access
• Controls mitigating process risks.
controls.
• Control attributes, including
E. THIRD PARTY RISKS:- Which include
»» Whether the control preventing or detecting a background checks, third party risk management,
risk event contract management, right to audit clause of these
»» Control frequency contracts, monitoring and compliance issues.
»» Whether the control mitigate a fraud risk
»» Whether the control is performed by manually, 5. SETTING AUDIT OBJECTIVES AND CRITERIA:-
or application or both After charting out the critical areas to be audited, Audit
»» An initial assessment of risk. objectives to be framed with the assistance of the subject
expert and the criteria or standards to which these audit
• Testing procedure for controls to be tested during the
objectives are to be tested. Audit objective is nothing but
audit, which include
some questions to be raised on the risk mitigation against
»» Inquiring how the control was performing the standards prescribed. This would enable in the field
»» Testing the control performance audit to find results for the questions raised and drafting the
»» Review the documentation of the performance report on the economy, efficiency and effectiveness of the
resources utilised by the organisation as well as how they
»» Independently performing the controls to had mitigated the risks associated with the business process.
validate the outcome.
6. CONCLUSION:
G. AUDIT PROGRAM REVIEW:- The audit program,
especially those for processors that have never been audited Planning takes into account both external as well as
before or audited long before should have multiple levels internal factors of an audited entity, internal control systems
of review and buy in before should have multiple levels of in place, risks involved and associated with the process to
review before finalised and allowing fieldwork to begin. The be audited and also the guidance of the subject expert. Since
following individuals should review and approve the audit the plan zeros on the areas to be audited, less time would be
program before commencement of fieldwork. taken in field work than planned. In summing up, for any
successful audit, a well-planned process is very important.
»» Team leader.
»» Subject matter experts.
»» Management’s main person of contact for the audit References:
(audit customer) 1. Compliance Audit Guidelines by CAG of India
2. COSO’s Internal Control Framework
4. CRITICAL AREAS TO BE INCLUDED IN THE
AUDIT PLAN
A good audit plan would not only meet the transparency
in governance or other compliances requirements, but also
reflect an enterprise-wide scope and coverage of risks. [email protected]
Therefore, the following five important risk areas to be
considered for inclusion in the audit plan so that the internal
audit would become effective.
A. CYBER SECURITY:- The Audit plan should
include verification of organisation’s data encryption,
Access management policies and controls, data

COVER STORY
GOVERNANCE & AUDIT

OF PROCUREMENT
CONTRACTS
CMA Krishnendu Prasad Ray Dr. Gour Gopal Banik

Retd. General Manager (Finance) Associate Professor
NEEPCO Ltd Department of Accountancy
Shillong Gauhati Commerce College, Guwahati
Abstract
Procurement involves the process of selecting vendors, establishing payment terms,

negotiation of contracts and ultimately, the actual purchasing of the goods and/or services.
It is concerned with acquiring all goods and services that are vital to an organization.
Procurement contract is a written agreement between a buyer and a seller where the buyer
agrees to buy the goods and/or services from the seller in exchange of certain consideration.
In a manufacturing sector, a significant amount of revenue gets siphoned out in the name of
contract and procurements and the same may vary from 55 % to 65 %. Hence, a transparency
is essential which helps to curve such expenditure. A regular internal audit of the contract &
procurement activities is essential in order to maintain the transparency and efficiency and
to keep control over such unproductive expenditure. This will, in turn, help in the revenue
improvement plan and improve the financial management of the corporate. A well defined
policy on contract & procurements and its regular audit will help the organization to bring
and to maintain clarity in each procurement.
This research paper plans to make an exhaustive study of Governance & Audit of Procurement
Contracts.

COVER STORY
T
I. INTRODUCTION: II. FUNDAMENTAL IN CONTRACT
he word Governance is generally understood MANAGEMENT:
as Corporate Governance, it means how the Contract Management is also known by Contract
corporate is being managed and extent of Administration. It is the management of Contracts, vendors,
transparency is being maintained in managing partners, employees etc. The personnel who are involved
the affairs of the company. Unless the management of the in contract management are required to negotiate, support
company is able to earn the confidence of its stakeholders and manage effective contracts. Contract Management
/ investors, running the company as a growth organization includes negotiating the terms and conditions in contracts
will be difficult. The Governance is now felt in every area and ensuring compliance with the terms and conditions, as
of activities of the corporation that helps the organization to well as documenting and agreeing on any changes that may
grow and to earn the confidence of the related person. Once, arise during its implementation. The purpose of contract
the principle of good Governance is being maintained in management is to maximize financial and operational
all the activities of the organization i.e. from the day when performance and at the same time, minimize the risks.
the task is assigned and up to the date of finalization and A Contract is a written or oral agreement enforceable by
achievement / fulfillment of the task as outlined in principle. law. The definition of Contract is given in Section 2(h) of
On the other hand, Audit means the examination of the Indian Contract Act, 1872 which is based on the English
various books of accounts with the relevant vouchers so as Common Law. On analyzing the definition, we find that
to enable the auditor to express his opinion as to whether a Contract is an agreement between the two parties. The
the Balance Sheet shows a true and fair view of the Assets agreement may be either oral or written and, thereby, a legal
and Liabilities and whether the Profit and Loss Account obligation is created for both the parties each of the whom has
of the profitability of the organization. It also includes to perform specific acts. It is preferable that agreements be put
physical verification of the inventory to ensure that all the in writing in order to make it enforceable in the court. Each
transactions are properly recorded in the respective books of party has is legally bound to do the specified duties as per the
accounts. Apart from the statutory auditing, internal auditing terms and conditions of the agreement. Each party must have
is also of utmost importance in any organization. The something of value which is called “consideration”.
Internal audit of an organization refers to an independent
managerial activity that requires a continuous and in-depth III. BASIC ELEMENTS OF A CONTRACT:
analysis as well as critical appraisal of the entire functioning
1. Mutual Assent: The parties to the contract must have
of the organization. Internal audit helps the organization in
a understanding in respect of the subject matter to the
the following manner:
contract.
a. Profit planning ,
2. Offer and Acceptance: One party to the contract will
b. Adding value to the organization , make the offer which must be a clearly communication
c. Strengthening the overall governance mechanism of to the either party. Similarly, the other party also is
the entity, able to understand and accept in unambiguous terms/
d. Various strategic risk management, conditions.
e. Internal control system. 3. Consideration: It means both the parties mutually
agreed to the value as decided in order to make the
f. Finally, it provides assurance that transparency is
agreement binding between the two.
being maintained in reporting which is as a part of
good corporate governance. 4. Capacity: The parties to the contract must be capable
to understand, frame and enter into any agreement in
In a manufacturing sector, a significant amount of revenue
the eye of law of the country.
goes out for contract and procurements and the same may
vary from 55 % to 65 %. A transparency is essential which
helps to curve such expenditure. A regular internal audit Types of Contracts: A Contract may be of different types
of the contract & procurement activities is needed in order like valid, void, voidable, illegal etc. A Valid Contract is
to maintain the transparency, efficiency and to keep control one which fulfills all the essentials of contract as enumerated
over the non-productive expenditure/outflow that helps in Section 10 of the Indian Contract Act, 1872. A Void
in revenue improvement plan and improve the financial Contract is one which contains the element of impossibility
management efficiency of the corporate. A well defined in performing by reason of some event. AVoidable
policy on contract & procurements and its regular audit will Contract is one which is enforceable by law at the option
help the organisation to bring and to maintain clarity in each of the either party. A contract may be un-enforceable due
procurement. to lack of some defect by both the parties. For example:
absence of registration etc. Besides, a Contract may be
An advance and comprehensive audit program at the
illegal /unlawful when the object or consideration decided
beginning of the financial year and regular meeting with
in the agreement is forbidden by law of the country. It may
the key management personnel will help to bring efficiency,
be noted that all illegal agreements or contracts are void but
transparency & justify the dependability on the auditing
all void agreements are not illegal.
activities and its report.

COVER STORY
IV. CONTRACT & PROCURMENTS: to contract;
Procurement is the process of buying goods and services c. Fixed cost: Items of fixed nature expenditure that
that involves the following activities like, (a) Finding suitable proportionate to the cost of the items,
materials from the rights type of suppliers/ manufacturer, d. Profit element: It is a fixed percentage based on the
(b) acquiring goods, services, or works from the external costs directly associated with the contracted work,
source, (c) Acquirement in the competitive bidding process
in order to avail the best possible prices (d) Buying may
FIXED-PRICE PLUS incentives for VARIATION fOR
involve negotiation in order to make use of economic and
EXTRA WORK
cost effective analysis, (e) Procurements are purchasing
decisions that involves factors like delivery and handling, This is a third type of fixed-price contract and is used
marginal benefit, and price fluctuations etc. for contracts that spread to multiple years and with multiple
type of extra work involved that cannot be assessed in
In a contract, an agreement is executed between the owner
advance at the time of awarding of the contract.
of the project and the contractor or supplier who has agreed
to provide the requested services and the same contains In this type of contacts, the contractor is being reimbursed
various clauses that defines the entire scope, terms, and for all actual costs incurred and then adds an additional
conditions thereof charge for the following:
a. Extra work involved for the additional work,
Types of contract & Procurements are as follows: b. Extra time and labour involved,
1. Procurement through open tender: c. Extra machineries for extra work,
a. National tender, In this type of contract, the majority of the risk lies on the
b. Global / International tender, buyer. Such type of contract needs high degree of negotiation
process in order to enable the buyer to find out the nature
2. Procurement through limited tender,
of work involved and related material and labour cost and
3. Procurement through offer or without call of tenders associated expenditure and time required for completion of
either from the dealers, business agents or channel the work.
partner etc,
4. Procurement from original equipments manufacturer, V. CONTRACT MANAGEMENT:
5. Job contract for specially designed items. Contract management refers to the management of
contracts made with customers, vendors, partners, or
Contracts pricing are broadly of the following types: employees. The persons who are involved in contract
a. Fixed-price contract, administration are required to negotiate, support and
manage effective contracts on behalf of the organization.
b. Cost plus contract,
There are certain stages in Contract Management which
c. Fixed-price plus variation clause . are as follows:
i. Contract Preparation: It is related to the identification
FIXED-PRICE CONTRACT of needs, setting of Goals, setting expectations as
It is a most common type of contract. The price is fixed well as defining the risks.
by the manufacturer and it will not change unless there is a ii. Author the Contract Agreement
change in the scope of contract.
iii. Negotiate the Contract Value with the bidder/seller
iv. Determination of the rate for extra items and
COST PLUS CONTRACT
supplementary items
A cost-plus contract is a type of contract where the
v. Fix the responsibilities of various statutory matters
contractor is being paid for all construction-related expenses
during the execution of contract
at actual plus profit element as agreed upon between the
contractor and the contractee i.e. the buyer. This type of vi. Manage Time: Time is an important element of
contract is applicable to construction related work, wherein Contract;
the exact assessment of volume work, time required, vii. Approval before Finalization of the Contract.
materials required and other associated activities etc is viii. Execution of the Contract in the line of agreements
difficult to assess at the time of awarding the contract. A and various clauses of the Contract
cost-plus contract is a win-win situation for both.
ix. Keep up with amendments and Revisions etc as and
when required during the execution of the Contract
There are three main components in the cost-plus
x. Finalization of the Contract after completion of
contract:
the contracted job i.e, obligations, auditing etc and
a. Direct costs: Labor, materials, direct expenses closing the final bill.
related to the product,
b. Overhead costs: All indirect expenses that related

COVER STORY
Contents of the Contract: (iv) The audit findings, (v) Suggestion for improvements,
i. Original agreement and its terms and conditions (vi) A preliminary list of unresolved issues etc.
ii. Scope of the work and supply / BOQ (Bill of quantity/ 7. Management Response: The management is required
Bill of materials to be careful while responding to the audit’s findings, the
problems identified / noted in the audit report and the action
iii. Pricing formula adopted and approved
plan to correct any noted problems or deficiencies/defects
iv. Tax/statutory due clause noted by the auditor, its efficacies and the expected date by
v. Deviation and its rate for deviated items which all the related issues will have been addressed.
vi. Performance of the contract, 8 Exit Meeting: A formal exit meeting may be scheduled
vii. Bank guarantee clause/ Indemnity clause with the company being audited in order to close any
existing loose ends or answer questions, discussion with
viii. Running bill payment in case of long duration
the management responses, any resolution and address that
contract
may improve the further scope of the audit in future.
ix. Running bill payment in case of long duration
9. Distribution of Audit Report: The finally approved
contract,
audit report is to be forwarded to the Competent Authority
x. Closing of contract / Final bill and other associated authority for their comments and
xi. Post contract guarantee clause / warranty clause etc, actions as required.
xii. Sub-Contract clause, 10. Feedback/Follow up: Finally, a follow up action by
the audit team, apart from regular meeting with the officials
VI. CONTRACT & PROCURMENTS AUDIT of the corporation, will help to resolve the process of
improvement of audit points.
The audit consists of several steps or phases that are
designed to ensure the most accurate, objective and reliable
standards and results. VII. AUDITING OF CONTRACTS
1. Planning of audit: Before taking up the audit task, the The contract Audit is sub-divided into the following
auditor needs to plan the audit in consultation with the audit activities that help in maintaining efficiency and transparency
team. He has to identify the key areas of inquiry so as to in management of contract;
examine, locate and to report to the analyzed areas. A. Technical Audit,
2. Notification to be issued to the auditee: Audits B. Financial Audit,
begin with the issuance of some kind of notification to the C. Contract Management Audit.
company or organization being audited. The notification
will specify certain points like (a) Purpose of the audit, (b)
Further, this can be classified into the following activities:
Duration of the audit (c) The list of documents the auditor
wants to examine etc. a. Pre - Award of contract Audit :
3. Initial Meeting: In the initial meeting between the i. Pre- Audit before the awarding of the contract,
senior managemet of the corporation/company and the ii. Pre –Audit of final bill of the contract,
auditors, the necessary support officers and other staff b. Post- Award of contract Audit:
members may also be present.
i. Audit during the execution of contract,
4. Fieldwork: The fieldwork plan is the first step
ii. Audit of the Running bills of the contracts,
in contract auditing work. For this purpose, a detailed
workable schedule is to be drawn up. The schedule should iii. Audit of Statutory and other compliances,
not disrupt the normal business activities of the corporation. iv. Audit of post award technical issues.
The auditors need to perform sample document checks, to
ensure that the company’s document creation and record Contract auditing involves the following activities:
keeping practices are sound and effective.
a. It is an examination of the clauses of the agreements
5. Communication: During the fieldwork by the auditing between the buyer and the seller. Such examination
team on-site at the company’s premises, the audit team helps to:
should be in regular contact with the CFO of the company
i. Identify the manner in which the corporate
in order to clarify procedures and ensure proper access to
budget is used as a procurement control.
the needed documents.
ii. Specify the various control measures relating
6. Draft Audit: As soon as the auditing team completes
to the issuance of purchase orders through
the fieldwork, document examination and review, the
contracts.
auditors prepare a draft audit report which is circulated
among the team-members for review and suggested iii. Specify the control systems applied in
revisions with respect to: (i) The purpose of the audit, (ii) preparing the proper records of information.
The procedures adopted by the auditors for conducting the iv. Identify the different types of frauds that
audit, (iii) The documents collected, examined & reviewed, can arise during the examination of the

COVER STORY
procurement function. viii. Disputes, mediation, alternative dispute resolution
v. Recognize the different types of procurement- (ADR) and litigation;
related investigations in which an auditor can ix. Customer loyalty index, business continuity plan and
engage. employee survey.
b. Examination of documents & records desired as
per agreement and available in connection with the IX. CONCLUSION:
contract, Contracts are critical legal instruments for corporations
c. The primary object of the contract audit is to ensure / companies of all sizes and virtually in all sectors. The
that the amount and quality of goods and services sourcing, negotiating, and drafting contracts can be quite
delivered to the customer was correct, a tedious process. The intent behind a contract audit is to
d. Verification of the goods and service delivered to ensure that the amount and quality of goods and services
the customer was billed correct and appropriate delivered to the customer is correct and that the customer
amount and as per the agreement. has been billed an appropriate amount and the expenditure is
justified. While conducting the audit of an organization, the
e. Examination of other statutory compliances to the
auditors are expected to apply and uphold the principles of
contract,
integrity, objectivity, confidentiality and competency as well.
1. Evaluating and verifying the accuracy of the A continuous review by the auditor will improve the contract
contractor’s policies, controls, and systems. management process. An efficient and qualified audit team
helps the organization to maintain the transparency in
VIII. VALUES OF REGULAR AUDIT: spending in contracts and procurements. It also helps the
A regular audit helps immensely in the day to day organization in achieving the ultimate goals of maximizing
management process that protects the company in any both profits and wealth.
unwanted loss and legal battle, It is a powerful tool in
contract management, the following are the advantages in References:
regular audit: 1. ANSON’S Law of Contract : J.Beatson , Oxford
i. Protecting the company against penalties, fines, University Press,
litigation and provides a regular health check on the 2. Contract Audit : A health check up & running :
program/process; Anupam Sharan & Michele Totin , Contracting
ii. Raising awareness of the contract among stakeholders Excellence Journal ( July/August 2014 edition,
and shared responsibility in adhering to contractual 3. https://www.legalmatch.com/law-library/article/
requirements; contract-faq.html
iii. Keeping the system updated and consistent with 4. https://www.dudesolutions.com/blog/3-types-of-
industry standards and practices; contracts-in-facilities-and-project-management
iv. Facilitating good contract and corporate governance; 5. https://www.accountingtools.com/articles/2017/5/14/
v. Establishing and creating trusts internally among contract-auditing
stakeholders and externally among clients and 6. https://www.contractworks.com/blog/how-to-
vendors; perform-a-contract-compliance-audit
vi. Improving efficiency of the process and generating 7. https://www.iaccm.com/news/contractingexcellence/
additional revenues through creative methods and print/?newsletterid=35
process.
vii. Compliance with labour laws, health insurance,
[email protected]
attrition, tax and treasury;
[email protected]
Kind Attention !!!

Dear all,
We regret to inform you that we are unable to publish “Down The Memory Lane” this month as it is prepared by
extracting memorable events from the various issues of The Management Accountant journal; which is currently
impossible due to 21-days Nationwide Lockdown state to fight against pandemic COVID-19. Hope to publish the
same again in the forthcoming issues.

COVER STORY
INTERNAL AUDIT &

INTERNAL ASSESSMENT:
EVOLVING CODES IN
MODERN CORPORATE
WORLD
Abstract
Internal Audit plays a vital role for every

organization, however approach of the
audit varies from One to another. It aims
at synchronizing the effort more efficiently
and effectively so that there must a proper
check of functions perform at various levels
and hierarchy. The internal audit aims
at strengthening control in organizing by
segregation of work, check of transactions
through trails and minimizing the occurrence
of error. With the modern application of the
new technological approach in the corporate
World procedure of exercising control and
internal check have been evolved. One must
understand the grey areas of Internal check,
Internal Audit & Internal control. This article
comprehensively covers evolved methods
and challenges faced in the way forward to
advance Internal Audit. It states the need to
assess risk in today’s disruptive environment
CMA Sarvesh Singh Bamrah
that helps in strengthening the system and
Accounts Officer developing competitive advantages in the
Madhya Pradesh Power Generating Company Ltd. modern era.
Birsinghpur, Jabalpur
I
Introduction leads to the development of Competetive advantages. When
nternal Audit is a part of management that is such advantages are maintained over a period of time they
fundamentally Defensive against Predictable threats become unmatched by competitors and known as distinctive
and progressive towards building sustainable advantages.
strategies by managing Resources. C Cost control
“A firm that continues to employ a previously successful O Operational control
strategy eventually and inevitably falls victim to a
competitor” N Normative control
Strengths and weaknesses were present in every functional T Tax control
area of an organization. Focusing and managing strength

COVER STORY
R Resources control 2. Internal audit has gained statutory status with
the changing and evolving corporate structure
O Output control complexities and increasing the size of corporations
L Labor control has drastically increased the role of internal auditors
in this area.
General Guideline of Audit 3. Internal audit has first gained is importance with
A comprehensive internal audit requires gathering and CARO 2003, according to which in case of listed
assimilating information about firm management, marketing, companies and specified companies the statutory
finance/accounting, production operation, research and auditor is required to report whether the internal audit
development. Internal audit, as defined is a process for system of the company is symmetrical with the size
assuring an organization’s objectives in operational and nature of the business of the company.
effectiveness and efficiency, reliable financial reporting, and 4. Internal audit as per Companies Act 2013:- Internal
compliance with laws, regulations and policies. audit is a compliance test which has been mandated
An effective internal audit consists of a check of all those by Section 138 of Companies Act 2013 upon the
policies and procedure which management adopt to ensure companies which come under the preview of the
orderly and efficient conduct of its business. Orderly and prescribed threshold, these companies are required to
efficient conduct of business includes appoint a person as an internal auditor.
1. Adherence to management policies
Understanding internal audit how it is different with
2. The safeguard of assets prevention internal check?
3. Detection of fraud and error, accuracy and 1. Internal audit is a critical analysis of each operation
completeness of the accounting record & timely with its trail records and corroborative evidence
preparation of reliable financial information whereas an internal check is an arrangement of duty
Every organization has a certain set of standards and in such a manner that the work of one person is
objective, the internal audit system should be designed in segregated and auto-checked by other
such a way that meets its various objective efficiently and 2. The object of an internal audit is to detect fraud and
effectively errors but the object of an internal check is to prevent
1. Safeguarding assets:- special attention should be taken such frauds and error.
for the capitalization of assets. Physical verification 3. Internal checks are always linked to all horizontal
of assets at financial year closing ,monitoring for and vertical levels of hierarchy. It is the simultaneous
minimizing losses and wastage as well as allowing process however internal audit is a post mortem
limited access to assets to check unauthorized access analysis and starts after completion of recording of
use or disposition. the transactions.
2. Execution of transaction:- Internal audit should be 4. Submission of report:- Internal auditor submit his
designed in such a way that it provides a diligent report to the management while in internal check
governace to different stages. The transaction statement relating to the transaction for the whole day
should not be handled by a single person. Adequate is submitted to departmental head.
documentation at every stage should be done for
establishing authorization procedures.
Internal audit area with reference to specific cases
A Correlated relationship exists between Internal Audit
and internal control. An internal audit constitutes an integral 1. Inventory related: proper store ledger should be
part of the internal control system. The objective of the maintained for the management of inventory. Specific
internal audit is to suggest improvement to the function of bin number, ABC analysis and receipt note should be
the entity, add value and strengthen the overall governance journalized for all receipts, similarly items indented
mechanism covering its strategic risk management and in various divisions of the organization should be
internal control system. booked in revenue or capital expenditure accordingly.
2. Confirmation of debit and credit statement: most
Evolution of internal audit receivables confirmation are collected through
mail names of a debtor who has paid are deleted
With the changing corporate scenario internal audit has subsequently from the data. The outstanding monthly
become an inevitable and integral part of an excellent statement should be sent out by a senior official
governance system. Internal audit is a vital growing need in to another party so that standing balances can be
India for the following reasons cross-examined and verified, which will result in
1. An internal audit provides a comprehensive check to no overstatement of debts or understatement of
the entity. It assimilates the management information remittance received.
system for physical examination and verification of 3. Cash transactions:-cash collected at authorized levels
the various tangible item. Internal Audit should be in the organization should be accounted in the same
done at each level of Corporate hierarchy. day with folios of money receipts and accounting

COVER STORY
vouchers. While issuing negotiable instrument This service provider works under a multitasking
to other parties it should be taken care that such business model that conflicts the security interest of
instrument has restrictive endorsement which maybe the organisation.
“does not negotiable” or “ account payee only” all 2. Agreements clear understanding regarding
payment should be authorized on the basis of validity contractual agreements provisions rights and course
approved voucher which is assembled by account of action should be defined. Access control Access to
payable department data should be monitored. Efficiently internal control
4. Purchase requirements purchase requisition should be over authorization and segregation of responsibilities
duly authorized by the officer for the necessity of the should be checked time to time
item to avoid double purchasing or blockage of the 3. Agreements:- Clear understanding regarding
fund in the high volume of non-moving stock. The contractual agreements, provisions rights and course
purchase department is responsible for negotiating of action should be defined. Access to data should
the best price-fixing delivery dates with the supplier be monitored. Efficiently internal control over
and ensuring that appropriate quality goods are authorization and segregation of responsibilities
obtained before the deadline such as annual overhaul should be checked time to time
or project capitalization dates.
4. Backups:- In case of any contingent situation
5. The statutory compliance:- finance department is responsibility should be fixed and arrangements
vested with the preparation of statements regarding should be done for data recovery. The system should
income tax deducted at source. It should also ensure be properly controlled for data deletion when the
deposit of dues with appropriate authorities within information is no longer required
prescribed time limits return regarding gst and
5. Data loss risk:- With access to data by cloud
income tax should be filed in time.
computing mode through smart devices there is
always a threat of Risk for unauthorized access in
Challenges and risk in modern internal audit case of theft or loss of devices
Methods adopted for internal audit may vary from 6. The expanded range of Malware has exposed new
organization to organization. however it’s genesis is broad. risks to the modern approach of data management.
In current scenario advance Information Technology, Proper awareness programs should be organized at
evolved gadgets have been introduced but at the same time operational and managerial levels of hierarchy.
risk of the data breach has raised drastically
7. Agencies: While engaging IT partner its certification
should be checked regarding ISAE 3402. It is an
Practicle failed Case in Modern IT World international service organization assurance standard,
1. Capital One Admits Massive Data Breach:- A provided by accountants to help the customer make
massive breach of Capital One customer data has hit better decisions. ISO/IEC 27001 is one of the
more than 100 million people in the U.S. and 6 million standards in the family providing requirements for
in Canada.Thanks to a cloud misconfiguration, a an information security management system (ISMS).
hacker was able to access to credit applications, Social
Security numbers and bank account numbers in one Thus approach of internal control and internal audit is
of the biggest data breaches to ever hit a financial changing from traditional to modern. New Challenges
services company — putting it in the same league in and risk were ascending with alarming rate. A diligent
terms of size as the Equifax incident of 2017. governace would frame its policies and Controling Procedure
2. 2011 PlayStation Network outage:- PlayStation considering all pros nd cons of this rapid changing tool.
Network was hacked and the personal details of 77m
users accessed. It was the largest security breach of References
its kind to ever hit console gamers, and an event with
1. The Audit and Assurance-A managerial Emphasis
huge repercussions for PlayStation - both in the short
“(3rd edition)
term for its users, left for weeks without access to
online services, and longer term as Sony sought to 2. www.icmai.in
win back customer trust 3. The Concept and cases of Strategical Management .
Now organization are molding advanced internal audit
to cover its risk which has been exposed with emerging
Technologies
1. Cloud assistance:- Data pooling in cloud computing
[email protected]
has gained relative importance because of its cost-
effective, low requirement of infrastructure, effective
and efficient nature. It can support Innovation by
lowering the financial barrier, however data under this
model is stored in a server shared with other clients.

COVER STORY
TRIANGULATION
OF CORPORATE
RESOURCES, RISK AND
REPUTATION PROJECTS
INTERNAL AUDIT’S TRUE
CONTRIBUTION
CMA Hanseswar Ghosh

Joint Director (Retired)
The Institute of Chartered Accountants of India
New Delhi
Abstract
In this ever changing economic environment, corporations are more often than not becoming
prey to such crises as resource constraint, lack of transparency, information asymmetry,
governance gap, laxity in risk management, liquidity pressure, financial impropriety, corrupt
business practices, commercial frauds etc. thereby affecting business functionality and leading
to failure. It would be fair and proper that the internal auditors changed pattern to further
strengthen entities’ internal control system at least to facilitate raising early warning signals
whenever something goes wrong and safeguarding business continuity.
T
Introduction abroad. Such step would liberate corporates acquiring capital
he existence, effectiveness and responsiveness from alternative sources thereby paving the way for Indian
of the internal audit function not only support economy to reach the US$5 trillion mark by 2024. Can the
organizations in smooth sailing and ensure auditors, in general, now afford to stay status-quo and allow
realizing their goals but are also of great help to things to function the way these are? Immediate answer
statutory auditors, including the cost auditors, in designing is no, simply because public perception and stakeholders’
entity specific audit methodology and formulating their expectation have gone up. The internal auditors, at this
work ethic. The government of India has initiated myriad point in time, must explore possibilities, sooner the better,
measures in the ‘ease of doing business’ front and may soon of acquiring required dynamism and refining due diligence
allow Indian public companies to directly list their securities procedures to discharge their duties befittingly. While the
new age and ways require entities to focus on constant

COVER STORY
innovation and reinvention to stay relevant, the (internal) professional competence alone cannot lead to excellence.
auditors who are believed to stay slightly ahead of the Excellence comes mainly, from creative problem solving
business, must equip themselves equally well to ensure that skills and values-driven thinking. An effective internal audit
an organization’s risk management, governance and internal function helps entities have proper controls, governance
control processes are operating efficiently and effectively and risk management process in place. Internal audit deals
and that business’s approach reflects good practices. with issues that are fundamentally important to the survival
and prosperity of an organization. With commitment to
Statutory status of Internal Audit and its coordination integrity and accountability, internal auditing provides value
with other assurance providers - Besides all listed entities, to governing bodies and senior management as an objective
certain other companies, based on paid-up capital, turnover, source of independent advice. Internal auditing function
outstanding amount of loans/borrowings and public deposit mostly assists Boards in their oversight role by keeping
criteria, are statutorily required to appoint an internal auditor. stringent control over the management activities covering
According to the Indian Companies Act, 2013, a Cost all the areas of an organization and thereby ensuring all-
Accountant is also eligible to conduct the internal audit of the round efficiency of the firm’s operations. Internal Audit
functioning and activities of such class of companies. While Function summarizes its work on an audit, reports its
the Audit Committee of the company or its Board shall, in findings and furnishes recommendations based on the work.
consultation with the internal auditor, formulate the scope, The flagged issues help Board finding prompt solutions and
functioning, periodicity and methodology for conducting the fixing management responsibilities. Finally, the auditor/
audit, the internal auditor needs to submit its report to the auditee’s combined effort contribute to value additions in the
board. Internal audit being an entity specific obligation its corporate efficiency, productivity and prosperity, knowledge
success largely depends on constant coordination with and and competence enhancement, innovation, progress and
cooperation of all concerned, including external assurance perfection, improved quality etc.
providers. The company management, risk management,
compliance teams, quality assurance, evaluation teams, Fitment of an Internal Audit Function to boost
internal audit, external auditors, other external sources corporate achievement - Since the internal audit
including government reviewers, accreditation providers, position carries requisite authority, the appointers need
work place health and safety providers, environment to be doubly sure that the person to be appointed has the
protection/monitoring authorities continue to be assurance necessary competence, gravitas and objectivity to provide
providers. independent guidance and support at the highest level
of decision making in the organization. S/he should be a
Concentration on competence, professionalism, strategic thinker, futuristic planner, good communicator, and
credibility, quality to showcase internal audit function’s reliable go-getter as an auditor is believed to know business
integrity, objectivity and independence - What truly better than the auditee. The internal audit function usually
matters is professionalism not a specified professional revolves focusing 3Gs, Guiding, Guarding and Governing.
who conducts audit. Besides others, a Cost Accountant can Reinforcing improved organizational productivity,
conduct internal audit who is bound by a code of ethics that Transparency in every transaction, accountability for all acts
stipulates and binds him/her to the highest level of care, and management actions, and most importantly providing
duty and responsibility. To work to the highest standards of companies an assurance of business continuity in a fair
professionalism, to attain the highest levels of performance and proper manner remain the primary responsibility of
and generally to meet the public interest requirement, such an efficient and effective internal audit function. Being a
a professional, in terms of the code, must refrain from specialized discipline of audit and to deliver its expected
performing any service which s/he is not competent to carry outcome, the internal audit function must have in-depth
out. The Code also requires professionals to be free of any industry knowledge, appropriate skill-sets and right attitude
interest which might be regarded as being incompatible with to closely coordinate with company officials, including the
integrity, objectivity and independence. The incidences of senior management and governing bodies, without impairing
serious corporate scams that we witnessed during last few professional independence, integrity and skepticism.
years including IL&FS, PMC Bank, stormed the Indian
financial sector. Consequently, auditors were viewed with Internal Auditors- be shrewd, read Indian
suspicion and occurrence of such eventualities somehow Government’s mood and do good to protect fraud -
brought disrepute to the profession. It’s hard to deny that such While the Indian company law is likely to be cleansed of
failures and frauds could have been contained, countered or ‘criminality’ clause, criminality provisions will reportedly
combatted had auditors, both internal and external, been be triggered in cases of frauds and where large public interest
more vigilant and less reliant on company management. is involved. The proposed law would remove criminality
The irony is what appeared difficult for them to dig out, got totally in respect of procedural and technical faults which
unearthed by a forensic auditor effortlessly. Let’s not cite otherwise, lack the element of fraud or do not involve larger
excuses, accept failures and pledge to stop such happenings. public interest. Importantly, to boost start-ups, fintech and
other small innovative firms the government of India plans to
What value an internal audit function adds to bring enabling provisions to the company law to allow direct
corporates - Value is pivotal to internal audit success. And, listing of securities by Indian public companies in foreign

COVER STORY
jurisdictions. In that context, an internal auditor needs to sectors that are deemed harmful from a social perspective
play a key role and catalyze positive change as this audit such as tobacco, liquor and gambling. On the environmental
function looks after the overall internal control system that side, they check for a company’s carbon footprint, emission
functions through examination and appraisal of other control norms, water consumption, waste reclying and energy
mechanisms, operating within the organization. Here, the practices. Those investors also avoid firms with poor
quote- “Whosoever desires constant success must change governance which have had regulatory issues. Though, this
his conduct with the times” perhaps fits well for internal ESG concept in India, is nascent, the Nifty 100 ESG Index
auditors. Again, internal audit that serves as a management (currently having 88 companies as on January, 2020) which
tool, performed by employees of the organization concerned was designed to reflect the performance of companies within
or external agencies specially assigned for this purpose Nifty 100 Index based on the ESG score, has outperformed
needs to ensure correctness in accounting data and to detect its parent Index Nifty 100 across various time frames.
fraud by way of periodic review of organizational systems The market Regulator, SEBI, has recently mandated that
and procedures. the top 1000 listed companies prepare an annual Business
Responsibility Report (BRR) starting this year. A BRR has
Involvement of Internal Auditors in Corporate extensive disclosures about the adoption of responsible
Risk identification and classification - An effective risk business practices.
identification process should include certain steps, such
as, creating a systematic process, gathering information Road ahead and future of the Internal Audit Function
from various sources, applying risk identification tools and - In the words of Shri Chandrajit Banerjee, Director General,
techniques, documenting the risks, documenting the risk CII, “Right Board leadership is essential to developing
identification process, assessing the process’s effectiveness. the culture of commitment to integrity, fairness honesty,
Again, to carry out risk analysis, corporates need to identify transparency and ethical conduct.” He went on to say-
the existing and possible threats that it might face. These “The integrity of financial statements is fundamental of
could be relating to human, operational, reputational, stakeholders’ trust, and the functioning of audit committees
procedural, project, financial, technical, natural, political is critical to building internal controls. All information
and structural aspects. According to controllability, risks should be made available to auditors, including through
may be classified as controllable risk and uncontrollable direct engagement between audit committees and auditors”.
risk. In other words, they are often termed as systematic According to him risk management remains a priority in an
(uncontrollable) risk and unsystematic (controllable) risk. A uncertain environment, and includes physical, technological,
systematic risk is beyond the control of an organization being financial and cyber risks. Meaning thereby, as the principles
unpredictable, is of macro nature that affects a large number of corporate governance widens to embrace all stakeholders
of organizations operating under a similar stream, can’t be including the government, lenders, creditors, employees,
assessed in advance as it depends on the influence of external customers, vendors and communities so increases the role
factors, such as, interest rate risks, market risk, purchasing and responsibility of internal auditors to ensure its due
power risk. Whereas unsystematic risk is controllable being compliance and conformance if the work-scope covered
predictable, is of micro nature that affects the organization those areas.
concerned, can be assessed in advance and risk mitigation
can be made with proper planning and risk assessment References
techniques. The examples of such risks are business risk,
1. Internal Audit Quality (Book), author- Sally Anne
liquidity risk, financial risk, credit risk and operational
Pitt
risk. Internal auditors mostly have profound influence over
the corporates to raise awareness, improve understanding, 2. Governance, Risk Management, Compliances and
catalyze change and encourage positive action. Blessed with Ethics- ICSI Publication
those unique abilities, the internal auditors are better placed 3. Cost and Management Audit- ICAI (CMA)
to inspire and involve human resources into transformative Publication
actions in the fields of identification, analysis and mitigation 4. The Hindu Business Line (Newspaper)
of risk and help organizations remain resilient.
5. The search Engine- Google
ESG Requirement- an emerging area of Internal Audit
- Recently, there’s a headline- “Barclays, first European bank
to face vote on climate change.” While investors set sight on [email protected]
ESG (Environmental, Social and Governance) aspects and
shift focus on companies that adopt environment-friendly
practices, produce products or services that influence
society positively and conduct their business ethically, the
internal auditors shouldn’t ignore those areas rather reinvent
themselves to reassure that companies score high on those
three non-financial parameters. Albeit there are no strict
norms on what constitutes ESG, most investors exclude

COVER STORY
ORGANIZATIONAL
ASPECTS IMPACTING
EFFICACY OF IA FUNCTION
CMA Padmanabhan Satyes Kumar

Ex Deputy General Manager (Finance) BHEL
Haridwar
Abstract
Efficacy of the IA function as a tool achieving the best results and systems in the overall interest of
the organisation is determined through sincere implementation of certain organisational aspects
which can really make this function much more useful than an organ for mere compliance of the
corporate governance norms.
I
Objective of IA Improvement studies, Improved Resource utilization,
nternal Audit (IA) is an internal control function of overall Risk Management, Fraud investigation etc.
the Top Management basically required to evaluate
the effectiveness of all other internal controls Efficacy of IA Functioning- Organizational Aspects
implemented in the organization. Despite the noble utility of the function, which is to
Thus, IA provides an independent, timely and reasonable preserve and optimize organizational interest, assets and
assurance to the Top Management/ Board/ owners on the resources, it is a bitter fact that in most organizations this
effective functioning of various internal controls in the function is generally reduced to a negative function limited
organization. to fault finding reports only.
On a much broader perspective, IA can also be effectively However, if an organization sincerely ensures the
utilized for various additional assignments such as following aspects, IA function will definitely result in greater
Root Cause Analysis (RCA), Policy reviews, System organizational benefit compared to its traditional utility:

COVER STORY
such report cannot be disclosed to the auditee as
1. Positive Staffing: directed by the Top Management.
a. Staffing of IA through competent officials c. Based on the draft report, and operational
ensure best possible results for the organization management’s reply / clarification / assurances
compared to sparing only idle manpower for / discussions thereon, final report is concluded.
the same. d. Complete report could also include
b. Multidisciplinary IA team ensures that not only recommendations and agreed roadmap for the
financial but also technical and other business phased out time bound manner Action Taken
aspects are optimized through IA reviews. Plans (ATP) on the audit issues.
2. Optimum Mandate: 6. Concrete ATRs:

a. Clearly communicated mandate from Board a. Audit recommendations are futile if not followed
level/owners on regular audits/ Special Audit, up with the Action Taken Report (ATRs) on the
ensures that the auditee has no doubt on the same.
authority of the IA team. b. Based on the agreed roadmap for implementation
b. It also ensures that IA is provided with clear, of the recommendations generally ATRs needs
full and timely information related to the scope to be called for from the auditee, authenticated
of the audit assignment. by IA and submitted to Top Management for
c. Organizational challenges or thematic their appraisal and advice.
reviews should also be clearly included in the
communicated mandate to ensure that there is a 7. Team Effort for RCAs:
serious brainstorming with the IA team to enable a. Root Cause Analysis (RCAs) refers to the
logical conclusion in the best interest of the detailed study on any concern area of the
organization. Management requiring corrective actions based
on the originating cause.
3. Collaborative Approach: b. IA can only coordinate a sincere RCA supported
a. Instead of typical audit approach of auditor by the relevant best functional resource which
and auditee taking contrary stand on any issue, a may be identified on assignment basis.
collaborative approach ensures more pragmatic
solutions as well as its wide acceptability across 8. Supervision from Board:
the organization.
a. Board level audit committee needs to provide
b. This also enables evolution of better systems periodic supervision and direction to the IA
through positive team efforts needed for long team, as a vital component of the dynamic Risk
term improvement of the organization. Management Policy of the organization.
b. Reporting to such highest level also ensure
4. Mutual Respect: highest degree of autonomy and objectivity for
a. Every individual should sincerely realize that the IA head as a safeguard from its functioning
no individual is greater than the organization being impacted by narrow objectives of any
and organizational interest can never be Management level.
compromised.
b. Interpersonal ego depletes the potential of the 9. System Improvements:
IA function, derails vital functionaries and a. Systems formulated under a particular set
wastes everybody’s precious time and efforts. of business environment/ products may need
c. Mutual respect for the opinion and potential periodical review/ rationalization through IA
of every auditee as well as auditor should studies guided for such purpose.
replace individual ego to attain maximum b. Due to its independent and objective orientation,
organizational synergy. IA can better conclude such assignment
especially if the organizational culture is
5. Consultative Reports: conducive for the same.
a. The next important chain after the conduct of the
IA review is the formulation of the concluding 10. Policy Modulations:
IA Reports to the Management / Board. a. Policies, Guidelines, Standard Operating
b. Instead of one sided audit report, the draft of the Practices (SOPs) etc. need also to be
same should always be shared with the auditee, continuously reviewed by IA in order to optimize
except under most sensitive assignments where Internal Controls.

