January 2016

VOL 19 NO.
08 PAGES 36 JANUARY 2016 R50
The Institute
of Chartered
Accountants of
India
(Set up by an act of
Parliament) Your monthly guide to CA news, information and events

CONTENTS
EDITORIAL BOARD INSIDE

President and Editor-in-chief 03 President’s Communication
CA. Manoj Fadnis, Indore
04 Chairman’s Communication
Chairman and Editor 05 Motivation: Unlock Your Potential and Shape Your Destiny
CA. V. Murali, Chennai
06 Article: Takeovers Are No Child’s Play
Addl. Secretary - Board of Studies 09 Article: Swachh Bharat Cess

CA. Vandana D. Nagpal
11 Article: How to Approach Questions in Interviews
15 Article: Anatomy of Learning: Leaning How to Learn

Editorial Support
K. Sudhakaran, Assistant Director 17 Academic Update: Accounting
Dr. Ruchi Gupta, Sr. Executive Officer
19 Knowledge Update: Swachh Bharat Cess(SBC)-Frequently Asked
Questions (FAQ)
22 Knowledge Update: Auditor’s Qualified Report on Consolidated

Office Financial Statements under the Companies Act, 2013
Board of Studies
The Institute of Chartered 26 Advisory: E-mail and Telephonic Queries: An Advisory for Students
Accountants of India, ICAI Bhawan, A-29,
Sector-62, Noida-201 309. 28 Announcements
Phone : 0120-3045938
34 Poem
SWACHH BHARAT - A STEP TOWARDS CLEANLINESS

HEAD OFFICE
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Success in life is not about Non-receipt of Students’ Journal
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luck, it is about managed
thoughts, focused attention EDITOR: CA. V. Murali
Printed and published by Shri Vijay Kapur, on behalf of The Institute of Chartered
and deliberate action. Accountants of India, New Delhi.
PUBLISHED at the Institute’s Office at Indraprastha Marg, New Delhi and
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02 January 2016 The Chartered Accountant Student

PRESIDENT’S COMMUNICATION
professionals equipped with contemporary practical
knowledge. Already the skill-sets being imparted have
extended from the traditional domains of accounting,
finance, taxation and auditing to the emerging areas of
business strategies, governance, sustainability, business
consultancy and so on.
The new scheme of education and training that is in the
process of implementation shall surely press forward
acquisition of skills sets that will improve both employability
and entrepreneuring capability. In the current business
environment, the probable employers prefer hiring those
who have already acquired skills, as it cuts down the training
time and cost to the company. In the Institute, this is
achieved through well thought mix of theoretical education
and practical training. Usable practical skills constitute the
integral and indispensable part of our profession.
“The mind is not a vessel to be filled, but a fire to be kindled”,
said Plutarch. The Institute does not encourage rote learning
by the students; rather teach them to be ever interested
and receptive to knowledge. This virtue is carried even
after acquiring the qualification in form of well planned
Continuing Education Programme. I am very pleased to
My Dear Students, share that in this issue of the students’ journal, the Board
of Studies is introducing a new column of Knowledge
H
eartiest best wishes for a wonderful and Update as a regular feature. It will cover recent trends and
prosperous New Year 2016. I wish that New developments in different areas of accounting, auditing,
Year provides the CA students zeal, enthusiasm taxation, and company laws, etc.
and luck to scale new heights of success in all
endeavours. I really take pride in the fact that each passing It gives me pleasure to inform that the Board of Trustees of
year our Institute is growing and gaining in strength. We Chartered Accountants’ Students Benevolent Fund (CASBF)
have great onus on our shoulders to maintain the core values has decided to grant financial assistance to 800 meritorious
of accounting profession. New Year is the most appropriate and needy students (i.e. to 400 male and 400 female
time for all of us to take pledge that we will serve our society students), who are currently undergoing articled training
with utmost sincerity, honesty, transparency and thereby for one year with effect from 1st April 2015 to 31st March
contribute in the overall development of the nation. I also 2016. When we help students, we actually help transform
extend my best wishes on the occasion of 67th Republic our generation next, and when we empower our generation
Day of our beloved motherland. The celebration of this day next, we actually secure our own future.
instills such a patriotic fervor that truly reflects our unity
In the month of January 2016, the results of CA examinations
among diversity.
held in November, 2015 shall be declared. Best wishes to
Undoubtedly, the country is marching ahead to become all the candidates. May your hard work is rewarded! We
new economic powerhouse. Notwithstanding Mid-Year have one of the most robust evaluation processes in place
Economic Review recently tabled in the Parliament has in the interest of students. At the same time with the belief
lowered the growth forecast to 7-7.5 per cent from 8.1-8.5 that improvement is always possible, we have made efforts
per cent in 2015-16, India will be amongst the top growing to further improve the processes so that no harm is done
economies of the world. The Reserve Bank of India has cut to a deserving student. I look forward to your joining the
interest rates in tranches this year to lower the borrowing profession as Chartered Accountant very soon.
costs and spur revival of investment cycle. I am very hopeful
that our country will grow faster to enhance standard of With best wishes,
living, have inclusive growth and improve employment. The
government is pushing ahead with economic reforms with
initiatives such as Make in India that should drive investment
and induce further growth. The country is eagerly waiting
for the new regime of Goods and Service Tax to become a
reality that should catapult the growth rate.
The growth of Chartered Accountancy profession has to CA. MANOJ FADNIS
be in tandem with the growth of our nation. India with its PRESIDENT
high growth rates require more number of highly skilled THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
The Chartered Accountant Student January 2016 03

CHAIRMAN’S COMMUNICATION
SUCCESS MANTRA
1. Successful people are simply those with successful habits.
2. Success is not a mystery, it is a science.
3. Successful people build each other up. They motivate, inspire
and push each other. Unsuccessful people just hate, blame and
complain.
4. A definitive aim in life will save wasted effort and give direction in
life.
5. Self confidence will help one master all fears that wrack a person –
fear of ill health, fear of poverty, fear of criticism, fear of death and
fear of loss of love.
6. Enthusiasm will enable one to move freely with all those one comes
in contact with and is the foundation of a pleasing personality.
7. Self-control is very important to help balance oneself in a practical
manner to become “the master of your fate, the captain of your
soul.”
8. Imagination and the habit of doing more: Creativity is a prized
commodity. A person with ideas is always looked up to. So is a
person who is willing to go the extra mile in pursuit of the goal.
My Dear Students,
EFFORT AND PERSEVERENCE HOLD THE KEY
W
ishing you all a Happy, Prosperous and fulfilling New As a student of the Chartered Accountancy Course, it is imperative
Year 2016. Warm Sankranti and Pongal Greetings. We to be diligent in study, put in regular effort and persevere steadily –
at the Board of Studies wish you all the very best for relentless toil is the key to crack the examinations. Concentration is
a wonderful year. May your efforts bear fruit. Never the act of focusing the mind upon a set goal and working towards it
forget two people in your life - your father and your mother. The till one attains success. You have the power to turn minus into plus.
person who loses everything to make you win – your father; The Look forward, never backward. Forge your way with persistence and
person who is with you in every pain – your mother. I am happy to perseverance. You are sure to emerge successful. Never stop giving your
share with you that the column of Knowledge Update, which has been best, just because someone does not give you your due credit. Abraham
started on pilot basis will be a regular feature of the Students’ Journal Lincoln has said “The best way to predict your future is to create it.”
from this issue onwards. I sincerely hope that this effort of BOS - will Keep doing what you can and God will do what you can’t. Good or
bridge the gap between theory and practice. We have also subjected bad, just smile. You have a lot to be thankful for. Don’t lose hope. You
the Online Mentoring facility for a review at the Board of Studies. never know what tomorrow has in store for you. Life’s best moments
Based on the feedback of our faculty members as well as students, we usually happen unexplained. When you feel like quitting, think about
have also decided to make available the online mentoring facility on why you joined. Dreams don’t work unless you do. Never overestimate
the Cloud Campus on the difficult areas of the subject(s) for the three your weakness or underestimate your strength. Your struggles will lead
levels of the CA course including counseling. you to your strengths. You have to fight through some bad days to earn
the best days of your life.
POINTS TO PONDER WRAP UP POINT
Talent wins games. But teamwork wins championships. Team
building, networking and relationship building are the keys to success. Take care of your thoughts when you are alone and take care of your
Use your voice for kindness; your ears for compassion; your hands for words when you are with people. Life ends when you stop dreaming;
Hope ends when you stop believing; Love ends when you stop caring.
charity; your mind for truth; and your heart for love. Don’t cry over Always remember that you are much more than you know. Within
the past, it is gone; Don’t stress about the future, it has not arrived; you lie great reserves, the promise of a better tomorrow. It is up to
live in the present and make it beautiful. Calmness of mind is one of you to rise over and above your circumstances, to make an indelible
the rarest and beautiful jewels of wisdom. The most important time impression and mark in your chosen area. Most people don’t achieve
to hold your temper is when the other person has lost it. A French their dreams. They quit or give up just steps away from the finishing
Proverb says “There is no pillow as soft as a clear conscience.” We are line. Have the tenacity and will to stick to your plan till you reach the
born to be real and not to be perfect. Creative thinking inspires ideas, goal. Shri Robin Sharma said “the only limits on your life are the ones
ideas inspire change. Happiness can be found even in the darkest of you set yourself. When you dare to go out of your circle of comfort
times, if one remembers to turn on the light. and explore the unknown, you start to liberate your true human
potential.” The great comedian Charlie Chaplin said “Life laughs at
The secret of success lies in our perception of our work. If we you when you are unhappy; Life smiles at you when you are happy;
perceive what we are doing as a struggle, then, whatever, we do will but Life salutes you when you make others happy.” Trust before you
seem difficult. If we visualise ourselves as overcoming the minor love; know before you judge; commit before you promise; forgive
obstacles in our path, we will surely be winners. It is for us to look before you forget; appreciate before you regret.
for and grab the opportunities. We must not be passive onlookers,
but pro-active and creative. Attitude matters, self perception counts, May the forthcoming New Year be wonderful in every way and may
harmony with oneself and energizing oneself is the key to get ahead. there be happiness and love each step, each day.
Henry David Thoreau said “Success usually comes to those who are
too busy looking for it.” It is said that the road to success is always With Warm Professional Regards,
under construction and it is self-motivation that will cruise you
through the journey of life. A Comfort zone is a beautiful, cozy and Forever, yours in service,
comfortable place – but nothing ever grows there. Hence, come out of
your comfort zone and enter into effort zone. When you feel low and
down, remember no matter what the problem is don’t nurse it, don’t
curse it, don’t even regret it, just gladly accept it, trust God – He will
reverse it! In life, never to get ‘upset’ about any issue or problem, it will
never sort the issue rather complicate it. Getting ‘Up’ to ‘Set’ things (CA. V. MURALI)
right will help you in life. CHAIRMAN, BOARD OF STUDIES, ICAI, NEW DELHI