COVER STORY
b. This is required in order arrive at a better there is absolute clarity amongst all on its role and
balance between too much of rules on one side objectives and the above noted organizational aspects are
and too little of controls on the other. sincerely implemented.
Thus It is for the Board and Top Management to
Concluding Remarks decide the width of the utilization of the IA function from
Like a positive human being, always learning being merely a mandatory requirement under Corporate
through introspection and improving continuously, IA Governance norms to a much greater role of a potential
can really become a faculty for ORGANISATIONAL catalyst for constant improvement and growth.
INTROSPECTION if it is optimally utilized and supported
positively across all functions for organizational growth. References
Continuous improvement, especially the organizational The article is written with the working experience
mandate and zeal for the same, keeps the organization gathered from almost 30 years of various organisations and
dynamically poised for better risk management and is not compiled through some research studies of various
minimization of waste and maximization of its wealth as input reference.
also for quickly adapting for external changes.
Thus contrary to the traditional frictions seen around IA
assignments, resulting in waste of time and resources, it
has the real potential to act as a coordinator for the overall [email protected]
organization improvement and sustainability provided
(COVID-19)
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Don't Panic | Don't Rush | Don't Overstock
Maintain at least 1 metre distance in market places, medical stores,
hospitals, etc.
Have patience and keep calm while shopping for essential goods/medical
supplies
Avoid frequent trips to the market to buy groceries/medical supplies
davp 17102/13/0032/1920
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Avoid non-essential social gatherings at home
Don’t allow visitors at home or visit someone else’s home
Observe social distancing at all times

If you have symptoms like cough, fever or difficulty in breathing, avoid
any kind of exposure and immediately call the helpline numbers
For information related to COVID-19
Call Ministry of Health and Family Welfare, Government of India’s 24x7 Control Room Number
Together we will fight COVID-19 1075 (Toll Free) | 011-23978046 , Email at [email protected] , [email protected]
mohfw.gov.in @MoHFWIndia @MoHFW_INDIA mohfwindia

COVER STORY
ROLE OF INTERNAL
AUDIT IN MERGER AND
ACQUISITION
Abstract
Internal Audit has evolved dramatically

from its traditional role of control
orientation to a more pro-active, risk
based and consultancy role. Internal Audit
CMA Sk Shakeel provides audit services to the management
Ph.D Scholar
University of Calcutta, Kolkata
at all levels, including Board of Directors
(BOD) and Audit Committee, thus
improving the Organization’s Corporate
Governance. In this study we analyze the
role of Internal Audit during Merger and
Acquisition activity. The present study also
attempts to evaluate the objectives and
process of Internal Audit and appointment
of Internal Auditor. The study also
highlights the role of a CMA with regard
Dr. Sukamal Datta to Internal Audit.
Principal
Naba Ballygunge Mahavidyalaya, Kolkata
A
Introduction an organization’s operations. It helps an organization
ccording to the definition of Internal Auditing accomplish its objectives by bringing systematic, disciplined
in the IIA’s International Professional approach to evaluate and improve the effectiveness of risk
Practices Framework (IPPF) “Internal Audit management, control and governance processes”. In the
is an independent, objective assurance and words of the Institute of Chartered Accountants in England
consulting activity designed to add value and improve and Wales (ICAEW), “An Internal Audit is a review of

COVER STORY
operations and records, sometimes continuous, undertaken - Effectiveness of operation,
within a business by specially assigned staff”. - Reliability of financial management and reporting,
Internal Audit is responsible to assess the effectiveness of and
risk management, control and governance processes and to - Compliance with laws and regulations.
provide an insight and recommendations that can enhance
these processes, particularly relating to –
Internal Audit is considered as the 3rd line of defense.
(Source: Internal Audit, career dual session, PWC, 2017)
Internal Audit is an important area of defense in the 4. To provide assurance to the BOD that fraud controls
organization. Internal Audit is considered as the 3rd line of are adequate to identify fraud risks and ensure that
defense and the Internal Auditors are responsible to report the internal control is functioning effectively.
its findings and recommendations to the Board of Directors 5. To conduct post investigation fraud audits to identify
(BOD)/ Audit Committee. Internal Audit is independent control breakdown and establish financial loss.
of the BOD/ Audit Committee and senior management.
6. To identify fraudulent acts by conducting fraud
Sound internal control should be implemented by the senior
investigation.
management.
7. To review the operating activities and Governance.
Research Objective 8. To review policies and its effectiveness.
1. To study the objectives of Internal Audit, appointment
of Internal Auditor and process of Internal Audit. Appointment of Internal Auditor
2. To study the role of Internal Audit in Merger and Under rule 13 of the Companies (Account) Rules, 2014
Acquisition. the following classes of Companies shall be required to
appoint an Internal Auditor or a firm of Internal Auditors:
Research Methodology (a) Every listed Company,
The present study is conclusive and descriptive. The study (b) Every Unlisted Public Company having one of these
was conducted on secondary sources of data collected from during the preceding financial year -
books, articles, journals, e-sources, etc. i. Paid up share capital of `50 crores or more.
ii. Turnover of `200 crores or more.
Analysis and Findings iii. Outstanding loans or borrowing from Banks or
Whenever any strategic transaction takes place such as Public financial institutions exceeding `1000
Merger and Acquisition (M&A), the role of Internal Audit crores or more at any point of time.
becomes evident and Internal Audit forms an essential part iv. Outstanding deposits of `25 crores or more at
for maintaining sound Corporate Governance. any point of time.
(c) Every Private Company having one of these during
Objectives of Internal Audit the preceding financial year:
1. To review accounting system and internal control i. Turnover of `200 crores or more.
system.
ii. Outstanding loans or borrowings from Banks or
2. To review both financial and operating information. financial institutions exceeding `100 crores at
3. To review compliance of management policies. any point of time.

COVER STORY
As per Sec.13 of the Companies Act, 2013, Internal Board to conduct the Internal Audit of the functions and
Auditor shall either be a – activities of the Company.
 Chartered Accountant, or
 Cost Accountant, or Internal Audit Process
 Such other professional as may be prescribed by the The Internal Auditor should follow the following
procedures to conduct Internal Audit effectively:
The Internal Audit Standards Board of the ICAI has issued standards on Internal Audit which provides guidance to the
members on all important aspects related to Internal Audit, so that they adopt the best practices and processes in carrying out
Internal Audit. Table 1 represents the Standards on Internal Audit to be followed during Internal Audit -
Table 1: Standards on Internal Audit
Standards on Internal Audit (SIA) Area of Audit/Subject

Standards on Key Standards on Internal Audit (SIA) 110 Nature of Assurance
Concepts
Standards on Internal Audit (SIA) 120 Internal Controls
Standards on Internal Standards on Internal Audit (SIA) 210 Managing the Internal Audit Function
Audit Management
Standards on Internal Audit (SIA) 220 Conducting Overall Internal Audit Planning
Standards on Internal Audit (SIA) 230 Objectives of Internal Audit
Standards on Internal Audit (SIA) 240 Using the work of an Expert
Standards on the Standards on Internal Audit (SIA) 310 Planning the Internal Audit Assignment
conduct of Audit Standards on Internal Audit (SIA) 320 Internal Audit Evidence
Assignments
Standards on Internal Audit (SIA) 330 Internal Audit Documentation
Standards on Internal Audit (SIA) 350 Review and Supervision of Audit Assignments
Standards on Internal Audit (SIA) 360 Communication with Management
Standards on Internal Audit (SIA) 370 Reporting Results
Standards on Internal Audit (SIA) 390 Monitoring and Reporting of Prior Audit Issues

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Standards issued up to Standards on Internal Audit (SIA) 5 Sampling
July 1, 2013
Standards on Internal Audit (SIA) 6 Analytical Procedures
Standards on Internal Audit (SIA) 7 Quality Assurance in Internal Audit
Standards on Internal Audit (SIA) 11 Consideration of Fraud in an Internal Audit
Standards on Internal Audit (SIA) 13 Enterprise Risk Management
Standards on Internal Audit (SIA) 14 Internal Audit in an Information Technology Environment
Standards on Internal Audit (SIA) 17 Consideration of Laws and Regulations in an Internal Audit
Standards on Internal Audit (SIA) 18 Related Parties
(Source: ICAI website, www.icai.org)
The Internal Audit functions should be included at the beginning stages during the merger and acquisition process so that
value added assistance can be obtained from such audit by conducting a risk assessment, corporate strategy process which is
mostly related to growth by acquisition.
The involvement of Internal Auditors in merger and acquisition process includes –
--------------------------Where Internal Audit typically gets involved---------------------------
(Source: Deloitte’s M&A trends report 2015)
Role of Internal Audit in Merger and Acquisition
(Source: Insights on Governance, Ernst and Young, April, 2013)
The Internal Audit is an important part of management team and it has a lot of relevance which should always be carried

COVER STORY
out tactfully. The Internal Auditor assesses and monitors diligence. The following process is required to be followed:
program management activities and provide relevant i. An in-depth analysis is to be done on risk coverage
information to management. Internal Audit can also conduct and management related to Governance, IT systems,
Audit management activities to highlight process gaps and credit risks, economic risks, tax, operational system,
areas of future improvements. There are four major key customers, supply chain management.
areas where Internal Audit can play an important role in
ii. Compliance with regulatory bodies such as SOX Act,
Merger and Acquisition life cycle of an Organization.
FCPA etc.
 To Assess synergy validation process – the Internal
(1) Strategy – Every organization has its own strategy
Audit is required to assess the synergies present in the
which it applies to achieve its goals, but before such
M&A and the kind of synergies the acquisition target offers
strategies are applied the Internal Auditor will have-
to improve the buyer’s return on investment. The Internal
 To Review the corporate strategy process – the Auditor is required to follow the following process:
Internal Audit should:
i. Assess the assumptions and variables in synergy
i. Make sure that corporate vision for growth aligns process and compare them with past experiences
with M&A. from similar transactions and benchmarking.
ii. Evaluate the process for target acquisitions. ii. Assess the feasibility of realizing the stated synergy
iii. Identify the value creating initiatives i.e., near and goals.
medium term goals for which M&A team can be held iii. Analyze on opportunities to increase the transaction
accountable. value and return on investment (ROI).
iv. Ensure that formal documentation of M&A strategy
is complete. (3) Deal approval and close – the Internal Audit has a
 To assess the risks to the Organization – the Internal role to perform before the deal approval process. Before the
Audit should: agreement takes place, the Internal Audit will have -
i. Identify the potential risks related to target M&A i.e.,  To assess deal approval process - the Internal Audit
people, customers, finance, business operations & IT should –
infrastructure. i. Review the business valuation and purchase price
ii. Assist in mitigation actions. with supporting documentation.
 To assess business case process – the Internal Audit ii. Review the cost and benefit analysis of forecasted
should: synergies.
i. Identify the costs associated with M&A strategies. iii. Evaluate the risks and controls associated with deal
ii. Identify the synergies value and timing. approval process.
iii. Consider the synergies available (e.g. benefit plans, iv. Ensure long and short term goals are defined before
failures) approval.
iv. Ensure that assumptions for exit costs accurately  To assess monitoring of valuation process leading up
applied in the business case. to close – this is assessed to determine the impact that any
changes in the risk and control environment may have on
v. Supervise the Return on Investment (ROI) projections
the company such as Changes in anticipated synergies and
process.
Changes made to key personnel. To carry out the process, the
Internal Auditor should –
(2) Due Diligence – During the course of M&A, when due
i. Review the purchase price adjustments.
diligence process will be carried out, Internal Audit has an
important role to perform, Internal Audit will have - ii. Analyze the impact of any changes is risks and
control environment.
 To assess valuation process - Internal Audit will assess
the valuation process to find out whether the price arrived iii. Evaluate the new synergies, if any.
is correct and therefore will provide information relating to iv. Review the impact of any changes to business and
risk and control issue that may arise, Internal Audit will also key personnel.
review the synergies the acquisition target offers to improve
buyer’s return on investment. For assessing valuation
(4) Integration - Internal Audit should get involve at the
process, the Internal Audit will follow the process:
stage of integration forming a part of integration design
i. Purchase price support valuation. and planning process, which will help to mitigate the risk of
ii. Project the Revenue and profitability. deal value leakage of the integration life cycle. The Internal
iii. Financial statement analysis. Auditor will have -
iv. Tax implications.  To assess integration planning process – Internal
Audit should go through-
 To conduct internal control and risk diligence – the
Internal Audit will check internal controls and conduct risk i. Management of Human resources (HR).

COVER STORY
ii. Financial statement analysis VAT Act, etc.
iii. Systems and Controls and identify the leakage.  Appear before all statutory and quasi judicial authorities,
iv. Overall operations of the integration process. they can practice as Insolvency Professionals.
 To assess integration project management - the  Act as a provisional liquidator or company liquidator.
Internal Audit should go through-  Conduct social audit by looking at cost-benefits
i. Authenticity of resources involved.
ii. Protocols used for communications.
Conclusion
iii. Identification of integration risks and issues and ways
to reduce it. Internal Audit provides a critical perspective to strategic
transaction deals that many executives may not consider with
 To Assess and monitor integration execution - the
these perspectives. The organization can determine potential
Internal Audit should go through-
risk, or control or regulatory issues and can prevent deal
i. Human Resource (HR) personnel changes, roles and value leakage during M&A process. Internal Audit can help
responsibilities management identify any important opportunity. The Internal
ii. Synergies tracking Audit is one of the most relevant and an essential function of
iii. Finance and systems transition – policies, treasury, an organization for maintaining high corporate governance.
financial reporting The Internal Audit not only forms a crucial part at the time
of M&A but also has a role during net-working capital
iv. Legal entity consolidation/ reporting
management, treasury management, cloud computing, IT
v. Merged operations. governance, etc. in the coming scenario the Internal Auditor
 To make the transaction value assessment – the will gain a greater importance for the smooth functioning of
Internal Audit should go through - organization’s activities. With an increase in the number of
i. ROI analysis including the cost-benefit analysis. M&A, the responsibility and area of work for Internal Audit
have also increased in recent times. The Internal Auditor is
ii. Improvement opportunities in M&A process. now expected to be more efficient, knowledgeable, tactful
iii. Impact assessment on existing business. and dynamic for carrying out Internal Audit functions in
case Merger and Acquisition.
Findings
The impact of Internal Audit on the Strategy, Assess References
synergy validation process, Deal approval and close, 1. Nikolaos Dounis(2017), “The role of Internal Auditing during
Integration will create value towards - Mergers & Acquisitions: The European Union Experience”,
January’2017, The IIA Research Foundation.
a. Achieving the target corporate mission and vision. 2. Insights on Governance Risk and Compliance (April 2013),
b. Identification of risks and taking necessary measures. Ernst & Young.
3. Pankaj Kumar Roy (2017), Oxford University Press.
c. Validation of business case process.
4. Munna Sheikh (2015), “Internal Audit’s role in Mergers and
d. Arrive at the value for the synergies arising on M&A Acquisitions”, Deloitte.
process 5. Internal Audit, Career Dual Session (July 2017), PWC.
e. Analyzing the internal control environment and its 6. Nelius Wangui Muchiri and Ambrose Jagongo
overall compatibility. (2017),”Internal Auditing and Financial performance of
Public Institutions in Kenya: A case study of Kenya Meat
f. Validating the adequacy of deal approval process. Commission”, African Journal of Business Management.
g. Prevention of deal value leakage. 7. Huzeifa Unwala (July 2019), “Standards on Internal Audit”.
8. Suraj Ilham Ali (2017), “The effect of Internal Audit on
h. Monitoring of integration process adequacy. Financial Performance of Microfinance Institutions in
i. Opportunities for improvement in the integration Kenya”, University of Nairobi.
process. 9. Rainer Lenz and Florian Hoos (2017), “Internal Audit
effectiveness: Multiple Case study research involving chief
j. Mitigate the deal value leakage risk through audit executives and senior management”, EDPACS the EDP
integration cycle. audit, control and security newsletter.
10. Munish Bhandari (2019), “A textbook on Corporate and
Allied Laws”, Bestword Publications Pvt Ltd.
Role of CMA
11. https://wwwglobal.theiia.org
12. https://www.icai.org
A CMA can- 13. Study Materials, ICMAI
 Conduct financial audit of Co-operative entities,
Internal Audit u/s 138 and all certification work under the
Companies Act’2013, [email protected]
 Conduct audit and certification under the GST Act, [email protected]
Customs Act, erstwhile Central Excise Act, Service Tax Act,

COVER STORY
INTERNAL AUDIT:
FUNDAMENTALS AND
NEXT-GEN
TRENDS
Abstract
Internal audit is an effective pillar of

corporate governance. Primary objective
of internal audit is to chase and reach
company’s pre-defined corporate objectives
with prevention of frauds. This paper
highlights the basic understanding of internal
audit and its role in risk management and
corporate governance. Steps of execution
of internal audit are discussed. Report of
internal audit consists of 5Cs viz. condition,
criteria, cause, consequence and corrective
action. This paper also includes Next-Gen
Dr. Rohan P. Dahivale
trends in internal audit with its objectives HoD & Dean Academics
and comparison with traditional methods. Rajgad Institute of Management Research & Development
Pune
P
1] Understanding ‘Internal Audit’ to evaluate and improve the effectiveness of risk
rocess of internal audit activity is usually management, control and governance processes.”
done in order to assess a company’s corporate
governance and accounting processes comprising 1.2 Internal Audit: From Past
internal control. Such internal audits safeguard After World War II and with the progress in the field
the compliances with ‘laws and regulations’. Internal of management science, the concept of internal auditing
audits equip the management with essential tools in order profession has grown up gradually. Conceptually it was
to reach the required operational efficiency. They help much similar with the QA (Quality Assurance) and financial
to maintain data collection with well-timed and precise auditing by public accounting firms. But to the contrast with
(accurate) financial reporting. Operational efficiency can be this, Lawrence Sawyer is every so often mentioned as “The
accomplished by identification of problems and necessary father of Modern Internal Auditing”1.
corrections lapses just before they might be exposed in an
In U.S. implementation of ‘Sarbanes-Oxley Act’ of 2002,
‘external audit’.
embraced prerequisite skills by internal auditors to help and
support companies to meet the various requirements of the
1.1 Definition of ‘Internal Audit’ law. This ensured enhancement in the value and profession’s
According to The Institute of Internal exposure.
Auditors (IIA) “Internal auditing is an independent,
objective assurance and consulting activity designed to 2] Role of Internal Audit
add value to and improve an organization’s operations.
The activity of internal audit is principally rapt at
It helps an organization accomplish its objectives
evaluation of internal control which is a process effected
by bringing a systematic, disciplined approach

COVER STORY
by company’s Board of Directors and management. It is
intended to provide following four reasonable assurances.
2.1] Internal Audit in Risk Management

Internal audit professional standards necessitate the
purpose in order to evaluate company’s risk management
activities and their effectiveness. Monitoring strategic risks
could indirectly or directly impact ability of a company to Step 1: Establish scope and objectives of audit and
accomplish their mission through objectives. communicate them to the management.
Company’s risk management process involves: Step 2: Understand business area, its scope, objectives,
key transaction points etc.
Step 3: Development of process flowchart plan that
involves interview, discussion and review of required
documents.
2.2] Internal Audit in Corporate Governance Step 4: Identification and description of key ‘risk facing’
Role of corporate governance is to frame processes, business activities within the scope of the audit.
structures and policies utilized under the company’s Step 5: Preparation of internal audit checklist. This
leadership. It is used to direct activities and achieve checklist will be effective tool in order to identify risk issues.
predefined objectives. Corporate governance aims to protect Step 6: Completion of work and data validation.
the interests of diversified groups of stakeholders in ethical
manners. Step 7: Development and execution of ‘risk bearing
sample’ and its test to understand the efficient and intended
‘Four pillars’2 of Corporate Governance are as follows: operating of most important management controls
Step 8: Preparation of a report inclusive of identified
issues and challenges. Narration of remedial action plans for
the management to resolve identified problems or gaps.
Step 9: Ensure the follow-ups on reported issues and
findings at regular intervals. Maintain a database for follow-
ups.
2.2.1] Activities related to Corporate Governance
i. To help the Audit Committee appointed by Board Note:
of Directors or Top Management to execute its • Length of the audit assignment can vary according to
accountabilities efficiently. the complexity and frequency of the audit conduction
ii. To report critical management control issues (if any). activity.
iii. To suggest questions (topics) for appointed Audit • Few of the suggested step or steps may be self-
Committee’s meeting agendas. iterative and repetitive before execution of next step.
iv. To coordinate with the external auditor and • The suggested sequence may differ from case to case
management. and few steps can be omitted.
v. To more formally evaluate corporate governance,
particularly in the area of corporate ethics, enterprise 2.3.1] Complexity and Maturity of internal audit
risk and fraud (if any).
2.3] Execution of Internal Audit

The suggested internal audit execution steps are as
follows, however some variation may be possible depending
upon the complexity and frequency of that internal audit.

COVER STORY
3. To develop deeper and valuable processes.
3.2] Traditional verses Next-Gen Internal Audit4

Traditional: Activities are labour intensive.
Next-Gen: ‘Data-driven’ analytical and efficient activities.
Traditional: Uncertainty around audit recommendations as
difficulty to ascertain changes in ROI.
2.4] Report of Internal Audit and 5Cs Next-Gen: Dynamic updates to see effects of sudden
After completion of audit and data validation, auditors changes can lead to contribution to expected benefits which
have to prepare a detailed report. This report will be are measurable and quantified.
submitted to the authorities who appointed internal auditors. Traditional: Deficiency of visualization limits ‘value’.
This report may be comprising of executive summary,
Next-Gen: ‘Big-Picture’ process view that enables
processed information, graphs and charts, findings, key
collaboration.
findings, laps identified (if any), recommendations, action
plan for management.3 Traditional: Changes are not completely identified.
Following are the 5Cs which may be found within the Next-Gen: Continuous monitoring and alerting in changes
audited report. in process.
Past: Traditional process of internal audit was process
Action
Verbs
Questions 5 Cs owner would describe it.
Which particular problem is
Future: The challenge is design of process as it is actually
Identify Condition performing.
identified?
What was the standard (Policy or Traditional: Manual flowcharts which are difficult to
Test benchmark of the company) that has Criteria maintain.
not been met? Next-Gen: Automated flowcharts which are easy to update.
What is the reason of problem
Analyse Cause
occurrence? 4] Conclusion
What is the risk or opportunity ‘Internal audit’ is one of the key pillar of the corporate
Find Consequence
fated?
governance. It provides objective insight, improves
What the management should do Corrective efficiency of operations, evaluates risks and protect assets,
Suggest
and when? action assesses controls and it ensures compliance with laws and
regulation. To enhance operational efficiency, there is need
3] Next-Gen Internal Audit to move to a more ‘data-enabled’ and continuous approach.
The world is adopting technological advances in almost all Internal audit provides stakeholders with relevant, impactful,
functional areas. Industries are also moving to next-gen and precise and timely findings on effective risk management
all are thinking for ‘next version’ of the existing processes. and control. Internal audit can improve with provision of
There are demands and challenges in front of internal audit more valuable, deeper and timelier insights from processes
too. These challenges can be listed as follows: and activities of audit. Thus with the help of internal audit
companies can manage and address current risks and can
make companies better with faster decisions in operational
improvements.
References
1. “The IIA-History and Evolution of Internal
Auditing”. Retrieved 2013-09-04
2. “IIA Article “Getting a Leg Up””. Findarticles.com.
Retrieved 2013-09-04
3. “Format of Internal Audit Report”
internalauditexpert.in. Archived from the original on
3.1] Objectives of next-gen internal audit 7 December 2013.
The three important objectives of next-gen internal audit 4. The Next Generation of Internal Auditing - Are
can be as follows: You Ready? Catch the Innovation Wave, Protiviti,
November 2018
1. To improve assurance by concentrating focus on the
key risk areas.
2. To make internal audits more effective and efficient. [email protected]

COVER STORY
ROLE OF INTERNAL AUDIT

IN M&A
- FUTURE TRENDS IN IA
Dr. Mohammad Khaja Moinoddin

Professor, Dept. of Commerce & Business Management
SRM Group of Institutions
Karimnagar, Telangana
Abstract
Without IA’s involvement, the getting organization might not understand whether or not the
management surroundings has adequate rigor or whether or not the acquisition or divestment
is correctly valued. IA will play a task in divestitures by making certain that controls stay robust
throughout the financial plan carve out, and operational and IT transition. Similarly, while not
IA’s involvement, the getting organization won’t understand whether or not, if the state of risks
and controls were taken into consideration at the time of valuation of the getting organizations.
F
Introduction
inancial statements are solely nearly as good because the risk and control surroundings that support them.
Organizations typically underestimate the challenges related to the acquisition or divestiture of an organization
or line of business. While not IA’s insight, prices may vary from a loss of chance to extra investments needed to
mend the problems that were lost. Rising market growth, valuation, the complexness of the control surroundings,
increasing regulative pressures — these area unit all pressing problems wherever Internal Audit will offer crucial input and
strategic price early within the strategic transactions life cycle.
ROLE OF IA DURING M&A

COVER STORY
Throughout the M&A process, IA should form a organize potential dangers to the control condition. IA
neighborhood of the program management team in order should watch that there is clear ownership of risks by the
that it can assess and monitoring program management board and that solid administration over roles and duties of
activities and supply key insights. IA also can audit different partners is set up.
programme management activities to spotlight process gaps
and areas of future improvements. 2. Due diligence
In the divestiture procedure, IA can survey the valuation
1. Strategy procedure, yet additionally can give significant bits of
An Entity may have an objective in its sights, yet before knowledge on the risks and the inward control condition
it makes a move, IA should audit the organization system identified with vital (administration and notoriety), monetary
process, survey the dangers to the association and assess the (credit and operational), activities (client, production
business case process. this may ensure that the association network and IT) and consistence (e.g., SOX availability)
can decide from the beginning whether the procurement
target lines up with the association’s corporate development 3. Deal approval and close
procedure (i.e., regardless of whether it’s the correct fit)
During divestitures, the IA office ought to recognize
if there are any progressions to the control condition and
2. Due diligence evaluate the adequacy of “between time” controls set up to
During the due diligence process, IA can evaluate the relieve dangers. IA ought to likewise screen the activity of
valuation procedure, the risks and control condition and high-chance controls during the progress time frame.
thusly the collaboration approval process. These evaluations
will empower the association to work out whether the value 4. Separation
is genuine, and supply early bits of knowledge on any hazard
At the hour of detachment, IA can survey and screen
or control issues which will hide underneath the financial
division venture the board, which can incorporate territories
proclamations; likewise, what very cooperative energies the
of HR, money, frameworks and activities. IA can likewise
procurement target offers to improve the purchaser’s arrival
recognize esteem spillages during the hour of partition.
on venture.
THE FUTURE OF INTERNAL AUDIT: 10 AUDIT

3. Deal approval and shut
TRENDS TO PREPARE FOR IN 2020
Before the association consents to the arrangement, IA
Today’s businesses need to be continuously evolving
can survey the arrangement endorsement procedure to shape
to meet changing commercial enterprise models, new
sure that short-and long haul objectives are characterized
regulatory requirements, generation innovations, and
before the arrangement closes. IA likewise can survey the
an boom in cyber attacks.
observing of the valuation procedure paving the way to the
arrangement on the very edge of decide the effect that any To help groups meet those new challenges, internal audit
progressions inside the hazard and control condition may (IA) features must evolve as well. While internal audit isn’t
wear the organization; for example , changes in foreseen always the sole proprietor of risk inside an
cooperative energies, and additionally changes being made organization, it provides impartial insight into an
to key faculty. organization’s inner controls, corporate governance,
and enterprise processes. IA educates board members and
bosses on the business risks and their impact, supporting hit
4. Integration
upon and address troubles before they ‘re identified by
IA should shape a piece of the blending group and will external audit.
be engaged with joining structure and arranging forms
As data and technology permeate every aspect of the
mix venture the board and execution, and consequently
modern organization, IA departments can no longer work
the exchange esteem evaluation. IA additionally can assist
alone. IA teams must expand their skill sets and work
with moderating the threat of arrangement esteem spillage
alongside other departments to more effectively reduce
through the blending life cycle.
risk, improve controls, and identify inefficiencies within the
organization. While 2019 has already brought significant
ROLE OF IA DURING DIVESTITURES changes to the audit industry, 2020 provides the opportunity
for even more.
Divestitures life cycle Here are the top 10 trends we expect to see for the internal
audit world in 2020:
1. Strategy
Like M&A, IA ought to evaluate the corporate methodology 1. Privacy compliance will be a key focus for internal
for divestitures. IA ought to have perceivability to the audit.
proposed divestiture changes and the detachment timing In the course of recent years, the world has seen a gigantic
and should enable administration to recognize, survey and increment in information protection guidelines at the state

COVER STORY
and national levels. Numerous associations are battling 5. Third-party risk management will become a concern.
to stay aware of these guidelines, attempting to unravel a Reliance on outsider merchants for essential business
developing number of authoritative, administrative, and capacities keeps on developing. As indicated by the Ponemon
inward necessities to show compliance. Institute, organizations share confidential data with a normal
With the potential for more protection guidelines in 2020, of 583 outsiders, and roughly 59% of organizations state
inward review needs to remain educated regarding these they’ve encountered an information break in the previous
progressions and build up a superior comprehension of year because of an outsider or seller. Numerous associations
potential security dangers, so it very well may be all the more are uncertain where their information goes or who
effectively engaged with distinguishing compliance hazards approaches it once it is imparted to an outsider, which can
and setting up the appropriate controls to relieve those prompt noncompliance, punishments, legitimate activity,
dangers. IA must beginning fusing protection contemplations and reputational harm.
into its venture hazard evaluations and decide how prepared
the association is to react to new guidelines just as continue 6. Internal audit will play a key role in digital business
progressing compliance. transformation.
To stay aware of the necessities of an undeniably
2. New cyber security regulations from the SEC and computerized working environment, numerous associations
PCAOB will require more internal audit involvement. are experiencing an advanced change, executing new
Digital threats are proceeding to increment in recurrence advances and procedures to make the business increasingly
and multifaceted nature, with every day bringing the proficient. For instance, shrewd robotization, for example,
potential of another information break. To consider open robotic process automation (RPA) is proceeding to grow
organizations responsible to their investors and financial at a fast clasp and will assume a key job in numerous
specialists, the U.S. Securities and Exchange Commission organizations in 2020. RPA takes into account assignments
(SEC) and the Public Company Accounting Oversight Board to be finished in a precise way, liberated from any variation,
(PCAOB) are constraining open associations to plainly show expanding effectiveness and exactness. As organizations
how they are moderating digital dangers, including key start this business change, interior review must stay aware
interior controls. of the dangers these mechanical changes carry with them.
3. Boards will become more involved in cyber security. 7. Integrated risk management (IRM) will remain a
By giving a free, target assessment of an association’s key initiative.
current controls, inner review assumes a crucial job in Inner review capacities are customarily seen as an
helping associations oversee potential digital dangers. In association’s third line of barrier, yet this siloed viewpoint
any case, with cyber attacks on the ascent, security breaks some of the time brings about restricted straightforwardness
at a record-breaking high and new weight from the SEC into other offices’ hazard the board endeavors. Integrated
and PCAOB, cyber security is presently turning into a top risk management (IRM) separates these storehouses and
need in meeting room conversations. Board individuals need offers review the chance to streamline forms, concentrate
to increase an exhaustive perspective on the dangers both business resources, and guarantee all divisions work as one.
inside and outside of the association. As inclusion in digital IA ought to be the main impetus behind these IRM programs
dangers develop and board obligation to cling to the FTC’s because of their capacity to recognize dangers and controls
expanded norms of care turns into a worry, sheets will depend and suggest significant arrangements. IRM likewise upholds
all the more vigorously on Chief Audit Executives (CAEs) IA’s chance to use computerization apparatuses and better
and their IA group to impart these risks and compelling convey the institutionalization and detailing of controls over
techniques for countering them. all hazard territories of the business.
4. More internal audit departments will use cyber 8. Internal audit will leverage data analytics to manage
security frameworks. the vast availability of data.
One of inner review’s goals is to furnish the executives The measure of information on the planet is relied upon
with an autonomous appraisal of an association’s cyber to arrive at 44 zettabytes by one year from now, which is in
security arrangements and techniques and their adequacy. excess of multiple times the quantity of stars in the perceptible
IA distinguishes administrative insufficiencies that could universe. However, with organizations taking care of more
put the association in danger, just as the important interior information than any time in recent memory, the potential
controls to relieve them. Like never before, associations dangers are much higher. Information examination has
must adjust the developing danger scene against their altogether changed the field of inside evaluating, changing
security program. In the coming year, this will be seen all manual procedures into mechanized ones, improving
the more frequently through the appropriation of a cyber the precision of review results, giving important bits of
security control structure, which can fill in as a pattern for an knowledge to the executives, and expanding the capacity to
association’s current program. distinguish and address hazards over the endeavor.

COVER STORY
9. Internal audit skills and expertise will expand. • Prior to bargain close, IA can help forestall bargain
The drive for development inside numerous associations is esteem spillage.
compelling the inward review calling to adjust and advance • From a post-exchange point of view, having IA
at a quick pace, and numerous evaluators are battling to stay associated with basic parts of the execution can make
aware of these changes. hierarchical efficiencies and discover appropriate
IA’s job in overseeing authoritative dangers, its venture control checking of new or changes in forms.
wide point of view, and its comprehension of different • Finally, all through the vital exchange life cycle, IA
structures make it multifaceted, however in the present can evaluate the administration of the program to
business condition, inner inspectors need to grow their distinguish any improvement openings.
capacities past customary territories like bookkeeping,
compliance, misrepresentation, and account. To help business References
change, numerous organizations are as of now searching for
1. Antila, E. and Kakkonen, A. (2008) “Factors affecting
inward inspectors with skill in specialized territories like
the role of HR managers in international mergers and
information science, investigation, IT, cybersecurity, and
acquisitions A multiple case study”, Personnel Review,
security. Notwithstanding procuring experts with specialized
Vol. 37, No. 3, pp. 280-299.
information, organizations ought to likewise urge current
representatives to extend their abilities and mastery through 2. Appelbaum, S.H., Lefrancois, F., Tonna, R. and Shapiro,
preparing in these regions. B.T. (2007a) “Mergers 101 (part one): training managers
for communications and leadership challenges”, Industrial
& Commercial Training, Vol. 39, No. 3, pp. 128-36.
10. Greater investments will need to be made in
internal audit. 3. Fadzil, F.H., Haron, H. and Jantan, M. (2005) “Internal
auditing practices and internal control system”,
As per the IIA’s International Standards for the
Managerial Auditing Journal, Vol. 20, No.8, pp. 844-66.
Professional Practice of Internal Auditing, CAEs are
answerable for guaranteeing that interior review assets are 4. Institute of Internal Auditors-UK (1995) Standards for the
“appropriate, adequate, and viably sent to accomplish the Professional practice of Internal Audit, Altamonte Springs,
affirmed arrangement.” Yet, numerous CAEs are battling to FL.
meet the board’s desires for adjusting review exercises with 5. Schraeder, M. and Self, D. (2003) “Enhancing the success
key business objectives while additionally administering of mergers and acquisitions: an organizational culture
fluctuating dangers on the present spending portion. perspective”, Management Decision, Vol. 41, No. 5, pp.
511-522.
CONCLUSION 6. Schweiger, D.M. and Goulet, P. (2000) “Integrating
CAEs should work intimately with their corporate acquisitions: an international research review”, in Cooper,
advancement groups to include IA during the whole key C. and Gregory, A. (Eds), Advances in Mergers and
exchanges life cycle, regardless of whether procurement or Acquisitions, JAI/Elsevier Press, Greenwich.
divestiture, with IA delegates shaping piece of the program
supervisory crew for the execution of such key exchanges: Websites
• Strategically, IA can decide an association’s www.delloite.com
availability for the exchange. • During due persistence,
IA can make the association aware of potential
[email protected]
hazard, or control or administrative issues that would
make the association overpay or underestimate.

COVER STORY
INTERNAL AUDIT -
A TOOL FOR ACHIEVING
ORGANIZATIONAL
OBJECTIVE
Abstract
Presently majority of the corporate sectors

use Internal audit as a tool for achieving
organizational objectives and also used to
assess organizational performance, because
internal audit plays a critical role which helps
the executives to reach their conclusion. It
mainly assist executives to achieve objectives
by safeguarding organization against fraud,
by ensure compliance with various laws and
regulations, by reducing wastage of resources
etc,. However this engagements of the internal
audit led to conduct this study. The study has
conducted at Malnad Alloy Casting Pvt. Ltd,
Shivamogga, the study has identified various
factors and also tested these factors using
statistical test which has resulted that internal Krupa. V. D
audit is positively influencing organization to Assistant Professor
achieve organizational objectives in the study Department of Commerce, Government First Grade College
NRPura, Chikmagalur (D)
area. Karnataka
I
1. Introduction auditing is an independent, objective assurance and consulting
nternal audit is an independent, objective assurance & activity designed to add value and improve an organization’s
consulting activity which is designed to add value and operations. It helps an organization accomplish its objectives
improve an organization’s operations. It always helps by bringing a systematic, disciplined approach to evaluate
an organization to accomplish its objectives by and improve the effectiveness of risk management, control,
bringing a methodical, disciplined approach to estimate and and governance processes.
improve the effectiveness of risk management, control and
governance processes and it is practiced by internal auditors. 2. Review of Literature
Internal auditing provides recommendations to the Shah Saud, (2015), “The role of internal audit in
organization based on analysis and assessment of various organisation goals achievements”, he stated that, the
data which is a catalyst for improving organizational fundamental role of internal audit is to assist management to
governance, management of risk and control. It also attain organizations goals and it also provides a satisfactory
provides value to governing bodies and senior management internal control system for risk prevention. It adds value
and involves in conducting proactive fraud audit in order to and improves an organizations operations by bringing a
identify fraudulent acts and also conduct post investigation systematic disciplined approach to evaluate and improve the
fraud audit helps to identify, control, breakdowns and effectiveness of risk management, control and governance
estimates financial losses. processes.
According to Institute of Internal Auditors defined Internal

COVER STORY
Arthur F. Rothberg (2010), “Internal Audit and 7. Sample Design:
Effective Risk Management Assessment”, he states that, »» Population: Companies/Corporates which are
Internal audit is one of the best methods of identifying frauds, practicing Internal Audit
mistakes and also risks that could actually lead to failure in
»» Sampling Technique: Convenient Sampling
the achievement of performance and profitability targets. It
Technique used for this study
is a valuable tool for all kinds of companies’ i.e large and
small, international and domestic companies. It will helpful »» Sample Size: For the purpose of fulfilling the
to assess manages risk as well as general effectiveness and objectives, the present study undertaken sample of
efficiency levels. 50 respondents (Employees) are taken from different
departments ( i.e, HR, Accounts, Technical etc.).
Noraini Shamsuddin and Norhanizah Johari (2014),
“The effect of Internal Audit towards internal control
system effectiveness”, stated that, internal audit act as an 8. Hypothesis
internal control system- it is a set of policies and procedures Ho: Internal audit practice doesn’t aid to achieve
established by management to enable the organization to organizational objectives.
achieve its objectives, To test the hypothesis chi-square method is used
Ebrahim Mohammed AI and Abdullah kaid AI (2014),
“The effect of the internal audit and firm performance: A
proposed research frame work” they analyzed that, internal
audit is regarded as the key element in the application of
accounting system. Therefore they mentioned that internal
audit is helpful in achieving the organizations objectives by
its effective performance in the department and in the firm. 9. Data Analysis and Interpretation
Table - 1: Respondents opinion about Internal Audit
3. Objectives of the Study functions in the organization
»» To examine the impact of internal audit in the
Functions SA A N DA SDA Total
achievement of organizational objective.
a) Assessing plans and
»» To give some suitable suggestions for the improvement
procedures to determine
of internal audit practices in the study area. the weakness or defects
17 32 01 00 00 50
in the systems and
4. Significance of Study procedure used by the
company
This study discovered that, internal auditing practice in
the study has lead to organization to achieve its objectives b) Assess the
by proper checking of organizational accounting data, effectiveness of
18 32 00 00 00 50
company’s internal
minimizing its risk and effective controlling.
control system
c) Safeguarding the
5. Scope of the Study funds and assets against 18 30 01 00 01 50
This study is mainly concentrated to know about the manipulation and frauds
internal audit practices and its role in achieving the d) Detect the frauds,
organization objectives. The geographical area for this study errors, mistakes, waste 19 27 03 00 01 50
is restricted to Shivamoga region and the study is conducted or abuse
at Malnad Alloy Casting Pvt. Ltd., which is situated in e) Facilitating the
Machenahalli, Shivamoga District. operations and effective
15 31 04 00 00 50
working of the audit
6. Sources of Data committee
The required data for this study is collected from both f) Verify the correctness
and authenticity of
primary and secondary sources. 15 30 05 00 00 50
financial records and
» Primary Data: statistical records
The primary data for this study is collected by g) Establish best
distributing structured questionnaires to the manager, practice reporting 17 27 05 01 00 50
accountants and employees of the organisation and relationships
also used interview method wherever it needed. h) Eliminate the
» Secondary Data: misappropriation of 11 27 11 01 00 50
book of accounts
The secondary data has been collected from industrial
reports, journals, through articles, books, newspaper, (Source: Survey Result)
magazines and websites. Note: SA-Strongly Agree, A-Agree, N-Neutral, DA-
Disagree, SDA-Strongly Disagree.

COVER STORY
From the above it is clear that, majority of the respondents their efficiency and also to ensure complete co-operation.
are agreed and strongly agreed that internal audit function
is to assessing plans and procedures to determine the »» Ho: Internal audit practice doesn’t aid to achieve
weakness or defects in the systems and procedure used by organizational objectives.
the company, assess the effectiveness of company’s internal
Table - 3: Respondents opinion towards role of
control system, safeguarding the funds and assets against
Internal Audit to achieve the organizational objectives
manipulation and, detect the frauds, errors, mistakes, waste
or abuse, facilitating the operations and effective working of Impacts SA A N DA SDA Total
the audit committee, verify the correctness and authenticity a) It reduces the 18 19 10 03 00 50
of financial records and statistical records establish best cost
practice of reporting relationships and eliminates the
b) Increases the 17 20 11 02 00 50
misappropriation of book of accounts. morale and
honest of staff
Table - 2: Respondents opinion about Objectives of c) Improve 27 16 07 00 00 50
Internal Audit practices in the organization financial
Objectives SA A N DA SDA Total performance
in the
a) To control the organisation
quality of goods 30 18 02 00 00 50
and services d) Improving 27 21 00 01 00 50
efficiency in
b) To monitor operation
internal policies
29 19 02 00 00 50 e) Assess the 08 24 17 01 00 50
and procedures
of the company work of the
subject by
c) To study the role third parties
and performance 23 26 01 00 00 50 on a regular
of organization basis
d) To measure f) Increase the 22 18 09 01 00 50
and evaluate financial
effectiveness of 20 26 04 00 00 50 reliability and
other types of integrity
control
g) Improve the 23 15 10 02 00 50
e) Develop the environment
performance of 21 27 02 00 00 50 of the
the organization organisation
f) To maximize h) Meaningful 34 13 03 00 00 50
the strength and 20 26 03 01 00 50 decision can
opportunities be taken
g) To establish (Source: SurveyRresult)
quality assurance 23 24 03 00 00 50
programme Table of Chi – square analysis
h) To check the
Particulars Values
efficiency of
21 23 06 00 00 50 Computed values 36.18
staffs increase
their efficiency Table value at 5% level of significance 28.869
i) To ensure
complete co- 15 30 04 01 00 50 The above test shows that, the table value of x2 at 5% level
operation
of significance is 28.869 the calculated value of x2 is 36.18.
(Source: Survey Result) Computed value is more than the table value therefore, the null
hypothesis is rejected and alternative hypothesis is accepted
From the above it is clear that, internal audit’s major i.e., Internal audit practice is aid to achieve organizational
objectives are to control the quality of goods and services, to objectives. Because internal audit practice positively
monitor internal policies and procedures of the company, to impacts on organizational performance by reducing the cost,
study the role and performance of organization, to measure by increasing the morale and honest of staff, by improving
and evaluate effectiveness of other types of control, to financial performance in the organization, by improving
develop the performance of the organization, to maximize efficiency in operation, by assessing the work of the subject
the strength and opportunities, to establish quality assurance by third parties on a regular basis, by increasing the financial
programme, to check the efficiency of staffs and increase reliability and integrity, by improving the environment of the

COVER STORY
organization and also helps in meaningful decision taking performance of the origination by reducing cost of
activities also. production, improving the efficiency in the operation,
increase the financial reliability and integrity.
»» Internal audit practice also enhances moral and
honest of staff, improve the environment of the
organization and also aid to take meaningful decision
in the organization.
»» Majority of the employees are opined that, internal
audit is discharging its responsibility to achieve
organizational objectives by evaluating design and
effectiveness of compliance function, by developing
long range audit plan, by assessing annual risk,
guiding departmental employees on policies and
procedures.
»» The study has also found that, there are certain
Role of Internal Audit to achieve the organizational challenges are faced for effective implementation
objectives of internal audit such as, difficulty in managing the
multiple compliance audits, it incurred higher cost,
10. Findings time consuming and also difficulty to understand.
»» Testing of hypothesis resulted that, internal audit
is aid to achieve organizational objectives because 11. Suggestions
it helps to achieve by controlling the quality of »» The organization should conduct internal audit
goods and services, by monitoring internal policies practice once in a month for effective organizational
and procedures of the company, by evaluating performance.
performance of organization, by measuring and »» Internal audit practice helps to detect the fraud,
evaluating effectiveness of other types of control, errors, mistakes, waste, and abuses. Even though
by developing the performance of the organization, there is a more misappropriation and manipulation
by maximizing the strength and opportunities, occurs while preparing internal audit, therefore the
by introducing quality assurance programme, by organization should take more appropriate measures
checking the efficiency of staffs and also by ensuring while conducting internal audit practice.
complete co-operation. »» The organization should communicate the result
»» The organization is regularly practicing internal of internal audit practice to the board and audit
(once in a 3 months) and external audit and both are committee regularly.
presented through repots. »» Through the internal audit practice, the organization
»» For internal audit practice, the organization following need to identify and assess the risks regularly and
accounting bodies guidelines (ICWA and ICAI) need to follow the adequate internal control system.
and for non-accounting i.e. quality control they are »» The organization should provide training to the
following ISO and OHSAS guidelines. employees for quality internal audit practice.
»» Majority of the employees in the organization agreed »» For practicing internal audit, the auditor should follow
and strongly agreed that internal audit is performing the recent changes made in the accounting standards.
its functions for the efficiency of the organization.
such functions are to determine the weakness in »» Along with the internal and external audit, the
the functional system, for effective internal control organization need to focus on green audit, tax audit
system, safeguarding the funds and assets against and other types of audit practice for improve the
manipulation and frauds, detect the frauds, errors, efficiency of the organization.
mistakes, waste or abuse, facilitating the operations
and effective working of the audit committee, 12. Conclusion
verifying the correctness and authenticity of financial From this study it is clear that, internal audit practice helps
records and statistical records and also eliminates the to detect errors, frauds and provide suggestions which helps
misappropriation of book of accounts. the management to take corrective action. It identifies the
»» Majority of the employees are agreed that, the main risks and uncertainties and gives optimal solution for risks
motives for conducting internal audit is to facilitate and uncertainties. Internal audit is aid to improve the financial
performance evaluation feedback and learning, position of the company and achieve the overall performance
improve the risk management system and also to of the organization. It aids an organization to accomplish
improve the financial position of the company. over all objectives by a systematic, disciplined approach
»» Majority of the employees are opined that, internal to evaluate and improve effectiveness of risk management,
audit practice is impacting positively on the financial control and governance. Internal audit strive for the business

COVER STORY
for effective and efficiency operations, reliability of financial 8. Muazu Saidu Badara, Sitizabedah Saidin, Impact of the
and management reporting, compliance with laws and effective internal control system on the internal audit
regulations, safeguarding of assets etc. effectiveness at local government level.
9. Noraini Shamsuddin and Norhanizah Johari ( May
2014), The effect of Internal Audit towards internal
References control system effectiveness.
1. Arthur F. Rothberg (2010), Internal Audit and Effective
10. Odoyo Fredrick S and Omwono Gideon A, An analysis
Risk Management Assessment.
of the role of internal audit in implementing risk
2. Carmen Rossiter, (2011), How internal audit adds value management.
to the governance process.
11. Shah Saud, (2015), The role of internal audit in
3. Ebrahim Mohammed AI, Abdullah Kaid, Faudziah organisation goals achievements”,Vol.6, issue-24.
hanim Binti Fadzil, (2014), The effect of the internal
12. Theofanis karagiorgos, George Drogalas and
audit and firm performance: A proposed research
Evaggelos Gotzamanis and Ioannis Tampakoudis (Jan-
frame work, Vol.4, issue-1, PP-34-41.
June 2010), Internal auditing as an effective tool for
4. Georgiana Susmanschi (2010), Internal audit as an corporate governance, Vol.2, issue-1.
attribute of management during the economic crisis.
5. John Verver, (2009), Improving Internal Audit through
Technology. Websites
6. Maria da Conceicao da Costa Marques (Septmber 19 1. www.ecojournal.com
2014) Internal audit in the public sector as a tool for 2. http://www.icaew.org
risk prevention of corruption in public administration 3. http://inernalaudit.uonbi.ac.ke
in Portugal,Vol.3, issue-3.
7. Muazu saidu badara and Siti Zabedah saidin, (Nov
2012), Improving the existing functions of internal [email protected]
audit at organisational level, Vol.1, issue-6.
Ministry of Health & Family Welfare

Government of India
(COVID-19)
COVID-19 testing - when and how?
All individuals need not be tested, because
Disease is primarily reported in Individuals with travel history to the affected countries or close contacts
of positive cases
WHOM TO TEST
ALL symptomatic people who
Have history of international travel in last 14 days Are hospitalized patients with Severe Acute
Had come in contact of confirmed cases Respiratory Illness (SARI) or Influenza Like Illness (ILI)
or severe pneumonia.
Are healthcare workers
Asymptomatic direct and high-risk contacts of confirmed cases should be tested once between day 5 and day 14
davp 17102/13/0031/1920
of coming in his/her contact. Direct and high-risk contact include:
Those living in same household with a confirmed Healthcare workers who examined a confirmed
case case without adequate protection as per WHO
recommendations
List of labs (Govt. & Private) can be accessed at: icmr.nic.in

For further information:
Call the State helpline numbers or Ministry of Health and
1075 (Toll Free) | 011-23978046
Family Welfare, Government of India’s 24x7 helpline numbers Email to: [email protected] , [email protected]

COVER STORY
INTERNAL AUDIT – FUTURE

TRENDS AND INNOVATION
AND EMERGING
SCOPE FOR CMAs
CMA L. Sriram
Management Consultant
Chennai
Abstract
Internal audit (IA) is moving towards evaluating Risk management, controls and governance.
Companies Act, 2013 has also recognized CMA as one of the professional for conducting
IA. Future of IA is in Big data analysis, Automated audit and assurance, Cyber security,
Continuous risk assessments, Resource utilization audits and Intelligent automation and cloud
computing. Trillions of data gathered over past years provide a huge opportunity for analysis
for better decision making. ERPs provide for automated audits. Audit parameters are set in
advance, which results in continuous analysis of the process and controls, and the exceptions
are reported concurrently. Monitoring capacity utilization of men and machines brings out
inefficiency. Board of directors today direct their attention more on strategies of production,
process, marketing, operational and financial planning. CMAs are amalgamation of a finance
professional with a knowledge of engineer. CMAs can analyse these data deeper and provide
better insights to the management for better decision making.

COVER STORY
I
Introduction: mitigation process are mapped to check un-covered
nternal Audit (IA) has moved from the traditional risks. Enterprise Risk Management covers Financial
areas of financial auditing and reporting on a few processes and also Non-traditional areas such as ;
financial parameters alone. Recognizing the emerging a. Political Risks – Agile and ever-changing
future, Companies Act, 2013 has recognized the role Political scenario across the globe necessitates
of CMAs to play a vital part in the IA functions. Section review of this risk more seriously than the past.
138 (1) stipulates certain classes of companies to appoint Organizations today cross Indian boundaries and
Internal Auditor, who can be a Chartered Accountant or a spread across the globe.
Cost Accountant or such other professionals who can be b. Interest rate risk and currency exchange risk:
decided by the Board to conduct the IA activities of the Any political landscape changes induce serious
organization. This is a very great shift in the thought process changes in the Interest and Currency exchange
of law makers, that the internal audit can be done by the risks.
professionals like CMA and CS also.
c. Technology obsolescence risk – Technology
CMA is no longer to be seen as a Cost accountant working changes very fast, it replaces itself within the
in the organization or a Cost auditor who certifies the Cost next five years. Huge investments in Machinery,
audit reports. Today’s CMA are involved in the Management Vehicles, Computer Servers and even Knowledge
Decision process. They act as internal consultants to the Management needs risk analysis and appraisal.
management in arriving the decisions. In this context, this
d. Litigation risks – Consumer of today knows
article looks into the future trends in internal audit and the
what his rights are and willing to fight for the
role and scope of CMA in future.
justice. Especially in the consumer focussed
industries like, Retail, Hospitals, Education,
Future trends in Internal Audit: Consumer goods etc., care should be taken
Internal Audit has been defined by the Institute of Internal to review the possible litigation against the
Auditors (IIA) as, organization and possible costs.
“Internal auditing is an independent, objective 3. Analysis of data – for decision making:
assurance and consulting activity designed to add value Organization’s data today resides in the servers,
and improve an organization’s operations. It helps an which are available for analysis at any point of time.
organization accomplish its objectives by bringing a Future data analysis in the organizations are like [3,
systematic, disciplined approach to evaluate and improve 4];
the effectiveness of risk management, control, and a. Analysis of Cost of Raw Materials across time
governance processes.” [1] periods.
b. Price increase / Price reduction analysis.
Internal Audit was done traditionally by Chartered
c. Vendor evaluation is easier with the data
Accountants, both in-house appointed and also by external
available. Supply parameters like quality, time,
CA firms. The focus was mainly in the day-to-day
price are available for analysis.
transactions of the company. Main focus was on the financial
transactions. Role of the IA was looked as a supporting role d. Prices of products can be analysed to see how the
to the Statutory auditor. Present Internal auditor is expected customer trend is moving over the years.
to play a role of Internal Management Consultant. Entire e. Analysis of competitor data – this is available
business operations have been brought under the scope of today in the form of reports available with MCA
Internal Audit. (Ministry of Corporate Affairs – XBRL Files)
f. Customer preferences
Focus has shifted to; g. Warranty analysis
h. Production failures and reasons for the same –
rejections, defectives, scrap etc.,
i. Health insurance denial rates
1. Analysis of process and Controls: Process audit j. Health / Life insurance demographics
is becoming the need of the hour and in the future, k. Mutual fund analysis across the funds, investment
considering the implementation of ERP in all the patterns, dividend pay-outs,
industries. Process is defined as a sequence of
connected activities with a Maker and a Checker and l. Stock Market analysis
is designed with a minimum of one Control. Design Data analytics by auditor is the future trend in any
and operational effectiveness of the process and audit. MS-Excel offers variety of tools for the analysis
controls are the focus in ERP audit. like, Data Analysis and Solvers. IDEA Software,
2. Analysis of Risks – Enterprise Risk Management provides for data analysis from the audit perspective.
(ERM): [ 2, 5 ] Risk analysis has become the focus of Big data analysis is moving towards automated
process audit. Risks of activities are listed out and the programs written by computer programmers, which

COVER STORY
analysis the data in a variety of ways. and a CMA is very aptly designed to carry out the
4. Analysis of data and workflow over cyberspace: analysis.
Next challenge is the cyber data and workflow. 2. Automated Audits and Assurance: Internal Audits
Organizations keep servers across the globe or in are slowly moving towards automated audits. For
another state within India due to Disaster Recovery example, parameters can be set in the system, which
Policy. Data and the activities cross the borders of the in turn generates the exceptions every day [7] Say;
organization and move back and forth in the process a. Materials, where invoice price is greater / less
across different time zones and countries. than the PO price
b. Materials inwarded with shortage
This poses serious risks like;
c. Suppliers paid before due date
d. Payments made without adjusting the existing
a. Denial of Service (DoS) – Physical or cloud
advances paid
servers are heavily buffered with unwanted data
and traffic, which prevents the service from e. Changes made in the Master files in every day
being made available to the customer. Serious f. Changes made in approval limits in the master
threats are possible in Internet Banking, Online files
E-commerce organizations, Payment gateways g. Changes made to the price masters if any
etc.
h. Production quantity, defectives, scrapped
b. Data hijack – Data is hijacked from one entity to
i. Scrap analysis with reasons
another entity or to a fraudulent entity. Problems
arise in Banking, Retail customer mater data j. Payments exceeding say., Rs. 100000/-
thefts, payment re-routed to another etc. k. Approvals done in late office hours (say odd
c. Mobile applications – No quality control on hours like after 9.00 PM and before 7.00 AM)
mobile applications developed and circulated in l. Payments done in Holidays
Google Play store today. Unless the applications m. Travel expenses exceptions
are heavily scrutinized for their security over the
internet, risk are very high in using them from n. Share of vendor – vendor evaluations
the standpoint of business. o. Compliance exceptions like – late filing of GST,
late filing of statutory returns like environmental
Future trends in fascinating directions. returns, etc.
In line with the shift in focus of the audit, the future trend p. Automated audit query / response system – if
is moving towards the following. the audit query is not responded by the process
owner within the due date, the system sends an
automated reminder, so that the process owner
efficiency/inefficiency in replying is recorded.
q. Audit query wise analysis over the past few
months can be done, to report to the management.
This is very handy, especially in Board
Meetings, where the IAD has to demonstrate,
how it was functioning over the past and how it
has identified the issues and how the issues were
resolved.
3. Cyber security: This involves automated monitoring
[6] of the below;
a. Breach of firewalls – how many, how resolved
b. Inward breach of firewalls – who accesses which
forbidden sites
c. Mail scanners – mainly for any data hijack from
organization to outside
1. Big Data Analysis: Organizations are sitting on d. Visitors management – not to allow cameras,
Trillions of Gigabytes of data accumulated over the mobiles, pen drives,
past. Quantitative analysis, using mathematical and e. Exception reports on log files for server
statistical tools are becoming the necessity of the day mismanagement, data deletions, Master files
for analysis and decision making. CMA is Finance access by the employees – this is provided on
professional with Engineering knowledge, which the need-to-know basis. Any one other than
helps him to understand the factory, process, cost the approved person trying to access, itself is
accounting, pricing process, manufacturing process a threat, to check whether this is intentional or

COVER STORY
accidental. this verification for a number of days, until the
4. Continuous Risk Assessments: Risk identification issues are reduced or resolved.
is a continuous process [7,8,9]. Risk and Mitigation • Already we can see, google and other
policy document have to be reviewed every year. In organizations use user adoptive advertisements.
large organizations the threats have to be continually Based on the past history of our internet web
monitored. This need automated systems to see searches, the advertisements are shown to us.
where the breach is, how the new risks are formed.
Since, organizations are dynamic, the processes Conclusion:
keep changing and so are the risks. So the IA to plan
Governance is seriously taken by the Board of Directors
for assessment of all the risk in a cyclical fashion
and they view the IA function more critically. The Board
by taking few risks every month and analyse the
wants assurance and also consulting advices on Business
mitigation processes.
strategies, Operational strategies and Marketing strategies
5. Resource utilization audits: This involves the from IA team. CMAs can seamlessly participate in the
utilization of all the resources the organization is Board discussions as they have business, product, process,
using like; operational and financial knowledge, with which they can
a. Human resources – un utilized labour, labour offer high quality in Internal Auditing.
efficiency, interfirm comparison,
Job description evaluations, Employee appraisals References:
b. Technical/Intellectual Property resources 1. The IIA’s International Professional Practices
– Utilization of collaborators technology Framework (IPPF)- https://global.theiia.org
effectively, utilization of IP effectively, check for 2. www.coso.org
IP/Technical expiry dates, other wise will lead to
3. www.icamai.org- Various Cost Audit Standards
litigation risks.
4. www.icai.org – Internal audit industry specific
c. Technological resources – Machines used
guidance notes
in the production, Vehicles used, etc need
capacity analysis. Un utilized machines waste 5. Brian.W Nocco, Nationwide Insurance and Rene
money. Late commissioning of machines waste M.Stulz, Ohio State University-ERM Theory and
borrowed money. Practice
d. Other assets – Buildings not used properly, say 6. Jaimie Yang and Drew Williams – July 26, 2018,
a good commercial property is used as godown Audit Bots. iaonline.theiia.org/2018/Pages/Audit-
for storage of goods. Alternatively, storage Bots.aspx
can be shifted to a lesser rented place and this 7. https://www.auditboard.com/blog/5-ways-robotics-
commercial property may be exploited for better process-automation-can-assist-internal-audit/
rent. 8. https://www.pwc.com/us/en/risk-assurance/
6. Intelligent Automation & Robotics: This is publications/assets/pwc-robotics-process-
something emerging as Robotic process automations automation-a-primer-for-internal-audit-
and machine learning. Programs are written in such professionals-october-2017.pdf
a way that the machine/Robot/Bot learns on the 9. Sanjay Nambiar, VP & Head, AI&Automation
previous experience, similar to human beings [6,10]. Ecosystem, Wipro Limited, Bot as a service-
Application of this in the audits are not very off. Very Addressing control risks in hyper automation
typical application will be in the areas of sampling. at scale. https://www.businesstoday.in/opinion/
• In sample selections, if the samples are found columns/hyper-automation-bot-service-addressing-
defective, then the system will automatically control-risks-at-scale-digital-workers-organisations/
expand the scope of the audit by selecting more story/381639.html
samples. 10. https://www2.deloitte.com/content/dam/Deloitte/us/
• In Perpetual inventory verification, system can Documents/public-sector/us-fed-audit-for-robotics.
pick up random samples based on the previous pdf
selection and how the organization needs the
samples.
• Automated audit brings out exceptions daily.
[email protected]
Based on the machine learning the areas for
verification will be done more repeatedly. For
example, if the exception report brings out
duplicate invoices recorded on the particular
day. Then the auditor marks this as serious level
1 transaction. Then the system learns based on
the previous experience of audit findings, selects

COVER STORY
INTERNAL AUDIT
PRACTICES FOR RISK
MANAGEMENT IN
REAL ESTATE ENTITIES
Abstract
Real Estate business is undergoing a

turbulent change at the global level. With
the regulators introducing new socially
beneficial regulations, introduction of
policies of green environment in realty
projects, the business requires a guide
and support from the professionals.
In this regard, cost and management
accountants will have to have through
understanding of the business policies,
laws and regulations, be aware of the
local practices and other challenges and
Dr. K. B. Manikandan
Assistant Professor guide the stakeholders in the business.
Post Graduate & Research Department of Commerce Considering this factor, we can strengthen
Dwaraka Doss Goverdhan Doss Vaishnav College our internal audit policies, procedures
(Autonomous)
Arumbakkam, Chennai
and guidelines thereby creating a value
addition to the stakeholders in terms
of statutory compliance, long term
wealth creation and cost management.
The internal audit should not result in
performance management but also help to
attain effective and efficient decisions.

COVER STORY
I
Internal Audit in Real Estate Entities: the demand for an internal audit function with the universal
n today’s fast changing VUCA environment, there is reach and industry knowledge to meet the important risks
a alarming need for managers & Chief functionaries inherent to these structures.
of real estate entities to ensure the available range
of availability of adequate & preventive Corporate Internal Audit Process in Real estate entities:
Governance functions. We need to Internal Audit should focus on testing internal control
• Ensure that the Third Party Service Providers over the land transactions such as acquisitions, easements,
providing services to the Real estate entities operate temporary construction permits, leases, sales & disposals,
under appropriate internal control framework. obtain certificate of completion, local development authority
• Develop, apply and sustain with effective internal clearances etc., The auditing should take a process- and
audit function which adequately addresses the key risk-orientated approach. Every audit engagement should
risks of the real estate business transactions and be tailored individually to the specific needs of the client
complying with the regulatory requirements. requirements and should meet the highest professional
standards.
• Provide the Key managerial personnel’s and chief
functionaries of the real estate business world Two dimensions of Internal Audit Reviews:
with appropriate risk reports to allow continuous 1. Assessment: It provides the comfort to management
monitoring of the risk leverage levels. regarding the efficiency and effectiveness of Risk
Real estate entities operates on complex structures Management processes and controls.
investing in different types of real-estate assets and spread 2. Advisory: It provides expert advice to improve and
across various jurisdictions, with a tendency by creating trust optimize corporate processes.
to a large extent on third-party service providers. It creates
Scope for Cost Accountants in Real Estate Sector:
Challenges in Internal Audit Function in Real Estate »» Understand the challenging market that requires
Sector: developer to provide value for money product that
The Internal Auditor should be affordable in price without deteriorating in
quality of the product.
»» should need to manage risks relating to compliance,
health and safety regulations, business conduct, »» Ponder upon the principles of due diligence of the-
physical security and information security across different types of real estate properties possessing
different locations. different dynamics, including office buildings,
shopping malls, hospitality industry and development
»» may be required to assess risks across diverse
projects.
geographical locations requiring the necessary local
language skills and understanding of local culture.

COVER STORY
Typical Risks and Potential Impacts: 3. Contract terminations • Litigation costs
The list of typical risk factors for real estate structures result in claims and incurred
– Asset management companies / property management disputes
• Cash flow leakage
companies along with the potential impact of failure of the 4. Credit checks for new
risk controls is given below: • Expenses
tenants prove to be
exceed budgets
inadequate
without adequate
Risk Impact of Failure 5. There are significant explanations
overdue balances with
• No cost optimization
Control Environment tenants
• Unauthorized
1. Policies and • Roles and 6. No adherence to
expenses
procedures specific to responsibilities not capital expenditure
each property do not clearly defined procedures for • No optimal use of
exist acquisitions and/or suppliers
• Management
disposal
2. Reporting deliverables decisions made
are not clearly defined on inaccurate/ 7. Development projects
and/or inconsistent incomplete data are not supported by
adequate budgets/cost
3. Inadequate procedures • Exposure to fraud or
monitoring
in terms of segregation error
of duties, 8. Supplier invoices for
• Loss of reputation
operating expenses are
4. delegations of and customers
not authorised and/
authority and approval
• Decrease in property or matched to service
limits
value due to orders
5. Outstanding litigation inadequate
9. Formal tendering
and/or customer
• Maintenance procedures are not
complaints are not
adhered to
6. communicated or
properly evaluated
7. No maintenance plan Wrap Up:
is in place/monitored Internal Audit function can play a critical role in
developing real estate entities to address the complicated
Financial Reporting issues and providing the greater value to the enterprise. It
1. Significant variations • Lack of transparency also helps to establish a benchmarking of the third-party
between budget service providers used in different locations or an assessment
• Exposure to of internal controls compared to industry best practices.
and actual are not
accounting errors
sufficiently explained
• Regulation/brand References:
2. Key reconciliations are
risk 1. Thames Management Consultants, Internal Audit
not prepared and/or
reviewed Service for Real Estate Consultants
http://thamesmc.com/download/Internal-Audit-
3. Manual adjustments
Services-for-Real-Estate.pdf
are not reviewed/
authorised 3. Deloitte India, Advisory on Real Estate Consulting
& Business (2018)
Income & Expenditure
1. Pricing strategy is not • Reduced margins
clearly defined and/or
applied
[email protected]
2. Non-standard terms • Exposure to tenant
for leases are not pre- damages
approved Properties
are inadequately
insured

DIGITAL OBJECT IDENTIFIER (DOI)
Issue: February - 2020 [Vol. 55 No. I1]
Issue Page
Name of The Article Name of Author/s Volume Issue DOI Numbers
No. No.
TIME BOUND ARBITRATION
Hareesh Kumar
PROCEEDINGS - A BIG REFORM IN Vol.55 Feb-20 2 28-31 10.33516/maj.v55i2.28-31p
Kolichala
ARBITRATION LAW
ALTERNATIVE DISPUTE
RESOLUTION AND THE ROLE OF
CMA Raja Ghosh Vol.55 Feb-20 2 32-35 10.33516/maj.v55i2.32-35p
COST ACCOUNTANTS: A BIG BITE
OF THE CAKE IN THE WAITING
ROLE OF COST ACCOUNTANTS AS
ARBITRATORS IN THE CMA Krishnendu
Vol.55 Feb-20 2 36-42 10.33516/maj.v55i2.36-42p
COMMERCIAL DISPUTE Prasad Ray
RESOLUTION PROCESS
ARBITRABILITY OF IP CMA (Dr.) Subir Kumar
Vol.55 Feb-20 2 43-45 10.33516/maj.v55i2.43-45p
DISPUTES IN INDIA Banerjee
ARBITRATION AND CONCILIATION
(AMENDMENT) ACT 2019:
SIGNIFICANT ALTERATIONS Shilpa Narang Vol.55 Feb-20 2 46-49 10.33516/maj.v55i2.46-49p
AND ITS IMPACT ON INDIAN
ARBITRATION MECHANISM
OPPORTUNITIES IN THE
FIELD OF ARBITRATION AND Abhishek N. Vol.55 Feb-20 2 50-53 10.33516/maj.v55i2.50-53p
CONCILIATION IN INDIA
ARBITRATION AND CONCILIATION
CMA Bapu Venkatesam
RECENT CHANGES AND LEGAL Vol.55 Feb-20 2 54-57 10.33516/maj.v55i2.54-57p
Maruvada
RECOGNITION
DIGITAL TRANSFORMATION –
CMA (Dr.) Paritosh
RISK ENABLED PERFORMANCE Vol.55 Feb-20 2 60-61 10.33516/maj.v55i2.60-61p
Basu
MANAGEMENT AND GOVERNANCE
PROCESS COSTING USING FIFO
OR WEIGHTED AVERAGE - WHICH
CMA Rajiv V. Shah Vol.55 Feb-20 2 63-65 10.33516/maj.v55i2.63-65p
IS BETTER FOR PERFORMANCE
EVALUATION?
ADDRESSING MANAGEMENT
Saji Mathew
REPORTING CHALLENGES: A Vol.55 Feb-20 2 66-69 10.33516/maj.v55i2.66-69p
CMA Suresh Kumar S
DOMAIN ONTOLOGY APPROACH
LEVERAGING THE POWER OF
ARTIFICIAL INTELLIGENCE: Prerna Khemka
Vol.55 Feb-20 2 70-74 10.33516/maj.v55i2.70-74p
A STUDY ON THE INDIAN Soumendra Laha
BANKING SECTOR
BRANCHLESS BANKING AN
EFFECTIVE DEVICE TOWARDS
J. Nagarathnamma
FINANCIAL INCLUSION: A STUDY Vol.55 Feb-20 2 76-84 10.33516/maj.v55i2.76-84p
Dr. P. Aranganathan
CONDUCTED AT BANGALORE
RURAL DISTRICT
PRACTICAL APPLICATION
OF THE MANAGEMENT CMA Ajay Vasant
ACCOUNTING TOOLS FOR Mahajan Vol.55 Feb-20 2 85-90 10.33516/maj.v55i2.85-90p
DECISION MAKING DURING Dr. Shailaja Deobagkar
RECESSION – SURVEY & ANALYSIS
PERFORMANCE ANALYSIS OF
ELECTROSTEEL STEELS LTD
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PRE, DURING AND POST CIRP
A CASE STUDY
CORPORATE GOVERNANCE
EVALUATION: THE INDIAN
SCENARIO IN THE LIGHT OF CMA (Dr.) Meenu
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SEBI’s LODR 2015 REGULATIONS Maheshwari
A CASE STUDY OF 30 BSE SENSEX
COMPANIES
TAX TITBITS CMA S. Rajaratnam Vol.55 Feb-20 2 104 10.33516/maj.v55i2.104-104p