CA. T. N. Manoharan MOTIVATION
Unlock your Potential and Shape your Destiny

accomplish your goals. Many of life’s failures are people who
did not realize how close they were to success when they gave
up. Success may not come the way you want it and when you
want it. But, if you have perseverance, success will definitely
come your way one day and as and when it comes it would be
much better than what you wanted.
All through the journey of your life, be grateful to your

parents, teachers, the Institutions you grew with, the society,
the nation and the universe as a while. The sense of gratitude
is the silver lining of any accomplished life. When you look
back and give a little bit of your affection, bondage, loyalty,
affiliation in some form or the other, you have done that extra
mileage to make your life more adorable. We are all mortals
Beloved Students, and don’t have any eternal existence. Nevertheless, we can
I
build Institutions which would be permanent, we can adopt
n the journey of your pursuit to qualify as a Chartered principles which would last for eternity and we can practice
Accountant, you might encounter challenges. You values that hold good for generations to follow.
can overcome those challenges if you can effectively
unlock your potential. Tapping your hidden capabilities Strike a balance between personal life and career path. Make
brings in tremendous self confidence and gives you the a sincere attempt to score the minimum pass mark in every
determination to accomplish your goal. You must believe role that you perform in life while you may excel to get
that what is within you is much stronger than what is thrown distinction in some of those roles so that in aggregate you are
before you as a challenge. Passion, perseverance and potential above the benchmark like in the CA examination. There is no
in you should enable you to achieve whatever you wish use in scoring centum in some roles and to remain a big zero
and target in your life. Don’t limit your challenges, instead in one or the other roles. You will not be declared as qualified
challenge your limitations and breach them to tap and bring or a success in life with such a performance and scoring.
out the best in you.
I have immense faith in all of you and I am confident that you
A situation in life is a problem when mind is weak; a will do justice as the architects of future India. I am sure some
challenge when mind is balanced and an opportunity when of you would grow in stature so as to give your signature the
mind is strong and confident. When an egg is broken from status of an autograph. Gone are the days when only film
outside, life ends but when it is broken from inside, life personalities, sports persons and political leaders could be
begins. Handle any challenge with your inner energy than considered as celebrities. In the emerging scenario, people
by mere undue influence of extraneous factors. Confidence with creativity, innovation, opinion making, knowledge
doesn’t come when you have all the answers but it comes dissemination and those who make the world a better place
when you are ready to face all the questions. The solution lies to live would all be celebrities. Aspire to emerge out as a “Role
in the attitude. A happy person is always happy, not because Model” to your next generation.
everything is right in life but because his attitude towards
everything in life is right. Some of you, I wish and pray, would cease to be mere readers
of history but would turn out to be creators of history. Many
If you learn to face any adverse situation in life, you don’t of you, even while leading an ordinary life, might be perceived
get perturbed and you will not be robbed of your happiness by the society as extra-ordinary by the contribution you make
all through your life. Believe me when I say that there is to the society in your own way. By doing ordinary things
no human being in this world who does not encounter any with an extra-ordinary passion, you will manifest yourself
problem. Equally true is the fact that there is no achiever into a legendary personality. I can visualize that your future
in life who did not face any failure. My dear young friends, unfolding is very bright and promising. I plead and urge every
please also realize that there is no problem in life without one of you to hold your head high and walk with courage of
a solution and there is no failure that can’t be converted into conviction that you will justify your existence in this world
a success. by crossing many milestones and touching as many lives as
possible. I wish you the very best in your pursuits and hope
Stress does not lie in the situation but in the way we deal to see you as my colleague in this noble profession. Jai Hind.
with it. Everything you want in life is waiting for you-an
inch outside your comfort zone and an inch inside your (The Contributor is Past President of ICAI
effort zone. By sheer determination and hard work you can and a Padma Shri Awardee)

ARTICLE Shraddha Mani
Takeovers Are No Child’s Play

vs. Household International in 1985. The Court upheld
the intention of the poison pill as a defense mechanism,
to prevent hostile acquirers from achieving control by
virtue of their deep pockets, rather than ballots, which
is basically democracy in the corporate world.
The contributor is a member of ICAI. More recently, in 2012, Netflix Incorporations,
(Mem. No. 167218) a company involved in video-streaming and DVD-
by-mail, based in the USA, adopted an anti-takeover
plan to prevent investor, Carl Icahn from increasing
G
olden Parachute, Poison Pill, White Knight, his nearly 10% stake in the company. Under the plan,
Shark Repellant.... These may sound like board Netflix’s shareholders, other than the person acquiring
games children play on picnics or power ups more than 10%, were given the right to acquire more
on your latest video game. However, in the real stock if any individual investor acquired more than a
world they are buzzwords for defense mechanisms used 10% stake in the company.
by companies to guard against hostile takeovers, often
giving them a new lease of life or protective shield to Blank Check
survive another day in board room battles and corporate In the USA, “blank check preferred stock” (preference
games of their own brought on by ambitious investors shares) can be issued and it involves sale to a particular
and competitors. The various defenses against hostile investor and would become redeemable upon a change
takeovers, or ‘shark repellants’ are – of control. These may have special voting, conversion or
control rights which can make a takeover more difficult.
Poison Pill
A Poison Pill is a strategy in which a hostile takeover bid is Greenmail
upset by way of the whole process of takeover being made The term ‘greenmail’ is derived from the words ‘blackmail’
more problematic. Such a strategy may include rights issue and ‘greenback’ (which refers to early American dollars).
i.e. shareholders can purchase shares of the company at a It is a measure adopted by a target company to reverse
substantial discount or at a two for one scheme. This rights a potential takeover by an entity who has purchased a
issue will be triggered only if a particular shareholder substantial stake.
buys a certain percentage of shares, whereby he becomes The target company purchases its own shares back
a potential takeover bidder. The potential bidder himself from the purchasing entity, at a premium, which is
is prohibited from exercising these rights. also called a ‘bon voyage bonus’ or a ‘goodbye kiss’.
Such a Rights Issue can be introduced and revoked In return for the greenmail payment, the purchasing
only by the Board of Directors and thus the potential entity, who has now made a substantial profit, ideally
bidder would have to negotiate directly with the stops pursuing the takeover and agrees to refrain
Board, otherwise the hostile takeover would become from purchasing that company’s shares for a specified
very expensive and tedious as shareholding would be number of years. Thus the target company is free from
diluted further.In such negotiations, the bidder and the threat of a hostile takeover, but at a cost, as it may
the company being targeted may agree on a mutually lead to increased debt for the target company trying to
acceptable acquisition price which is high and can protect itself and reduced cash reserves. Greenmails
maximize shareholders’ wealth or the takeover bid may may also result in increased promoter shareholding or
fail altogether if the company is keen on retaining its capital reduction as a result of repurchasing the shares.
current ownership and management structure. However, the company gets to retain its management
Poison Pills are unlawful without shareholder and employees and other assets which otherwise would
approval in some jurisdictions and lawful if done in have been compromised had the hostile takeover gone
a transparent manner but not a well-received tactic through.
in others. Sometimes, from the point of view of a Regulatory requirements and heavy tax obligations
shareholder, a takeover may be financially rewarding. in certain jurisdictions have made greenmails less
Poison Pills in Action - The term ‘Poison Pill’ was common nowadays.
coined by investment banker Martin Siegel and was
advocated by corporate lawyer Martin Lipton and Pac-man Defense
became popular when the Delaware Supreme Court in In this type of defense, the target company, counter
the United States of America upheld its usage in Moran purchases the shares of the acquirer company, reminding