DIGITAL OBJECT IDENTIFIER (DOI)
Issue: March - 2020 [Vol. 55 No. II1]
Issue Page
Name of The Article Name of Author/s Volume Issue DOI Numbers
No. No.
WOMEN ENTREPRENEURSHIP:
HOW WOMEN CAN TAKE THE Aparajita Roy
Vol.55 Mar-20 3 17-20 10.33516/maj.v55i3.17-20p
NATION FORWARD - CHALLENGES Neha Agarwal
& WAY FORWARD
A STUDY ON WOMEN
Dr. Ashish Kumar Sana
ENTREPRENEURIAL PROPENSITY Vol.55 Mar-20 3 21-27 10.33516/maj.v55i3.21-27p
Biswajit Paul
OF EAST ASIA AND PACIFIC REGION
SELF-HELP GROUPS
CMA K. N Hari Hara
TRANSFORMING LIVES,
Prasad Vol.55 Mar-20 3 28-32 10.33516/maj.v55i3.28-32p
PROMOTING & SUSTAIN WOMEN
Ravikanth Kuchibhotla
EMPOWERMENT
EMPOWERMENT OF RURAL
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SOCIETAL EVILS!
WOMEN ENTREPRENEURSHIP
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INDIAN PERSPECTIVE
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EMPOWERMENT: A STUDY OF Dr. Sumanta Dutta
INDIAN INC.
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ROLE OF BUSINESS
CORRESPONDENCE MODEL IN
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SOCIO-ECONOMIC EMPOWERMENT
OF WOMEN
DIGITAL TRANSFORMATION -
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RECENT DEVELOPMENTS AND Vol.55 Mar-20 3 78-79 10.33516/maj.v55i3.78-79p
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APPLICATIONS
CONQUERING THE DIFFICULT
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PHASE
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SEEKING FISCAL PRUDENCE IN Chava
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UNION BUDGET! Prof. (Dr.) Vinayak S.
Deshpande
BUDGET 2020 CMA S. Rajaratnam Vol.55 Mar-20 3 91-92 10.33516/maj.v55i3.91-92p
COST ACCOUNTANTS AND PRICE -
COST JUSTIFICATION AT THE TIME CMA Ajay Deep
Vol.55 Mar-20 3 93-95 10.33516/maj.v55i3.93-95p
OF PURCHASE OF MATERIALS IN Wadhwa
PSUs
THE CONCEPT OF NEW INDIA CMA Dharma Teja
Vol.55 Mar-20 3 96-97 10.33516/maj.v55i3.96-97p
CHALLENGES AND EXPECTATIONS Emmadi

DIGITAL TRANSFORMATION
ARTIFICIAL INTELLIGENCE FOR

DIGITAL TRANSFORMATION -
GENESIS, FICTIONS, APPLICATIONS
AND CHALLENGES
CMA (Dr.) Paritosh Basu

Senior Professor
NMIMS School of Business Management
Mumbai
M
Genesis and Evolution of Artificial Intelligence Automation) applications because of quantum leap in
ankind is fascinated since many centuries computing power and ever declining costs of storing
about ideation and creation of devices which humongous data. Organisations are gradually appreciating
can imitate actions of a human being. The that there is a drop of oil in every unit of data which will
thought of enabling non-living objects to drive prosperity in digital era. According to a published
be in functional mode like that of an intelligent being had report (May 2019)3 in India by 2021, AI will be the most
always intrigued scientists’ mind. History reveals that ancient impactful enabler in doubling the rate of innovation driven
Greeks had illusions about robots, and Chinese and Egyptian value enhancements (2.2 times) and employee productivity
engineers had built automatons. Technology evangelist Gill benefits (2.3 times).
Press (December 2016) traced genesis of the first such
thought in 1308 in a book of Catalan poet Ramon Llull. AI and More - Demystified
He has quoted about sixty-five instances of rudimentary to Artificial Intelligence
advanced form of artificial intelligence (AI) between 1308
There are many perceptions and narratives about AI.
to 20161. Genesis of AI, therefore, can be traced in centuries
The author’s interactions with some professionals reveal a
old literatures.
certain degree of mysticism and fictional feeling. There is a
Scientists such as Alan Turing, Marvin Minsky and John need, therefore, to demystify such misgivings. Etymological
McCarthy had advanced theoretical and technological meaning of AI, as per Oxford Dictionary, “… is the study and
underpins of AI. ‘The History of Artificial Intelligence’2 development of computer systems that can copy intelligent
(December 2006), authored by Chris Smith et. al. indicated human behaviour.” Merriam-Webster Dictionary defines AI
that John McCarthy was the first scientist in 1956 to christen as “The ability of a machine to imitate intelligent human
the technology, behind a computing machine trying to behaviour.” The simplified definition could be that AI is
attain the cognitive capability of a human being, as artificial a data-oriented digital technology-based computing system
intelligence. The paper revealed that. “ …. in Vannevar which “… can perform tasks, normally requiring human
Bush’s seminal work ‘As We May Think’ (1945) he proposed intelligence, such as visual perception, speech recognition,
a system which amplifies people’s own knowledge and decision making, translation between languages, etc.”
understanding. Five years later Alan Turing wrote a paper
Artificial intelligence, at a theoretical plane, is all about
on the notion of machines being able to simulate human
machine performing the functions of knowledge reasoning
beings and the ability to do intelligent things, such as play
and representing, which briefly is called as KR and KKR.
Chess”
“Knowledge of real world plays a vital role in intelligence
Human civilisation is presently on the cusp of an and same for creating artificial intelligence. Knowledge plays
exponential growth phase of AI, and RPA (Robotic Process

an important role in demonstrating intelligent behaviour in Cognitive Intelligence (CI). This is because the computing
AI agents. An agent is only able to accurately act on some system is essentially trying to imitate certain cognitive
input when he has some knowledge or experience about abilities of a human being. Deloitte in a paper5 on Cognitive
that input.4 The components of an AI based system has six Intelligence has referred CI as a “… software programmed
elements, viz., perception, learning, KR, KKR, planning and to augment human cognitive functions. These technologies
execution. The following graphic represents various types are becoming better through machine learning and human
of knowledge that digital scientists are trying to handle with feedback through interactions”.
the help of computer programming and algorithms:
Stages of AI
AI has three major stages in course of its capability
development of a computing system:
• ANI: Artificial Narrow Intelligence - Capability in a
specific context, e. g., weather forecasting,
• AGI: Artificial General Intelligence - Capability to
perform cognitive functions at equal level of a human
being across wide variety of domains; and
• ASI: Artificial Super Intelligence - Entering the stage
of science fiction when AI will surpass all hitherto
seen human intelligence.
It is a worldwide accepted position that combined

applications of AI, RPA and IoT are helping humanity live
a better life. Senior citizens in developed countries can now
live more independently yet safely at home. But the larger
question is:
Source4 • Will AI be able to a substitute the wisdom of human
beings by mimicking the way their brains work for
dealing with issues involving emotional intelligence?
Machine Learning
• Will that stage of ASI ever come when AI will
Machine Learning (ML) is a member of the AI’s extended
overtake human intelligence and wisdom?
family of technologies. It uses statistical techniques to allow
the machine to learn without being explicitly programmed. In
a supervised ML environment machine learns from a data set There are conflicting views about the present stage of
that contains inputs and known outputs. A functional model development of AI as a technology. It has crossed the
is built that makes it possible to predict what the output milestone of ANI, but most certainly millions of miles away
variables will be for new unknown outputs. ML in a non- from AGI. Facebook’s Director of Research Yann LeCum
supervised environment is not expected to give the correct said, “Despite these astonishing advances we are a long
answer. The system learns from the given dataset of only long way from machines that are as intelligent as humans
input variables. The algorithm is encouraged to discover the – or even rats. So far, we have seen only 5% of what AI can
new pattern of data that facilitates decision making. do.” Readers will immensely be benefitted by reading a
research paper titled ‘Debunking the Myths and Realities of
Artificial Intelligence’6
Robotic Process Automation
Robots and Humanoids are the next important members in
Adoption of AI for Digital Transformation
AI’s ranch. Robots are essentially programmable machines,
often built in a human shape as humanoids. These are usually One of the most amazing applications of AI was
able to carry out a series of autonomous or semi-autonomous published in The Independent. It reported that, “Working
actions. The following are the four important features of a with programmer Noah Rubin, Damien Riehl built software
Robot: capable of generating 300,000 melodies each second,
creating a catalogue of 68 billion 8-note melodies. The
• Can interact with the physical world via sensors and
melodies were then copyrighted and released into the public
actuators,
domain in the hope of stifling litigious musicians.7 Another
• Are programmable, startling information is about 63,000 artificially intelligent
• Can be powered with artificial intelligence, and robots handling ‘Measurable, Repeatable, Predictable and
• Are usually autonomous or semi-autonomous. Transaction’ jobs at Accenture’s operations. Their leadership
team does not want any human being to handle such MRPT
jobs.
Cognitive Intelligence
AI and CI and Robots are being extensively applied
In a wider sense AI is synonymously christened as
in almost all industry sectors. For health care the critical

areas of applications are diagnosis and treatment, surgery, called ‘Deep Voice. It can clone any voice in about
patient engagement and behavioural compliance, medical 3.7 seconds. Baidu has also created an automated
service administration and stoppage of fictitious billing. In device that can read books in author’s voice with no
the Journal of the Royal College of Physicians Davenport recording studio.
and Kalakota (June 2019)8 wrote that, “…. algorithms are • Àlibaba uses natural language for conducting
outperforming radiologists at spotting malignant tumours, predictive analyses of what customers would like
and guiding researchers in how to construct cohorts for to buy categorised as per region, city and individual
costly clinical trials. However, for a variety of reasons, we store, and accordingly arrange for inventory at the
believe that it will be many years before AI replaces humans shop. They also use this their City Brain Project
for broad medical process domains.” aimed at reducing traffic jam in smart cities.
AI is a powerful tool to perform predictive analytics. • JD.com of China uses AI to run their retail delivery
Meteorology professionals extensively use AI for infrastructure with the help of Drone and RPA.
collaborated analytical study of voluminous complex data
• BFSI sector across the world are using Chatbots and
from worldwide geographical regions. They develop insights
Robots for responding to customers’ queries during
about nature’s behaviour and predict to forewarn about
online service delivery and handling customers at the
weather conditions and natural calamities. It has time and
physical contract points. Robots and Humanoids are
again been proved that such predictive analyses have helped
also being used for providing knowledge and advisory
minimising furies of destruction, loss of life and assets.
services for investments and wealth management.
Corporate houses across industry sectors are using AI for
• Almost all large corporates are using AI based
multifarious applications. Predominantly the purpose is to
software, developed by security service providers as a
reverse map business strategies from market to the drawing
secret weapon embedded in their computing systems,
board for planning operations, designing execution tactics
for proactively detecting and handling cyber-attacks
and then go back to market for implementation, In other
and malware.
words this is called Physical-Digital-Physical Loop (PDP
Loop) for enhancing effectiveness of marketing, CRM and • Manufacturing units are using artificially intelligent
CXM. Robotic-workmen and RPA for in-plant and in-
warehouse operations, in collaboration with human
The following is a list of high-end applications of
workman, particularly for assembly line and supply
Cognitive Intelligence by digital giants:
chain functions. Artificially intelligent IoTs are also
• An engine called ‘The DeepText’ is used by Facebook being used for monitoring performance of machines
to appreciate and interpret millions of texts posted by and identifying need for breakdown and preventive
users and their emotional and sentimental thoughts maintenance.
embedded therein. They also use DeepFace engine
which can identify any specific user in a photo shared
The list can continue for hundreds of similar such
through Facebook platform.
applications. But readers might have got glimpses of how
• Amazon uses AI for predicting what customers may AI and other related applications are being extensively
need and recommending products for buying even used to develop various products and processes which help
before they think of it, and at times shipping to generating businesses and / or optimising costs.
selected customers. CI is also used for preparation of
It will be interesting at this stage to note some statistics
bills without customers checking out through a billing
on ‘Government Artificial Intelligence Readiness Index,
counter. This is done based on images of products
2019’ published by Oxford Insights and the International
they put into bag, as snapped by cameras fitted all
Development Research Centre.9 According to their findings
around, when they shop in Amazon stores. Customers
“Artificial intelligence (AI) technologies are forecast to
know how much to pay when the leave the store.
add US$15 trillion to the global economy by 2030…. as
• Apple uses AI for multiple applications such as Face might be expected, the governments of countries in the
Id, coordination between Apple phone, AirIpad and Global North are better placed to take advantage of these
watches, helping customers with the assistance of Siri gains than those in the Global South.” Singapore topped
and recommending songs for customers using Apple their AI Readiness Index with a score of 9.185. The USA
Music. was in the fourth position with 8.804. Surprisingly India
• Google uses AI for self-driving cars. Google Assistant with a score of 7.515 came at the 17th position before China
and Duplex use natural language processing for AI which was at the 20th position with 7.370.
and Voice inter-face to enable a machine executing
instructions. AI and Future of Humans – Risks and Challenges
• IBM started with ‘Deep Blue Computer’ that defeated Pew Research Centre and Imagining Internet Centre of
a world chess campion. Tehy is now working on Elon University, one of the top 100 Universities of the USA,
‘Project Debator’ which is an engine. It will compete jointly published a research report in December 201810 based
by formulating arguments and counter arguments like on 979 participants expressing their views about future
a professional debater. till 2030. One of the most critical set of questions for the
• Baidu uses their own AI based cognitive technology research was: Is it most likely that advancing AI and related

technology will enhance human capacities and empower • Transparency and ability to explain,
them? Will most people be better off than they are today? • Robustness, security, safety and accountability.
Or, is it most likely that those will lessen human autonomy
Other non-OECD countries such as Argentina, Brazil,
and agency to such an extent that most people will not be
Colombia, Costa Rica, Peru and Romania have adhered to
better off?
the above standards for adopting AI.12
Barring 25 participants, who did not respond, “…about
63% said most people will mostly be better off. 37% said
AI and RPA - Ethical and humane issues for solution
that people will not be better off. The report included views
designing and applications
of Analysts who expect that people will become even more
dependent on networked AI in complex digital systems and Artificial Intelligence can create mayhem if not judiciously
will continue to be in the historic arc of augmenting lives managed while both designing and applying solutions.
with mostly positive results from wide range implementation Computing systems, particularly in an ML environment,
of such tools.”10 Increasing dependence on AI and related must be updated with relevant and contemporary data before
systems is likely to result in widespread difficulties. taking any decision based on results thrown up by the AI
tool. Again, if AI falls in the hands of people with ulterior
Critical concerns and challenges that emerged from the
motives, results can be disastrous. This is no longer an
responses are:
apprehension but reality. Researchers have established that
• “Human Agency: Decision-making on key aspects cyber criminals have used AI ahead of time for designing
of digital life is automatically ceded to code-driven, tools to penetrate the target computing systems, spawning
“black box” tools. People lack input and do not learn malwares for hacking data and extracting ransoms.
the context about how the tools work
Many researchers have cautioned about the evil effects
They sacrifice independence, privacy and power over unregulated applications of AI. Taddeo and Floridi (August
choice; they have no control over these processes. 2018)13 concluded that introducing a set of regulations
This effect will deepen as automated systems become containing ethical principles for developing and applying AI
more prevalent and complex based solutions is of utmost importance. Such ethics-oriented
• Data Abuse: Most AI tools are and will be in the hands regulations will play a pivotal role in ensuring that the power
of companies striving for profits or governments of AI is harnessed for the benefit of humanity, keeping to the
striving for power.”10 minimum its applications by people with ulterior motives. It
would help understand how to responsibly use the power of
The challenge before digital scientists, corporate CXOs this technology.
and government officials is how to address these concerns It is, therefore, an imperative for all solution designers to
and mitigate risks. Objective of the aforesaid report published keep all perceivable ethical and humane dimensions in view
by Oxford Insight was to encourage governments to achieve while using AI and RPA for solution designing. At this stage
a state of readiness as far as possible to help citizens being it will be useful to briefly revisit the following dimensions
benefitted through automation, while protecting them from and impacts of AI from perspectives of all stakeholders
associated risks. In the same report they have cautioned before dealing with some of the emerging major issues
about the following two risks: to be considered for solution designing with AI and their
• Countries in Global South could be left behind by the applications:
so called fourth industrial revolution. 1. What is AI: It is a combination of datasets, models
• The danger which is looming large is widening of and predictions all of which can have bias or fairness
global inequalities due to unequal implementation of and hence demands stakeholders’ transparency,
AI based technologies in southern part of the world accountability, interpretability, and abilities to explain
that may result in unequitable distribution of benefits and remediate.
from automation. 2. What AI is made to do: Human-AI interaction and
collaboration, planning and decision making by
Recommended Standard of OECD Council government agencies and business professionals,
cyber-security and safety, privacy of information,
OECD Council in their ‘First Intergovernmental Standard
surveillance, controlled use, malicious use by
on Artificial Intelligence’11, published in May 2019,
cybercriminals, etc.
recommended the following guidelines based on consensus
of 36 OECD Countries: 3. What AI Can be: Human-like cognitive abilities can
threaten human beings because artificially intelligent
• Aim to foster innovation and trust in AI,
robots can claim singularity and right to function
• Promote responsible stewardship of trustworthy AI, independently. This will happen at that time and
and ensure level of its sophistication when the user is left to
• Respect for human rights and democratic values, the mercy of the computer programme and become
• Inclusive growth, sustainable development and dependent on the result processed out by the AI based
well-being, programme and / or the SOP for RPA. Robots may
also claim right to life, i.e., power supply to it should
• Human-centred values and fairness,
never be switched-off.

4. What AI impacts: Effectiveness of business decisions, Affirmative answers to the above questions with needful
automation vs. human resource engagement, civil clarities are essential for achieving success from applications
rights in democracy and collaboration between of artificially intelligence, RPA, chatbots, robots and
human and robotic resources. humanoids.
5. Ethics and morality of AI: Ethical and moral quality of
predictions, inferences drawn, and / or end outcomes Conclusion
derived from results thrown up by AI tools may not Mankind is presently at its fourth stage of evolution.
always be what are desirable. All those at times may First, we became human beings from apes, and then became
adversely influence ethical, moral and emotional civilised. In the third stage we learnt to conduct industry,
qualities of impacts on business results and finally trade and commerce in a structured and regimented manner.
human beings at large. The fourth evolution is towards digital transformation.
6. How AI can harm: Prediction and / or end outcomes Scholars dealing with predictive ascensions are of the view
from AI tools may negatively impact an individual’s that soon this will directly or indirectly touch every single
ability to establish her / his rightful identity and right human being under the sun and continue to change the way
to representation. This in turn can adversely impact of living. The objective of this paper will be well served if
her / his ability to get services or access resources it could generate alertness amongst stakeholders about the
allocated / to be allocated to him / her. issues to be tackled for meeting success while developing
Remaining alert about the above dimensions of AI, RPA and applying AI based solutions with the goal to serve
and the related issues will help digital scientists to address humanity.
the consequential questions with more positive mindset and
impactful results. Acknowledgement
The author acknowledges contributions of Ms. Rajashree
AI and RPA - Ethical and humane issues for solution Basu in writing this paper.
designing
Keeping in view the above the following questions have Webliography
been designed for all stakeholders directly and indirectly Only webliographical references have been quoted below
associated with AI and RPA. Answers to such questions may for economy of words and space.
help them to achieve success while using one of the most
1. https://www.forbes.com/sites/gilpress/2016/12/30/a-
powerful tool of the present digital era: very-short-history-of-artificial-intelligence-
1. Directionless - What happens if there is no directional ai/#5f64eb396fba
guidance and regulation? 2. https://courses.cs.washington.edu/courses/
2. Legal authority - What happens if users suffer losses csep590/06au/projects/history-ai.pdf
due to advices from robots or humanoids? 3. https://news.microsoft.com/en-in/artificial-intelligence-
3. Unemployment - Will AI be able to generate new jobs rate-of-innovation-microsoft-idc-study/
with more thinking content? 4. https://www.javatpoint.com/knowledge-representation-
in-ai
4. Collaboration - What happens if RPA and robots fail
to collaborate with human beings? 5. https://www2.deloitte.com/content/dam/Deloitte/lu/
Documents/technology/lu-cognitive-intelligence-when-
5. Transition - How to ensure transition with painless intelligent-machines-learn-to-venture-into-the-business-
change management? world.PDF
6. Inequality - How to distribute the wealth created by 6. https://www.forbes.com/sites/cognitiveworld/2019/04/22/
AI, RPA, robots and humanoids? debunking-the-myths-and-reality-of-artificial-
7. Humanity - How to ensure that human beings do not intelligence/#2ea0fb8043b5
become slaves of networked AI? 7. https://www.extremetech.com/extreme/306575-new-tool-
8. Biasness - How to limit the bias from artificially generates-every-possible-melody-for-public-domain-use
intelligent robots, humanoids and chatbots? 8. https://www.ncbi.nlm.nih.gov/pmc/articles/
PMC6616181/
9. Security - How to deal with challenges and mitigate
risks from cybercriminals who use AI tools? 9. https://ai4d.ai/index2019/
10. Evil genies - How to safeguard stakeholders’ interests 10. http://www.elon.edu/e-web/imagining/surveys/2018_
survey/AI_and_the_Future_of_Humans_credit.xhtml
against unintentional outcomes?
11. https://www.humane-ai.eu/humaneai-oecd/
11. Singularity - How human resources can stay in
control of complex and intelligent AI based systems? 12. https://legalinstruments.oecd.org/en/instruments/OECD-
LEGAL-0449
12. Robot rights - How to define and ensure ethical
13. https://science.sciencemag.org/content/361/6404/751.
treatment for and by robots and humanoids? full
13. Artificial stupidity - How to safeguard against
blunders of artificially intelligent computing systems?
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ECONOMIC SURVEY
ECONOMIC SURVEY 2019-20

- AT A GLANCE
CMA Pankaj Kapoor

Assistant Professor
Doon Business School
Dehradun
Abstract
The Department of Economic Affairs, Ministry of Finance, Government of India is responsible

to table the Economic Survey in the parliament every year, before presetting of Union Budget.
Economic survey is prepared under the guidance of the Chief Economic Adviser to Ministry
of Finance. Economic Survey for year 2019-20 rolled out on 31st January 2020 into two
volumes with aspiration of #economy@5trillion supported by theme of wealth creation.
Volume one contains 11 significant economic emerging aspects which can be seen as gear of
economic growth and sustainability, where-as volume two comprises performance of major
sectors supported by statistical data. This article is to summarise key highlights of volume I
of Economic Survey – 2019-20.
I
ndia being 5th largest economy in the world in supported by statistical data.
nominal GDP terms and aspiration of being 3rd largest Mr. Krishnamurthy V. Subramaniam, Chief Economic
by 2025 can rest on theme of economic freedom Advisor and Team@EcoSurvey is of opinion, that pro-
and wealth creation to be US$ 5 trillion economy. business system will generate greater wealth than pro-crony
Economic survey is an attempt to capture the recent system. Assemble in India can be integrated into Make in
economic developments and craft the policy framework to India to focus on labour intensive export, this will generate
foster wealth creation in India. employment.
Ms. Nirmala Sitharaman, Union Minister for Finance and Survey believe tradition of wealth creation is old practiced
Corporate Affairs, Government of India, tabled the Economic in India be it intellectual wealth or monetary. But in reference
Survey 2019-20 on January 31, 2020 in parliament. Survey to global financial crisis, ‘trust is essential’ if India wish
is in two volume. Volume I contains 11 areas of recent to support its financial system for creating wealth further
economic development, supported by evidence based on; hence trust can be seen as public good. Even cover
analysis; in form of individual chapter. Whereas volume II page of survey shows, synthesis between old tradition and
is in form of ready reckoner of existing status and policies contemporary development (using fin-tech for public sector
of major industries, and also contain recent development; banks etc.) of wealth creation through lavender of old and

ECONOMIC SURVEY
new note of INRs 100. from 1 AD TO 1500 AD)
At last, volume I of survey, links the economics to From such graph, survey concluded that for more than
common person by continuing on the principle of behaviour three-fourths of known economic history, India has been the
economics, using concept of ‘Thalinomics’ (Thali i.e. a plate dominant economic power globally; and such dominance
of food + Economics). Let’s understand each of 11 areas manifest by design; not happenstance. Survey further
highlighted by volume I of survey. explain, India resume its rich tradition of wealth creation
post liberalisation again by witnessing the exponential rise
»» Wealth Creation – The invisible hand supported in GDP, per capital GDP and wealth generation in stock-
by the hand of trust markets. Further it show wealth creation leads (positive
correlation) to high salaries to employees (R2=0.49),
Economy survey took a reference of Maddison A (2007)
purchase of raw material (R2=0.14) and capital expenditure
from oxford university press to reach out to figure 1 which
(R2=0.22), Foreign exchange reserve (R2=0.23) and direct tax
shows Global contribution to world’s GDP by major
inflow (R2=0.59). It is worth to mention that, Hon’ble Prime
economies from 1 AD to 2003 AD. (It is worth to mention
Minster of India during his speech on 73rd Independence
that x-axis of graph shown as figure is non –linear scale,
Day, highlighted only when wealth is created will wealth be
hence underestimate the dominance of India, especially
distributed.
Figure 1 - Global contribution to world’s GDP by major economies from 1 AD to 2003 AD
Survey further make a reference to Adam Smith’s philosophy of invisible hands and quote during said period of economic
dominance, Indian economy relied upon invisible hands (openness in economic transactions) of market supported by hand of
trust (foster intrinsic motivation through ethical and philosophical dimensions). Survey shows that, liberalized sectors grew
significantly faster than other (survey shown a comparison of Steel and Cement (open sector and grown at CGAR of 7%
between FY05 to FY19) against Coal (closed sector grown at 5% during same period) and also highlight the need of hand of
trust (stating trust as public good) to support the invisible hand in order to be 5 trillion US $ economy. Further survey suggests
that policies must empower transparency and effective enforcement using data and technology to enhance this public good.
Figure 2 – Needs of strengthening the invisible hand

ECONOMIC SURVEY
»» Entrepreneurship and Wealth Creation at the sector) at grassroots level for over 500 districts in India.
Grassroots Using the World Bank’s Data survey confirms that India
Survey in this chapter use MCA-21 database to examine ranks third in number of new firms created. Cumulative
the entrepreneurial incubation (new firms creation in formal annual growth rate of new firms has been 12.2% during
2014-18 against 3.8 per cent during 2006-2014.
Figure 3 - Features of grassroots entrepreneurial incubation in India

»» Pro-Business versus Pro-Crony intervention concluded that some of government intervention
Survey in this chapter highlight the need of distinction are needless to market. Instead of creating value, by
between ‘Pro-Business’ and ‘Pro-Crony’ policy for promoting competitiveness in market to boost economy;
achieving the aspiration of becoming a $5 trillion economy. needless intervention of government by undermining the
“Pro-business” policy unleashes the power of competitive market leads to values destruction. Hence all the departments
markets to generate wealth where as “Pro-crony” policy may of ministries, need to identify the areas where government
favour specific private interests. Survey also confirmed that intervention is needless and undermine the market.
pro-crony policies has destroyed value in the economy.
Survey confirmed that ‘Pro-crony’ policies (as reflected in »» Creating Jobs and Growth by Specializing to
discretionary allocation of natural resources) leads to rent- Exports in Network Products
seeking by beneficiaries and Pro-Business (Competitive India being young country (youth considered as
allocation) policies can put an end to such rent extraction. demographic dividend – large number of young population)
Survey also highlight that crony lending led to wilful default. can avail an unprecedented opportunity of Network
Production (production over the global value chain by
»» Undermining Markets – When government Multinational Corporation) by incorporating ‘Assemble in
intervention hurts more than it helps India’ into ‘Make in India’.
Survey, based upon critical evaluation of four government
Figure 4 - Expected benefit to India being assembler and exporter of Network Products.

ECONOMIC SURVEY
Survey suggests, China used this specialised strategy to Survey concluded that ‘presently Indian banking sector
export primarily to markets in rich countries. Similarly, is not capable to meet the need of Indian Economy (being
India must place laser-like focus on enabling assembling 5th Largest)’. Survey highlights the need of global hank
operations at mammoth scale in network products. by stating India has only one bank (SBI at 55th) among the
Survey also highlight the gain in form of trade surplus global top 100. Even the country smaller than India has same
(Increase in export over increase in import) from trade (Finland, Denmark, Norway, Austria, Belgium) or more
agreements (1993-2018) for India. See the table below (Sweden, Singapore) number of global banks.
Increase in Increase in
Dimensions Net Gain
Export Import
Manufactured
13.4 12.7 0.7
Products
Total
10.9 8.6 2.3
Merchandise
Table 1 - Trade Surplus from trade agreements (from
1993 to 2018).
»» Targeting ease of doing business in India

Survey considered ease of doing business as key to
entrepreneurship, innovation and wealth creation, Although
India leap to 63rd position in 2019 (from 70th in 2018, by
progressing on 7 out of 10 criteria), but still lagging in
certain criteria such as Ease of Starting Business (136th – 49
and 68 days respectively in Delhi and Mumbai), Registering Figure 5 - Number of banks in global top 100 Banks
Property (154th), Paying Taxes (115th – More than 250 (2019)
hours), and Enforcing Contracts (163rd - 1,445 days). Survey
try to highlight the scope for improvement using case studies »» Financial Fragility in the NBFC Sector
in these criteria. Survey explore the gamut of laws, rules
Survey took the example of payment default by
and other documentary requirements for manufacturing and
Dewan Housing Finance Limited and Subsidiaries
service business (especially restaurants)
of Infrastructure leasing and Financing Services, to
Survey mentioned that export are not depended, only highlight the risk (roll-over risk) faced by Non-Banking
on cost of production but also on logistic process and Finance Companies (Shadow Banking System) majorly due
documentation. Survey also concluded that procedural to over-dependence on short-term wholesale funding. Survey
efficiency in imports are higher than exports, using various confirmed such default causes the unrest among the investors
case studies. One among these case study is based upon (of Liquid Debt Mutual Fund) and they started redeeming
Bengaluru airport for import and export of electronics, their investments; which further causes cash crunch to
which was found world class. Survey recommends sea-port NBFC. Survey suggests health score (dynamic health index
in India should adapt the processes followed by air-ports. developed for diagnostic to access financial fragility) based
upon sample application on Housing Finance Corporations
»» Golden Jubilee of bank nationalisation – taking and Retail-NBFCs, can be used as an early warning signal
stock by policy maker.
Survey consider the golden jubilee of nationalisation as
accomplishment of the 389,956 officers, 295,380 clerks, and »» Privatisation and Wealth Creation
121,647 sub-staff of Public Sector Banks (PSBs). Larger Survey evaluate the strategic divestment decisions of
economy need efficient banking system to support its growth, government regarding CPSEs, especially BPCL (Where
since in India 70% of banking business is with PSBs; hence government divest its 53.29%). Survey compare BPCL with
efficiency of PSBs become critical factor. Survey concluded HPCL and find strategic divestment of BPCL lead to increase
PSBs are performing poorly in comparison to Non Public of around INRs 33000 crores in equity shareholder values
Banks (NPBs). in comparison to BPCL, hence concluded that privatisation
Survey suggest efficiency of PSBs can be enhanced of CPSEs (on account of strategic divestment) will create
using fin-tech (Survey suggest government, being promoter wealth. Survey also advocate for aggressive divestment
of PSBs constitute an entity like GSTN (to support with in the selected CPSEs for which the Cabinet has given in-
Artificial intelligence, Machine learning and Big data principle approval.
techniques by collecting data from all the PSBs especially
for credit control). PSBs should incentivise employee with »» Is India’s GDP growth overstated? No!
Employee Stock Options and give them representation on
Survey confirmed that, decision making either by investor
board.
or policymaker impacted by GDP growth rate, hence GDP

ECONOMIC SURVEY
growth is critical aspect for economy. Survey tries to put an end price discovery. Based upon consumer price index data from
to recent debate about over-estimation of the GDP growth by 80 centres from 25 States and UTs survey concluded there has
2.7% for India due revised methodology of computing GDP been decline in the price (Using dietary guidelines by National
(revised in 2011) by stating that the models that over-estimate Institute of Nutrition, Hyderabad 2011) of Thali post 2015-16,
GDP growth for India, also mis-estimate GDP growth for 51 but prices has increased during 2019-20. Survey concluded that
other countries out of 95 countries in the sample over the same due to moderation in prices after 2015-16, an average household
time period. Survey also observed that since countries differs consuming vegetarian Thali and Non-Veg Thali (two Thalis) has
in various ways hence cross country comparison should be gained INRs 10887 and INRs 11787 on average per year.
performed with due care to each of the factors concerned.
Reference/Source
»» Thalinomics – The Economics of a plate of food 1. Compiled from volume I of Economic Survey 2019-20
in India
In last chapter survey attempt to quantify the price of
Thali (a plate of food) paid by common person. Survey states
that measure were introduced to enhance the agriculture [email protected]
productivity and efficiency of agriculture market for transparent

BANKING
BANK LIQUIDITY:
SOME CONCEPTUAL UNDERPINNINGS
L
Introduction
iquidity is ability to meet obligations in time.
An entity failing to meet its obligations might
manage to fulfil commitment if a little more
time would be available for the purpose. This
may be interpreted by the market as “incipient distress”. As
a consequence, market might become reluctant to supply
liquidity to the entity besides recalling all dues prematurely.
Liquidity is life line of business in the absence of which it
cannot survive. Ability to pay depends on income generation Biplab Chakraborty
by assets while ability to pay in time depends on the extent Risk Consultant and Trainer
of synchronisation of income inflow with maturity pattern of Former General Manager
obligations as also ability to obtain cash to fill up the gap if Reserve Bank of India, Kolkata
and when arises.
Intermediation is the key activity of banks. Banks
Intermediate between savers having surplus money and
borrowers who are in deficit and in need of money. Bank
Abstract
in the process does three types of intermediation viz.,
Maturity, size and risk intermediation. Banks take money The paper discusses the notion of liquidity
from people who insist on getting it back at time as agreed
upon a priori. Banks lend the money so collected to those
and liquidity risk within banks in particular
who, as per bank’s assessment, are able and willing to pay and the financial system in general. A
it back adhering to the agreed upon time schedule. While distinction has been made between three
accepting deposits bank commits to return the money on different liquidity types, central bank
demand or otherwise as per pre agreed terms and conditions
not withstanding whether the money lent to other folks are
liquidity, funding and market liquidity
returned back to bank as per promise or not, assuming the and their relevant risks to understand the
credit risk inherent in lending instead of passing it on to conceptual underpinnings thereof.
depositors.
It is known that all depositors would not need to withdraw
all deposit money at the same time till their perception about safely invest/lend the remaining residual funds at disposal.
solvency of bank concerned remains unimpaired. On the “The fluctuations of deposits, like the waves of the sea, take
contrary, most depositors would normally resort to need based place on the surface of a relatively permanent body.” Banks
withdrawal of their deposits with the banks perceived to be need to understand how, why, when, and how much the size
solvent most of the time. The banking business rests on the of those waves change. Based upon study of behavioural
premise that if public perception of solvency would remain pattern of depositors’ withdrawals, Banks prudentially
unimpaired, banks would be assured of lendable/investable hold a target amount of cash and other liquid assets which
pool of deposits on a counting basis even after meeting the would be quickly convertible to cash to meet any possible
withdrawal demands of depositors. With depositors’ trust withdrawal demand to maintain untainted public perception
intact, keeping a fraction of the deposit funds by way of of solvency. Banks have traditionally been holding their
reserve to meet depositors’ withdrawal demands banks can liquidity reserves or liquidity buffer in the form of shorter

BANKING
term, higher quality securities. Buffers are necessary but not Theories of liquidity management
sufficient. Theories of liquidity management has evolved over time.
Banks take smaller size of deposits of different maturities According to Commercial loan theory of liquidity bank’s
and grant bigger loans of varying maturities. The major liquidity can be ensured so far as bank assets are self-
chunk of assets of a bank comprises credit granted to liquidating in nature. This implies that bank business to
liquidity deficit economic agents with the commitment to be restricted to working capital finance only avoiding term
pay interest thereon and repay the principal as per agreed lending. The theory is basically pro cyclical in nature. During
terms and conditions .The funds obtained by banks from the recessionary phase the working capital cycle tends to
outsiders are payable with absolute certainty after expiry of get prolonged triggering default on the part of borrowers
contracted period or at any time before as per the options if to pay to lender in time and consequential loan recall and
any embedded to the relative contract unless the fund givers foreclosure of borrowers’ assets by lenders aggravate the
agree to roll over the contract. However, assets funded by cycle . But non availability of buyers of those assets triggers
outsiders’ funds would mostly not have identical maturity liquidity crisis. Till the great depression of 1930s banks did
pattern and sizes. Thus, temporal mismatch between not favour term lending. In the process banks failed to take
inflow and out flow of funds are inevitable and inherent in care of the entire credit needs of growing economies. In the
basic structure of banking business model. Therefore the existing vacuum term lending institutions came into being.
probability of outflow outstripping the inflow of funds is Inadequacies of this theory led to emergence of Shiftable
positive and liquidity risk is intrinsically embedded in banks’ theory of liquidity. According to this theory as long as
basic business model and unavoidable. Size and maturity banks holding assets transferable or saleable for cash
transformation process, one of the most critical functions of would continue to be liquid. Under this theory banks should
the banks, are inherently vulnerable to liquidity risk. insist on borrowers providing liquid collateral securities in
Although the concept of Financial liquidity is not easy addition to principal assets. When the loan turn sticky bank
to delineate precisely, its importance in smooth functioning can sell the collaterals to get cash. In addition, the theory
of the financial system can hardly overemphasised. The emphasises holding of liquid government securities which
mayhem in financial markets during GFC 2007-08 revealed could be sold for cash in the market or to the central bank.
heightened funding liquidity risk, and also how this type The shiftable theory emphasised security-oriented approach
of risk can adversely impact market liquidity necessitating to lending. Promising and potential ventures in the absence
remedial intervention by central banks. The liquidity in of good collateral were thus denied credit by banks
money markets dried up significantly, following large notwithstanding the potential to generate adequate cash
scale credit avoidance in the interbank markets. Banks flow to service the loans. In the vacuum came up venture
refused to lend to each other because of funding liquidity capitalists to finance entrepreneurial ventures in emerging
problems emanated out of then prevailing apprehension and economies. In this backdrop anticipated income theory made
uncertainty over the toxicity of their exposures to structured its appearance in the scene. This theory advocated that the
products. The amount of exposure was of significant bankers need focus their attention to adequacy of potential
reckoning as market liquidity of these structured assets had future cash flow of the borrower towards loan repayment
declined significantly and thereby reinforcing difficulties in to ensure effective liquidity management. The theory thus
valuing such products. Consequently, central banks had to helped emergence of purpose-oriented approach to lending
intervene and inject liquidity into the markets. without however relegating the security aspect of loan and
denying the basic premise of commercial loan and shiftable
theories.
Liquidity
Liquidity is the capacity to secure cash as and when
Liquidity Risk
needed. Liquidity is ability to fund increasing assets and
meet obligations as they become due without increasing Liquidity Risk is the risk where a financial institution
acceptable losses. The notion of liquidity in the economic would not be perceived to have sufficient cash at one or more
literature relates to the ability of an economic agent to time in the future. It is the probability that over a period of
exchange his or her existing wealth for goods and services or specific time horizon the entity will become unable to settle
for other assets. In this definition, liquidity can be understood obligations with immediacy. The liquidity risk owes its
in terms of flows (as opposed to stocks), in other words, it is origin to incomplete markets and asymmetry of information,
a flow concept. which can lead to moral hazard and adverse selection. To the
extent that such conditions persist, liquidity risk is endemic
Liquidity is prospective concept hard to measure with
in the financial system and can cause a vicious link between
historical accounting information.
funding and market liquidity, prompting systemic liquidity
There are three concepts of liquidity viz., Monetary risk. Liquidity risk cannot altogether be avoided by banks
Liquidity, Funding Liquidity and Market Liquidity (Asset and at the same time it cannot also be fully hedged.
Liquidity). Monetary Liquidity captures looseness of
Liquidity risk is of different species. Liquidity risk is
monetary condition; it is linked to the stance of monetary
secondary in nature. Its escalation always follows one or
policy authorities. Funding liquidity is the ease with which
more escalation in other financial risks. It is therefore often
the banks can raise funding. Market liquidity refers to the
identified as consequential. Institution specific liquidity
ease with which one asset can be traded for another.