ARTICLE
us of the manner in which Pac-man (in the video game) Macaroni Defense
chases and overpower his enemies, the ghosts, after
consuming a ‘Power Pellet’ dot. The company would have When adopting this defense mechanism, the company
to have enough cash to acquire the shares required to halt issues a large number of bonds on the condition that they
the advances of the acquirer or in case the target company must be redeemed at a higher price if the company is taken
cannot acquire shares, the company or persons affiliated over. It is called Macaroni Defense because if the company
to the company may adopt other means of influence such is under threat of being taken over, the redemption price
as debt etc. The acquirer company is now faced with the of the bond expands in the same manner as macaroni
hard choice of pursuing the takeover bid and risking pasta does in boiling water.
control over its own company, or buying out the target
company’s share in itself, at a higher price. At the end of White Knight
the day, whether the defense is successful or otherwise, A White Knight may be a company or an individual
the target company would be exhausted of a significant that acquires a target company at a fair consideration
amount of its cash reserves which it could have put to in which the target company acquired is facing a hostile
better alternative use. acquisition from another potential acquirer (Black
In the case of Martin Marietta Corporation in 1982, Knight). White Knights are preferred as acquirers as they
the company (MMC) borrowed $ 1 billion to finance act in good faith and may not replace the management,
a retaliatory acquisition by Bendix Corporation. The unlike hostile bidders whose intention is to take over
company ultimately had to sell off some of its divisions the management and steer the company in a different
to repay the heavy debt as well as buy back some of the direction. They arrive to rescue the target company
stock that had fallen into the acquirer’s hands. from the hostile bidder by offering a more lucrative bid
or more agreeable terms to the management. However,
Golden Parachute very ambitious Black Knight acquirers may allow the
A Golden Parachute would refer to agreements between deal between the target company and the White Knight
employers and high level managers on with respect to go ahead and then may launch a hostile takeover
to hefty compensation packages on termination of bid on the White Knight itself, resulting in a corporate
employment. Termination of employment would be checkmate.
specified to mean termination as a result of takeover or A White Knight could also refer to the acquirer of
merger. Therefore, as a result of a takeover, the company’s a struggling firm that may not be under any threat of
management would leave the company and the acquirer a hostile takeover but which is financially weak and
company would have to pay this increased cost. Similarly, possibly undergoing liquidation.
a tin Parachute would refer to compensations payable to For instance, in 2009, Fiat took over Chrysler to save
mid-level managers. The increased cost and loss of talent it from liquidation. In 2011, Google acquired Motorola
may deter acquirers. Mobility (Motorola’s cell phone division). Around
2000-2001, Gesco Corporation Limited along with
Staggered Board Mahindra Realty & Infrastructure Developers together
A Staggered Board is one in which only a fraction of the thwarteda takeover bid by the Dalmia Group on Gesco
members of the board are voted into office each time Corporation. Although Gesco and Mahindra were
instead of all the directors having the same one year successful, Gesco eventually merged into Mahindra.
office. Therefore, if an acquirer wishes to capture a board Reliance Industries’ acquisition of stake in EIH Limited
in order to reverse the poison pill provision, it would have to counter a possible bid by another major shareholder,
to wait for 2 cycles of directors to retire by rotation before ITC Limited is another example of White Knights in
it can gain control of the entire board. With a staggered action in India in the past.
board, an acquirer cannot win a proxy fight either (where
the acquirer convinces shareholders to vote out members Grey Knight
of the board of directors in a meeting). A Grey Knight is an acquiring entity that enters a bid for
India already has such a concept in place (Section a hostile takeover and is perceived as more favourable
152 of the Companies Act, 2013) whereby only one- than the Black Knight (but less favourable than the
third of the directors are liable to retire every year. White Knight).The position of a Grey Knight is odd in
Also, at least two-thirds of the board should consist the sense that it is neither welcome nor unwelcome in
of directors who retire by rotation. The remaining the acquisition bid. It is more a question of choosing the
one-third is appointed in the manner as stated in the lesser of the evils, when faced with a difficult situation
Articles of Association. However, Section 169 of the such as a hostile takeover.
Companies Act, 2013 allow shareholders to remove Also interesting to note is the term, Yellow Knight.
a director by an ordinary resolution. In such a case, It refers to a company that was once making a takeover
an acquirer may be successful in its proxy fight. A attempt but results in discussing a merger with the
staggered board combined with a poison pill provision target company, probably due to the target company’s
is a potent combination against hostile takeovers. ability to fend off the takeover. The colour yellow refers

ARTICLE
to its association with cowardice, since the company would adopt such measures even if it meant rebuilding
has backed out of a takeover attempt and is now willing the company from its roots, if ravaged by a takeover
to listen to the target company’s terms. war.
The SEBI (Substantial Acquisition of Shares and
Asset Stripping or Selling off the Crown Jewels Takeovers) Regulations, 2011 controls but does not
Here, the target company sells off its most attractive and make takeovers albeit hostile ones, difficult. The
advantageous assets to a friendly third party or spins off Takeover Code applies only to listed companies.
the assets into a separate entity, thus converting itself Regulation 6 prescribes that only an acquirer, who
into a sort of ‘shell company’ that is unattractive to the together with persons acting in concert with him,
acquirer. In case of a spin off, the existing shareholders holds shares or voting rights in a target company
would get shares in the new entity. Alternatively, the entitling them to exercise 25% or more but less than
target company could take up heavy loans that would the maximum permissible non-public shareholding
be due after the takeover, thus increasing the acquirer’s (currently 75%), shall be entitled to voluntarily make
financial responsibility. In reality, it would be difficult to a public announcement of an open offer for acquiring
implement such a strategy as shareholders’ resolution is shares. It is also provided that a voluntary offer can be
required for disposal of a company’s assets and they are made only by a person who has not acquired any shares
unlikely to pass such a resolution as it would result in in the target company in the preceding 52 weeks prior
diluting the value of their shares. to the offer. Also, during the offer period, such acquirer
shall not be entitled to acquire any shares otherwise
Dual Capitalization than under the open offer. The acquirer is prohibited
This involves issuing another class of shares with from acquiring any shares of the target company after
differential voting rights i.e. a new class of shares is issued the open offer for a period of 6 months except under
which has superior voting rights but inferior dividends, in another voluntary offer. Regulation 3 prescribes that
addition to the current regular class. Current shareholders an acquirer shall not acquire shares enabling him to
can exchange their old shares for these new ones. For exercise more than 25% of voting rights in a target
example, the differential voting rights shares may have 10 company unless he makes a public announcement of an
voting rights per share but the regular shares may have open offer for acquiring shares of such target company.
one voting right per share. As per Regulation 29(1), any acquirer who acquired
Adopting a defense mechanism such as the ones shares in a target company aggregating to 5% or more
mentioned above seem to be Pyrrhic victories for the of the target company’s shares will have to disclose
companies adopting them as although the company is their aggregate shareholding to the target company. As
victorious in warding off the threat of a hostile takeover, per Regulation 7, the minimum offer size for an open
it is harming its own shareholders’ rights and value offer is 26% of the total shares of the target company.
in the process either by making the investment more This all makes silent acquisitions difficult and the target
unattractive or by diluting shareholding pattern.This company can thus safeguard themselves against hostile
was probably the reason for the term ‘Poison Pill’ as takeovers as they can see the storm approaching. Thus,
such a pill not only harms the bidder or the aggressor, in India, there is scope for poison pills and other such
but also the target or the victim taking the pill. Thus, shark repellants. Staggered Boards are compulsory by
most defense mechanisms are ‘no-win situations’. A law in India and while poison pills and others are not
corporate should evaluate the takeover offer in an explicitly illegal, it might be prudent to have them in
unbiased manner, prioritizing its shareholders, over place in case a corporate raider comes calling.
its management’s own ego and long term plans i.e. if a
takeover can unlock value in a corporate, get rid of lazy Bibliography / References
or bad management, utilize its idle cash reserves, then The SEBI (Substantial Acquisition of Shares and Takeovers)
they should consider a deal with the bidder. Regulations, 2011
Being a takeover target is inevitably beneficial for www.wikipedia.org
shareholders, as the stock price goes up, increasing www.investopedia.com
shareholders’ wealth. The target company management Takeover Games & SEBI Takeover Regulations by N. L. Bhatia and
may try and adopt measures such as buy back or rights JagrutiSampat (Taxmann)
issue in order to ward off the takeover and these are Delaware Journal of Corporate Law – The Ever-Evolving Poison Pill
again beneficial for the shareholders. If the takeover is by Joseph M. Grieco
successful, the new management would make changes Legal Affairs Magazine – The Perfect Pill by Len Costa
in operations or financial management, thereby New York Times – Origins of the Pac-Man Defense, published
enhancing the wealth for the shareholders. January 1988
As the proverb goes, when the going gets tough the The Ukranian Journal of Business Law – The Art of Takeover
tough get going. On the other hand, some companies, Defense by Katerina S. Kokot, September 2006
particularly family businesses, would want to protect Hostile Takeovers: Combat Strategies by Amit K. Vyas / www.
their business from uninvited acquirers at any cost and bcasonline.org

ARTICLE
Swachh Bharat Cess
Jaspreet Kaur Shaily Singhania

Reg.No. CR00515471 Reg.No. CR00521164
Introduction Thus, the funds raised through the imposition

The Swachh Bharat Mission (SBM) was initiated of SBC shall be utilized wholly and exclusively
and officially launched by the government of India for financing and promoting the Swachh Bharat
on 2nd Oct, 2014 by the Hon’ble Prime Minister with Initiatives or any matter relating thereto.
an aim to accomplish the vision of ‘Clean India’.
The campaign covers approximately 4,041 statutory Determination Of Point Of Taxation
cities and towns to clean the roads, streets, localities The Point of Taxation of SBC shall be determined
and infrastructure of the nation. The Swachh Bharat in accordance with Rule – 5 of the Point of Taxation
Mission requires an investment of `62,009 crores Rules, 2011.
(US$ 9.4 billion approx.), out of which `14,623 crores As per Rule 5, SBC shall not be levied in the
(i.e.; US$ 2.2 billion approx..) shall be made available following cases if service is performed after 15th Nov,
by the Central government. With a view to meet 2015:
the funding requirements for the said Mission, the  Where the invoice is issued as well as
government has planned to raise funds by imposing consideration is received before the date when
the Swach Bharat Cess(SBC) on Service Tax apart SBC became effective, i.e.; before 15th Nov, 2015;
from the other sources. and,
 Where the consideration is received before the
Levy And Collection of the SBC On Service Tax date when SBC became effective, i.e.; before 15th
The provisions related to the levy, imposition and Nov, 2015 and the invoice is issued on or before
collection of SBC are contained in the Chapter VI 29th Nov, 2015 (i.e.; within 14 days of the date
(Section 119) of the Finance Act, 2015. The SBC when SBC became effective).
shall be levied on all taxable services at the rate not
exceeding 2% of the value of taxable services. However, this is contrary to provisions of section
The Hon’ble Finance Minister, while informing 67A which states that rate of service tax, value of a
the House of Parliament on the matter, stated as taxable service and rate of exchange will be the one
under: as in force or as applicable at the time when the
“123.------It is also proposed to have an enabling taxable service has been provided or agreed to be
provision to levy Swachh Bharat Cess at a rate of provided.
2% or less on all or certain services, if need arises.
This cess will be effective from a date to be notified. Countering Some Basic Issues Involved
Resources generated from this cess will be utilized  Separate indication in invoice:
for financing and promoting initiatives towards SBC needs to be mentioned separately in the
Swachh Bharat.” invoice as a different line item after Service Tax.
Thus, the provisions of Section 119 shall come It is to be noted that SBC shall be levied, imposed
into force w.e.f. 15th Nov, 2015 as declared by the and collected independent of the Service Tax.
government of India vide Notification No. 21/2015 Thus, it has to be levied, treated and accounted
and the SBC shall be imposed from the said date at for separately. In fact, separate accounting code
the rate of 0.5% on all taxable services. has been notified as under:
As regards collection, the funds raised through
SBC shall first be credited to The Consolidated Fund Swachh Tax Other Penalties Deduct
of India and thereafter, the Central Government Bharat Cess Collection Receipts Refunds
may, utilize such funds for the purposes as specified (Minor Head)
under sub – section 2, after the Parliament makes 0044-00-506 00441493 00441494 00441496 00441495
due appropriation of the funds.

ARTICLE
 Class of services on which SBC is to be levied: SBC and Reverse Charge Mechanism
SBC may be levied on all or any of the services
as notified by the Central Government. The In certain cases, the liability to pay Service Tax
Central Government vide Notification No. has been shifted onto the recipient of service
21/2015 has imposed SBC on all taxable 0rather than the service provider. Such an
services. arrangement is referred to as the Reverse Charge
Mechanism. The arrangement of Reverse Charge
 Date of levy and the value on which it is to be Mechanism was made effective vide Notification
levied: No. 30/2012 – Service Tax dated 20th June, 2012.
SBC is to be levied at a rate of 0.5% on the The Central Government, vide Notification No.
value of taxable services. Here, it is to be noted 24/2015 – ST, dated 12th Nov, 2015 clarified that
that unlike the other cess in existence, that is the Notification No.30/2012 – Service Tax dated
to say, the Education Cess and the Secondary 20th June, 2012 would be effective for the purposes
and Higher Education Cess, SBC is not to be of levy of SBC mutatis mutandis.
imposed on the amount of tax liability. Rather, it In case of Reverse Charge Mechanism, the
is to be imposed directly on the value of taxable Point of Taxation of SBC shall also be determined
services. in accordance with Rule 7of the Point of Taxation
Rules, 2011 as is applicable in case of determining
SBC in case of Exempt Services the Point of Taxation of Service Tax under Reverse
As discussed earlier, the SBC is to be levied on Charge Mechanism.
all taxable services. Thus, the exempt services fall
outside the periphery of the imposition of SBC. SBC and CENVAT Credit
Thus, any service which is covered in the Mega It is noteworthy to mention that SBC has not
Exemption Notification or falls under any category been included in the chain of CENVAT Credit.
of the Negative List shall not be subject to SBC as Thus, CENVAT Credit can neither be booked
these services are not taxable. nor availed in respect of SBC. In cases where any
reversal is needed to be provided in respect of any
 SBC in case of Abatement: amount of CENVAT Credit booked earlier, no
Abatement implies the exemption of a certain reversal would be required to be made in respect
percentage of the value of taxable services. of the amount of SBC as no credit is booked in the
Thus, in case of abatement, SBC shall be first instance.
applicable and be levied only on that portion of
the service which is taxable and no cess in the CONCLUSION
name of SBC shall be levied or imposed on that Hence, in light of the above discussion, we can
part of service which has been exempt owing to conclude that SBC would raise a substantial
the provision of abatement made effective by amount of funds for the Government of India
the government vide Notification No. 26/2012- (estimated at `10,000 crores per annum) to
Service Tax, dated June 20, 2012. meet the huge funding requirements of the SBM
apart from the other sources. SBC would help
 Applicability of SBC in case of services to foster the implementation of the Swachh
covered under Rule 6 of Service Tax Rules, Bharat Mission which would further pave
1994: A new sub – rule, i.e.; Sub – Rule 7D has way to accomplishing the objective of ‘Clean
been inserted to Rule 6 vide Notification No. India’. However, at the same time, it would also
25/2012 – Service Tax, dated 12th Nov, 2015 increase the tax burden. Due to the non –
to provide for the imposition of SBC on the availability of CENVAT Credit, it will result in
services covered under Sub- Rules 7, 7A, 7B or cascading effect of the cess. A direct enhancement
7C by applying the following formula: of the effective rate of Service Tax would
also result in hike in prices of export goods, thus
 Service Tax Liability (calculated as per sub – not facilitating to making export goods competitive
rule 7, 7A, 7B, 7C)*0.5%/14% in the international markets which is contrary to
the ‘Make in India’ initiative of the government of
 SBC in case of restaurant services and India. The need for separate accounting treatment
catering services: would cause inconvenience and complexity.
SBC would be applicable on the same portion of Hence, there are a few points which still need
service as the Service Tax, i.e.; 40% and 60% in consideration.
case of the restaurant services and the catering (Disclaimer: The views expressed in the above article are
services respectively. based on FAQ issued by CBEC.)

Dr. N. K. Ranjan ARTICLE
How to Approach Questions in Interviews

Interviews are the most awaited situations for both candidates as well as employers.
At the same time, these are probably the most anxious and dreaded hour for both.
Candidates suffer from an anxiety on how to succeed and get selected, the employers
suffer from an anxiety on how not to hire a wrong candidate and repent later. Both
parties are equally worried and in their own ways. Interests of both of them are equally
at stake. Read this article to understand how to approach some of the general interview
questions…
A
s freshers, when you face an interview, you training programme cut out for their new employees,
often wonder why they ask such obvious which is administered to them as per their profile.
questions and thereby actually miss their
point. While responding to them, you Both (Employers and Candidates) are Worried
never think of the reasons behind their questions and Through their HR interview processes, interviewers
expectations—it usually is a mystery for most of the often shortlist the candidates that have been selected
candidates as to what exactly the interviewers pick through written tests, group discussions, etc.; they
from your responses; most of the times, to think about examine the selected candidates and trim their list
that realm is a waste of time. further keeping in mind the objectives behind hiring.
Interviewers prepare their questions keeping in Organisations by the time of interview are well aware
mind their organisation’s goals, objectives, mission and of their candidates through their respective CVs,
vision, i.e. what the organisation ultimately requires accompanying job applications, etc. As candidates, you
from their employees, which type of employees will should understand the insecurities of organisations
be the best suited to contribute to the organisation’s too (don’t get amused here!)—they have their own
productivity and eventually its vision, etc. Questions sets of anxieties and dilemmas behind hiring—what
could be many varying in content and form. Popular they should do to get to the right candidate for
general questions like, tell us about yourself, tell us their organisation. So it is a two-way game. Neither
your strengths and weaknesses, why should we hire the candidates nor the organisations in interview
you, why do you think you are fit for the position, what situations are relaxed or are supposed to take the
are your hobbies and interests, how do you see yourself selection process easy; both are equally anxious
professionally 10 years from now, how will you handle as interests of both of them are at stake. Imagine
a particular situation (by providing a case/ business when an organisation discovers to its horror after a
example), who has been the most inspiring person in year of hiring that the candidate they have selected
your life and why, tell us something about our company is not fit for them. Similarly, as candidates you also
and what are your expectations from us, etc., appear need to determine if the position you apply for suits
archaic and clichés. you—if the position includes what you look for in your
Let us consider those questions here to have an dream job.
understanding on the organisations’ expectations and
interviewers’ takeaways from your responses. Let us Let us try to understand some of those interview
understand that organisations are not just looking for questions one by one that appear general to most of
whether you can respond correctly, what you respond, you:
etc., but also for how you respond. You will have to Interviews often start with an exchange of
learn how organisations derive their takeaways from pleasantries like ‘welcome to...’, ‘how are you’, ‘how
interviews from the way you approach their questions do you do’, etc., to make the interview comfortable
and answer them. Interviewers often hit at your for employers as well as candidates. Candidates
psychology and try to understand that. Mostly, they are should appear cheerful and enter the interview room
of the view that candidates are untrained employees with a pleasant and genuine smile and they should
and they almost never expect the candidates to attempt this situation positively and briefly. Always
be know-all and understand-all in interviews. So, remember, —smile relaxes the candidates too, and
candidates are supposed to be inducted, trained and brief responses are what employers expect here, since
guided, after they join the organisation. Therefore, they are just trying to make the situation comfortable
organisations often have a mandatory induction-cum- for you.