BANKING
problems often arises from erosion of capital base due to quantity of liquidity supplied to the economy by the central
impairment of assets quality. Liquidity and credit risk are bank, i.e. the flow of monetary base from the central bank
close associates! While liquidity crisis can cause a credit to the financial system. In practice, the central bank strategy
event, impairment of credit quality may trigger a Liquidty determines the monetary policy stance, which decides on the
crisis. level of the operational target (usually the key policy rate).
We maintain capital to take care of unexpected losses. The In order to implement this target, the central bank uses its
required amount of capital can be determined under Value monetary policy instruments (conducts repo, open market
at Risk framework for market, credit and operational risks. operations, forex swap, varying reserve ratios etc.) to impact
This framework does not work for liquidity risk. In case of the liquidity in the money markets so that the interbank rate
liquidity risk there would be no small events occurring from imoves closely aligned to the operational target rate set by
time to time but events are rare and distabilising. Capital is an the prevailing monetary policy stance. More technically,
indirect buffer once the market has started to perceive a bank central bank liquidity, a synonym for the supply of reserve
as being illiquid. Northern Rock for example was regarded money, which results from managing the central bank assets
as well capitalised by the markets and by its regulator when held in its balance sheet, in accordance to the monetary
it experienced a bank run in September 2007. policy stance. Central bank’s market operations intend to
align the inter-bank short-term lending rates closely to the
Liquidty is mopped up by illiquid assets and volatile
target policy rate.
liabilities while it is provided by stable funds and liquid
assets. As a basic rule liquid asset as well as haircuts on
liquid assets should be supported by stable funding sources. Funding Liquidity
A ten-year floating rate loan with quarterly resetting period Funding Liquidity is the ability of the entity to raise cash
carries interest rate risk for quarter while liquidity risk would by borrowing either on secured or unsecured basis. The
persist for full tenure of the loan. Basel Committee of Banking supervision defines funding
liquidity as the ability of banks to meet their liabilities,
In liquidity risk we are required to meet Net Cash Outflow
unwind or settle their positions as they come due (BIS,
(NCO) within a given time frame. Capital would be of little
2008). Similarly, the IMF provides a definition of funding
help in generating cash flow for the purpose. Cash flow can
liquidity as the ability of solvent institutions to make agreed
be generated selling liquid assets or using them as collateral
upon payments in a timely fashion. However, references
(repo) in market or with central bank. In the context of
to funding liquidity have also been made from the point of
liquidity capital is replaced by NCO and unencumbered
view of traders or investors, where funding liquidity relates
assets to offset NCO. Thus, Liquidity Risk is well taken
to their ability to raise funding (capital or cash) in short
care of if cash flow from unencumbered assets with in a
notice. An entity is liquid as long as inflows are bigger or
given time should be more than NCO. The potential cash
at least equal to outflows. Liquidity sources for banks are
flows from sell of unencumbered assets depends on balance
mainly the depositors, who entrust their money to the bank.
sheet position of the concerned entity and its standing in
A second source is the market. A bank can always go to the
the market and general capability of the market to absorb
asset market and sell its assets or generate liquidity through
additional assets when sold by the entity. It therefore follows
securitisation, loan syndication and the secondary market for
that liquidity risk need be analysed under bank specific
loans, in its role as originator and distributor. Moreover, the
and market specific scenarios. Banks’ ability to withstand
bank can get liquidity from the interbank market, perhaps
liquidity risk depends upon the capital level and its losses
the most important source of liquidity. Finally, a bank can
absorbing ability. But assets of well capitalised banks may
also choose to get funding liquidity directly from the central
not be sufficiently liquid to tide over liquidity crisis while a
bank.
bank with sufficient liquid assets but holding low economic /
regulatory capital would tide over the liquidity crisis at ease.
Although capital sufficiency would be a needed precondition Funding Liquidity Risk
for securing superior rating and consequential reduction in Funding Liquidity Risk is defined as the risk that the
funding cost, available capital would not be appropriate firm will not be able to meet efficiently both expected or
buffer in liquidity crisis situation. unexpected current and future cash flow and collateral needs
Liquidity risk might arise in both sides of the balance without adversely affecting their daily operations or financial
sheet. Sufficient liquidity may not be generated by the assets conditions. Like solvency it is a point-in -time and binary
held while liquidity from various funding sources might be concept. Either the bank will be able to settle the obligation
insufficient to meet the obligations as when arising. In most or not at any given point in time. Funding liquidity risk can
of the cases the trigger event would be found in market: assume infinitely many values depending on the underlying
credit impairment/ default, market or operational losses, funding position of the bank concerned. It is forward looking
damages to reputation. and measured over a specific time horizon. Funding liquidity
risk management aims at well diversified, reliable, and cost-
efficient liability structure supporting bank’s business-mix
Central bank liquidity
and business strategy.
Central bank liquidity is the ability/willingness of the
central bank to supply liquidity needed to the financial system
for its stability and smooth functioning. It is measured as the

BANKING
Market Liquidity prices of similar assets. Without a reliable source of short-
Market Liquidity reflects its multifaceted nature. It is term funding, market functioning become impaired which
defined as the cost-both in terms of expenses and time-of can further disrupt both funding and market liquidity.
buying or selling an asset for cash. A number of recent studies
define market liquidity as the ability to trade an asset at short Market liquidity risk
notice, at low cost and with little impact on its price. Market Market liquidity risk is the probability of inability to
liquidity reflects a number of factors including any direct trade at a fair price without involving any abnormal waiting
transaction expenses e.g. brokerage cost, the price at which time. It is the systematic, non-diversifiable component of
sell is executed relative to the midpoint of bid-ask spread, liquidity risk. One implication thereof is the commonalities
how much the transaction, if at all, moves the market price in liquidity risk across stocks and across bonds and equity
and speediness with which transaction can be completed. A markets. The second implication of systemic risk is that it
more acceptable definition is as follows: A liquid market is a need be priced. Market liquidity risk is observably factored
market where participants can rapidly execute large volume in asset prices as a cost or premium, affecting the price of
of transaction with small impact on prices. Market liquidity an asset in a positive way and consequently impact market
need be examined in three dimensions e.g. tightness, depth decisions (i.e. optimal portfolio allocation). The larger the
and resilience. Tightness is how far transaction prices diverge premium larger would be the market liquidity risk.
from mid-market prices and can generally be measured by
bid-ask spread. Depth denotes the volume of trade possible
Conclusion
without affecting the prevailing prices. Resilience refers to
speed with which price fluctuations resulting from trades Banks are highly leveraged entities. They face risk of
area dissipated or speed with which order flow is adjusted. depositors and whole sale fund providers may withdraw
and not roll over the contracts. For effective management of
Dynamics of market liquidity is still not fully understood.
funding liquidity banks need appropriately price the funds
Three phenomena viz., concentration of liquidity in specific
matching to the maturity of products and business activities
markets or instruments, evaporation of liquidity from
at origination. For fixing the volume of optimal liquidity
markets, and flight of liquidity from one segment to another
cushion outcomes of stress tests and scenario analysis which
are of particular interest. There exists positive correlation
should include idiosyncratic and market wide disruptions,
between individual stock liquidity and overall market
need be factored in. Assets held for liquidity cushion should
liquidity. Some studies have found that liquidity is correlated
be of highest quality to minimise uncertainty as to cash
across markets, (i.e., across stocks and across stocks and
generation whenever necessary. Business activities creating
bonds and also points to the existence of a global (market)
needs for banks to carry additional liquidity should be charged
liquidity factor. The liquidity in the interbank market, and
based on likelihood of needs to fall back upon contingency
the liquidity in the asset market, are the main sources for a
funding arrangements. In summary banks should endeavour
bank to acquire funding liquidity from the markets .
to accrue less illiquid assets, use more stable funding to
Although market and funding liquidity are often treated fund business activities and carry a more adequately sized
as distinct, they can be closely related. This is specially the liquidity cushion to withstand expected and unexpected
case during crisis. If funding liquidity declines due to market idiosyncratic and /or market wide disruptions besides
stress, for example, this may cause intermediaries to become putting in place a robust contingency funding arrangement
less willing to provide market liquidity. Decline in market dependable at the time of idiosyncratic and market related
liquidity in turn may further impair funding liquidity creating contingencies/stress.
a negative feedback dynamics. Both capital and liquidity
requirements play role in preventing such self-reinforcing
References:
negative dynamics. When funding liquidity is tight the
market liquidity tends to be lower. Traders provide market 1. Liquidity Risk Measurement and Management:
liquidity. Their ability to do so depends on their availability Edited by Leonard Martz &Peter Neru
of funding. Funding liquidity and market liquidity are 2. Banking Strategy, Credit appraisal and Lending
mutually reinforcing and leading to liquidity spiral. Decisions: Hrishikesh Bhattacharya
During financial crisis collapse of several financial firms 3. Principles for Sound Liquidity Risk Management
occurred out of inability to finance their long-term illiquid and Supervision: BCBS
assets. The deterioration in funding liquidity also escalated 4. Liquidity Risk management Strategies and Tactics:
the degree of systemic stress as firms were forced to sell Leonard Martz &Peter Neru
assets which depressed their prices, impairing their solvency
5. Liquidity Risk Measurement and Management :
position throughout the financial system. Funding liquidity
Basel III And Beyond: Leonard Matz
has link back to market liquidity. For example, if entities
dealing in securities (trading and investing) are short of
funding liquidity, this would tend to lessen transaction
volume which would result in thinner market and less [email protected]
overall market liquidity. It is likely to lead to lesser price
efficiency triggering wider and more persistent disparities in

COST ACCOUNTING RECORDS
DERIVING THE HIDDEN BENEFITS

OF COST ACCOUNTING RECORDS
(PRODUCT COSTING)
AS PRESCRIBED UNDER COMPANIES
(COST RECORDS AND AUDIT) RULES
2014, MOVING FROM INSIGHT TO
ACTION
Abstract
“The creation, operation, alternation,

and cessation of every action and function
in an organization – whether within the
private, public or voluntary sector – all
consume economic resources. Measuring,
accumulating, and assigning those CMA Krishan Singh Berk
resources to the organization’s various Cost & Management Consultant
Faridabad
processes and outputs allows the structure
and operation of the organization to be
explained, understood, and improved. contribute to an understanding, through respective product
margins, of how profits and values are created, and how
Costing, the accounting term that efficiently and effectively operational processes transform
embraces these processes and expresses input into output. Given its importance, it is not surprising
them using money as a common language, that the outcomes of cost accounting records should not
lies at the heart of managerial accountancy be merely used to satisfy the regulatory requirement but
may also be applied more to support effective managerial
and, exercised intelligently, is among the decision making.
most powerful disciples available to the The CCRAR, as a part of managerial costing, focuses
professional accountants in business.” on connecting operational resources and processes with
their monetary value to generate the information required
Evaluating and Improving Costing in
for effective decision support and value creation through
Organizations - IFAC: International Good its mechanism of product costs and other performance
Practice Guidance. measurement tools. It provides ‘actionable’ cost information.
T
There is a need to raise awareness for better use of
he Cost Accounting Records as prescribed by the costing information and make it a tool for better decision
Companies (Cost Records & Audit) Rules 2014 & support system to meet the organization’s goals and
Amendment Rule’ 2017 (CCRAR) in its costing objectives. The information derived by maintenance of cost
framework described and embedded under CRA accounting records could be used for better product costing,
1, and the Product Cost statements prepared by companies, customer profitability, segment reporting and performance

management & control in addition to its being able to assist product margins, key drivers of margin by reviewing price,
the management in the formulation and implementation of volume mix, administrative and discretionary spending and
a corporate strategy for profit maximization and decision building a performance measurement culture. CCRAR data
making. will enable insights by connecting it to operational levers.
The managerial costing framework embedded in the There are certain vital questions which impair cost
CCRAR is not merely wait-and-criticize, but it embraces, visibility & cost transparency, that companies could answer
defends and promotes the cause the best it can. If there is with the help of CCRAR:
no truth, there is also no lie – no error. The CCRAR doesn’t • What’s driving profit and which are the products that
advocate for methodologies or models but details attributes contribute to it, and which need attention?
that the maintenance of cost records should have in order
• Are we considering total product cost and
to give managers a handle to make effective decisions and
contribution, in making decisions for pricing? Do
replace relativist-oriented discussions with critical thinking.
we have better grasp on the operational data and are
The managerial costing system framework as mentioned product costs in line with Budgets?
in CRA 1 of CCRAR reflects what we call causality, to
• What are the levers to reduce overheads and shared
trace cost based on activities where costs are being incurred
service cost of support departments?
considering capacity, consumption of resources, and
managerial objectives. • Is profitability analysis made available by customers,
channel or region?
By reengineering the present internal costing system
and rectifying the weaknesses in the present practices, the • How many variations of a product do we make, and
needs of managers could be better served to understand the what’s the cost and profit of each product variation by
interaction of operational resources as consumed by different Product Group or Customer Group?
products to ultimately create better pricing, introduce cost • What costs are we putting into the product and not
reduction and create long-term sustainable value for the able to recover on price? How could product costing
company. data help in cut costs?
Managers will be most effective when their decision • How can we make and evaluate different scenarios of
support information provides them with insight directly product cost and product pricing?
into the quantities of resources and goods. There are four All these questions can be answered by reviewing the
‘lines of sight’ for financial professionals: oversight, insight, Product Cost Statement Analysis in a structured and granular
hindsight, and foresight. way derived from the present system of maintaining cost
Insight is turning information into intelligence (analytics) accounting records.
– what we propose to seek from CCRAR. Foresight is
where the finance professional including managerial costing Structure of the CCRAR (Companies Cost Record
personnel plays a leading role in anticipating the future to Rules) Framework
help the company envision a great future with strategic and
» To ensure clarity of intent
competitive moves.
The intent of the information use view is to provide
Decisions are never made in a vacuum but are products of
a basis for decision makers to apply the result
the entire organization with observable reality or truth.
of the CCRAR model to gain insights and make
With CCRAR cost modeling framework Companies would inferences in order to make decisions and act in an
uncover further areas where significant cost improvement analogous manner. Per unit of cost of production,
can be obtained. The core of organizational success is in cost of operations, cost of sales and margins for
understanding customer needs and designing and executing each of its products is provided by the Cost Records
productive operations that meet these needs. Managerial Maintenances framework.
costing applies causality and analogy as a bridge to model
»» To enhance understandability of:
and apply monetary measurement to operation, it might not
address the essential issue of understanding customer needs, • Objectives of product costing mechanism
but it does assume a thorough understanding of the operations • Characteristics of managerial Costing
modeled and measured. Cost modeling framework may • Scope of the information for decision making
generally be defined as the analysis of resource data including and control
direct labor, direct material, indirect cost, sales, general and
administrative (SG&A) costs, research and development • Assist pursuing more on Economies of scale
(R&D) cost, and profit to understand the projected or true compare to economies of scope
cost of products and services produced or purchased by the
organization. Scope of CCRAR Framework
Today, when to sustain or grow margins have slowed or The entire framework of CCRAR is based on:
declined companies are finding avenues for cost reduction • Linking organization’s resources to products,
and price increases in a more integrated way of driving activities and services expressed in monetary terms
overall profitability by creating improved insights on each with its economic impact

• The deployment and acquisition of resources such as What are the big issues in the present maintenance of
people, machinery, buildings, capital, etc., comprises Cost Records and its usefulness to the management?
the source of all the costs of a company and through Broad-based studies of various organizations, the
these records it presents a model of unique insightful common big issues present in the system are highlighted for
information by providing an accurate reflection of rectification and corrective action.
these resources, their usage and related costs. This
Symptoms:
insight provides a tool of judgment in the use of cost
& its optimization.
• Variation in Product Profit margins are hard to
• These records entail an accurate reflection on the
explain.
company’s Cause and Effect relationship. Causality
• There is no mechanism to deeply react and explore to
& Analogy principle used in CCRAR serves as
drop seemingly non profitable products.
the litmus test for incorporating concepts in the
• There exist high-margin niche products difficult to
managerial costing system since they embody
explain
the purpose of the system and guard and preserve
• Reported cost collection system need be linked and
operation of the costing system
mapped with financial general ledger to better reflect
• Since product costs are based on historical cost, they the reality.
play an important role in learning, helping to evaluate • Assigning cost of support functions is not done in a
past results for insights against plans and expectation structured way; to reflect cause and effect relationship
and extrapolating from trends and process variations. and transparency
• Product costs derived from CCRAR also provide • Bundling of products is not done to understand profit
a clear model of existing operations which trigger variances
insights into the economic effects of tactical decisions • Technological improvements costs need be captured
with present or very near future term impacts. by Products
• Product costs information entails the entire
company’s functions and processes (Product or • The company needs to reengineer its preparation
Service operations) and the resource that the company of annual budget
used to carry it out helps in the company’s strategic Making available a budgeted cost sheet of products for the
objectives. period – a key check and key control mechanism
• Cost information informs the predictive actions, • The company needs Cost Traceability mechanism
analysis and decisions which will sustain and create in more details for products produced with
long term value consistent with the company’s goals, standard processes and clear allocation rules.
free from distortion and restricted insights associated
Gathering the needed product data is one of the biggest
with any external reporting convention for financial
challenges in manufacturing today because most companies
accounting and information excluding all non-cost
record incredible amounts of data at every stage of a
information/data for the period
product’s lifecycle but unfortunately, most of it is generally
• Product Costs as determined by CCRAR is the inaccessible. Relevant data is usually spread across the
assignment of production costs to all outputs of the enterprise or sits on individual’s hard drives and are held
organization, whether items manufactured, goods within multiple business systems; it is distorted by the time
resold, or services delivered, it points out Avoidable it reaches the Costing Team.
Cost and better view of Opportunity costs.
• Mapping the general ledger to the costing system
This is done by analyzing the product margin by at a sufficiently granular level is likely to improve
Pareto Principles. product costing
The managerial costing information involves in The costing team needs to know that activities incur what
adaptation to support simulation, forecasting, costs and where these costs sit in the General Ledger and
planning and making comparisons and projections. how these need to be allocated in the costing systems.
Cost Accounting Standards facilitate uniformity and
• Extracting accurate financial data from general
relevance of the information.
ledger to assign them to Products needs to be
• Cost Model will differ with organizations but a addressed considering present issues mentioned
thorough understanding of the framework as provided herein
in CRA 1 & cost accounting standards, its principles,
»» A desired level of attention and concentrations is
concepts and constraints enhances an organization’s
not being given to COST DNA of the company
insight into its option for designing, developing and
which comprises of Data Structure, Costing
using internal management information to achieve its
Method, Cost Capturing and Cost & Profitability
strategic objectives in an optimal manner. Filters are
mode.
used in selecting concepts in the form of constraints
like objectivity, accuracy and materiality • The company needs more emphasis on knowing
waste or scrap by identifying them for respective
products

• The company needs a good handle on inputs for References
products including product wise data on work in 1. Conceptual Framework for Managerial Costing – Report of
process the IMA Managerial Costing Conceptual Framework Task
Force 2013
• The company needs to consider unused production 2. Evaluating and Improving Costing in Organization-
capacity and not to load products with unused cost International Good Practice Guidance IFAC
of capacity 3. HFMA-Guidance: Understanding the general Ledger for
• More cross-functional understanding need be costing
developed 4. Costing System Attributes that Support Good Decision
Making: IMA 2019
• Managing, communicating and incorporating 5. Gheorghe Lepadatu-Professor at Christian University: The
engineering data and introduction of Engineering importance of the cost information in making decisions:
Change Notice or product structures Romanian Economic and Business Review -Vol.6 No 1
[email protected]

CORPORATE MANAGEMENT
WHISPERS
IN THE CORRIDORS
W
Introduction:
ith the fast paced growth of corporate form
of industrial operations, a large number of
legal and operational complexities come into
force. The compliances and the complexities
are rampantly increasing. Alongside such complexities, there
appears a pervasive tactical syndrome over the whole canvass
of the management hierarchy. Here, it is essential to define
“Tact” or Tactical approach which is invariably applied in
CMA Jay Prakash Vishwakarma resolving managerial and administrative issues. But, at the
General Manager (Finance) same time, It is all the more important to bring into focus how
Central Coalfields Ltd. this “Tact” or Tactical Approach” has entailed upon more harm
Ranchi than the gains envisaged to be ripen by it.
What is Tact or Tactical Approach:

Abstract Before “Tact or Tactical Approach” is defined, the word
“Strategy” is to be understood as the entire activities are
This article “Whispers in the Corridors” termed as “Strategies”. In the parlance of management science,
strategy is defined as a design in term of sequential activities
is an endeavour to encompass the current culminating into a envisaged final goal. But, the “Tact” is a
phenomena of corporate management piece of action or approach which a person adopts at different
prevalent now-a-days. It is an effort level of management and it becomes a part of broad strategy.
to substantiate as to how the whole Now-a-days, we all normally discuss about “Tact” or
“Tactical Approach”. A person with a tactical approach is
process of decision making is guided at
perceived to be better skilled in accomplishment of task than
the administrative and top management the person with a simple and straight ways of functioning and
level in a corporate entity. It has tried possessing emotional values. Such managers are normally
as to how the decision making process, considered to be non-performers and an agent of inefficiency.
This article is aimed at analyzing the real world situation in
formulation of policies and administrative
our ongoing scenario of corporate management. This will
issues are closely intertwined with the also go into depth to substantiate the subject how “Tactical
Tact and Tactical behavior of managerial Approach” has blurred the situation creating difficulties
personnel. This article is aimed at for an in delineating the activities into ethical and unethical ones.
Slowly and steadily , this “Tact” has made a transition from
in-depth study of different categories of ethical to unethical ways of life.
managerial personnel by whose traits
and characteristics, the dynamics of Is it necessary to have such study?
management gets affected, either badly or It may appear a bit a matter of laughter, if one discusses
in a fair manner. It also aims at to provide such issues in management context, as management itself is
a real traits-cum- impact based analysis a science of strategies where “Tact” or “Tactical approach”
comes into play of its own. Nevertheless, it has become
of different categories of managerial essential to bring it before the corporate world as the ethical
personnel in an organization. The study ways of managerial functioning are the only ways of intrinsic
highlights the effects entailed upon the value addition to the organization. It has become all the more
entity by managerial actions. important due to the fact that a large number of managerial
personnel having faith in ethics and real value creation are

finding themselves unable to permeate in the managerial area management.
and become mere spectators or considering themselves of no • To be tactful in all their activities is the prime
use to the organization. characteristics and every action has a grain of
There are also such personnel or managers who after a long cleverness as well as shrewdness.
wait start indulging into activities which their peers are doing • Emotional quotient finds no place in their behavior and
since long. They start to follow the same path of tactical actions. They always remain in the pursuit of personal
approach. By this, the process of cleansing the management gains only, but superficially appearing to be the best
stumbles a jolt. Second, the unseen message runs through the interest purveyor of the organization.
corporate parlance that there is no sense in being a simple or
transparent person. In result, the net effort or growth of the
Impact of this class specific managers on the organization
organization with durability gets adversely affected. So, it
becomes essential to have a study of this current condition Such managers are intelligent enough to create a space
found pervasive in the organization. in the upper hierarchy of the management. It becomes their
prime goal to be achieved. By their maneuvering , they always
pose or let the perception run that they are to deliver better
Attribute based Analysis
results than their peers. But, in actual sense, it may be merely
Everyone in the organization wants to be recognized as a short- term gain or even of no use to the organization. But,
important. This desire is so emphatic that the prime goal of the perception of their belongingness to the organization runs
the organization gets ignored or even lost. To be important or so emphatically to leave no scope for higher management, but
be recognized becomes their prime objective. We find such to put faith in them.
phenomenon in all walks of management behavior. Actually,
Actually, some grains of emotional values should be there
the people almost at all levels are self-oriented. It is the duty of
in the decision making process. Too much practicality thwarts
the top management to be judicious in recognizing the values,
the essence of human values. And, in the absence of human
which are full of ethics and also fruitful to the organization.
values, everything falls apart. Such practices and approaches
For the sake of a simplified study, we can divide the managers
bring better results in the long run and that too with moral
into various categories. This categorization may be depicted in
essence. So, there should be proper and just blending of
a group/traits-wise presentation as under:
pragmatism and ethical values in every decision making
process of the management. Resolving smaller issues is the
Traits Intelligent
Not
Laborious
Not pillar of Corporate Governance.
Intelligent laborious
But, in the present context, immediate results are always in
Not Laborious Not quest and hence intelligent but shrewd person are considered to
Intelligent
Shrewd intelligent and Laborious
but shrewd be more desirable. But, in real sense, they prove to be a drain
but shrewd shrewd but shrewd
on financial strength of the organization and bring disrepute to
Not Not the entity. Such class- specific managers are neither good for
Intelligent Laborious
Simple Intelligent Laborious
and Simple
but simple
and simple
but simple the organization nor for their colleagues. But, they appear to
be different from what they actually are.
Not Not
Emotional and and
emotional
but
emotional
but 2. Not intelligent but shrewd
emotional emotional
Some managers are not intelligent but shrewd. Their
Intelligence Quotient is very low. But, despite this discomfort,
The above class-specific presentation is a simplified real they try to act or they do act to outstrip others. Their
life condition in the management atmosphere. Characteristic manifestation speaks how intense they are to occupy the space
based classification may be present, but for the sake of analysis of others. But, due to being not so intelligent their opportunistic
of the prevailing situation and all the more for study of the case acts are noticeable by their colleagues. Such people become
in focus, this attributes- based group classification has been a source of discord in the work place. This group of managers
outlined. lack emotional values and so they care least for others and also
for the problems what they have brought to the fore.
Study of each attribute based group classification Managers of the category cause negative impact on the
1. Intelligent but shrewd organization and their contribution to the organization is
This class - specific managers possess high intelligence almost negligible. They fall prey to their temptation and do
quotient (IQ), but at the same time have a very shrewd undesirable things with least care. Actually, such person are
behavior. Such people never let any opportunity go astray or in susceptible to corrupt practices easily and consequently, the
vain. A fox like behavior is a correct analogue of this category image of the organization gets tarnished.
of managers. Basic attributes of such people may be outlined
as under: 3. Laborious and shrewd
• They are very intelligent and always pouring their By the theory of association of attributes, the correlation
eyes and ear into the transaction and process of the between being laborious as well as shrewd is very negligible.

According to generalized theory, laborious people are found
to be sacrosanct, full of ethical and emotional values. They 6. Not Intelligent but simple
have a firm belief that there is no substitute to hard labour. The This group of managers is although not intelligent but simple
percentage of such people is very negligible. in approach. Such managers perform their assigned tasks as a
routine. They are obedient and also flawless. The problem with
4. Not Laborious but shrewd them is only absence of intelligence and so something extra
This class-specific managers constitute a significant portion inputs are non-existent in completion of works. Such managers
of the managerial strength. If we go by SET theory, this group prove to be performers as they complete the assigned tasks
of managers are the elements of the same -set, as of not with a selfless spirit. They lack tact or tactical approach and so
intelligent but shrewd. Precisely, people neither intelligent they are leveled as unwise and valueless for the organization.
nor laborious, but shrewd constitute a common group.. But the things are another way round. This group of managers
is largely contributive to the entity.
The organization is badly impacted by this group of
managers. In real sense, there is no benefits coming out of such Again, the role of management becomes very important as
managers. far as recognition of such managers is concerned.
5. Intelligent and Simple 7. Laborious and simple

This group of managers are the backbone of the organization. The characteristic of this class of managers resembles that
All operational and managerial process are taken care of by of “Not Intelligent but simple” up to a large extent with slight
this group of managers. The spirit of corporate governance variation that they apply their mind wherever needed due
finds a place in the organization by a disciplined efforts of to being laborious. They go extra miles in accomplishment
such people. As regards the coverage of such managers in any in their jobs and work unceasingly till completion. This
entity, it may be least 30% and even goes to the extent of 40%. class specific managers are very less in magnitude but very
This quantum of percentage is based on an optimistic frame beneficial to the organization. In the realm of downtrend of
of mind. Optimistic in the sense that this group of managers moral values and being everyone engaged in his own stride
are instrumental in regulating, governing and optimizing create an environment of narrow and selfish view. That is why
the whole process of operations and adherence to policies managers of this class is very less in number. But wherever
and timely completion of activities. If this had not been the they are , they prove their presence. With this characteristics,
scenario, the performance would have been more dismal and they suffer largely as they face ignorance. The Tact or tactical
a decreasing trend in continuity. But, despite all constraints approach is not in their armoury. They are simple and have
and complexities, it is found that problems are sorted out and faith in hard labour. Actually, they are the backbone of any
that too in adherence to all prescriptions and policies. Actually, organization.
the efforts of this group of managers are totally dovetailed to
organizational broader goal and they take everything to be a 8. Not Laborious but simple
matter of organizational image as well as of their own. In any organization, it is observed that at least 10-15%
Their classic characteristics is opposite to the managers managers are simple but not laborious. They let the things take
who are intelligent but shrewd. The managers of this group their own course and do not think of adverse impact which
are perceived not to be so contributing by the top management may come due to their apathy. Their behavior and approach
as the intelligent but shrewd managers are recognized. Here, are same in their personal life. They believe that things will
the whole source of troubles germinates and the organization be good or bad in its own sake. This group of managers do not
suffers. How it happens is to be put in place. Due to prevalence take any pain and always remain as a mute spectator.
of this stream of thought at the higher level of management, the
merits get defeated and undeserving people are rewarded or 9. Intelligent and emotional
better we can say that intelligent and shrewd managers snatch
It is very important to illustrate this group of managers.
the opportunities. The top management gets mesmerized to the
They are emotional and intelligent as well. It is very difficult
level that their eyes are totally misdirected. The merit- based
to corroborate as to whether intelligence and emotion are
frame of thought remains to be attended causing erosion of
supplementary to one another or are inversely placed. But, it
values on both counts. First, Loss to the organization is caused
is sure that both co-exist because quotient of emotion works
by the undesirable tact of undeserving rewarded people as
as a nutrient to quotient of intelligence. An intelligent person
they think of their own only. Second, the hard and contributing
in normal case is also emotional. But they do not bring input
people become a mute spectator. So, the organization is doubly
of tact in their work as their emotional cord prohibits them to
affected adversely .
do so. This group of managers bring a lot of innovative ideas
Hence, it becomes imperative on the part of the top for the benefits of the organization but easily get perplexed
management to provide a conducive and moralistic view when their ideas are not given due recognition. Such scenario
while framing policies for career growth and recognitive in the organization in continuity creates an environment of
parameters so that this intelligent and simple managers are confusion for them and they fall prey to passivity. Actually,
not left unrecognized as it fosters an un-motivational spirit there comes the role of top management to acknowledge the
amongst them. Lacks on its part brings erosion of values and gravity of this condition in the organization. If left unheeded,
gives birth to a declining trend.

it gives birth to an unhealthy environment leading to erosion approaches away for finding solution to the organization. But
of values and thereby loss of efficiency. But, there lies a caution is that too much reliance on it drives the management
responsibility also on this group of managers to have a balance towards immediate solution somehow which actually takes
between intelligence and emotion. Emotion may not drag the the shape of unlawful acts leading to drain and strain on the
intelligence in an undesirable direction as it brings stress and organisation in the long run. Only a lawful and that too with
strain on their own well-beings. Absence of proper control and a long-term view in sight is the only and only solution for a
balance of emotion entails upon their health and efficiency. value based growth of the organization. The management’s
Emotion is essential for a value based and moralistic decision. responsibility is to structure and strengthen itself in creation of
Only need is to keep it under intelligence fervor. a preparatory platform for a level-playing field for intelligent,
emotional and laborious managers and also to nurture a
10. Not Intelligent but emotional concept that a self-centric work is neither rewarding for the
managers nor for the organization.
This class specific managers are normally found to be
swayed away by emotion only and usually lack intelligence. Only organizational growth will ensure the development of
They bring undesirable results to themselves and also to the everyone in the organization be it career or pecuniary benefits.
organization. Emotion without intelligence makes them unable We should stand, strive and accomplish for the organization.
to keep a balance in their activities. The management should
take note of such managers and some sort of training and Conclusion
workshop should be put in place to resolve their undesirable Now, the final question remains for the management in
emotional mindset. general and for top management in particular to deal with
these complex combination of attributes of managers and
11. Laborious and emotional arrive at a comprehensive and inclusive solution so that the
This class of managers are very honest to their works. They whole workforce of the organization should be embedded with
believe in hard labour and put in all efforts for accomplishment its broader and healthy goal. Healthy here connotes to ethical
of jobs. But their belief gets shaken if their efforts are not and durable solution . A suggestive box is being given below:
recognized. Their emotional quotient generates an irritating • An attributes based data bank of managers should be
attitude towards the approach of the management. Now, created
the role of the management should come into play to create • An automated system of evaluation with least human
an environment and policies to address such issues. An intervention should be put in place.
interactive session at regular interval for free flow of views
• An interactive session at regular interval for free flow
from the managers in a comprehensive manner is a suggestive
of opinion and suggestion should be conducted.
tool to be put in place. But resolving this issue is of prime
importance. If it is left unheeded, a de-motivational syndrome • A system of interaction amongst the managers should
will start to breed in the atmosphere of the organization. The be there so that all may come into contact with each
management should put in place a proper system of evaluation other to discuss the issues which they come across in
for recognizing and rewarding the managers. performance of works.
• A system of grievance redressal only for managers
12. Not Laborious but emotional should be structured.
This variant of managers is also very insignificant. It • A Think-Tank Committee consisting of general
appears to be unnatural that emotion does not carry the string managers of different discipline should be in place
of labour. Emotional managers are normally laborious. If it is to advise the top management in a microscopic way .
so, emotion is said to be just an instantaneous offspring. The box is kept open-ended as more prescription may be
there.
Main theme Conclusively, the management should adopt an inclusive
After this attribute based analysis, it is to substantiate the pattern and culture of growth for every deserving person lest
topic “Whispers in the Corridors”. Who whispers ? whom there should be “whispers in the corridors”.
does the corridor belong? It is crux of this whole narratives.
Only Tact or Tactical values are perceived to be in the corridor
and its whispers is normally heard. Long-term- solution is
lost in the wake of short term tactical dynamics. But it is not
[email protected]
always true. Managers with unbiased and truthful solution
are recognized, although not always. We can say that whole
issue rests with proper delineation and distinction between
shrewdness and simplicity. More the management enables
itself to keep the undesirable tact at arms’ length, better it will
be for creation of real value based decision. And, the image of
the organization will be enhanced.
But it is not suggestive to totally ignore the tactical

ACQUISITION
THE TATA STEEL BHUSHAN

STEEL DEAL
Kabir Dash CMA (Dr.) Ashish Varma

Operations Manager Associate Professor
CPP Group, Gurugram IMT Ghaziabad
Abstract
The article, TATA steel’s acquisition of Bhushan steel through IBC route is of relevance
to practising professionals, managers and students. The successful resolution has improved
India’s image as an Investor friendly nation and would have far-reaching implications in
the future. Various points discussed in this article include the deal details, the reason for the
failure of Bhushan steel, reason of acquisition by TATA Steel, the Post-acquisition TATA steel
performance and effect of IBC on Indian business ecosystem.
T
ATA steel successfully acquired Bhushan steel which had acquired a massive debt of over INR 55000 crores
for INR 35,200 crores on 18th May 2018 through was admitted to NCLT by its committee of creditors (COC)
IBC route. Bhushan Steel was among 12 corporate led by State Bank of India. With the acquisition of Bhushan
entities identified by Reserve bank of India for steel which had steel producing capacity of 5.6 million
early bankruptcy proceedings. TATA steel successfully out tonnes (1 tonne=1000 Kilogram) per annum, TATA Steel
bided JSW steel which had offered INR 29,700 crores (I became India’s largest steel producing company.
crore=10^8) for the acquisition. Insolvency proceeding was Bhushan steel’s resolution through IBC was a game-
initiated against Bhushan steel on 26th July 2017, and the changer for the Indian corporate sector. The right to exit a
deal was completed on 18th May 2018. Post-acquisition business through IBC had helped to increase India’s position
Bhushan steel was renamed as TATA steel Bhushan steel ltd. in ease of doing business ranking published by world bank.
The new entity TATA steel BSL ltd. (TATASTLBSL) has IBC is one of the significant reason in increasing India’s
remained as a separate listed entity in the stock exchange. ranking from abysmally low at 142 in the year 2014 to 63rd
As per IBC norms, TATA Steel paid required employee rank in 2020.
salary dues and corporate insolvency costs. Bhushan steel

ACQUISITION
government and Indian government extended 12.5%
Year World Bank -Ease Of Business Ranking
protection to Indian steel makers.
2020 63
2019 77 The Acquisition
2018 100 The consortium of banks led by State bank of India had an
exposure of 56,029 crore in Bhushan steel. TATA Steel was
2017 130
the winner in the bidding process by successfully outbidding
2016 130 JSW steel. The claim amount and settlement amount are
2015 142 appended below.
Brief Information About The Deal
TABLE 1:Ease of doing business ranking published
Total claims by financial creditors 56,079 Cr.
by world bank.(Source: Wikipedia,“ Ease of doing business index”,
available on https://en.wikipedia.org/wiki/Ease_of_doing_business_ Total settlement amount 35,200 Cr.
index accessed on 20th Jan 2020.) Hair Cut done by financial creditors 37%
Reason for TATA Steel’s acquisition of Bhushan steel TABLE : 2: TATA Steel’s claim settlement (Source: Sangita
TATA Steel’s successful acquisition of bought a sigh of Mehta, May 2018, “Tata Steel completes Rs 35,200 crore purchase
relief to the stressed banking sector. The deal was the first of bankrupt Bhushan Steel” available on https://economictimes.
indiatimes.com/industry/indl-goods/svs/steel/tata-steel-completes-5-2-
successful resolution under IBC route. There were only two billion-purchase-of-bankrupt-bhushan-steel/articleshow/64224367.cms
bidders, and TATA steel’s bid amount was significantly higher accessed on 28th Jan 2020)
than JSW steel. Few of the reasons that can be attributed to
Bamnipal steel was set up by TATA Steel as SPV (Special
TATA steel’s aggressive bidding for the acquisition can be
purpose vehicle) for the sole purpose of acquiring Bhushan
as follows.
steel. Out of the total deal amount of 35,200 crores, money
1. Bhushan steel being a greenfield project was pumped in from TATA steel was around INR 17, 000 crores
a lucrative deal. Greenfield projects are those from its reserves. TATA steel was sitting with a cash reserve
projects which require minimal modifications or of over INR 27,000 crores at the time of the deal. The rest of
developments. From its internal study, TATA steel the amount came from debt which lied in the balance sheet
realized that it was much easier to expand Bhushan of Bhushan steel.
steel’s steel capacity from 5.6 to 8 million tonnes per
The bifurcation of money invested in Bhushan steel by
year. (1 tonne=1000 kilogram)
TATA steel for the acquisition is as follows
2. With India’s GDP expected to grow at around 7 per
1. INR 35,200 crores to the lenders of Bhushan steel for
cent per annum, the Steel industry was set to grow
their outstanding dues.
at around 8-10 percentage over the years to come.
Further, there were huge synergies among TATA 2. INR 159 crores to Bhushan steel to acquire 72,65
and Bhushan steel’s plant in the procurement of raw percentage equity stakes.
material, marketing and logistics. 3. INR 1200 crores to the operational creditor of
3. The value-added plants of Bhushan steel at Ghaziabad Bhushan steel over a period of 12 months.
and Khopoli were already generating profits. Further, 4. INR 100 crores to the financial creditors for buying
Bhushan steel was very active in the auto sector and the unsustainable debts of the lenders.
other value-added products. TATA steel realized it
could use Bhushan steel’s expertise to expand its
reach in the auto component market.
4. Bhushan steel ltd was ready to go after plant with a
capacity of 5.5 million tonnes per year. To build a
similar capacity, it would have taken TATA steel 4-5
years to commission from scratch. As land prices
were going up, Bhushan steel was one of the safest
bid TATA steel could have made. With the industry
practice of EBITDA of Ten thousand INR per one
tonne of steel, TATA steel realized it could capitalize
EBITDA of 15,000 to 20,000 crore from the existing
Bhushan steel’s production capacity of 4-5 mtpa in
4/5 years. Figure 1: TATA Steel’s payment bifurcation for
5. Price of steel had been increasing over the years. acquiring Bhushan steel (Source: Prepared by author from
publicly available sources)
China was set to close the annual steel producing
capacity of about 150 million tons from 2016 to Unsustainable debts of Bhushan Steel amounting
2020. The Indian steel industry got patronage from 25,285.46 crores were sold to BNPL by financial creditors

ACQUISITION
of Bhushan Steel for 100 crores. The problem began from 2011 onwards when global steel
Though TATA steel owes little over 72 percent stake prices crashed, and Bhushan steel’s repayment obligations
in Bhushan steel, economic interest was 100 percent as of debt were trebled to INR 1118 crore. The operating cash
Bhushan steel will owe the unsustainable debt to TATA Steel flow of INR 994 crores was insufficient to repay the debt
in addition to everything else. Hence cash flow from the obligation. The loan repayment of phase I and II of Odisha
company would first move to TATA steel before moving to steel plant was due that time and plant was not ready for
other creditors (1 crore =10 million INR rupees) production.
When Bhushan steel’s financials were made public for FY
2016-17, the current ratio of the company was over 5. Over
leveraged has made the company challenging to run as going
concern. Its loan book had gone up by over 13 % from FY
2015-16 to FY 2016-17.
The liability of the company over the years explains
exciting insights. It is a textbook example of a company
going from boom to bust through over leverage structure.
By FY16, the leverage ratio of Bhushan steel had reached an
unsustainable 14.3.
Figure 2 - Shareholding Pattern Post-Acquisition

(Source: Pritam Sangwan,Jun 2019,”TATA Steel acquirs Bhushan steel
through IBC” available on https://mnacritique.mergersindia.com/tata-
steel-acquires-bhushan-through-ibc-route/ accessed on 12th Jan 2020)
Analysis of the causes of distress at Bhushan Steel.