ARTICLE
On Introduction Responding to what your weaknesses are is a

Tell us about yourself—candidates here get an little tricky. Employers want to know if you know
opportunity to explain their story, i.e. their yourselves. Of course, all of you are aware of your
background especially with regard to why they are weaknesses. Idea is to understand that you know which
at the interview. You need to suitably answer and weaknesses can directly affect your job performances.
explain your educational background and training, if Some experts advise not to give out any weakness
any, along with one or two achievements highlighting that can affect your job or to say something very
quantifiable evidences; justifications as to why you general, use humour, or, to say something that could
call them achievements will help the interviewers. actually be good from other perspectives. But there
Keep yourself brief as you will have further questions is nothing general or good about weaknesses. If we
on your education, training and achievements, in due have weaknesses, they will directly or indirectly affect
course. In fact, it will be better if you could ask back— our professional matters too. It is all a matter of time
it will help both of us if you could tell me what exactly and degree. Better present your assessment correctly
I should talk about in response to your question. along with your corrective measures.
Interviewers will like your forthrightness and will be Even when you say—I am a perfectionist, I tend to
happy to guide you there. take up many things at a time, or, I always say yes to
Probably they would not like you to talk about people who ask for help, you cannot say these could
your family, particularly your parents and their not negatively affect the organisations; if you think
achievements. Please decide if you should mention these are good for organisations, better call them your
your parents’ achievements. Keep your response strengths. Be honest as dishonesty never pays in the
simple and brief while describing yourself. This will long run. When you know you have a weakness, you
help you in building rapport with your interviewers. must have worked out a plan to come out of that. And
Although this appears to be a harmless question you should already be doing something methodically
without any challenge, your response may inspire about them to remove that from your persona. So talk
them to ask more questions further. For example, about your weakness while explaining your efforts to
while talking about yourself, when you say: I am get rid of them. You don’t need to deceive.
Radhika from Munnar…, be prepared to hear: Aha!
Munnar, what a place! Recommend me 3-4 things to On Professional Vision
do if I am in Munnar. Where do you see yourself in 5 or 10 years from now?
Responses to such questions help employers in knowing
On Strengths and Weaknesses your professional aspirations and realise if their
What are your key strengths and weaknesses? This organisation will be able to retain you while dealing with
appears to be a very common and popular interview those aspirations. By preparing a response to this question
question across sectors. Interviewers want to in the context of an organisation, you will discover how
understand whether you analyse your conduct and the organisation could support your aspirations in future.
understand yourselves, besides actually wanting to And, this will help you decide in accepting the offer if
know your strengths. While describing strengths, keep you get one. It is a win-win process as both you as well
yourselves brief, and describe two of your strengths as the organisation will get to understand each other in
that interviewers could easily relate to the key terms of your aspirations and their fulfilment. When you
responsibilities of the said job position. Substantiate articulate your professional vision, you in a way inspire
your response with examples from your life. Idea is your interviewers to explain how the organisation could
to clarify why those characteristics are your strengths. help in actualisation of your aspirations.
Simply saying you are a very positive person won’t You do not need to mention any position, i.e. I
help unless you explain how being positive has helped want to be the CFO or COO of the company, since this
you in resolving your issues. You need to analyse actually speaks about your attitude to work—what you
beforehand and prepare a list of your strengths. are bothered about is a position and not learning. On the
When you say: I learn quickly or I communicate really lighter side, imagine if the organization’s CFO or COO is
well…, please consider if these could be part of the job present in the interview. So, it is better to talk about your
profile you have applied for. This is another area of performance and learning curve—what you want to be
concerns. Great communication skills should not be good at, how you would contribute to the organizational
mentioned as strengths unless these directly affect the goals, and so on, so that you would communicate
job performance in the organisation; employers often your drive to grow on the one hand and you will not
find that out from the interview itself. Basically you appear selfish or just a grabber on the other. Also be
are required to understand the company and its goals logical about your vision keeping in mind your present
and objectives, its mission and vision, and so on, and professional standing—how you would professionally
analyse whether you and your strengths are in sync grow. Whatever, you should be able to logically defend
with them. your standpoint.

ARTICLE
On Real-Life Situations and Responses A similar question could be—will you be willing
Then there could be case-based questions—what will to relocate? You should note that you would not be
you do when this happens? Often the interviewers relocated against your wishes unless there is some crisis.
supply you with a professional/ business situation and Organisations pop such question to understand your
ask you to respond with a plausible strategy to deal accommodative nature. Unless you have strong reasons
with the critical situation. You should be able to assess for staying in a place, you should agree for relocation in
the problem while ignoring its symptoms. Once you principle, since this gives you an opportunity to learn,
know the problem, you should suggest some options make new bonds and know new places.
to help the situation. Start by asking how much time The question on change of shift hours is again to
you have to resolve. This will serve two purposes— ascertain your flexibility. Unless there are valid reasons,
one, you can prepare your response better and second, any shift should not be a problem.
they will know that you are capable of planning. Be Why should we hire you? Of course, you should not
ready to defend your solution. say that you are an expert. Talk about your strengths.
Or, the interviewers may also ask you to pick a Knowing the organisation and its culture can help you
challenging situation from your past and narrate how prepare your response here, i.e. how the organisation
you resolved that. Experts say that this is another could benefit from your strengths. Mention your
chance for candidates to explain their strengths, i.e. organisational qualities, i.e. flexibility, team work,
how they took on the challenge, what they did and ability to work in groups, etc., while referring to
how they fared in overcoming that situation. Basically, your internship or past experiences to argue how
you can derive your response in this case from your organisations have benefitted from your qualities.
preparations for the question—what is your strength? Since so much of authentic information is available
online or in print, you should try to read about the
On Hobbies and Interests organisation in advance, especially about its objectives,
There could be questions on your interests and goals, mission and vision, domain expertise, etc. This
hobbies that give you an opportunity to talk about will help you in responding well to questions relating to
non-professional aspects of your life, i.e. what you like the organisation (e.g. Why do you want this position?
doing when you are free. Hobbies and interests reflect What do you like most about our organisation? What
on your attitude to life. You can very well talk about are your expectations from the organisation?), and in
your hobbies irrespective of your degree of expertise communicating the keenness about your application.
in them, e.g. this could be I like listening to songs… to I Usually at the end, interviewers ask: Do you have
like singing songs. Be genuine, so that you could handle anything to ask? If you have studied the organisation
cross questions if the situation arises so. Dishonesty, if in advance, you can ask your questions, which may
discovered here, will be fatal. be on your opportunities to grow, your profile, your
department, your colleagues, social activities (if you
On Other Popular Questions are interested in social welfare) and your superiors
There could be questions relating to the most inspiring and peers in the organisation. This will present your
person in life. Be genuine. If you have not thought inclusive outlook and approach.
about it yet, it is better to think about it now. This Normally, freshers are ready to work anywhere
could be a person in your family, i.e. your mother, in any comparable profile, you must remember: your
father, or your elder sister or brother, your uncle, organisation as well as you both need each other
etc., your friend or some public personality. Once to prosper. You must have a preference. If you have
you know that, try to know your reasons behind your applied for a position, this means you must have
choice. Find out how these reasons could be helpful found something good about that—you can use that
professionally. Anything positive in your life, socially information in response to the question, why you want
or professionally, has a potential to transcend its to work for them. The same can go in your response to
energy to all domains of your life. what you like most about the organisation.
Then there could be some stress questions that So far your expectations from the organisation
interviewers ask in order to test your ability to are concerned, your response should always hint
judge and contain yourself in crisis. How would at strengthening your professional knowledge and
you deal with a change in your role or profile in expanding your profile. If you really think about your
the organisation? As a fresher, your foremost goal expectations from your organisation, you will end up
should be to learn and develop yourself. So, thinking about your knowledge and profile, at this stage
diversity offered in your role should be considered of your career.
enriching. Plus, this will be a proof of your flexibility
in the interests of your organisation. Of course, On Other Important Concerns
the organisation will acknowledge your generous Your approach to your dress and your overall
conduct of keeping the organisation’s interests appearance reflects on your approach to the interview
above yours. time if you are casual or careful about the interview.

ARTICLE
Your appearance will communicate that. Your that would be required to carry out the duties and
punctuality also communicates. Wear a dress that responsibilities at that position. Once you identify the
doesn’t take the organisation’s attention away from characteristics and qualities, tally them with your own
you. It is better to avoid a perfume since in most of and see if they describe you. If not, the job probably is
the cases, people have very strong tastes, either they not meant for you. This will never be your dream job.
love the perfume or they hate that. Do a little homework to understand your dream job.
Communicate what you also believe to be true. Jodi Glickman recommends—start by identifying your
Do not tell a lie. You are before experts and your lies strengths and the things you enjoy.1
if discovered could be very embarrassing, besides So if you want to be a successful candidate who
being fatal for you. Do not get into arguments with responds effectively, you should first listen to the
interviewers; if you feel strongly for something, interviewers’ question (and do not avoid if that
convey that once and drop the topic from your appears difficult; just accept the reality), and answer
side. There has to be more than one side of a story. what has been asked in brief without giving out
ou may not be aware of that. This will reflect on your unnecessary details (and keep your answers relevant
flexibility. and brief ). Experts say that among many other things
Just because compensations and positions appear in a candidate, not listening to questions irritates
lucrative, and you can perform, you should not apply interviewers the most.
for them. Check your life examples to understand what
actually suits and interests you, as these will help you in Suggested Reading
sustaining yourself in job with passion. HBR Guide to Getting the Right Job, 2012; Harvard
Finally, before you apply for a job—analyse the Business Review Press.
profile and draft that on the basis of job description
given in the job advertisement. This will enable you (The contributor is an Assistant Secretary and
to identify the personal characteristics and qualities Curator of Accountancy Museum of ICAI.)
1
Aim High—but Don’t Lose Sight of Earth (p.39) (from HBR Guide to Getting the Right Job; 2012)

Taruna Kohli ARTICLE
Anatomy of Learning: Learning how to learn
L
earning is inherent to the process of acquiring knowledge mother nature. All of this rejuvenates you and prompts you to work
for qualifying an examination or developing certain life towards your goal as every other living being does. You may now
skills that help you evolve as a student, a professional or as close your eyes and try to concentrate on your breath as you inhale
a good human being. Learning is a continuous process. We and exhale. This is the first stage of meditation. Once you practice
could learn every moment of our lives only if we pay attention and it for a few days, you will realize that your concentration has
are alive to our immediate environment. The human mind is like a improved considerably.
sponge that keeps absorbing voluminous amounts of information Learning happens when your mind is engaged actively, even for a
subconsciously and involuntarily leading to learning through short period of time. You must keep your mind engaged in activities
observation and experience. But learning voluntarily in a structured that stimulate your mental faculties for small time periods initially
manner, requires conscious efforts. It is pertinent to envisage the and gradually increasing the duration. You can start with a simple
process threadbare, to ascertain the effort required. The process can activity of finding words in a dictionary, which requires a few minutes
best be described in a phased manner as: of focus. Subsequently, you can upgrade it to reading an article in
a newspaper and marking new words or reading a paragraph of a
Read->Interpret and Comprehend->Retain and Reinforce- chapter in a textbook and marking important terms and finding their
>Recall->Reproduce definitions. You can gradually upgrade to a few paragraphs, then a
A student can face problems or hazards in any of the phases in the page to a full chapter. This exercise may initially require a lot of time
learning process. So it is critical for every student to identify his / and patience but practicing it religiously will certainly help you to
her shortcomings, overcome the same and achieve success. Most develop high levels of concentration over long periods of time. You
common learning hazards faced by students are: may also hone your mental skills by playing scrabble, solving the daily
 Procrastination crossword, Sudoku OR Rubik’s cube regularly.
 Lack of concentration/focus due to wavering mind and
distractions Developing the right skills to ‘Comprehend’
 Irregularity (intentional or un-intentional) Students generally have aversion to one or more subjects. The basic
 Disinterest due to non-comprehensibility of the subject reason is, that they are not able to comprehend OR do not pay
 Anxiety issues due to forgetfulness attention to, the fundamental concepts of the subject. Many a times,
 Lack of expression while reading from a textbook, you may encounter a few terms
which you are unable to comprehend; therefore, you are not able
The following write-up presents a pragmatic approach on each to make out the context. This makes you doubt your capabilities,
one of these problems and their solutions from the standpoint of your choice of subjects, further destroying your mood and
a student. your confidence.
To get around this hazard, you must obtain dictionary/glossary
Developing the right mindset for all the subjects, so that you can find the accurate connotation of
Learning requires a self-conscious, peaceful, receptive and open the term in the given context. Flag the term or place a stick-on with
mind, free from all distractions, preoccupations and fears. You first the definition/meaning beside the term to highlight it. After you are
will have to inculcate a ‘Can Do’ attitude no matter how arduous done with the cursory reading, mark all nouns, verbs and other
the task may seem. You should constantly remind yourself that you important terms and flag them similarly. This exercise not only
may only need to try a trifle bit harder than your peers to learn engages your mind actively (during an otherwise passive activity
anything. It is equally important to remind yourself that deferring like reading), but it also helps you to instantly recall the terms even
something, will only make things worse as you will lose time, the if you revisit it after a few days. Prepare a lexicon of all these terms,
most precious non-replenish able resource. You should rather take this comes handy during revision.
the challenge head on. To begin with, you may acquaint yourself Summarize all the vital points of the topic/concept in a small
with the relevance of the subject, how is the subject connected paragraph. If it is a detailed procedure, delineate the process/
with other disciplines and how is it going to help you further in mechanism into sequential points. This helps you to link the present
your professional career. You can start with reading the preface of topic with the previous one and puts the current topic in the right
the book, most often than not it declares whom is it meant for and perspective signifying its relevance in the larger schema of the
what is its purpose. This helps you to break free from the inertia and chapter. After you complete a topic, formulate basic questions on
finally get started. the topic like What, Why, How and attempt to write the answers in
a stipulated time. You should also try to attempt questions on the
De-clutter your mind topic at the back of the chapter. Reiterate the entire process for the
When your mind is preoccupied with myriad thoughts streaming rest of the topics in the chapter.
through with lightning speed , you can neither be at peace nor Depict all the topics in the chapter through illustrations.
concentrate. You need to calm yourself down. This can be best List down all the topics as entities and entailing sub topics as
achieved by connecting yourself with the natural environment sub-entities, how they are related as relationships, processes
by spending some time observing the birds, insects and squirrels (comprising of one or more entities or sub-entities) and try to
dancing around in the warm embrace of the sun, watching flowers illustrate them into a model. You can depict entities as ovals,
bloom, listening to the birds chirping as if singing in the glory of relationships as arrows, processes as rectangles. This provides a

ARTICLE
bird’s eye view of the chapter. You can prepare placards of such recall then formalize, and then write, wasting a lot of your precious
models/illustrations for all the chapters to understand how they fit time during the exam.
in the wider schema of the subject.
Recall
For a Practical Paper During the examination you have to utilize your time optimally else
Verbalize the problem solving process every time you solve you may not be able to complete the paper. So recalling everything
a complex problem. You can follow the generic procedure in the least possible time is crucial to your performance. It becomes
enumerated below: (You may intercede one or more steps before easier for you to recall if you learn through activities that engage your
customizing the generic process according to a subject/topic) mind and stimulate your mental faculties. If you have memorized
1. What is given: Note down all the parameters/values given in something, just repeat the lines in your mind over and over again.
the problem. These can be perceived as entities. You may also try to recall through visuals such as illustrations,
2. What is to be determined: As per problem description the notes prepared earlier, a similar question that you attempted
parameters or values to be calculated. during the revision exercise. You may attempt to recall through your
3. What is known about the entities and how they are experiences such as lectures or classes that you attended earlier
logically connected: Explore background knowledge about and discussions that you have had with your peers.
each of these parameters (entities) and the logical connection
that they have with other parameters /entities perceived Reproduce
as relationships. List down all that you know about the Examiner can easily distinguish between a good answer and a bad
parameters (entities), analyze their relationships and try to one. It is needless to state that writing a good answer is crucial to
determine the hidden information in the question. This step scoring. Let us now discuss few characteristics of a good answer.
can be the most challenging and critical as it requires you to Clarity: the answers should be written legibly with a consistent
have exhaustive knowledge about all the parameters and how hand-writing throughout the paper, clearly highlighting the
they relate with each other. important terms. Try to attempt all parts of a question together.
4. State assumptions if any: List down all assumptions that you Do not repeat or beat around the bush. Be brief and to the point.
are making and the underlying reasons. Do not write more than you know. Remember the examiner is
5. Is there a direct formula/procedure: Apply the same not going to collect garbage.
correctly upon the parameters given, considering the given Completeness: The answer should comprise of all major aspects
assumptions. of the concept replete with case studies, examples, illustrations
6. No Direct formula: Analyze the information derived in the and assumptions if any.
step 3 in view of the assumptions in step 4 and calculate the Quality: The answer should be structured in a logical
interceding values on the basis of which the final answer can sequence. Enumerate the points with sub headings, describing
be arrived at. each point briefly.
Whenever you solve a complex problem, place a flag indicating The answer should be as accurate as possible. For eg. Specific
the steps in brief to arrive at the final answer, this will help you to parts in the answer required to be presented accurately like
instantly recall the problem solving process. definitions, case laws etc. (already described above) should be
stated verbatim. Their explanations can be stated in your own
Retain words. If you are not confident about your expression, you can
After you have successfully comprehended the concept/topic/ memorize everything (from the text book/reference book /
chapter, you must identify parts of the topic that are required suggested answers).
to be stated verbatim for accuracy. These can be: Definitions, The examiner expects certain keywords, terms (duly
Enumerated Procedures/systems, illustrations, case laws, and highlighted) in your answer, only if he finds those in your answer
formulae. All these need to be memorized, to retain or register into then only he will award you marks generously.
your memory so that you can instantly recall everything without Sometimes a certain question has more than one solution. In
much effort. Memorizing also reduces latency between your mind such a case, you can explain your standpoint and the underlying
and your hand while writing during the exam. You are required assumptions (if any). You have to capture the imagination of
to determine how many times you need to read in order to the examiner and project your knowledge in the best possible
reproduce it verbatim. Once you know, you can calibrate your manner.
effort as well as allocate time optimally for preparation of the
concept/topic. This is one aspect of preparation which is largely Conclusion: Learning is basic to problem solving. It is a sequential
ignored by most students. They would just read a concept a few process, to be followed with persistence and perseverance to achieve
times, till they think they have memorized, but are not able to put desired results. Most of you may have your own way of doing things,
it down on paper. If you know that you need to read ‘n’ number of which may be augmented with some or all of these techniques to
times to memorize something verbatim, it means you should have maximize learning. Tips and techniques discussed above are not
the time, the willingness and the patience to read it as many times. exhaustive; they merely suggest how to kick start the process. As
Any less effort amounts to effort deficit. Greater the deficit, you progress on the path of learning, you may discover/devise your
lesser the output. In an ideal scenario, effort deficit has to be own novel ways that work best with your strengths. So go ahead,
nil. Frequent revision to reinforce is crucial for instant recall. The Explore new pathways to learning.
lexicon that you prepared earlier can be of much help. Contrary to
this, if you try to write the answer in your own words, you will first (The contributor is Assistant Secretary, ICAI)