Figure 5 - Financial liability of Bhushan Steel from
Bhushan steel was India’s leading steel company in the
2008 to 2018 (Source: Prepared by author from publicly available
auto sector, and between FY 2006-10, the company was sources given in the reference section)
performing well. In these years Bhushan steel’s profit had
grown over 50 per cent. The cash from operations was The company tried its best to prevent its loan converted in
significantly higher. to non -performing assets. With the bribery charges framed
against its top management as well as Syndicate bank CMD,
A closer look at the stock price of the steel company gave the situation worsened. Bhushan steel consistently failed to
significant insights. By 2011 the stock price had reached an repay its payment obligations and was admitted to NCLT by
all-time high of 522. Investors were bullish on the prospects its committee of creditors.
of the company. The stock price had beaten the index
multiple times, and opportunities were looking optimistic.
The performance of Bhushan Steel post-acquisition
In a matured market stock price defines the intrinsic value
of the share. Analysis of the stock price of the share post-
acquisition gives interesting insights.
Figure 3: Share Price Movement of Bhushan Steel

from 2006-2020 (source: money control “TATA Steel BSL ltd”
available on https://www.moneycontrol.com/stock-charts/tatasteelbsl/
charts/BS14 accessed on 28th Jan 2020)
Bhushan steel came in the debt trap when it started Figure 7: Bhushan steel’s Price Movement Post
expanding its production capacity through loans, and returns acquisition (Source: Money control, ”TATA Steel BSL Ltd” available
were inadequate to pay to pack the loan. The debt portion on https://www.moneycontrol.com/india/stockpricequote/steel-crhr-
was rising consistently year on year basis. The expansion of strips /tatasteelbsllimited /BS14 accessed on 28th Jan 2020)
Odisha plant of Bhushan steel which costed Bhushan steel
INR 19,400 crores was debt-funded. Though the company Post-acquisition of Bhushan steel by TATA, Bhushan
was over-leveraged year on year basis, debt repayment was Steel has paid back more than INR 3000 crore loan. Various
not a problem as business generated cash well over loan industry reports had observed significant improvement
repayments in financials and plant utilization of Bhushan steel. Latest

ACQUISITION
credit rating agencies have upgraded Bhushan steel’s long crhr-strips /tatasteelbsllimited /BS14 accessed on 28th
term bond to AA and A1+ for short term. The earnings before Jan 2020 on 20th Jan 2020
interest, tax, depreciation and amortization or (EBITDA) has 3. Sanat Shrivastava,May 2019,” Insolvency and
increased from INR 1442 crore in the nine months of 2017- Bankruptcy Code of India | IBC 2016” available on
18 to 3012 crore in 2018-19. In terms of YTD increment of https://www.youtube.com/watch?v=cBhlyryLRLU
EBITDA, the growth has been eight per cent. accessed on 25th Jan 2020
Tata Steel BSL is currently aiming to reach full capacity 4. Business Stansdard, TATA STEEL BSL LTD.
through the removal of bottlenecks and separation of existing (TATASTLBSL) - COMPANY HISTORY availabe on“
facilities. https://www.business-standard.com/company/tata-steel-
bsl-3169/information/company-history accessed on
25th Jan 2020
Conclusion
5. Aman Sethi,Aug 2017,” NPA crisis: The rise and
The acquisition of Bhushan steel thorough IBC route fall of Bhushan Steel into the great Indian debt
helped the TATA group significantly in terms of capacity trap” available on https://www.hindustantimes.
enhancement, encash tax break up and alignment in better com/business-news/npa-crisis-the-rise-and-fall-of-
raw material utilization. In a clear sign to do away with any bhushan-steel-in-the-great-indian-debt-trap/story-
legal formalities, TATA group has kept a lead period between GHrvRRFIBsMLXKJzbqvaFN.html accessed on 25th
acquisition of TATA steel and subsequent merger with the Jan 2020
parent TATA group company. 6. Leap Up, May 2018,” Tata Steel Acquires Bhushan
The acquisition is expected give a subsequent boost to Steel Through The Indian Bankruptcy Code,
TATA steel to reach its target steel production of 33 MTPA 2016” available on “https://www.youtube.com/
by 2025. The acquisition also gave TATA steel ltd high- watch?v=GCtarEx0Kes&t=160s” accessed on 25th
quality assets of Bhushan steel, value-added products and Jan 2020.
entry into western India. The merger can be defined as a 7. Sangita Mehta, May 2018, “Tata Steel completes Rs
value addition to stakeholders and the consolidation of the 35,200 crore purchase of bankrupt Bhushan Steel”
same line of business. The acquisition of Bhushan steel available on https://economictimes.indiatimes.com/
through IBC route helped lenders to clean up their balance industry/indl-goods/svs/steel/tata-steel-completes-
sheet. The successful resolution has also improved India’s 5-2-billion-purchase-of-bankrupt-bhushan-steel/
articleshow/64224367.cms accessed on 28th Jan 2020
image as an Investor friendly nation, and would have far-
reaching implications in the future. 8. Dilip satapathy, March 2019,” Tata Steel BSL
prepays Rs 3,000 crore loan riding on massive
turnaround” available on https://www.business-
References: standard.com/article/companies/tata-steel-bsl-
1. Pritam Sangwan,Jun 2019,”TATA Steel acquirs prepays-rs-3-000-crore-loan-riding-on-massive-
Bhushan steel through IBC” available on https:// turnaround-119031300651_1.html accessed on 25th
mnacritique.mergersindia.com/tata-steel-acquires- Jan 2020.
bhushan-through-ibc-route/ accessed on 12th Jan 2020
2. Money control, ”TATA BSL Ltd” available on https://
www.moneycontrol.com/india/stockpricequote/steel-
[email protected]
[email protected]

CASE STUDY
PERFORMANCE ANALYSIS
OF ESSAR STEEL LIMITED:
PRE, DURING AND POST
CIRP
A CASE STUDY
Abstract
The Corporate Insolvency Resolution

Process (CIRP) of Essar Steel Limited was
commenced on 2nd August 2017, and the
resolution was approved on 8th March 2019.
The financial health of Essar Steel Limited
(ESL) deteriorated from 2015 onwards
due mainly to high cost of operations,
mismanagement of resources, and external
business environment impacting the steel
sector. With little or no remedial measure
undertaken by the management, the rot
became sustained, forcing the company to
bankruptcy. This paper provides the analysis
of operational and financial performance of
CMA (Dr.) S K Gupta
the company pre, during and post Corporate MD & CEO
Insolvency Resolution process. IPA of Institute of Cost Accountants of India
Delhi
E
Company Profile ESL is a fully integrated flat carbon steel manufacturer--
ssar was incorporated in 1976 as Essar Steel Ltd from iron ore to ready-to-market products. Its products find
( ESL). According to analysts, the Ruia family wide acceptance in highly discerning consumer sectors, such
played a significant role in the development of as automotive, white goods, construction, engineering and
the industry. Essar was the first private sector shipbuilding. It is the India’s largest exporter of flat steel
company, which was permitted by the government to set up products and aims to reach 25 MTPA capacity.
a 2-million tonne steel plant. It is the India’s largest exporter of flat products, selling

CASE STUDY
almost one-third of our production to the highly demanding flat products in the strategically located Point Lisas Industrial
US and European markets, and to the growing markets of Zone, Couva, Trinidad.
South East Asia and the Middle East. “A number of major Paradeep facility- It is a 6 MTPA integrated steel project
client companies have approved its steel for their use, located in Orissa, India.
including Caterpillar, Hyundai, Swaraj Mazda, the Konkan
Essar Steel is the first steel company to set up the only
Railway and Maruti Suzuki. Essar Steel has acquired
retail chain for steel products under the brand name Essar
extensive quality accreditations. Its lean team gives it one of
Steel Hypermart. It has a strong network of over 60 Steel
the highest productivities and lowest manpower costs among
Hypermarts. The outlets are conveniently located across
steel plants internationally.It is totally integrated - from raw
the length and breadth of the country to cater to the
material to finished products, adding value at every stage of
customised requirements of small and medium enterprises.
the manufacturing process”.(Annual Report of ESL 2016-17
The hypermarts offer a comprehensive range of flat steel
).It is the first Indian company to brand flat products, under
products for a variety of applications. Other product lines,
the name ‘24-carat steel’.
like longs, structural, and tubular, are also being developed
to make Essar Steel Hypermart a one-stop-shop for steel
Company’s plants include- products.
“Hazira Steel Complex- Essar Steel operates the world’s
largest gas-based hot briquetted iron (HBI) plant with Product range of the company includes:
a production capacity of 5.1 million tonnes per annum
Hot rolled products-
(MTPA). The plant uses state-of-the-art technology, which
ensures high quality raw material for the steel plant. Essar Coils- In raw as well as pickled and oiled form of 180 mm
Steel is one of the world’s lowest cost producers of HBI - 2000 mm/7.08’ - 78.74’ width, 1.60 mm - 20.00 mm/0.063’
on a per tonne basis. The plant is supported by a captive - 0.79’ thickness and 25 MT (max) weight.
power plant of 32MW, which operates at 100% capacity. Plates- of 5-20mm thickness, 750-2000 mm width, 2500-
The complex includes two flying shear lines of capacity 0.2 12000 mm length, and as per DIN 1016 (in mm) thickness
MTPA each, and two slitting lines of capacity 0.2 MTPA tolerance.
each, catering to the market of plates and sheets. Sheets- Essar Steel’s high precision shearing line (Bronx-
Essar Steel Algoma Inc- Established in 1901, Essar Steel UK) turns out top quality steel sheets meeting demanding
Algoma Inc. is an integrated steel producer based in Sault international standards.
Ste. Marie, Ontario, Canada. Formerly operating as Algoma Shot Blasted and Primed- Shot blasted and painted steel
Steel, it was acquired in June 2007 by Essar Steel Holdings from Essar offer the cleanest surfaces and a comprehensive
Limited. Its current production capacity is 2.4 million tonnes environment protection to its steel.
per annum (MTPA). Algoma’s cornerstone asset, the Direct
Cold rolled products- Hot rolled coils from Essar Steel
Strip Production Complex (DSPC) is the newest continuous,
are used to produce cold rolled products in the coils/ plates
thin slab caster in North America, positioning Algoma as
and sheets form. Cold Rolled Closed Annealed (CRCA)/
a leading supplier of high strength, light gauge steel. In
Cold Rolled Full Hard (CRFH) type, of 600 mm - 1525
addition, Algoma’s heat-treat plate facility provides a full
mm/23.63’ - 60.04’ width, 0.14 mm - 3.175 mm/0.0055’ -
range of quality steel grades for abrasion resistant, ballistic
0.125’ thickness with Matte, Bright, Dull surface finish.
and other specialty plate applications. Other key mills at
the plant include a slabcaster, a 106-inch strip mill (one of Galvanized products- Galvanized Plain (GP)/Galvanized
the widest in North America), a 166-inch plate mill, a cold Corrugated (GC) type, 600 mm - 1370 mm/23.62’ - 53.94’
mill, a just-in-time blanking facility and a welded shapes and width, (BMT) 0.14 mm - 3.175 mm/0.0055’ - 0.125’
profiles division. thickness, with Regular spangle, Minimised Spangle, Zero
Spangle surface finish.
PT Essar Indonesia- It commenced its commercial
operations in 1997. With a current rolling capacity of 400,000 Essar Global Limited is a diversified business corporation
MT per annum, PT Essar has a state-of-the-art galvanizing with a balanced portfolio of assets in the manufacturing and
line with a capacity of 150,000 metric tonne per annum. The services sectors of Steel, Energy, Power, Communications,
company focuses on manufacturing value-added soft cold Shipping Ports & Logistics, and Construction. Essar Global
rolled products. has offices in Asia, Africa, Europe and the America”.( ESL
website )
Visakhapatnam Complex- Essar Steel has built an 8.0
MTPA iron ore pelletisation plant in Visakhapatnam, Andhra
Pradesh, India with technology supplied by Lurgi GmbH of Essar Steel Limited : Strategic Target Positioning
Germany.
Hot rolled steel, chequered plates, Shot
Essar Steel Minnesota LLC- It has access to iron ore Segment blasted plates, Cold rolled steel, TMT
resources of over 1.4 billion tonnes. The plant will have an Bars, Galvanised corrugated sheets
annual capacity of 2.5 million tonnes per annum (MTPA)
when completed. Sectors such as automotive, white
Target Group goods, construction, engineering and
Essar Steel Caribbean Limited( ESCL)- It is a 2.5 shipbuilding
million tonnes per annum (MTPA) integrated steel plant for

CASE STUDY
Company having value added During CIRP
segments in the steel industry, a Pre-
Positioning
diversified distribution network & Pre during
integrated nature of operations CIRP % CIRP
Heads change % Reasons for Change
( March change
ESL –Performance analysis
2017) (March
Pre CIRP 2018)
The financial health of Essar Steel Limited (ESL) Income
deteriorated from 2015 onwards due mainly to high cost
of operations, mismanagement of resources, and external Declined due to
overall decline
business environment impacting the steel sector. However, in demand for
the signs of decay did not appear suddenly. Over the years, Sales 48 25
steel products,
the decline in business became more prominent. Indian both globally and
promoters have historically relied on debt to grow, and the domestically.
Ruias were no different. Its statement of indebtedness showed
Expenses
a principal outstanding of Rs. 50,786 crore as of 31 March
2017, of which Rs.5,016 crore was interest outstanding. Material cost
Material
Essar’s cash flows were not enough to repay its outstanding Cost
36 28 reduced due to
debt. With little or no remedial measure undertaken by the decline in output.
management, the rot became sustained, forcing the company
Manpower cost
to bankruptcy.The Corporate Insolvency Resolution Process
increased due to
(CIRP) of ESL was commenced on 2nd August 2017, and the Employee
-5 5 resumption and
resolution was approved on 8th March 2019. Cost
scaling up of
The key performance indicators reflecting the operational production.
and financial position of the company during the period 2015 Other expenses
to 2017 are as under : which includes
Performance indicators 2015 2016 2017 power and fuel,
administrative
Current Ratio 0.61 0.23 0.18 Other expenses, selling and
91 52
Interest Coverage Ratio 1.20 0.27 0.20 Expenses distribution expenses
decreased due to
Inventory days 60.67 58.79 40.10 improved efficiency
Return on Assets ( %) 0.78 - 6.91 - 9.55 and better expenses
control.
Return on capital employed (%) 12.95 - 3.48 - 3.12
Assets turnover 0.30 0.25 0.40 Finance expenses
increased due to
Sales / working capital (%) -2.13 - .52 0.62 Finance increased current
16 33
EBITM (%) - 6.18 -8.72 -5.09 Expenses liabilities consequent
upon increased
Altman Z Score- is a predictability volume of output.
ratio that indicates future possibility .30 - .83 -.77
of bankruptcy of the company Depreciation amount
declined due to
Du Pont Ratio-
Depreciation 1 -7 decrease in net block
The Du Pont ratio gives a
comprehensive view of company’s
including impaired
performance. assets.
Du Pont ratio = (Net Profit/sales) x
Profitability
(Sales/Asset) x (Asset/Equity)
NP/Sale -0.37 -0.78 -0.76 Margins remained
Sale/Asset 0.25 0.26 0.40 EBITDA
14 12 almost similar in pre
Asset/Equity 21.07 19.26 18.38 margin %
Du Pont -2.01 -3.89 -5.65
and during CIRP
Margins remained
From the above analysis it is apparent that the Essar PBT Margin
-34 -35 almost similar in pre
Steel Limited had a poor operational and financial position (%)
and during CIRP
during the period 2015 to 2017 with all financial indicators
including Altman Z score and Du Pont ratios pointing
towards impending distress in the company. From the above analysis it appears that the performance
of the company during the period of CIRP was more or less
the same as in pre CIRP period. Though the rot was stemmed

CASE STUDY
to some extent due mainly to deep rooted operational and of Rs 25 billion and production of 550,000 tonnes in April
financial inefficiencies and bottlenecks compounded by 2018. Production in May 2018 was even higher at 580,000
the external environment including government policies tonnes.When the insolvency process started for Essar in
regarding Steel sector and the demand and prices of the steel August 2017, the EBITDA was Rs 1.8 billion, sales at Rs
products. 18.15 bn and production at 454,000 tonnes”.( Economic
Times)
Post CIRP Even though the company demonstrated an improved
“Debt-ridden Essar Steel has registered an EBITDA performance post the CISR resolution, one of the concern is,
(earnings before interest, tax, depreciation and amortization) of course weak demand outlook of steel industry. In India,
of Rs 4,229 crore during its Corporate Insolvency the flat steel price has fallen steeply in recent years.India
Resolution period (over 600 days).The company earned Rs Ratings and Research (Ind-Ra) has also revised down its
4,000 crore from its operations between August 2017 and outlook on the Indian steel sector from ‘stable-to-negative’
February 2019. In addition, an earning of Rs 229 crore for for the remainder of FY20 owing to sluggish steel demand
March 2019.Moreover, this amount excludes Rs 734 crore growth expectations. A Moody’s Steel Asia Outlook has
EBITDA utilised for Finance Costs (Financial Lease, LC/ said that India’s steel demand will slow to mid-single digit
BG Charges to banks and finance charges on payables to growth due to weak auto and manufacturing demand.
suppliers etc) for maintaining the Corporate Debtor (Essar “For Arcelor Mittal, which made a bid for ESL amounting
Steel) as a going concern”.(Economic Times). Crude steel Rs. 42000 crore successfully, there are several other costs
production witnessed growth of 9.5% at 1.88 million tonnes need to be incurred. It has to spend another Rs. 2500 crore
and the company posted operating profit of Rs 1,120 crore in for the slurry pipeline in Odisha and will need to invest up
the quarter ending June 2019. This is more than twice Essar to Rs. 15000 crore more for reducing dependence on gas
Steel had earned when Resolution professional took over usage in iron making. Arcelor Mittal’s resolution plan for
the debt-laden alloy maker about two years ago. Net sales Essar Steel includes a capital expenditure plan of Rs 18,697
increased in the quarter by 3% at Rs 8,100 crore crore to take the finished steel goods capacity of the plant to
Operating profit is also 2.5% higher than the same period 8.5 million tonnes by 2024. The long-term aspiration is to
last year and more than double of the March quarter, when increase finished steel shipments between 12 and 15 million
low steel prices had hit realisations for the entire steel tonnes through the addition of new iron and steel-making
industry.The improvement has come due to cost efficiency assets”.( Economic Times )
and better inventory management, aided by better product
mix.the company is meeting working capital requirements Conclusion
through internal cash and is not borrowing anymore from Essar Steel Limited has shown significant improvement
banks.Essar’s performance was despite withdrawal of in operational and financial performance in post CIRP
funding lines by MSTC to the tune of Rs 700 crore. MSTC phase. Despite a sluggish demand growth in steel sector, the
used to provide funding lines for import. company has shown improvement in operations cash flow,
At the end of March 2019, Essar’s production stood at efficiency and profitability. Essar Steel, one of the Reserve
6.78 million tonnes compared to 6.18 million tonnes in Bank of India’s (RBI’s) first ‘Big 12’ of non-performing
2017-18 and 5.47 million tonnes in 2016-17.Essar recorded assets to be auctioned under the Insolvency and Bankruptcy
an 80 per cent capacity utilization in downstream units and Code 2016, is likely to clock its best-ever performance
a substantial increase in production of value added products this financial year. However, in future, how the company
comprising galvanising, colour coated products and pipes. addresses the market and operational challenges need to be
Resolution professional ,who is now chairman of the keenly observed.
monitoring committee is of the view that the performance of
Essar was possible on account of support from the financial References
creditors and the management.It also establishes the plant
capability.
1. Annual Report - Essar Steel Limited 2016 -17
The resolution of steel non-performing assets (NPAs)
2. Annual Report - Essar Steel Limited 2017 -18
got a fillip after a series of government policy initiatives
to support the domestic steel industry was followed by a 3. Annual Report - Essar Steel Limited 2018-19
sustained increase in steel prices. Together they have made 4. www.essarsteel.com
steel a more viable businessPrices of hot rolled coil (HRC) 5. www.nseindia.com
had touched a low of about Rs 28,000 a tonne at the end of
6. Economic Times
FY16 and then moved up to around Rs 46,000 in Q1FY19.
After dipping in Q3 2018 to Rs 38,000 7. www.nclt.gov.in
“At the time of the first round of bidding, those interested
had access to the January 2018 numbers, when Essar
recorded an EBITDA (operating earnings) of Rs 1.9 billion,
sales of Rs 23.8 bn and production of 540,000 tonnes.From
there, it steadily moved to an EBITDA of Rs 3 billion, sales [email protected]

TAXATION
TAX TITBITS
CMA S. Rajaratnam
Retd. Member
Income Tax Appellate Tribunal
Advocate & Tax Consultants
Chennai
C
orona Virus occupies newspapers about the steps Taxpayers’ Charter is already in vogue in U.S., Australia,
that are being taken worldwide for arresting the Hong Kong, Chile, Italy, Kenya, Brazil and Mexico.
damages caused by this vermin. Even so the According to the International Ombudsman Institute (IOI),
budget proposals by our Finance Minister Smt. there are now ombudsmen in around 140 countries who
Nirmala Sitharaman has drawn more than usual attention, are likely to be vested with more enforceable rights for the
besides giving her credit as one of our talented and illustrious taxpayers and, therefore, most welcome.
Finance Ministers which India has had, starting from Late There are also other welcome measures as for example
Shri. R.K. Shanmugam Chetty, Shri. T.T. Krishnamachari, the increase in tolerance limit for the difference between
Shri. P. Chidambaram and Dr. Manmohan Singh. accounted consideration for sale of immovable property
One of the main features of the budget as indicated in the and the guidelines value from five to ten per cent.
last issue is decriminalisation of normal defaults converting A major step is the Direct Tax Vivad Se Vishwas Act, 2020,
them into criminal offences. Even before it has become law, which has received the assent of the President on 17.3.2020
the liberalisation of this policy has started by the Ministry with minor clarificatory amendments, intended like some
of Corporate Affairs directing Registrars of Companies of the earlier measures to retard the alarming increase in
and Official Liquidators to offer immunity to independent litigation as between the taxpayers and the Department.
and non-executive directors, who are not promoters of the But this measure can only be described as half-hearted as
company by not taking any criminal action against them, it only offers immunity from penalty and prosecution apart
while Fifth Amendment Rule, 2019 notified has introduced from partial relief in matters of interest, while it requires
a Scheme for training of independent directors before their the payment of the entire disputed tax along with extra tax
induction. at different rates with minimum at 10% irrespective of the
Another major reform, in the budget proposals is nature of the dispute making the right of appeal illusory.
the abolition of Dividend Distribution Tax. But it is The Scheme has been introduced with a lot of fanfare as
only a measure of shifting liability from company to a great concession and is expected to be implemented by
its shareholders. What is overlooked is that taxation the Assessing Officers bringing pressure on the assessees in
of dividend itself amounts to double taxation, whether arrears of disputed tax to avail the Scheme. This one-sided
the dividend is taxed in the hands of the company or the Scheme which expects payment of the entire disputed tax
shareholders, because the dividend is paid out of the taxed along with an extra tax only to buy immunity from penalty
profits. This aspect of double taxation has been recognised and prosecution is a bad bargain for the taxpayers and is,
only in Greece, where dividend distributed is allowed as therefore, one-sided. With better application of mind and
a deduction from taxable income of the company, so that on representations from the taxpayers, a review should be
double taxation of dividend both in the hands of the company possible to make the Scheme more successful.
and its shareholders is altogether avoided. Besides the
While the Finance Minister’s budget intends to bridge
company on the income out of which dividend is declared,
the differences between the taxpayers and tax collector,
taxation of distributed dividend whether in the hands of the
measures are not adequate as only few of the inequities
company or shareholders amounts to double taxation, so as
have been attended to. All the same, the Budget 2020 will
to require rethinking in the light of the fact that the dividend
be a landmark bringing credit for our Finance Minister for
distributed is itself out of taxed income.
more than one reason.
A major step in the budget is the introduction of Taxpayers’
Charter as part of our law vesting the taxpayers with
certain rights. Ombudsmans have not served their purpose. [email protected]

INSTITUTE NEWS
EASTERN INDIA REGIONAL COUNCIL
THE INSTITUTE OF COST ACCOUNTANTS OF INDIA

SERAMPORE CHAPTER
The chapter on 16th February 2020 organized a half day

seminar on “Recent Amendments in the area of Income
Tax- a Section wise Analysis” at Serampore, CMA Bhawan.
CMA Syamalendu Bhattacharya [Addl. Asst. Director
(TRG) Direct Taxes Regional Training Institute, Kolkata
(Retired)] was the key note speaker to the occasion. The
welcome address to the seminar was given by CMA Ranjan
Sanyal, chairman of the chapter. He also highlighted the
key amendments as has been taken place in the area of
Income Tax in the recent past including Budget 2020. CMA
Syamalendu Bhattacharya elaborated in detail the changes
as has been proposed in the Finance Bill 2020 covering the THE INSTITUTE OF COST ACCOUNTANTS OF INDIA
areas of personal income tax computation, corporate tax BHUBANESWAR CHAPTER
computation, various provisions of TDS, residential status,
transfer pricing etc. The whole program was coordinated by The Chapter organized a Career Awareness Programme cum
CMA Bibhas Saha, secretary of the chapter. The seminar Seminar on “Union Budget 2020-21: It’s Impact on Indian
ended with a formal vote of thanks from CMA Santanu Economy and Taxation” at Kalinga College of Commerce
Mukhopadhyay, Past Chairman of the chapter. Among , Bhubaneswar on March6, 2020. CMA Surya Narayan
others present in the seminar were, CMA Ashis Banerjee, Tripathy, Member of MC and Chairman, Infrastructure
Regional Council Member, EIRC and past Chairman of the Development Committee of the chapter delivered on
Serampore Chapter, CMA Prabir Kumar Datta, immediate the topic as “Resource Person”. CMA Debadatta Swain,
Past Chairman of the Chapter, and a host of CMAs. Member & Guest Faculty of the chapter highlighted about
CMA Course and its career prospects. A Career Awareness
Programme cum Seminar on “GST: Issues and Challenges”
held at KISS College of Commerce, Bhubaneswar on
March 6, 2020. CMA Subhasish Sahoo, Director, Cany
Advisory Services Pvt. Ltd and Practicing Cost Accountant
delivered on the topic as “Resource Person”. Shri Hemanta
Kumar Biswal, Asst. Admin. Officer highlighted on Career
Prospects in CMA Course and clarified various queries
of Students w.r.t CMA Course. On the occasion, Prof.
(Dr.) Harekrishna Satapathy, Vice Chancellor of KISS
Deemed University also addressed. The Chapter celebrated
“International Women’s Day” on March 8, 2020 at its
premises in a grand way. CMA Saktidhar Singh, Chairman
of the Chapter delivered welcome & key note address. CMA
Niranjan Mishra, Council Member and Chairman, Indirect
Taxation Committee, ICAI graced and addressed on the
occasions as “Guest of Honour”. Eminent State Level
Women dignitaries such as Professor Supriya Pattanayak,
BANKURA CHAPTER
Vice - Chancellor, Centurion University of Technology and
Management , Khordha inaugurated and graced as “Chief
Guest” on the occasion , Dr. Mitali Chinara, Professor and
The Chapter organized a career counselling programme
Head, Department of Analytical and Applied Economics,
on March 3, 2020 at Ramananda College, Bishnupur. Dr
Utkal University, Bhubaneswar, Dr. Sruti Mohapatra, Chief
(Ms) S Gorai, Principal of Ramananda College, CMA S C
Executive Officer, Swabhiman (State Disability Information
Samanta, chairman of the chapter and others addressed the
and Resource Center), Bhubaneswar and Mrs. Puspalata
programme.
Panda, Social Entrepreneur, PRERANA, Bhubaneswar
graced and addressed on the occasion as “Special Guests”. As
assigned the responsibility by the Institute, this Chapter has
successfully organised 4 days out of 12- day pre-Placement
Orientation Programme from 12.03.2020 to 15.03.2020 for
December, 2019 term qualified Students. Shri Radhashyam
Mahapatro , Director (HR) NALCO Ltd., Bhubaneswar

INSTITUTE NEWS
inaugurated and graced the 12-Days Pre-placement
orientation training programme as “Chief Guest” and CMA
Bijay Kumar Mohanty, Chief Project Manager, REC Ltd.,
Odisha as “Special Guest” in the presence of CMA Niranjan
Mishra, Council Member and Chairman, Indirect Taxation
Committee, ICAI, CMA Saktidhar Singh, Chairman , ICAI-
Bhubaneswar Chapter, CMA Himoj Mishra, Secretary,
ICAI-Bhubaneswar Chapter and CMA Santanu Kumar
Rout, Chairman, Coaching Committee, ICAI-Bhubaneswar
Chapter. In Second session (Pre-Lunch) CMA Debaraj
Biswal, Former CEO of CESCO, Odisha and Former MD &
CEO of Bhubaneswar Stock Exchange Ltd., Bhubaneswar
shared his rich industry experience among the participants
and in Post Lunch session CMA Shiba Prasad Padhi, Partner
, M/s SAPSJ & Associates, Cost Accountants, Bhubaneswar
guided the Young CMAs on “GST: Practical Aspects, online
Filing and Returns”. On Day 2, CMA CS Uttam Kumar
Mohalik, Practicing Company Secretary, Bhubaneswar
taken on the topic “Overview on Companies Act, 2013”
and Post Lunch Session was taken by CMA Surya Narayan
Tripathy, Chairman, Infrastructure Development Committee
of the Chapter on “Basic Accounting”. On Day 3, March
14, 2020, Pre- lunch session was taken by CMA Niranjan
Mishra, Sr Partner, M/s Niran & Co., Cost Accountants and
Council Member& Chairman Indirect Taxation Committee,
ICAI on “Cost Accounting & Auditing Standards” and Post-
Lunch Session was taken by Dr. Anita Mishra, Soft Skill
Trainer, Bhubaneswar on “Techniques on Resume Writing”.
On Day-4, March 18, 2020, Pre-Lunch session was taken by
Dr. Ajit Kumar Kar, Senior Manager & In-Charge, Learning
& Development, IMFA Ltd., Bhubaneswar on “Soft Skill
& Communication Skill Development” and Post-Lunch
Session was taken by CMA Sudhansu Ku Sahu, GM (Fin),
CESU & Past Chairman, ICAI- Bhubaneswar Chapter on
“Overview of Direct Tax : Computation of Income under
head Salaries, Capital Gain, Allowable and Disallowable
expenses under Business Profit & Gain”. As a part of CSR
and branding activities , this Chapter has successfully
organised “3- Days Yoga Camp” in association with Patanjali
Yoga Pitha, Khordha during 13.03.2020 to 15.03.2020
at CMA Bhawan,. Yoga Guru Shri Sudhanshu Sekhar
Adhikari , Head , Patanjali Yoga Pitha, Khordha , Odisha
guided participants on Yoga, Ayurveda & Meditation. The
Chapter recently elevated to the post of Director (Finance)
in two reputed power sectors units of Odisha. CMA Samir
Kumar Swain, Member of the chapter who has been recently
elevated to the position of Director (Finance), Odisha Power
Transmission Corporation Ltd. (OPTCL) was greeted by
CMA Saktidhar Singh Chairman, CMA Mukesh Chaubey,
Vice Chairman and CMA SatyabrataHota, Member of the
Chapter on February 14, 2020.CMA Gagan Bihari Swain,
Member and Past Chairman of the Chapter who has been
recently elevated to the position of Director (Finance),
GRIDCO Ltd, greeted by CMA Niranjan Mishra, Council
Member and Chairman, Indirect Taxation Committee, ICAI,
CMA Bibhuti Bhusan Nayak, Vice Chairman, EIRC and
CMA Saktidhar Singh Chairman of the Chapter on February
26, 2020.

INSTITUTE NEWS
NORTHERN INDIA REGIONAL COUNCIL

JAIPUR CHAPTER
The chapter organized a seminar on “Insolvency &

Bankruptcy Code” and “Ease of Doing Business” on 15th
February 2020 at itspremises. The seminar was organized
in association with Insolvency and Bankruptcy Board of
India (IBBI) & Insolvency Professional Agency of the
Institute. The seminar was inaugurated by Dr. B.L. Gupta,
Retd. Professor, University of Rajasthan. In the beginning
of the seminar, chairman of the Chapter, CMA S.L.
Swami welcomed key speakers and all the participants.
In first technical session, key speaker was Advocate
SatyendraKhorania. He explained in detail about various
amendments in the Insolvency & Bankruptcy Code during
the year 2019.In the second technical session, key speaker
was CMA Vishnu Upadhyay who explained in detail on the
topic “Ease of Doing Business”. Program was conducted
by Vice-Chairman of the chapter, CMA SudarshanNahar.
secretary of the chapter, CMA Swapnil Bhandari thanked
key speakers and all the participants.

GUWAHATI CHAPTER
The chapter published the first ever e-newsletter on

15thMarch 2020. CMA Rana Bose, chairman of the chapter
released the issue in a general meeting of the members.
Speaking on the occasion, chairman, CMA Bose thanked
all the members who had contributed to the publication of
the journal. He had also informed that the newsletter would
be a medium to share updated information on the chapter’s
activities as well as the profession.