ACADEMIC UPDATE
Accounting
Report of the Working Group on Implementation of Annex VIII: Survey of International Practices for
Ind AS by Banks in India has been released by RBI for Presentation of Financial Statements.
Public Comments (Source: www.rbi.org.in)
The Union Budget for 2014-15 emphasised the urgent need
for convergence of the current Indian accounting standards SEBI amends formats for publishing financial results
with International Financial Reporting Standards (IFRS). under new listing regulations (including compliance
The Ministry of Corporate Affairs (MCA), Government of with Ind-AS)
India notified the rules for IFRS converged Indian accounting The Securities and Exchange Board of India (‘SEBI’)
standards (Ind AS) along with its implementation road map had recently notified the SEBI (Listing Obligations
for corporates in a phased manner from 2016-17 onwards. and Disclosure Requirements) Regulations, 2015 (the
The roadmap for convergence of insurance companies, ‘Listing Regulations, 2015’) on 2 September 2015, which
banking companies and non-banking financial companies are effective from 1 December 2015.
(NBFCs) is expected to be announced by MCA in due Regulation 33 of the Listing Regulations, 2015 deals
course. The Reserve Bank recommended to the MCA a with Financial Results and prescribes various disclosures
roadmap for implementation of Ind AS by banks from in specified formats to be submitted by the listed entities
2018-19 onwards and NBFCs in a phased manner (2018-19 to the stock exchanges. SEBI has prescribed the revised
and 2019-20). formats to be used by the listed entities vide circular
Considering these developments, a Working Group on no. CIR/CFD/CMD/15/2015 dated 30 November 2015
Implementation of Ind AS by Banks in India was constituted which is effective from 1 December 2015.
to look into the issues in implementation of Ind AS by Highlight of the key amendments made in formats
banks. This Working Group is chaired by Shri Sudarshan prescribed under listing regulations are:
Sen, Principal Chief General Manager, Department of
Banking Regulation. Revised formats have been prescribed under clause
On October 20, 2015, the RBI via press release 2015- 41 of the erstwhile Listing Agreement, with additional
2016/958 has come out with a Report of the Working Group disclosure of reconciliation in case of financial results
on Implementation of Ind AS by Banks in India which is prepared in accordance with Ind AS. Consequently,
placed on its website. The Reserve Bank of India had invited the revised formats prescribe inclusion of following
comments/feedback on the report. reconciliations in accordance with paragraph 32 of
The Working Group, in its report, has structured its Ind AS 101, First time adoption of Indian Accounting
recommendations into the following key areas with focus Standards -
on financial instruments:  Reconciliation of equity in accordance with previous
i. Classification and Measurement of Financial Assets GAAP to Ind AS, at the:
ii. Classification and Measurement of Financial - date of transition to Ind AS
Liabilities - end of comparable interim period
iii. Hedge Accounting and Derivatives - end of latest period presented as per previous GAAP
iv. Fair Value Measurement  Reconciliation of comprehensive income in accordance
v. Impairment of Financial Assets with previous GAAP to Ind AS, for the:
vi. Presentation of Financial Statements and Disclosure - Comparable interim period
vii. Derecognition, Consolidation and Other Residuary - latest period presented as per previous GAAP
Issues. Notably, there are few matters, which need clarification
from Ind AS perspective:
The report of the Working Group also comprises of the 1. Manufacturing, trading and service companies
following significant annexures: are permitted to follow functional classification of
Annex I: Proposed Third Schedule to Banking Regulation expenditure in its annual profit and loss account in
Act, 1949 an alternative format. However, it is relevant to note
Annex II: Suggested formats for Notes to Financial that the presentation of expenditure by function is
Statements not permitted by Ind AS 1, Presentation of Financial
Annex III: Application Guidance for Preparation of Statements.
Financial Statements 2. The statement of financial results includes terms such
Annex IV: Instrument wise comparison of valuation as exceptional items, which are not defined in Ind AS.
requirements 3. Separate disclosure of financial and non-financial
Annex V: List of RBI instructions that need review assets and liabilities have not been provided in
Annex VI: Educational Material by ICAI the Statement of Assets and Liabilities in Annexure
Annex VII: Legislative Amendments IX; and

ACADEMIC UPDATE
4. Minority interest is included under ‘Equity and empowerment of persons belonging to Scheduled Castes
Liabilities’ as a separate heading; Schedule III to the living below the Double Poverty Line.
Companies Act, 2013 requires that minority interests In order to enable NBFC-MFIs to act as channelizing
be presented within equity separately from the equity of agents of NSFDC, RBI vide Notification No. RBI/2015-
the owners of the parent. 16/196 DNBR.CC.PD.No.069/03.10.01/2015-16 dated
October 01, 2015 has decided that the condition relating to
Para 5 of the circular, consistent with the existing formats, the maximum variance permitted shall not be applicable to
requires the comparative financial information, to be in loans extended by NBFC-MFIs against funding by NSFDC.
accordance with Ind AS, which includes the last audited The on-lending to individuals by NBFC-MFIs out of funds
financial year. of NSFDC shall only be through direct credit to their
Further, the auditor’s report and review report formats accounts with banks. Further, NBFC-MFIs shall exclude
have been amended to include references to Ind AS and the borrowing from NSFDC in arriving at the average cost of
listing regulations. However, these have not been amended funds of the company for the purpose of pricing of credit,
to align it with the reporting standards, viz., Standard on other than to the beneficiaries targeted by NSFDC. For this,
Auditing (SA) 700, 705 and 706 issued by the Institute of NBFC-MFIs shall maintain proper record of funds received
Chartered Accountants of India. from NSFDC and the lending out of those funds.
(Source: www.sebi.gov.in) In terms of extant instructions on pricing of credit by
MFIs, the maximum variance between the minimum and
Non Banking Financial Company - Micro Finance maximum interest rate on loans cannot exceed 4 per cent.
Institutions (NBFC-MFIs) – Directions – Modifications Appropriate disclosures in this regard shall be made
The National Scheduled Castes Finance & Development in the balance sheet of such NBFC-MFIs. The minimum
Corporation (NSFDC) under the Ministry of disclosures should include quantum of funds received from
Social Justice & Empowerment, Government of India, NSFDC, cost of such funds, loans disbursed therefrom, rate
has proposed to expand its outreach by channelizing of interest on such loans and the number of beneficiaries.
funds through select NBFC-MFIs at lower rate of interest. (Source: www.rbi.org.in)
The objective of NSFDC is to work for the economic (Board of Studies)
ANNOUNCEMENT
Four Weeks Residential Programme on Professional Skills Development organised by
Board of Studies at Centre of Excellence, (CoE), Hyderabad
The Board of Studies is pleased to announce the next batch of ICAI Four Weeks Residential Programme as below:
Venue Participant Fees Date Links for Registration
Centre of Excellence Men ` 40,000/- 28th January 2016 to http://icai.org/new_category.
(CoE), Hyderabad 24th February, 2016 html?c_id=345
The programme aims to help the Chartered Accountancy students and newly qualified Chartered Accountants in
imbibing the professional skills required for effective functioning in business organisations and the profession. The
Programme environment focuses on development of communication skills, personal qualities, interpersonal and
teamwork skills, problem solving skills and leadership skills.
Salient Features of the Programme:
 Emphasis on Soft Skills, Communication Skills and Personality Development.
 Exemption from payment of Fees to Top 10 Rank holders.
 Part of Articleship Training.
 No need for Separate GMCS/GMCS II
 Special Session on Group Discussion & Interview.
 Preparation of Project and Presentation Skills.
 Building Team Spirit.
Only men students who have passed Chartered Accountancy IPCC/ PCC/ PE- II examination and pursuing last year of
article training or completed Articleship training are invited to join the course for this batch. Recently qualified men
Chartered Accountants are also welcome to join the course.
For online registration, further details visit the Board of Studies Announcements under the Students Icon on the Home
Page of ICAI website www.icai.org.
Additional Secretary,
Board of Studies

KNOWLEDGE UPDATE
Swachh Bharat Cess (SBC)

Frequently Asked Questions (FAQ)
Background (5) The provisions of Chapter V of the Finance Act,
Chapter VI (Section 119) of the Finance Act 2015 1994 and the rules made thereunder, including
contains provisions for levy and collection of those relating to refunds and exemptions from
Swachh Bharat Cess (SBC). Now the Government tax, interest and imposition of penalty shall, as
has announced 15th November, 2015 as the date far as may be, apply in relation to the levy and
from which the provisions of Section 119 would collection of the Swachh Bharat Cess on taxable
come into effect (Notification No. 21/2015 ST dated services, as they apply in relation to the levy and
06.11.2015). Section 119 provided that SBC will collection of tax on such taxable services under
be levied as service tax on all or any of the taxable Chapter V of the Finance Act, 1994 or the rules
services @ 2%. However, the Government has made thereunder, as the case may be.”
exempted all taxable services from payment of such
amount of SBC, which is in excess of SBC calculated On this issue, Hon’ble FM in his speech for
at the rate of 0.5% of the value of taxable services Budget 2015-16 has stated as under:-
(Notification No. 22/2015 ST dated 06.11.2015). “10. The third is ‘Swachh Bharat’ which we have
Thus, effectively, the rate of SBC would be 0.5% and been able to transform into a movement to regenerate
new rate of service tax plus SBC would be 14.5%. As India. I can speak of, for example, the 50 lakh toilets
such SBC translates into a tax of 50 paisa only on already constructed in 2014-15, and I can also assure
every one hundred rupees worth of taxable services. the Members of this august House that we will indeed
The proceeds from this cess will be exclusively used attain the target of building six crore toilets. But,
for Swachh Bharat initiatives. Madam, Swachh Bharat is not only a programme
of hygiene and cleanliness but, at a deeper level,
In this context, the relevant Chapter of the a programme for preventive health care, and
Finance Act, 2015 is reproduced below:- building awareness.”
“CHAPTER VI “123. ----It is also proposed to have an enabling
SWACHH BHARAT CESS provision to levy Swachh Bharat Cess at a rate of
119. 2% or less on all or certain services if need arises.
(1) This Chapter shall come into force on such date as This Cess will be effective from a date to be notified.
the Central Government may, by notification in Resources generated from this cess will be utilised
the Official Gazette, appoint. for financing and promoting initiatives towards
(2) There shall be levied and collected in accordance Swachh Bharat.”
with the provisions of this Chapter, a cess to be
called the Swachh Bharat Cess, as service tax Q.1 What is Swachh Bharat Cess (SBC)?
on all or any of the taxable services at the rate Ans. It is a Cess which shall be levied and collected
of two per cent. on the value of such services for in accordance with the provisions of Chapter VI of
the purposes of financing and promoting Swachh the Finance Act, 2015, called Swachh Bharat Cess, as
Bharat initiatives or for any other purpose service tax on all the taxable services at the rate of
relating thereto. 0.5% of the value of taxable service.
(3) The Swachh Bharat Cess leviable under sub-
section (2) shall be in addition to any cess or Q.2 What is the date of implementation of SBC?
service tax leviable on such taxable services under Ans. The Central Government has appointed 15th
Chapter V of the Finance Act, 1994, or under any day of November, 2015 as the date from which
other law for the time being in force. provisions of Swachh Bharat Cess will come
(4) The proceeds of the Swachh Bharat Cess levied into effect (Notification No. 21/2015 ST dated
under sub-section (2) shall first be credited to 06.11.2015).
the Consolidated Fund of India and the Central
Government may, after due appropriation made Q.3 Whether SBC would be leviable on exempted
by Parliament by law in this behalf, utilise such services and services in the negative list?
sums of money of the Swachh Bharat Cess for such Ans. Swachh Bharat Cess is not leviable on services
purposes specified in sub-section (2), as it may which are fully exempt from service tax or those
consider necessary. covered under the negative list of services.