INSTITUTE NEWS
Commissioner and Thiru A. Swaminathan- Jt. Commissioner
SOUTHERN INDIA REGIONAL COUNCIL participated.
SIRC organised Discussion Meeting/Study Circle Meetings

at its premises on different dates of February 2020. As per the
directives received from Advanced Studies Directorate, ICAI
SAP-FICO Power User Course 2019-20 was commenced
on 1st February, 2020 followed by a formal inaugural
session. CMA Mrs. Jyothi Satish, Chairperson, SIRC –ICAI
addressed the participants. Ms. J. Indhu Priadarshini was the
trainer of the programme.SIRC organised the Oral Coaching
Inauguration Programmes on 12th February, 2020 at its
premises for its Foundation, Intermediate & Final students
who would be appearing for Institute Examinations to be held
in June 2020. CMA Mrs. Jyothi Satish, Chairperson-SIRC
welcomed the CMA Dignitaries, students and their parents
during her welcome address. CMA K. Rajagopal, Chairman,
Students’ Facilities Committee – SIRC in his address
mentioned that CMA Qualification is one of the most sought
after qualifications in the employment market nowadays
and even a student who has completed CMA Intermediate
Course can get placement for a reasonable pay package.
CMA K. PandurangaRao, RCM-SIRC in his address briefed
on his professional career and advised students to attend all
classes during their Coaching Sessions which will help in
fetching high marks to get through the CMA Examinations
in single attempt. CMA Y. Srinivasa Rao, RCM – SIRC in
his address highlighted that CMA Course is the best course
and many manufacturing organizations recruiting CMAs
to implement Cost Reduction and Cost Control processes.
CMA H. Padmanabhan, Council Member of the Institute in THE INSTITUTE OF COST ACCOUNTANTS OF INDIA
his special address said that the entire CMA Course can be HYDERABAD CHAPTER
completed with a very minimum cost and for the past 12
years, there is no increase in the Course Fee. CMA Sankar P The Chapter on 12th February, 2020 organized progamme
Panicker, Vice Chairman, SIRC in his address said collective on intricacies of IBC process and NCLT Procedures-issues
decision by a student and his/her parents to join the CMA in association with ICSI-Hyderabad branch. CS Dipti Atul
Course is important and nowadays cultural shift is happening Mehta and CS G. Raghu Babu elaborated the intricacies of
in the economy. CMA R. Vishwanath Bhat, Treasurer – SIRC IBC Process and NCLT Procedures. The chapter on 22nd
in his address stressed the students on the need to develop & 23rd February, 2020 organized a programme on Data
theoretical and practical knowledge while pursuing their analytics and tools for decision making. K. Vijay Srinivas,
CMA Course and the pay package offered by the Corporates CA Saran Kumar, CA Premnath D. have presented vivid
are based only on candidate’s talent, exposure and subject lectures on this subject. Shri Taha Hussain, Director –
knowledge in the respective areas. CMA D. Muni Sekhar, Deloitte India was the Chief Guest for this program. On
Secretary , SIRC proposed vote of thanks and the programme 26th to 28th February, 2020, the chapter organized Special
concluded with National Anthem. SIRC organised the coaching sessions on “Registration and preparation for exam-
2ndBatch of Training programme on ‘Advanced Course on independent directors”. CMA Dr. P. Siva Rama Prasad, Retd.
Goods & Services Tax’ to Senior Officers of the Commercial Asst. General Manager, SBI has trained the aspirants for the
Taxes Department , Govt. of Tamilnadu at Hotel Thangam mandatory exam of the independent directors. Recognizing
Grand. Madurai during 18th February to 20th February, stress and knowing how to manage it can be challenging. Shri
2020. The 3rd Batch of the said Training was held at Hotel K.S.K. Jayadev Rao, Motivational speaker on February 28,
TajVivanta, Coimbatore from 24th February to 26th February, 2020 explained very clearly about effects and management of
2020. CMA Jyothi Satish, Chairperson, SIRC welcomed the stress to support a healthy state of being. CMA K. Narasimha
participants and rendered Inaugural Address. Thiru Suseel Murthy has been appointed as Director of National Stock
Kumar, Director/Jt. Commissioner(State Tax), Commercial exchange. The Hyderabad Chapter felicitated him on this
Taxes Staff Training Institute, Chennai addressed the occasion on February 29, 2020. The Chapter organized
participants on the importance of the Training Programme and a felicitation ceremony to all CMAs, who witnessed a
briefed on the topics to be covered by the eminent speakers. professional career of more than 40 years and have crossed the
In the 3rd Batch, during the Inaugural Session, ThiruKranthi age of 70, on 29th of February 2020 at FTAPCCI, Redhills,
Kumar Pati, IAS -Jt. Commissioner, Tmt. Gayathri Krishnan Hyderabad.The program was well attended by the members
B, IAS - Jt. Commissioner, Thiru S. Gnanakumar - Jt. with their family and we invited Shri N. Ram Chander Rao,

INSTITUTE NEWS
MLC of Telangana as a chief guest and Shri Raavi Kondal
Rao, Telugu film actor as a special invitee and dignitaries.
MYSURU CHAPTER
CMA Dr. A.S. Durga Prasad, Past-President and CMA Dr. K
C H A V S N. Murthy, Central Council Member graced the
A One day State level “Workshop on International Financial
dais.
Reporting Standards” was organized by Sarada Vilas college
Mysuru in association with the chapter was conducted on
February 25, 2020. The chief guest of the programme was
Dr D Anand Dean, Commerce and Business Administration,
Bahaddur Institute of Management. Manasa Gangothri UoM
Mysuru, highlighted the importance of Convergence of IFRS
and Ind AS and Prof Sathyanarayana presented keynote
address. Shri B S Parthasarathy. President Sarada Vilas
Educational Institutions, Shri H K Srinath Hon. Secretary
SVEI and CMA M Ashok Kumar, Chairman ICAI Mysuru
Chapter and Prof. Dhanalakshmi P, Principal Sarada Vilas
College were present in the workshop.

COCHIN CHAPTER
The Chapter conducted jointly with IBBI, a PD programme

on The Insolvency and Bankruptcy Code (Amendment)
Ordinance, 2019 and Ease of Doing Business at CMA
Bhavan, Center For Excellence, Vyttila, Cochin 0n 22nd
Feb 2020. The programme was inaugurated by lighting the
lamp. The session handled by CMA Sankar P. Panicker,Vice
Chairman, SIRC. The Students Committee of the chapter
conducted a Management Fest “Pragathi-2k20” on March 6,
2020 at DD Retreat Club, Thammanam, Cochin. CMA Anil
Xavier, Chairman of the Chapter welcomed Chief guest,
all the dignitaries present on the dais and participants from
various chapters to the programme. The programme was
inaugurated by President of the Institute CMA Balwinder
Singh and he delivered inaugural speech. CMA Jyothi
Sathish, Chairperson, SIRC and CMA H. Padmanabhan ,
Central Council Member and CMA Sankar P Panicker, SIRC
Vice Chairman were presented in the fest. Cochin Chapter
Students Committee Chairman Mr.Ananthu K.V. offered the
vote of thanks. The chapter celebrated Women’s Day and
conducted a PD programme on “Women in Management –
Challenges & Opportunities”. The special guest and speeker
of the programme was CMA Rekha Venugopal, AGM -
Finance & Accounts, HR, Trans Asian Shipping Services
Pvt. Ltd. CMA Meena George, MC Member welcomed all
the dignitaries present on the dais and members presented
for the programme. CMA Anil Xavier, Chairman Cochin

INSTITUTE NEWS
Chapter and CMA Sankar P.Panicker Vice Chairman, SIRC
were presented. CMA Renjini R., MC Member offered vote
of thanks to all the members.

COIMBATORE CHAPTER
A PD Program was conducted on 3rd February, 2020 on

Budget Analysis jointly with ICSI Coimbatore Chapter,
Coimbatore Management Association, The Auditors
Association of Southern India, Coimbatore Branch and PSG
Institute of Management, Coimbatore. Speakers were Dr. CA
V. Gopalan, Director, Janhar Management Services on Impact
of Budget – Economic and Sectorial analysis and CA K.Ravi,
CFO Roots Group of Companies on Budget and Direct
Taxes and CA M.Ramji, Practising Chartered Accountant,
Coimbatore on Budget and Indirect Taxes. A joint PD
Program with The Auditors Association of Southern India,
Coimbatore Branch was conducted on 24th February, 2020.
CMA A.N. Raman, Past President SAFA gave a vivid lecture
on “Disruptive Business Strategies”. The chapter celebrated
International Women’s Day on 9th March, 2020. Chief Guest
Smt. B. Gayathri Krishnan, IAS, Joint Commissioner, Tamil
Nadu Commercial Taxes Dept, Coimbatore inaugurated the
function. CA. SasirekhaVengatesh conducted a workshop.
Demo on self defence for ladies was conducted which was
found useful by female members present.

THRISSUR CHAPTER
The Chapter conducted a Seminar on Union Budget –

2020 at Casino Hotels Ltd., Thrissur on 22nd Feb 2020. CA
V. Ramnath, Partner, M/s. K S Palanisamy & Co, Chartered
Accountants, Coimbatore took the technical session.

INSTITUTE NEWS
SALEM CHAPTER
The Chapter conducted a seminar on 30th January 2020

on the title “Charitable Trust under Income Tax Act”. CMA
Dr K Nagarajan explained among various provisions, that
the Trust has to file Income Tax Return in ITR-7 for every
financial year on or before the 30thSeptember of next
year. CMA Dr K Nagarajan in his address in the seminar
on ‘Highlights of Union Budget 2020’ conducted by the
Chapter on 8th February 2020 highlighted that the GDP WESTERN INDIA REGIONAL COUNCIL
Growth is expected to be in the range of 6% to 6.50% during
2020-21 as against 5% during 2019-20 based on estimates. WIRC celebrated International Women’s Day on 8th
Prime Minister Kisan Samman Nidhi has been extended to March 2020 at Thane SMFC. Dr. Sujata Yardi, Master
all farmers irrespective of the land size. Past President of the of Science (Physiotherapy), FIAP, Professor & Dean of
Institute, CMA M Gopalakrishnan took active participation College of Physiotherapy Nerul, Mrs Varsha Kolhatkar,
in the session and shared his views on the ‘Union Budget Asstt Commissioner Customs and CGST & CMA ArtiPatil,
2020’. Chief General Manager, Saraswat Co–op bank Ltd, were
the guest speakers. CMA Neeraj Joshi, Chairman WIRC,
CMA AshishThatte, CCM-ICAI, CMA Chaitanya Mohrir,
Chairman, Task Force for Women Empowerment, WIRC
& CMA Vinayak Kulkarni, Professional Development
Committee-WIRC were also present on the occasion.

HOSUR CHAPTER
The Chapter inaugurated the sixth batch GST certificate

course on February 29, 2020. Chief Guest was Shri Nagaraj,
Assistant Commissioner GST, State Tax. CMA Marga
bhandhu, Member, CMA Rajhshekar M R., chairman
of the chapter, Shri Nagaraj AC-GST State Tax, CMA
CA Venkateswaran, Member were among the eminent
dignitaries present in the programme. On February 15, 2020,
the chapter inaugurated the second batch oral coaching.
Chief Guest Smt. Jyothi Satish, Chairman SIRC, Chennai,
Guest of Honur, Shri Suresh Gunajali Past Chairman SIRC,
Shri Vishwanath Bhat Treasurer SIRC and Shri Shivakumar,
Chairman Oral Coaching attended the programme.

PIMPRI CHINCHWAD AKURDI CHAPTER
The Chapter conducted a seminar on ‘IFRS’ on 4th

January, 2020 at CMA Bhawan, Pimpri, Pune. CMA
Pradeep Deshpande, Secretary of the chapter welcomed and
introduced the speaker CMA Pradeep Sahasrabudhe. CMA
Pradeep Deshpande felicitated him by offering a memento.
CMA PradeepS ahasrabudhe in his speech said IFRS is a set
of accounting standards developed by an independent, not-

INSTITUTE NEWS
for-profit organization called the International Accounting
Standards Board (IASB). The chapter conducted seminar on
‘Challenges in Implementation and Cost Benefit Analysis of
Artificial Intelligence and Business Intelligence Proposal’
on 8th February, 2020 at CMA Bhawan, Pimpri, Pune.
CMA Pradeep Deshpande welcomed and introduced the
speaker, CMA Ajay Mahajan, Dy General Manager, Tata
Motors. CMA Dhananjay Kumar Vatsayan felicitated CMA
Ajay Mahajan by offering memento.The Chapter conducted
inaugural function of Oral Coaching classes on 18th January
2020 at CMA Bhawan.CMA Pradeep Deshpande, Secretary
welcomed all the students, Chief Guest CMA Gopal Bhutada,
General Manager, Business Finance, Tata Motors Ltd., CMA
Mahendra Bhombe, Treasurer, WIRC of ICAI, CMA Ashish
Deshmukh, Past Chairman of PCA Chapter and Mr. Prabhakar
Mendhe, Soft Skill Facilitator. CMA Mahendra Bhombe THE INSTITUTE OF COST ACCOUNTANTS OF INDIA
felicitated CMA Gopal Bhutada and CMA PradeepDeshpande BARODA CHAPTER
felicitated Mr. Prabhakar Mendhe by offering mementos.CMA
Ashish Deshmukh gave information about the chapter. CMA The Chapter arranged a live event on Union Budget 2020,
Sagar Malpure gave presentation about oral coaching and on 01st February 2020. More than 20 members and students
faculties of the chapter. CMA Gopal Bhutada in his speech have been benefited from the said session.The chapter got
congratulated all the students for choosing CMA option Best Performing Chapter under Category ‘B’ of WIRC for the
and guided them about future career of CMA Profession. year 2019 in the hand of Member of Parliament Mr. C R Patil
CMA Mahendra Bhombe gave some important tips about Sir, at RCC 2020 at Surat. The Chapter also organised Student
Examination, Interviews, Competition in market, Job options Conference for motivating the students who have passed out
etc.The chapter celebrated Republic Day on January 26, 2020 in December 2019 term in Foundation, Intermediate and Final
at CMA Bhawan, Pimpri, Pune. On this occasion CMA Jayant on 22nd February 2020.The Chapter took part in INDO – US
Hampiholi, chairman of the chapter hoisted the flag. Members Summit; Namaste Trump Program at Motera Cricket Stadium,
from professionals, members of the Institute, students, Ahmedabad on 24th February 2020, jointly with Federation of
managing committee members and staff of the chapter were Gujarat Industries, Vadodara Chapter of Company Secretary,
present for this event. The function was followed by national Baroda Branch of Chartered Accountants. The Chapter
anthem.The Chapter conducted a seminar on ‘Coffee with arranged CEP programme on ‘Excellence in Excel’ on 29th
Live Telecast on Union Budget 2020 and Discussion’ on 1st February 2020. The Faculty was CA Suril Mehta. The speaker
February, 2020 at CMA Bhawan, Pimpri, Pune.CMA Jayant was felicitated by CMA HardikDiwanji, chairman of the
Hampiholi, Chairman, CMA Pradeep Deshpande, Secretary chapter.
and other committee members along with members in
practice, members from industries, professionals and students
attended the seminar. The chapter conducted a seminar on
‘Union Budget 2020’ on 8th February, 2020 at CMA Bhawan,
Pimpri, Pune. CMA Pradeep Deshpande, secretary of the
chapter welcomed and introduced the speakers, CMA L D
Pawar, Past Chairman – WIRC and CMA JayantHampiholi,
chairman of the chapter. CMA Jayant Hampiholi felicitated
CMA L D Pawar and CMA Abhijeet Deshmukh felicitated
CMA Jayant Hampiholi by offering a memento.CMA Jayant
Hampiholi briefly highlighted on the Union Budget 2020.
CMA L D Pawar in his speech said, our Hon’ble Finance
Minister assures that the Tax Harassment will end very soon.
He covered the topic on Key GST Proposals, Excise and
Customs under Indirect Tax. The program ended with vote of
thanks.

STATUTORY UPDATES
DIRECT & INDIRECT TAXES UPDATES - MARCH 2020
operates in accordance with the Securities and Exchange
DIRECT TAXES UPDATES
Board of India, circular IMD/HO/FPIC/CIR/P/2017/003
Notification No. 14/2020 dt 4th March 2020: dated 04th January, 2017, shall be deemed as Foreign
AGREEMENT BETWEEN THE GOVERNMENT OF THE Institutional Investor (FII) for the purposes of transactions
REPUBLIC OF INDIA AND THE GOVERNMENT OF in securities made on a recognised stock exchange located in
HIS MAJESTY THE SULTAN AND YANG DI-PERTUAN any International Financial Services Centre (IFSC), where
OF BRUNEI DARUSSALAM FOR THE EXCHANGE OF the consideration for such transaction is paid or payable in
INFORMATION AND ASSISTANCE IN COLLECTION foreign currency.
WITH RESPECT TO TAXES. An Agreement between the
Government of the Republic of India and the Government Notification No.18/2020 dt 18th March 2020: The Direct
of Brunei Darussalam for the exchange of information and Tax Vivad Se Vishwas Rules, 2020: In exercise of the
assistance in collection with respect of taxes (hereinafter powers conferred by sub-section (2) of section 12 read with
referred to as the said Agreement) was signed at New Delhi, sub-sections (1) and (5) of section 4 and sub-sections (1) and
India on the 28th day of February, 2019. (2) of section 5 of the Direct Tax Vivad se Vishwas Act, 2020
(3 of 2020), the Central Government hereby makes the rules.
Notification No. 15/2020 dt 5th March 2020: In exercise
of the powers conferred by clause (xii) of sub-section (5) Notification No.19/2020 dt 20th March 2020: — In
of section 11 read with section 295 of the Income-tax Act, exercise of the powers conferred by clause (46) of section
1961 (43 of 1961), the Central Board of Direct Taxes hereby 10 of the Income-tax Act, 1961 (43 of 1961), the Central
makes the following rules further to amend the Income-tax Government hereby makes the following amendments in the
Rules, 1962, namely: In the Income-tax Rules, 1962, in rule notification of the Government of India, Ministry of Finance,
17C, after clause (v), the following clause shall be inserted, (Department of Revenue), (Central Board of Direct Taxes)
namely: - “(va) investment made by a person, authorised number S.O.1537(E) dated 09th April, 2019 published in
under section 4 of the Payment and Settlement Systems Act, the Gazette of India, Extraordinary, Part-II, Section 3, Sub-
2007, in the equity share capital or bonds or debentures of section (ii), namely:-
a company — (A) which is engaged in operations of retail In the said notification
payments system or digital payments settlement or similar (a). for the third paragraph, the following paragraph shall
activities in India and abroad and is approved by the Reserve be substituted, namely;-
Bank of India for this purpose; and (B) in which at least fifty-
one per cent of equity shares are held by National Payments “3. This notification shall be deemed to have been
Corporation of India.” applied for the period from 01-06-2011 to 31-03-
2012 in the assessment year of 2012-2013 and also
from the assessment years 2013-2014, 2014-2015,
Notification No.16/2020 dt 5th March 2020: —In exercise 2015-2016, 2016-2017, 2017-2018, 2018-2019 and
of the powers conferred by sub-clause (d) of clause (viiab) shall apply with respect to the assessment years 2019-
of section 47 of the Income-tax Act, 1961 (43 of 1961), the 2020, 2020-2021, 2021-2022, 2022-2023, and 2023-
Central Government hereby notifies the following securities 2024.”;
for the purposes of the said sub-clause, namely:- (i) foreign
currency denominated bond; (ii) unit of a Mutual Fund; (iii) (b). at the end, the following Explanatory Memorandum
unit of a business trust; (iv) foreign currency denominated shall be inserted, namely:-
equity share of a company; (v) unit of Alternative Investment “Explanatory Memorandum This notification shall be
Fund, which are listed on a recognised stock exchange given retrospective effect for the period from 01-06-
located in any International Financial Services Centre in 2011 to 31-03-2012 in the assessment year of 2012-
accordance with the regulations made by the Securities and 2013 and also from the assessment years 2013-2014,
Exchange Board of India under the Securities and Exchange 2014-2015, 2015-2016, 2016-2017, 2017-2018,
Board of India Act 1992 (15 of 1992) or the International 2018-2019, in view of the order of the Hon’ble High
Financial Services Centres Authority under the International Court of Karnataka in the matter of Mysore Palace
Financial Services Centres Authority Act 2019 (50 of 2019), Board V. the Central Board of Direct Taxes and 3
as the case may be. This notification shall come into force Others [W.P. No.40801 of 2019 (T-IT)], dated 17th
with effect from 1st April 2020. Day of December, 2019. It is certified that by giving
retrospective effect to the notification no person
Notification No. 17/2020 dt 13th March 2020: —In interest will adversely get affected.”
exercise of the powers conferred by clause (a) of the 3. This notification shall be deemed to have come into
Explanation to section 115 AD of the Income-tax Act, 1961 effect from 09th April, 2019
(43 of 1961), the Central Government hereby specifies that
a nonresident being an Eligible Foreign Investor which Notification no 20/2020 dt 20th March 2020: In exercise

STATUTORY UPDATES
of the powers conferred by clause(b) of section 164 and in a case unless the estimated salary income including the
section 178 of the Finance Act, 2016 (28 of 2016) read with value of perquisites is taxable after giving effect to the
sub-sections(1) and (2) of section 120 of the Income-tax Act, exemptions, deductions and relief as applicable.
1961, (43 of 1961) the Central Board of Direct Taxes hereby
authorizes the Assessing Officer working in the Principal 2. In view of the above, Circular No.04/2020 may
Chief Commissioner of Income-tax (international Taxation) accordingly be treated as modified to this extent.
Region having Jurisdiction in respect of the assessees for the
purpose of the Income-tax Act, 1961, to exercise or perform
all or any of the powers and functions conferred on, or, INDIRECT TAXES UPDATES
assigned to an Assessing Officer for the purpose of Chapter
VIII of Finance Act, 2016 . Circular No. 132/2/2020 – GST dt 18th March 2020:
Clarification in respect of appeal in regard to non-constitution
Notification No 21/2020 dt 20th March 2020: of Appellate Tribunal: The matter has been examined in
CORRIGENDUM: —In the notification of the Government detail. In order to clarify the issue and to ensure uniformity in
of India, Ministry of Finance (Department of Revenue), the implementation of the provisions of the law across field
published on the 18th March, 2020, vide S.O. 1129(E), in formations, the Board, in exercise of its powers conferred by
the Gazette of India, Extraordinary, Part II, Section 3, Sub- section 168 (1) of the CGST Act, hereby issues the following
section (ii), at page 32, in Form-3, for “as per column (7) clarifications and guidelines.
above within thirty days”, read “as per column (8) above Appeal against an adjudicating authority is to be made as
within fifteen days”. per the provisions of Section 107 of the CGST Act. The sub-
section (1) of the section reads as follows:
Circular No 7/2020 dt 4th March 2020: Clarifications “107. (1) Any person aggrieved by any decision or order
on provisions of the Direct Tax Vivad se Vishwas Bill, passed under this Act or the State Goods and Services Tax
2020 : During the Union Budget. 2020 presentation, the Act or the Union Territory Goods and Services Tax Act
‘Vivad se Vishwas’ Scheme was announced to provide by an adjudicating authority may appeal to such Appellate
for dispute resolution in respect of pending income tax Authority as may be prescribed within three months from the
litigation. Pursuant to Budget announcement, the Direct date on which the said decision or order is communicated to
Tax Vivad se Vishwas Bill, 2020 (Vivad se Vishwas) was such person
introduced in the Lok Sabha on 5th Feb, 2020. The objective Relevant rules have been prescribed for implementation
of Vivad se Vishwas is to inter alia reduce pending income of the above Section. The relevant rule for the same is rule
tax litigation, generate timely revenue for the Government 109A of Central Goods and Services Tax Rules, 2017
and benefit taxpayers by providing them peace of mind,
certainty and savings on account of time and resources
Circular No.133/ 03/2020-GST dt 23rd March 2020:
that would otherwise be spent on the long-drawn and
Clarification in respect of apportionment of input tax credit
vexatious litigation process. Subsequently, based on the
(ITC) in cases of business reorganization under section 18
representations received from the stakeholders regarding its
(3) of CGST Act read with rule 41(1) of CGST Rules:
various provisions, official amendments to Vivad se Vishwas
have been proposed. These amendments seek to widen the Representations have been received from various
scope of Vivad se Vishwas and reduce the compliance taxpayers seeking clarification in respect of apportionment
burden on taxpayers. and transfer of ITC in the event of merger, demerger,
amalgamation or change in the constitution/ownership of
business. Certain doubts have been raised regarding the
CORRIGENDUM TO CIRCULAR NO.4 /2020 DT
interpretation of subsection (3) of section 18 of the Central
16th January 2020: Income-Tax Deduction from Salaries
Goods and Services Tax Act, 2017 (hereinafter referred to
during the Financial Year 2019- 2020 under Section 192 of
as the CGST Act) and sub-rule (1) of rule 41of the Central
the Income-Tax Act, 1961
Goods and Services Tax Rules, 2017 (hereinafter referred to
In Circular No.04/2020 dated 16th January, 2020 on the as the CGST Rules) in the context of business reorganization.
above mentioned subject, it is to state that Para 3.1 under
heading “Method of Tax Collection” is modified as below:
Circular No.134/04/2020-GST dt 23rd March 2020:
Clarification in respect of issues under GST law for
For sentence 3 of Para 3.1: companies under Insolvency and Bankruptcy Code, 2016
No tax, however, will be required to be deducted at source 1. As per IBC, once an entity defaults certain threshold
in a case unless the estimated salary income including the amount, Corporate Insolvency Resolution Process
value of perquisites, for the Financial Year exceeds Rs (hereafter referred to as “CIRP”) gets triggered
2,50,0001- or Rs 3,00,0001- or Rs 5,00,0001-, as the case and the management of such entity (Corporate
may be, depending upon the age of the employee. Debtor) and its assets vest with an interim resolution
professional (hereafter referred to as “IRP”) or
May be read as: resolution professional (hereafter referred to as
No tax, however, will be required to be deducted at source “RP”). It continues to run the business and operations

STATUTORY UPDATES
of the said entity as a going concern till the Dadra and Nagar Haveli and Daman and Diu consequent to
insolvency proceeding is over and an order is passed merger of the two UTs
by the National Company Law Tribunal (hereinafter The Government, on the recommendations of the Council,
referred to as the “NCLT”) hereby notifies those persons whose principal place of
2. To address the aforementioned problems, notification business or place of business was in the erstwhile Union
No.11/2020- Central Tax, dated 21.03.2020 has territory of Daman and Diu or in the erstwhile Union territory
been issued by the Government prescribing special of Dadra and Nagar Haveli till the 26th day of January, 2020;
procedure under section 148 of the Central Goods and is in the merged Union territory of Daman and Diu and
and Services Tax Act, 2017 (hereinafter referred to Dadra and Nagar Haveli from the 27th day of January, 2020
as the “CGST Act”) for the corporate debtors who are onwards, as the class of persons who shall, except as respects
undergoing CIRP under the provisions of IBC and the things done or omitted to be done before the notification,
management of whose affairs are being undertaken follow the following special procedure till the 31st day of
by IRP/RP. In order to ensure uniformity in the May, 2020 (hereinafter referred to as the transition date) as
implementation of the provisions of the law across mentioned below.
the field formations, the Circular No.134/04/2020- The said registered person shall,-
GST Page 2 of 5 Board, in exercise of its powers
(i) ascertain the tax period as per sub-clause (106) of
conferred under section 168(1) of the CGST Act
section 2 of the said Act for the purposes of any of the
hereby clarifies various issues.
provisions of the said Act for the month of January, 2020
and February, 2020 as below:-
Notification No. 08/2020 – Central Tax dt 2nd March
(a) January, 2020: 1st January, 2020 to 25th January, 2020;
2020: Seeks to “Amend the CGST Rules, 2017 to prescribe
(b) February, 2020: 26th January, 2020 to 29th February,
the value of Lottery”: In the Central Goods and Services
2020;
Tax Rules, 2017, with effect from the 1st March, 2020, in
rule 31A, for sub-rule (2), the following sub-rule shall be (ii) irrespective of the particulars of tax charged in the
substituted, namely:- “(2) The value of supply of lottery shall invoices, or in other like documents, raised from the 26th
be deemed to be 100/128 of the face value of ticket or of the January, 2020 till the transition date, pay the appropriate
price as notified in the Official Gazette by the Organising applicable tax in the return under section 39 of the said Act;
State, whichever is higher. (iii) who have registered Goods and Services Tax
Identification Number (GSTIN) in the erstwhile Union
Notification No.09/2020– Central Tax dt 16th March territory of Daman and Diu and the erstwhile Union territory
2020: Seeks to exempt foreign airlines from furnishing of Dadra and Nagar Haveli till the 25th day of January,
reconciliation Statement in FORM GSTR-9C: — In exercise 2019 have an option to transfer the balance of input tax
of the powers conferred by section 148 of the Central credit (ITC) after the filing of the return for January, 2020,
Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter from the registered Goods and Services Tax Identification
referred to as the said Act), the Central Government, on the Number (GSTIN) in the erstwhile Union territory of Daman
recommendations of the Council, hereby notifies the persons and Diu to the registered GSTIN in the new Union territory
who are foreign company which is an airlines company of Daman and Diu and Dadra and Nagar Haveli by following
covered under the notification issued under sub-section (1) the procedure as below:-
of section 381 of the Companies Act, 2013 (18 of 2013) (a) the said class of persons shall intimate the jurisdictional
and who have complied with the sub-rule (2) of rule 4 of tax officer of the transferor and the transferee regarding
the Companies (Registration of Foreign Companies) Rules, the transfer of ITC, within one month of obtaining new
2014, as the class of registered persons who shall follow the registration;
special procedure as mentioned below. (b) the ITC shall be transferred on the basis of the balance
The said persons shall not be required to furnish in the electronic credit ledger upon filing of the return in
reconciliation statement in FORM GSTR-9C to the Central the erstwhile Union territory of Daman and Diu, for the tax
Goods and Services Tax Rules, 2017 under subsection (2) of period immediately before the transition date;
section 44 of the said Act read with sub-rule (3) of rule 80 (c) the transfer of ITC shall be carried out through the
of the said rules: return under section 39 of the said Act for the tax period
Provided that a statement of receipts and payments for the immediately before the transition date and the transferor
financial year in respect of its Indian Business operations, GSTIN shall debit the said ITC from its electronic credit
duly authenticated by a practicing Chartered Accountant ledger in Table 4(B)(2) of FORM GSTR-3B and the
in India or a firm or a Limited Liability Partnership of transferee GSTIN shall credit the equal amount of ITC in its
practicing Chartered Accountants in India is submitted for electronic credit ledger in Table 4(A)(5) of FORM GSTR-
each GSTIN by the 30th September of the year succeeding 3B.
the financial year. The balance of Union territory taxes in electronic credit
ledger of the said class of persons, whose principal place of
Notification No. 10/2020 – Central Tax dt 21st March business lies in the Union territory of Daman and Diu, as on
2020: Seeks to provide special procedure for taxpayers in the 25th day of January, 2020, shall be transferred as balance

STATUTORY UPDATES
of Union territory tax in the electronic credit ledger. or services or both to a registered person.
This notification shall come into force from the 1st
Notification No. 11/2020 – Central Tax dt 21st March October, 2020.
2020: Seeks to provide special procedure for corporate
debtors undergoing the corporate insolvency resolution Notification No. 14/2020– Central Tax dt 21st March
process under the Insolvency and Bankruptcy Code, 2016 2020: Seeks to exempt certain class of registered persons
In exercise of the powers conferred by section 148 of the capturing dynamic QR code and the date for implementation
Central Goods and Services Tax Act, 2017 (12 of 2017) of QR Code to be extended to 01.10.2020: In exercise of
(hereinafter referred to as the said Act), the Government, on the powers conferred by the sixth proviso to rule 46 of the
the recommendations of the Council, hereby notifies those Central Goods and Services Tax Rules, 2017 (hereinafter
registered persons(hereinafter referred to as the erstwhile referred to as the said rules), the Government, on the
registered person), who are corporate debtors under the recommendations of the Council, and in supersession of the
provisions of the Insolvency and Bankruptcy Code, 2016 notification of the Government of India in the Ministry of
(31 of 2016), undergoing the corporate insolvency resolution Finance, Department of Revenue No. 72/2019 – Central Tax,
process and the management of whose affairs are being dated the 13th December, 2019, published in the Gazette of
undertaken by interim resolution professionals (IRP) or India, Extraordinary, Part II, Section 3, Sub-section (i) vide
resolution professionals (RP), as the class of persons who number G.S.R 928(E), dated the 13th December, 2019,
shall follow the following special procedure, from the date except as respects things done or omitted to be done before
of the appointment of the IRP/RP till the period they undergo such supersession, hereby notifies that an invoice issued by
the corporate insolvency resolution process, as mentioned. a registered person, whose aggregate turnover in a financial
year exceeds five hundred crore rupees, other than those
referred to in sub-rules (2), (3), (4) and (4A) of rule 54 of
Notification No. 12/2020 – Central Tax dt 21st March
said rules, and registered person referred to in section 14
2020: Seeks to waive off the requirement for furnishing
of the Integrated Goods and Services Tax Act, 2017, to an
FORM GSTR-1 for 2019-20 for taxpayers who could not
unregistered person (hereinafter referred to as B2C invoice),
opt for availing the option of special composition scheme
shall have Dynamic Quick Response (QR) code.
under notification No. 2/2019-Central Tax (Rate)
Provided that where such registered person makes a
In the said notification, in paragraph 2, the following
Dynamic Quick Response (QR) code available to the
proviso shall be inserted, namely: – “Provided that the
recipient through a digital display, such B2C invoice issued
said persons who have, instead of furnishing the statement
by such registered person containing cross-reference of the
containing the details of payment of self-assessed tax in
payment using a Dynamic Quick Response (QR) code, shall
FORM GST CMP-08 have furnished a return in FORM
be deemed to be having Quick Response (QR) code.
GSTR-3Bunder the Central Goods and Services Tax Rules,
2017 (hereinafter referred to as the said rules) for the tax This notification shall come into force from the 1st day of
periods in the financial year 2019-20, such taxpayers shall October, 2020.
not be required to furnish the statement in outward supply of
goods or services or both in FORM GSTR1 of the said rules Notification No. 15/2020 – Central Tax dt 23rd March
or the statement containing the details of payment of self- 2020: Seeks to extend the time limit for furnishing of the
assessed tax in FORM GST CMP-08 for all the tax periods annual return specified under section 44 of CGST Act, 2017
in the financial year 2019-20.” for the financial year 2018-2019 till 30.06.2020.
Notification No. 13/2020– Central Tax dt 21st March Notification No. 16/2020 – Central Tax dt 23rd March
2020: Seeks to exempt certain class of registered persons 2020: Seeks to make third amendment (2020) to CGST
from issuing e-invoices and the date for implementation of Rules. In exercise of the powers conferred by section 164 of
e-invoicing extended to 01.10.2020 the Central Goods and Services Tax Act, 2017 (12 of 2017),
The Government on the recommendations of the Council, the Central Government hereby makes the following rules
and in supersession of the notification of the Government further to amend the Central Goods and Services Tax Rules,
of India in the Ministry of Finance, Department of Revenue 2017
No. 70/2019 – Central Tax, dated the 13th December, 2019,
published in the Gazette of India, Extraordinary, Part II, Notification No. 17/2020 – Central Tax dt 23rd March
Section 3, Sub-section (i) vide number G.S.R. 926 (E), dated 2020: Seeks to specify the class of persons who shall be
the 13th December, 2019, except as respects things done or exempted from aadhar authentication. In exercise of the
omitted to be done before such supersession, hereby notifies powers conferred by sub-section (6D) of section 25 of the
registered person, other than those referred to in sub-rules Central Goods and Services Tax Act, 2017 (12 of 2017),
(2), (3), (4) and (4A) of rule 54 of the said rules, whose the Central Government, on the recommendations of the
aggregate turnover in a financial year exceeds one hundred Council, hereby notifies that the provisions of sub-section
crore rupees, as a class of registered person who shall prepare (6B) or subsection (6C) of the said Act shall not apply to a
invoice and other prescribed documents, in terms of sub-rule person who is not a citizen of India or to a class of persons
(4) of rule 48 of the said rules in respect of supply of goods other than the following class of persons, namely:–

STATUTORY UPDATES
a. Individual; the erstwhile State of Jammu and Kashmir for the July, 2019
b. authorised signatory of all types; to October,2019 and November, 2019 to February, 2020 .
c. Managing and Authorised partner; and In the said notification, in the first paragraph, for the
second and third proviso, the following provisos shall be
d. Karta of a Hindu undivided family.
substituted, namely: –
This notification shall come into effect from the 1 st day
Provided further that the return by a registered person,
of April, 2020.
required to deduct tax at source under the provisions of
section 51 of the said Act in FORM GSTR-7 of the Central
Notification No. 18/2020 – Central Tax dt 23rd March Goods and Services Tax Rules, 2017 under sub-section (3)
2020: Seeks to notify the date from which an individual shall of section 39 of the said Act read with rule 66 of the Central
undergo authentication, of Aadhaar number in order to be Goods and Services Tax Rules, 2017, for the months of July,
eligible for registration. 2019 to October,2019, whose principal place of business
In exercise of the powers conferred by sub-section is in the erstwhile State of Jammu and Kashmir shall be
(6B) of section 25 of the Central Goods and Services Tax furnished electronically through the common portal, on or
Act, 2017 (12 of 2017), the Central Government, on the before the 24th March, 2020.
recommendations of the Council, hereby notifies the date of Provided also that the return by a registered person,
coming into force of this notification as the date, from which required to deduct tax at source under the provisions of
an individual shall undergo authentication, of Aadhaar section 51 of the said Act in FORM GSTR-7 of the Central
number, as specified in rule 8 of the Central Goods and Goods and Services Tax Rules, 2017 under sub-section
Services Tax Rules, 2017 (hereinafter referred to as the said (3) of section 39 of the said Act read with rule 66 of the
rules), in order to be eligible for registration: Central Goods and Services Tax Rules, 2017, for the months
Provided that if Aadhaar number is not assigned to the said of November, 2019 to February, 2020, whose principal
individual, he shall be offered alternate and viable means of place of business is in the Union territory of Jammu and
identification in the manner specified in rule 9 of the said Kashmir or the Union territory of Ladakh shall be furnished
rules. electronically through the common portal, on or before the
This notification shall come into effect from the 1 st day 24th March, 2020.”
of April, 2020. This notification shall be deemed to have come into force
with effect from the 20 th Day of December, 2019.
Notification No. 19/2020 – Central Tax dt 23rd March
2020: Seeks to specify class of persons, other than individuals Notification No. 21 /2020 – Central Tax dt 23rd March
who shall undergo authentication, of Aadhaar number in 2020: Seeks to extend due date for furnishing FORM GSTR-
order to be eligible for registration. 1 for registered persons whose principal place of business is
In exercise of the powers conferred by sub-section in the erstwhile State of Jammu and Kashmir or the Union
(6C) of section 25 of the Central Goods and Services Tax territory of Jammu and Kashmir or the Union territory of
Act, 2017 (12 of 2017) , the Central Government, on the Ladakh for the quarter October-December, 2019 till 24th
recommendations of the Council, hereby notifies the date of March, 2020
coming into force of this notification as the date, from which In the said notification, in the second paragraph, the
the – following proviso shall be inserted, namely: – “Provided
a. authorised signatory of all types; that for registered persons whose principal place of business
is in the erstwhile State of Jammu and Kashmir or the Union
b. Managing and Authorised partners of a partnership
territory of Jammu and Kashmir or the Union territory of
firm; and
Ladakh, shall furnish the details of outward supply of goods
c. Karta of a Hindu undivided family, or services or both in FORM GSTR-1 under the Central
shall undergo authentication of possession of Aadhaar Goods and Services Tax Rules, 2017 effected during the
number, as specified in rule 8 of the Central Goods and quarter October-December, 2019 till 24th March, 2020.”
Services Tax Rules, 2017(hereinafter referred to as the said This notification shall be deemed to come into force with
rules), in order to be eligible for registration under GST: effect from the 31 st Day of January, 2020.
Provided that if Aadhaar number is not assigned to the said
persons, they shall be offered alternate and viable means of Notification No. 22/2020 – Central Tax dt 23rd March
identification in the manner specified in rule 9 of the said 2020: Seeks to extend due date for furnishing FORM GSTR-
rules. 1 for registered persons whose principal place of business is
This notification shall come into effect from the 1 st day in the erstwhile State of Jammu and Kashmir, and having
of April, 2020. aggregate turnover of more than 1.5 crore rupees in the
preceding financial year or current financial year, for the
Notification No. 20/2020 – Central Tax dt 23rd March month of October, 2019 and November, 2019 to February
2020: Seeks to extend due date for furnishing FORM GSTR- till 24th March, 2020.
7 for those taxpayers whose principal place of business is in In the said notification, in the first paragraph, for the first
proviso, the following proviso shall be substituted, namely:

STATUTORY UPDATES
– “Provided that for registered persons whose principal place effect from the 30th Day of November, 2019.
of business is in the erstwhile State of Jammu and Kashmir,
the time limit for furnishing the details of outward supplies Notification No. 25/2020 – Central Tax dt 23rd March
in FORM GSTR-1 of Central Goods and Services Tax Rules, 2020: Seeks to extend due date for furnishing FORM GSTR-
2017, by such class of registered persons having aggregate 3B for the months of October, 2019 , November, 2019 to
turnover of more than 1.5 crore rupees in the preceding February, 2020 for registered persons whose principal place
financial year or current financial year, for the month of of business is in the erstwhile State of Jammu and Kashmir
October, 2019 till 24 th March, 2020.”. on or before the 24th March, 2020.
In the said notification, in the first paragraph, after the In the said notification, in the first paragraph, for the first
second proviso, the following proviso shall be inserted, proviso, the following proviso shall be substituted, namely:
namely: – “Provided that for registered persons whose – “Provided that the return in FORM GSTR-3B of the said
principal place of business is in the Union territory of Jammu rules for the months of October, 2019 for registered persons
and Kashmir or the Union territory of Ladakh, the time limit whose principal place of business is in the erstwhile State
for furnishing the details of outward supplies in FORM of Jammu and Kashmir, shall be furnished electronically
GSTR-1 of Central Goods and Services Tax Rules, 2017, by through the common portal, on or before the 24th March,
such class of registered persons having aggregate turnover 2020.”
of more than 1.5 crore rupees in the preceding financial year
In the said notification, in the first paragraph, after the fifth
or current financial year, for the months of November, 2019
proviso, the following proviso shall be inserted, namely: –
to February till 24 th March, 2020.”
“Provided also that the return in FORM GSTR-3B of the said
This notification shall be deemed to come into force with rules for the months of November, 2019 to February, 2020
effect from the 20thDay of December, 2019 for registered persons whose principal place of business is
in the Union territory of Jammu and Kashmir or the Union
Notification No. 23/2020 – Central Tax dt 23rd March territory of Ladakh, shall be furnished electronically through
2020: Seeks to extend due date for furnishing FORM GSTR- the common portal, on or before the 24th March, 2020.”
1 for registered persons whose principal place of business This notification shall be deemed to come into force with
is in the erstwhile State of Jammu and Kashmir, by such effect from the 20th Day of December, 2019
class of registered persons having aggregate turnover of
more than 1.5 crore rupees in the preceding financial year or
current financial year, for each of the months from July, 2019
2020: Seeks to extend due date for furnishing FORM
to September, 2019 till 24th March, 2020.
GSTR-3B of the said rules for the months of July,2019 to
In the said notification, in the first paragraph, for the first September, 2019 for registered persons whose principal place
proviso, the following proviso shall be substituted, namely: of business is in the erstwhile State of Jammu and Kashmir,
– “Provided that for registered persons whose principal shall be furnished electronically through the common portal,
place of business is in the erstwhile State of Jammu and on or before the 24th March, 2020
Kashmir, the time limit for furnishing the details of outward
In the said notification, in the first paragraph, for the fourth
supplies in FORM GSTR-1 of Central Goods and Services
proviso, the following proviso shall be substituted, namely:
Tax Rules, 2017, by such class of registered persons having
– “Provided also that the return in FORM GSTR-3B of the
aggregate turnover of more than 1.5 crore rupees in the
said rules for the months of July,2019 to September, 2019 for
preceding financial year or current financial year, for each
registered persons whose principal place of business is in the
of the months from July, 2019 to September, 2019 till 24 th
erstwhile State of Jammu and Kashmir, shall be furnished
March, 2020.”
electronically through the common portal, on or before the
This notification shall be deemed to come into force with 24th March, 2020.”
effect from the 20thDay of December, 2019
This notification shall be deemed to come into force with
effect from the 20th Day of December, 2019
2020: Seeks to extend due date for furnishing FORM GSTR-
1 for registered persons whose principal place of business is
2020: Seeks to prescribe the due date for furnishing FORM
in the erstwhile State of Jammu and Kashmir, for the quarter
GSTR-1 for the quarters April, 2020 to June, 2020 and July,
July-September, 2019 till 24th March,2020.
2020 to September, 2020 for registered persons having
In the said notification, in the second paragraph, for the aggregate turnover of up to 1.5 crore rupees in the preceding
first proviso, the following proviso shall be substituted, financial year or the current financial year.
namely: – “Provided that for registered persons whose
In exercise of the powers conferred by section 148 of
principal place of business is in the erstwhile State of Jammu
the Central Goods and Services Tax Act, 2017 (12 of
and Kashmir, shall furnish the details of outward supply
2017) (hereafter in this notification referred to as the said
of goods or services or both in FORM GSTR-1 under the
Act), the Central Government, on the recommendations of
Central Goods and Services Tax Rules, 2017 effected during
the Council, hereby notifies the registered persons having
the quarter July-September, 2019 till 24th March,2020.”
aggregate turnover of up to 1.5 crore rupees in the preceding
This notification shall be deemed to come into force with financial year or the current financial year, as the class of

STATUTORY UPDATES
registered persons who shall follow the special procedure said form for April, 2020 to September, 2020
as mentioned below for furnishing the details of outward Provided that, for taxpayers having an aggregate turnover
supply of goods or services or both. of up to rupees five crore rupees in the previous financial
The said registered persons shall furnish the details year, whose principal place of business is in the States of
of outward supply of goods or services or both in FORM Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra,
GSTR-1 under the Central Goods and Services Tax Rules, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra
2017, effected during the quarter as specified in column (2) Pradesh, the Union territories of Daman and Diu and Dadra
of the Table below till the time period as specified in the and Nagar Haveli, Puducherry, Andaman and Nicobar
corresponding entry in column (3) of the said Table, namely:- Islands or Lakshadweep, the return in FORM GSTR-3B of
the said rules for the months of April, 2020 to September,
2020 shall be furnished electronically through the common
Quarter for which details Time period for
Sl portal, on or before the twenty-second day of the month
in FORM GSTR-1 are furnishing details in
No. succeeding such month.
furnished FORM GSTR-1
Provided further that, for taxpayers having an aggregate
1 April, 2020 to June, 2020 31st July, 2020
turnover of up to rupees five crore rupees in the previous
July, 2020 to September, financial year, whose principal place of business is in the
2 31st October, 2020
2020 States of Himachal Pradesh, Punjab, Uttarakhand, Haryana,
Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh,
The time limit for furnishing the details or return, as the Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam,
case may be, under sub-section (2) of section 38 of the said West Bengal, Jharkhand or Odisha, the Union territories
Act, for the months of April, 2020 to September, 2020 shall of Jammu and Kashmir, Ladakh, Chandigarh or Delhi, the
be subsequently notified in the Official Gazette. return in FORM GSTR-3B of the said rules for the months
of April, 2020 to September, 2020 shall be furnished
Notification No. 28/2020 – Central Tax dt 23rd March electronically through the common portal, on or before the
2020: Seeks to prescribe the due date for furnishing FORM twenty-fourth day of the month succeeding such month.
GSTR-1 by such class of registered persons having aggregate Payment of taxes for discharge of tax liability as per
turnover of more than 1.5 crore rupees in the preceding FORM GSTR-3B. – Every registered person furnishing the
financial year or the current financial year, for each of the return in FORM GSTR-3B of the said rules shall, subject to
months from April,2020 to September, 2020. the provisions of section 49 of the said Act, discharge his
In exercise of the powers conferred by the second proviso liability towards tax by debiting the electronic cash ledger or
to sub-section (1) of section 37 read with section 168 of electronic credit ledger, as the case may be and his liability
the Central Goods and Services Tax Act, 2017 (12 of 2017) towards interest, penalty, fees or any other amount payable
(hereafter in this notification referred to as the said Act), under the said Act by debiting the electronic cash ledger, not
the Commissioner, on the recommendations of the Council, later than the last date, as specified in the first paragraph, on
hereby extends the time limit for furnishing the details of which he is required to furnish the said return.
outward supplies in FORM GSTR-1 of the Central Goods
and Services Tax Rules, 2017, by such class of registered Circular No 16/2020- Customs Dt 16th March 2020:
persons having aggregate turnover of more than 1.5 crore Electronic Sealing-Deposit in and removal of goods from
rupees in the preceding financial year or the current financial Customs Bonded Warehouses
year, for each of the months from April,2020 to September, Representations have been received from e seal vendors
2020 till the eleventh day of the month succeeding such to defer the implementation of circular no 10/2020 dt 7th
month. February 2020. In view of the same the Board has deceided
The time limit for furnishing the details or return, as the to defer the implementation of circular 10/2020 customs till
case may be, under sub-section (2) of section 38 of the said 30th April 2020.
Act, for the months of April,2020 to September, 2020 shall New date of implementation of the said circular shall be
be subsequently notified in the Official Gazette. 1st May 2020.

Source: Income tax, GST portal, taxguru.in, Customs
2020: Seeks to prescribe return in FORM GSTR-3B of
portal and other sources
CGST Rules, 2017 along with due dates of furnishing the
Kind Attention !!!

Hope you are getting The Management Accountant Journal in physical form at your doorstep regularly. If
not, requesting esteemed Members, Students and Subscribers to mail us at: [email protected] for smooth and
uninterrupted delivery of the same.

ADVISORY FOR RENEWAL OF CERTIFICATE OF PRACTICE
FOR 2020-21
The members of the Institute holding Certificate of Practice (CoP) having validity up to 31st March, 2020 are requested to
comply with the following guidelines for renewal of their Certificate of Practice:
1. The following changes consequent to amendment of the Cost and Works Accountants Regulations, 1959 vide Notification
dated 4th February, 2011 published in the Gazette of India may be noted:
a. The validity of a Certificate of Practice (CoP) is for the period 1st April to 31st March every year unless it is
cancelled under the provisions of the Cost and Works Accountants Act and Regulations, 1959 as amended.
b. The Certificate of Practice issued shall automatically be renewed subject to submission of prescribed Form M-3
and payment of renewal fee* and annual membership fee*.
c. From the year 2011-12 onwards, letter for renewal Certificate of Practice is not being issued. However, the members
concerned may download the renewal status from the Institute’s website www.icmai.in.
2. It may please be noted that under Section 6 of the Cost and Works Accountants Act, 1959, both the Annual Membership
Fee* and Fee for Renewal of Certificate of Practice* falls due on 1st April each year.
3. Special attention is invited to the fact that the validity of a Certificate of Practice expires on 31st March each year unless
it is renewed on or before the date of expiry in terms of the amended Regulation 10 of the Cost and Works Accountants
Regulations, 1959. Hence, a member shall be required to renew his certificate within 31st March every year.
4. If the Certificate of Practice of a member is not renewed within 31st March, 2020, his/her status of CoP from 1st
April 2020 till the date of renewal would be “Not Active”.
5. Subject to what has been mentioned in Sl. No. 4 above, a member can get his/her Certificate of Practice for 2020-21
renewed within 30th June, 2020. If application for renewal of Certificate of Practice is made after 30th June, 2020, the
member’s Certificate of Practice for 2020-21 will not be renewed but will be considered as a case of fresh issuance with
effective date being the date of the application or receipt of the prescribed fee * for Certificate of Practice, whichever is
later.
6. It may please be noted that mere payment of fees * alone will not be sufficient for renewal of Certificate of Practice.
Application in prescribed Form M-3 is to be used for Renewal of Certificate of Practice duly filled in and signed is
mandatory. The soft copy of prescribed Form M-3 for Renewal of Certificate of Practice can be downloaded from
Institute’s website www.icmai.in.
7. The Institute has introduced a scheme of Continuing Education Programme (CEP) and the same is mandatory in
accordance with proviso to sub-regulation (1) of Regulation 10 of the Cost and Works Accountants Regulations, 1959,
as amended, whereby no Certificate of Practice and renewal thereof shall be issued unless a member has undergone
minimum number of hours of such training. The detailed guidelines in this connection are available on Institute’s
website www.icmai.in.
8. Other relevant issues for Renewal of Certificate of Practice are as follows:
a. Application for renewal of Certificate of Practice upto 31st March, 2021 has to be made in prescribed Form M-3
which may be filed online or through hard Copy of form duly filled in and signed on both sides together with Renewal
Certificate of Practice fee * of Rs.2,000/- and all other dues to the Institute on account of annual membership fees
* and entrance fees *.
b. The annual membership fee* for Associate and Fellow members are Rs.1,000/- and Rs.1,500/- respectively. The
entrance fee * for Associate and Fellow members is Rs. 1,000/- each payable at a time at the time of application for
admission to Associateship or advancement to Fellowship, as the case may be.
c. The fees * may be paid online or by Demand Draft/at par cheque payable at Kolkata if remitted by post to the
Headquarters of the Institute.
d. Members should note that the renewal of Certificate of Practice can be effected only after receipt of the prescribed
fees* along with duly filled in form at the Headquarters of the Institute and on meeting the stipulated CEP
credit hours. Mere submission of the same at the Regional Councils or Chapters will not be sufficient. Members
are advised to make payment directly to the Headquarters or use the online facility of submission of application and
payment to avoid any delay.
All practicing members are advised to send their application for renewal of Certificate of Practice for the year
2020-21 along with other requirements as indicated above immediately so as to reach the Institute’s Office at
Kolkata well in advance to enable the Institute to issue the renewal of Certificate by 31st March, 2020.

Renewal of Part-time Certificate of Practice
1. For renewal of part-time Certificate of Practice, it is also essential to furnish a certificate from the employer in the
following form or in a form as near thereto as possible if the practising member has undertaken any employment or
there has been a change in employment:
“Shri/Smt ………………………………………………….......................................... is employed as

(designation) ……………………................................................. and (name of Organisation)…………………. ……
…………….................................................. he/she is permitted, notwithstanding anything contained in the terms of
his/her employment, to engage himself/herself in the practice of profession of Cost Accountancy in his/her spare time
in addition to his/her regular salaried employment with us.
Signature of Employers with seal of Organisation”
2. It may be noted that members holding Part-time Certificate of Practice (CoP) are not eligible to undertake statutory
assignments like Cost Audit, Central Excise Audit, etc.
*GST is applicable against payment

(Statutory Body under an Act of Parliament)
www.icmai.in
Research Bulletin, Vol. 46, No. I April 2020 (ISSN 2230 9241)
Call for Research Papers/Articles

We invite you to contribute research paper/article for “Research Bulletin”, a peer-reviewed Quarterly Journal of The Institute of Cost
Accountants of India. The aim of this bulletin is to share innovative achievements and practical experiences from diverse domains of management,
from researchers, practitioners, academicians and professionals. This bulletin is dedicated to publish high quality research papers providing
meaningful insights into the management content both in Indian as well as global context.
Guidelines to submit full Paper

»» Soft Copy of the full paper should be submitted in double space, 12 font size, Times New Roman, keeping a margin of 1 inch in four
sides, MS Word (.doc) format.
»» Each paper should be preferably within 5000 words including all.
»» An abstract of not more than 150 words should be attached.
»» The cover page should contain the title of the paper, author’s name, designation, official address, contact phone numbers, e-mail address.
Theme Topic:
Changing Landscape of Securities Market
Papers are invited on the following sub-topics, but not limited to:
»» Impact of Economic Reforms on Capital Market
»» Impact of Abolition of Dividend Distribution Tax (DDT)
»» Demerger of Debt Mutual Funds
»» Global Instability – the winds of change
»» Quantamental Investing
»» Innovation and Technology – Enablers of Change
»» Retail Investors’ Participation in Securities Market
»» Financial Literacy, Investor Education & Awareness
»» Corporate Bond Market
»» Currency Market
»» Corporate Governance and Shareholding Patterns
»» Growth of Asset Management Industry
»» Digital Securities – a new Generation of Assets
»» Arbitrage Pricing
»» International Trade and Capital Flows
Papers must be received within 30th April, 2020 in the following email id:
[email protected]

(STATUTORY BODY UNDER AN ACT OF PARLIAMENT)
EXAMINATION TIME TABLE & PROGRAMME – JUNE 2020
FOUNDATION COURSE EXAMINATION
Foundation Course Examination Syllabus-2016

Day & Date
Time 2.00 p.m. to 5.00 p.m.
Thursday,
Fundamentals of Economics & Management
11th June, 2020
Friday,
Fundamentals of Accounting
12th June, 2020
Saturday,
Fundamentals of Laws & Ethics
13th June, 2020
Sunday,
Fundamentals of Business Mathematics & Statistics
14th June, 2020
Examination Fees
Inland Centres C 1200/-

Foundation Course Examination
Overseas Centres US $ 60
1. The Foundation Examination will be conducted in Offline mode only. Each paper will be of 100 marks.
2. Application Forms for Foundation Examination has to be filled up through online and fees will be accepted through
online mode (including Payfee Module of IDBI Bank).
3. STUDENTS OPTING FOR OVERSEAS CENTRES HAVE TO APPLY OFFLINE AND SEND DD ALONGWITH THE FORM.
4. (a) Students can login to the website www.icmai.in and apply online through payment gateway by using Credit/Debit
card or Net banking.
(b) Students can also pay their requisite fee through pay-fee module of IDBI Bank.
5. Last date for receipt of Examination Application Forms is 10th April, 2020.
6. Examination Centres: Adipur-Kachchh(Gujarat), Agartala, Agra, Ahmedabad, Akurdi, Allahabad, Asansol,

Aurangabad, Bangalore, Baroda, Berhampur(Ganjam), Bhilai, Bhilwara, Bhopal, Bewar City(Rajasthan),
Bhubaneswar, Bilaspur, Bikaner (Rajasthan), Bokaro, Calicut, Chandigarh, Chennai, Coimbatore, Cuttack, Dehradun,
Delhi, Dhanbad, Duliajan (Assam), Durgapur, Ernakulam, Erode, Faridabad, Ghaziabad, Guntur, Guwahati, Haridwar,
Hazaribagh, Howrah, Hyderabad, Indore, Jaipur, Jabalpur, Jalandhar, Jammu, Jamshedpur, Jodhpur, Kalyan, Kannur,
Kanpur, Kolhapur, Kolkata, Kota, Kottakkal (Malappuram), Kottayam, Lucknow, Ludhiana, Madurai, Mangalore,
Mumbai, Mysore, Nagpur, Naihati, Nasik, Nellore, Neyveli, Noida, Palakkad, Panaji (Goa), Patiala, Patna,
Pondicherry, Port Blair, Pune, Raipur,Rajahmundry, Ranchi, Rourkela, Salem, Sambalpur, Shillong, Siliguri, Solapur,
Srinagar, Surat, Thrissur, Tiruchirapalli,Tirunelveli, Trivandrum, Udaipur, Vapi, Vashi, Vellore, Vijayawada,
Vindhyanagar, Waltair and Overseas Centres at Bahrain, Dubai and Muscat.
7. A candidate who is completing all conditions for appearing the examination as per Regulation will only be
allowed to appear for examination.
8. Probable date of publication of result: To be announced in due course.
* For any examination related query, please contact [email protected]
Kaushik Banerjee
Secretary

122
(STATUTORY BODY UNDER AN ACT OF PARLIAMENT)
INTERMEDIATE AND FINAL EXAMINATION TIME TABLE & PROGRAMME – JUNE 2020
PROGRAMME FOR SYLLABUS 2016

ATTENTION: INTERMEDIATE & FINAL EXAMINATION (JUNE – 2020 TERM) WILL BE HELD ON ALTERNATE DATES FOR EACH GROUP.
INTERMEDIATE FINAL
Day & Date (Time: 2.00 P.M. to 5.00 P.M.) (Time: 2.00 P.M. to 5.00 P.M.)
(Group – I) (Group – II) (Group – III) (Group – IV)
Thursday,
Financial Accounting (P-05) ------------------- Corporate Laws & Compliance (P-13) -------------------
11th June, 2020
Friday, Operations Management & Strategic
------------------- ------------------- Corporate Financial Reporting (P-17)
12th June, 2020 Management (P-09)
Saturday,
Laws & Ethics (P-06) ------------------- Strategic Financial Management (P-14) -------------------
13th June, 2020
Sunday, Cost & Management Accounting and
------------------- ------------------- Indirect Tax Laws & Practice (P-18)
14th June, 2020 Financial Management (P-10)
Monday,
Direct Taxation (P-07) ------------------- Strategic Cost Management – Decision Making (P-15) -------------------
15th June, 2020
Tuesday,
------------------- Indirect Taxation (P-11) ------------------- Cost & Management Audit (P-19)
16th June, 2020
Wednesday,
Cost Accounting (P-08) ------------------- Direct Tax Laws and International Taxation (P-16) -------------------
17th June, 2020
Thursday, Strategic Performance Management and Business
------------------- Company Accounts & Audit (P-12) -------------------
18th June, 2020 Valuation (P-20)
EXAMINATION FEES
Group (s) Final Examination Intermediate Examination
One Group (Inland Centres) C1400/- C1200/-
(Overseas Centres) US $ 100 US $ 90
Two Groups (Inland Centres) C2800/- C2400/-
(Overseas Centres) US $ 100 US $ 90
1. Application Forms for Intermediate and Final Examination has to be filled up through online only and fees will be accepted through online mode only (including Payfee Module of IDBI Bank). No Offline form and DD
payment will be accepted for domestic candidate.
2. STUDENTS OPTING FOR OVERSEAS CENTRES HAVE TO APPLY OFFLINE AND SEND DD ALONGWITH THE FORM.
The Management Accountant - April 2020

3. (a) Students can login to the website www.icmai.in and apply online through payment gateway by using Credit/Debit card or Net banking.
(b) Students can also pay their requisite fee through pay-fee module of IDBI Bank.
4. Last date for receipt of Examination Application Forms is 10 th April, 2020.
5. The provisions of direct tax laws and indirect tax laws, as amended by the Finance Act, 2019, including notifications and circulars issued up to 30th November, 2019, are applicable for June, 2020 term of examination for the
Subjects Direct Taxation, Indirect Taxation (Intermediate), Direct Tax laws and International Taxation and Indirect Tax laws & Practice (Final) under Syllabus 2016. The relevant assessment year is 2020-21. For statutory
updates and amendments please refer to: https://icmai.in/studentswebsite/Syl-2016.php
6. Companies (Cost Records and Audit) Rules, 2014 as amended till 30th November, 2019 is applicable for June, 2020 examination for Paper 12- Company Accounts and Audit (Intermediate) and Paper 19 - Cost and
Management Audit (Final) under Syllabus 2016. For updates and amendments please refer to the link: https://icmai.in/studentswebsite/Syl-2016.php
7. The provisions of the Companies Act 2013 are applicable for Paper 6 - Laws and Ethics (Intermediate) and Paper 13 - Corporate Laws and Compliance (Final) under Syllabus 2016 to the extent notified by the Government
up to 30th November, 2019 for June, 2020 term of examination. Additionally, for applicability of ICDR, 2018 for Paper-13 - Corporate Laws & Compliance (Final) under Syllabus 2016 refer to relevant circular in website for
June, 2020 term examination by following link: https://icmai.in/studentswebsite/Syl-2016.php
8. For Applicability of IND AS and AS for Paper 5 - Financial Accounting, Paper 12 - Company Accounts and Audit (Intermediate) and Paper 17 - Corporate Financial Reporting (Final) refer to relevant circulars and
notifications in website for June, 2020 term examination in the given link: https://icmai.in/studentswebsite/Syl-2016.php
9. Pension Fund Regulatory and Development Authority Act, 2013 is being included in Paper 6-Laws and Ethics (Intermediate) and Insolvency and Bankruptcy Code 2016 is being included in Paper 13 - Corporate Laws and
Compliance (Final) under Syllabus 2016 for June, 2020 term of examination. Please refer to the link: https://icmai.in/studentswebsite/Syl-2016.php
10. Examination Centres: Adipur-Kachchh (Gujarat), Agartala, Agra, Ahmedabad, Akurdi, Allahabad, Asansol, Aurangabad, Bangalore, Baroda, Berhampur (Ganjam), Bhilai, Bhilwara, Bhopal, Bewar City(Rajasthan),
Bhubaneswar, Bilaspur, Bikaner (Rajasthan), Bokaro, Calicut, Chandigarh, Chennai, Coimbatore, Cuttack, Dehradun, Delhi, Dhanbad, Duliajan (Assam), Durgapur, Ernakulam, Erode, Faridabad, Ghaziabad, Guntur,
Guwahati, Haridwar, Hazaribagh, Howrah, Hyderabad, Indore, Jaipur, Jabalpur, Jalandhar, Jammu, Jamshedpur, Jodhpur, Kalyan, Kannur, Kanpur, Kolhapur, Kolkata, Kota, Kottakkal (Malappuram), Kottayam,
Lucknow, Ludhiana, Madurai, Mangalore, Mumbai, Mysore, Nagpur, Naihati, Nasik, Nellore, Neyveli, Noida, Palakkad, Panaji (Go a), Patiala, Patna, Pondicherry, Port Blair, Pune, Raipur, Rajahmundry, Ranchi,
Rourkela, Salem, Sambalpur, Shillong, Siliguri, Solapur, Srinagar, Surat, Thrissur, Tiruchirapalli, Tirunelveli, Trivandrum, Udaipur, Vapi, Vashi, Vellore, Vijayawada, Vindhyanagar, Waltair and Overseas Centres at
Bahrain, Dubai and Muscat.
11. A candidate who is fulfilling all conditions specified for appearing in examination will only be allowed to appear for examination.
12. Probable date of publication of result: Inter & Final – 23rd August, 2020.
* For any examination related query, please contact [email protected]
Kaushik Banerjee
Secretary
www.icmai.in
Ministry of Health & Family Welfare
Government of India
NOVEL
(COVID-19)
Protect yourself and others!

Follow these Do's and Don'ts
Practice frequent hand wash-
Cover your nose and Throw used
ing. Wash hands with soap
mouth with tissues into closed
and water or use alcohol
handkerchief/tissue while bins immediately
based hand rub. Wash hands
sneezing and coughing after use
even if they are visibly clean
If you have these

See a doctor if you feel unwell signs/symptoms please
(fever, difficult breathing and call State helpline number Avoid participating
cough). While visiting doctor or Ministry of Health & in large gatherings
wear a mask/cloth to cover Family Welfare’s 24X7
your mouth and nose helpline at 011-23978046
Have a close contact

with anyone, if you’re Touch your eyes, Spit in public
experiencing cough nose and mouth
and fever
Together we can fight Coronavirus

For further information :
Call at Ministry of Health, Govt. of India’s 24X7 control room number
+91-11-2397 8046
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www.icmai.in January 2020 - The Management Accountant 1
A HISTORY OF FIRSTS AN OVERVIEW
Ever since they kicked off in 1956, Salgaocar FC have been Launched as Vimson in the 1956-57 season, the
setting the standards and raising the bar on the Goan football club won the second division league on debut with
circuit. Over the last six decades, the achievements of the club an unbeaten record. They were later called Clube
have been staggering and they have recorded a number of firsts Desportivo Salgaocar before Goa’s Liberation in
in the history of Goan football. 1961 when they won the premier division title for
ISSUE 34
Whether it’s in the Federation Cup, where Salgaocar made the first time, a feat that they were to replicate on
IndIa ISBN 978-93-83999-04-0 it to four finals in a row between 1987 and 1990, or the
100 + 50 +
several occasions in the decades to follow.
ISSUE 34
National Football League which the club won for the first Post Liberation, they were renamed Salgaocar
jAn 2020
time in1999, or the feat of winning four trophies in a month Sports Club and went by that moniker for nearly
in 1999, Salgaocar FC have always set the pace. As Salgaocar 50 years. Since the late 1980s they have become a
FC celebrate 60 glorious years since its inception, it’s worth major force in Indian football and have won several
9 789383 999040
JanUaRy 2020
recounting some of the firsts that the club have recorded: major championships, some of them on a handful
Leave me in my seat pocket for r 6,000 $100 First Goan team to participate in a major outstation of occasions, and beaten all the top clubs in India
others to explore. Catch up with
me online instead! tournament, DCM Trophy, in 1962 several times over. In 2012, a new identity and logo
In a search for remnants of our
CD OF ORIGINAL VOICE First Goan team to be invited by the Prime Minister were unveiled as Goa’s most beloved football outfit
( Jawaharlal Nehru) to his official residence country’s singularly rich heritage that
A. N. SHARMA RECORDINGS OF EARLY decided to script a new future as Salgaocar FC.
has taken two decades of his life, A. N.
AirAsia Inflight Magazine INDIAN ARTISTES INCLUDED First team to win the second division undefeated
THE WONDER THAT WAS THE CYLINDER

Author of the famed Bajanaama: A Study Salgaocar FC’s youth development programme,
IN THE BOOK. in 1957 Sharma delves deep into India’s sound
of Early Indian Gramophone Records, an launched in 2003 with the intention of discovering
First major corporate team in Goa recording history. From the days of the
extensive project that has earned its place in and grooming young Goan talents, has been
phonograph and the wax cylinder in the
posterity, A. N. Sharma probes deeper into First captain of Goa in the Santosh Trophy in 1963-64 thoroughly professionalised and a steady stream of
India’s sound recording past in The Wonder was Salgaocar’s Menino Figueiredo. He was also the first early 1900s, Sharma has unearthed
Early and rare Indian cylindrical records

players have emerged from this initiative who have
Goan footballer to represent India in 1965
Early and rare Indian priceless cylindrical recordings of
A. N. SHARMA I ANUKRITI A. SHARMA

that was the Cylinder. From the early 20th gone on to serve both the club and country with
century — the era of the phonograph and
the wax cylinder — he brings to light rare

First Goan team to win the Federation Cup in 1988
Only Goan team to figure in four Federation Cup finals
cylindrical records Indian artistes that were considered to
be lost in the annals of time — till now.
distinction. It has also been commended by the
Asian Football Confederation as being the best or
January 2020 cylindrical recordings of legendary Indian Salgaocar has the most Federation Cup wins (four) among the best in the country.
artistes throughout the ages. among Goan teams A fascinating account of India’s
Currently, Sharma is an officer with First Goan team to win the Durand Cup in 1999 contribution to sound recording,
the Indian Revenue Service and a serving The Wonder that was the Cylinder is
COFFEE ANNUAL
First Goan team to win the National Football League
Commissioner of Customs, Central Excise in 1999 brimming with intricate details about a
and Service Tax in Mumbai.
Brahmanand Sankhwalkar and Bruno Coutinho, forgotten era of Indian history. It brings
Goa’s only two Arjuna awardees, represented Salgaocar to light the country’s remarkable legacy
January 2020
for 17 and 12 years respectively

HISTORY OF SALGAOCAR FC (1956-2016) in music, theatre and film through
GoAir’s Exclusive Inflight Magazine First Goan team to compete in the cylindrical recordings discovered — for
Asian circuit
the first time — through Sharma’s own
personal efforts over the past 25 years.
TABLE REPORTS
Together with his daughter, talented
INCLUDED: A CD OF writer and editor Anukriti A. Sharma, Cover pic: The Salgaocar team do a victory lap after
RARE CYLINDRICAL they spin an elaborate backstory beating East Bengal 2-1 in the 1997 Federation Cup
RECORDINGS for each artiste, filled with well- HISTORY OF SALGAOCAR FOOTBALL CLUB (1956-2016) final at the Salt Lake Stadium in Calcutta
OF LEGENDARY documented facts and painstakingly
ANUKRITI A. SHARMA INDIAN ARTISTES
A freelance editor, proofreader and constructed through rigorous amounts
illustrator at Rupa Publications and Random
“… amongst the most charming spots, of research.
House India, Anukriti A. Sharma is a Delhi- however, is the bold promontory, known as
BOOKS
Follow us on www.facebook.com/cmaiapparel based writer and blogger with more than two Malabar Point, and crowned with a mansion, These startling findings are being
VOL. 39 - ISSUE 12 years of editorial experience. Her blogs — originally the residence of Sir John Malcolm, published for the first time in a
DECEMBER 2019
now set apart for the accommodation of
Inflight Magazine
My Memoirs of Mesmerizing Memories and book that captures the rich musical
Strategy Marketing Analysis Resources Te c h n o l o g y
Ekphrasis India — have won many accolades the Governor, when the heat becomes heritage of India and will prove to be
and eminent personalities such as Javed oppressive at Parell. This agreeable resort of inestimable value to researchers,
CHERI TORRES AND Akhtar, Ayaz Memon and Ashok Chakradhar
pitched upon the tall and rocky headland, like collectors and lovers of music and
JACKIE STAVROS have acknowledged her writing. She has
an eyrie above the waves commands a varied
VOL. 39, No. 12, DECEMBER 2019
Indian history around the world.

on using appreciative inquiry also published her work in various college
www.GoAir.in
journals and online magazines such as The and extensive view, lovely at all times, but
to tackle complex problems.
9
[ PAGE-52 ] NRI, Youth Ki Awaaz and Impulse. more particularly so when the sun’s broad
Anukriti has collaborated with her father golden disc is half obscured below the azure
GAUTAM BORAH
on how to integrate extensively on this book, considering it to be waters, and the feathery tips of the coconut Nestled amid the Vindhyas and the Satpura
a contribution of immeasurable value to the woods retain their amber-tinted hues …”
digital into CX delivery. mountain ranges and home to the largest forest
[ PAGE-48 ] archives of Indian history. – Description of Raj Bhavan by a 19th cover in the country, Madhya Pradesh is a veritable
treasure trove. Endowed equally by nature and by
Century traveler, Mrs. Postans.
upinder and santosh dhar
A Whirl of Hues
history, the geographical heart of India holds many
India’s first world-class management magazine
“Maharashtra Raj Bhavan is oneI of the most
35 7
NOV-DEC 19 VOL 18 ISSUE 6 A. N. SHARMA ANUKRITI A. SHARMA marvels within it—some roam its jungles feeding
the ecosystem, some adorn its temples, forts and
beautiful Raj Bhavans in India. You can see palaces while some safeguard generations of ethos
the sunrise; you can see the sunset. It is in its tribal pockets…
spectacular. And then it’s covered from With a wealth of architectural wonders on one side
three sides by the sea.” and sprawling national parks and reserves on the
–S.M. Krishna, other, Madhya Pradesh offers a stunning balance of
Jaipur, Rajasthan Governor of Maharashtra (2004-2008) natural endowment and man-made splendour. The
State has vehemently preserved its gifts, whether
Raising they are sculptures that have survived through the
CELEBRATE A NEW YOU WITH AMAZING TIPS & TRICKS ON the Bar ages or the countless species of wildlife that inhabit
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in April 2020 - The Management Accountant 1

With a portfolio of over 35 custom magazines, 7 consumer titles, 3 event properties,

Contact us to see how you and your brand can grow

Spenta Multimedia wins four

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• Managing Information relating to Environment

• Methods of Environmental Cost & Management Accounting

Management • Ecological Accounting

• GST Returns: Issues, Challenges and Controversies

• Advance Ruling Mechanism in GST

• An Overview of the Indian Economy: Policy, Reforms and Governance

5 Trillion Dollar • Strengthening industrial competitiveness: Special emphasis to manufacturing sector

DIRECTORATE OF JOURNAL & PUBLICATIONS

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through Demand Draft, Cheque, RTGS or

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Aligning Internal Ind AS 20 -

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PHD Conference on Vivad se Vishwas Scheme

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INTERNAL AUDIT & ASSURANCE STANDARDS

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INTERNATIONAL AFFAIRS COMMITTEE

www.icmai.in April 2020 - The Management Accountant 15

CMA Ashwin G. Dalwadi

I am sure you will appreciate that any ambitious plan can’t

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through e-content deliveries and other possible e-training

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CMA Balwinder Singh, President along with CMA

Inauguration of Workshop on Applications of Data

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CMA Chittaranjan Chattopadhyay,Chairman of Banking

CMA Harijiban Bandyopadhyay , Past President of the

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Smt Mala Ray, Hon’ble Member of Parliament, Lok

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CMA Balwinder Singh President , ICAI Presenting Memento

Technical Session II Technical session III

Technical Session IV Technical Session V

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GOVERNANCE & AUDIT

CMA Krishnendu Prasad Ray Dr. Gour Gopal Banik

Procurement involves the process of selecting vendors, establishing payment terms,

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Kind Attention !!!

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INTERNAL AUDIT &