KNOWLEDGE UPDATE
Q.4 Why has SBC been imposed? Q. 11 Whether SBC is levied on all or selected
Ans. SBC has been imposed for the purposes of services?
financing and promoting Swachh Bharat initiatives Ans. The Central Government was empowered
or for any other purpose relating thereto. to impose SBC either on all or some of the taxable
services. Vide Notification No. 22/2015 ST dated
Q. 5 Where will the money collected under 06.11.2015, Government has notified that SBC shall
SBC go? be applicable on ALL taxable services except services
Ans. Proceeds of the SBC will be credited to which are either fully exempt from service tax
the Consolidated Fund of India, and the Central under any notification issued under section 93(1)
Government may, after due appropriation made of the Finance Act, 1994 or are otherwise not
by Parliament, utilise such sums of money of the leviable to service tax under section 66B of the
SBC for the purposes of financing and promoting Finance Act, 1994.
Swachh Bharat initiatives or for any other purpose
relating thereto. Q.12 How will the SBC be calculated for services
under reverse charge mechanism?
Q.6 How will the SBC be calculated? Ans. In case of reverse charge under section 68(2) of
Ans. SBC would be calculated in the same way the Finance Act, 1994, the liability has been shifted
as service tax is calculated. Therefore, SBC would from service provider to the service recipient.
be levied on the same taxable value as service tax. As per section 119(5) of the Finance Act, 2015,
the provisions of Chapter V of the Finance Act,
Q. 7 Whether SBC would be required to be 1994, and the rules made thereunder are applicable
mentioned separately in invoice? to SBC also. Thus, the reverse charge under section
Ans. SBC would be levied, charged, collected and 68(2) of the Finance Act, 1994, is made applicable
paid to Government independent of service tax. to SBC.
This needs to be charged separately on the invoice, In this context, to clarify, Government has issued
accounted for separately in the books of account Notification No. 24/2015 ST dated 12.06.2015 to
and paid separately under separate accounting code provide that reverse charge under Notification No.
which would be notified shortly. SBC may be charged 30/2012 ST dated 20.06.2012 shall be applicable for
separately after service tax as a different line item in the purpose of levy of Swachh Bharat Cess mutatis
invoice. It can be accounted and treated similarly to mutandis.
Education cesses.
Q.13 How will SBC be calculated for services
Q. 8 Whether separate accounting code will be where abatement is allowed?
there for Swachh Bharat Cess? Ans. Taxable services, on which service tax is
Ans. Yes, for payment of Swachh Bharat Cess, a leviable on a certain percentage of value of taxable
separate accounting code would be notified shortly service, will attract SBC on the same percentage of
in consultation with the Principal Chief Controller value as provided in the Notification No. 26/2012 ST
of Accounts. These are as follows:- dated 20.06.2012. So, this notification would apply
for SBC also in the same manner as it applies for
Swachh Tax Other Penalties Deduct service tax.
Bharat Cess Collection Receipts Refunds For example, in the case of GTA, [Service Tax +
(Minor Head) SBC]% would be (14% Service Tax + 0.5% SBC) X
0044-00-506 00441493 00441494 00441496 00441495 30% = 4.35% (4.20%+0.15%).
Q.14 Whether CENVAT credit of the SBC is

Q. 9 What would be effective rate of service tax available?
and SBC post introduction of SBC? Ans. SBC is not integrated in the CENVAT credit
Ans. Effective rate of service tax plus SBC, post chain. Therefore, credit of SBC cannot be availed.
introduction of SBC, would be [14% + 0.5%]. Further, SBC cannot be paid by utilizing credit of
any other duty or tax.
Q.10 Whether SBC is a ‘Cess’ on tax’ and we
need to calculate SBC @ 0.50% on the Q.15 What would be the point of taxation for
amount of service tax like we were earlier Swachh Bharat Cess?
doing for calculating Education Cess and SHE Ans. As regards Point of Taxation, since this levy
Cess? has come for the first time, all services (except
Ans. No, SBC is not a cess on service tax. SBC shall those services which are in the Negative List or are
be levied @ 0.5% on the value of taxable services. wholly exempt from service tax) are being subjected

KNOWLEDGE UPDATE
to SBC for the first time. SBC, therefore, is a Q.18 Whether SBC would be applicable on
new levy, which was not in existence earlier. Hence, services covered by Rule 6 of Service Tax Rules
rule 5 of the Point of Taxation Rules would be (i.e. air travel agent, life insurance premium,
applicable in this case. Therefore, in cases where purchase and sale of foreign currency and services
payment has been received and invoice is raised by lottery distributors/selling agents)
before the service becomes taxable, i.e. prior to Ans. Sub-rule (7D) to rule 6 has been inserted vide
15th November, 2015, there is no lability of Swachh Notification No. 25/2015-Service Tax, dated 12th
Bharat Cess. November, 2015 so as to provide that the person
In cases where payment has been received liable for paying the service tax under sub-rule (7),
before the service became taxable and invoice is (7A), (7B) or (7C) of rule 6 of Service Tax Rules, shall
raised within 14 days, i.e. upto 29th November, 2015, have the option to pay SBC as determined as per the
even then the service tax liability does not arise. following formula:-
Swachh Bharat Cess will be payable on services Service Tax liability [calculated as per sub-rule
which are provided on or after 15th Nov., 2015, (7), (7A), (7B) or (7C)] × 0.5%/14%.
invoice in respect of which is issued on or after The option under this sub-rule once exercised,
that date and payment is also received on or after shall apply uniformly in respect of such services and
that date. Swachh Bharat Cess will also be payable shall not be changed during a financial year under
where service is provided on or after 15th Nov., 2015 any circumstances.
but payment is received prior to that date and
invoice in respect of such service is not issued by 29th Q. 19 How would liability be determined in case of
Nov., 2015. reverse charge services where services have been
received prior to 15.11.2015 but consideration
Q.16 How would the tax (Service Tax and SBC) paid post 15.11.2015?
be calculated on services covered under Rule 2A, Ans. In respect of reverse charge mechanism,
2B or 2C of Service Tax (Determination of Value) SBC liability is determined in accordance with
Rules, 2006? Rule 7 of Point of Taxation Rules, as per which, point
Ans. The tax (Service Tax and SBC) on services of taxation is the date on which consideration is paid
covered by Rule 2A, 2B or 2C of Service Tax to the service provider. Thus, SBC liability in such
(Determination of Value) Rules, 2006, would case will be 0.5% × Value of taxable service.
be computed by multiplying the value determined
in accordance with these respective rules with [14% Q.20 Does a person providing both exempted
+ 0.5%]. and taxable service and reversing credit @ 7%
Therefore, effective rate of Service Tax plus SBC in of value of exempted service under Rule 6 of
case of original works and other than original works CENVAT Credit Rules, does he need to reverse
under the works contract service would be 5.8% the SBC also?
[(14% + 0.5%)×40%] and 10.15% [(14% + 0.5%)×70%] Ans. As SBC is not integrated in the CENVAT
respectively. Similar, would be the tax treatment for Credit chain and reversal under Rule 6 is payment
restaurant and outdoor catering services. of amount equal to 7% of the value of exempted
services, hence, reversal of SBC is not required
Q.17 How would the tax be calculated on under Rule 6 of CENVAT Credit Rules, 2004.
restaurant services covered under Service Tax Source: www.cbec.gov.in
(Determination of Value) Rules, 2006.?
Ans. Swachh Bharat Cess would be calculated on IMPORTANT NOTE
the value arrived at in accordance with the Swachh Bharat Cess has become effective from
Service Tax (Determination of Value) Rules, 15.11.2015 vide Notification No. 21/11/2015 ST
2006. For example, the effective Swachh Bharat dated 06.11.2015. Therefore the same will not
Cess in respect of services provided in be applicable for May, 2016 examination [Part
relation to serving of food or beverages by a II: Indirect Taxes of Paper 4: Taxation (IIPC
restaurant, eating joint or a mess, having the Course) and Paper 8: Indirect Tax Laws (Final
facility of air–conditioning or central air-heating Course)] as the cut off date for the applicability
in any part of the establishment, would be 0.5% of the amendments made vide notifications/
of 40% of the total amount, i.e, 0.2% of the total circulars for the said examination is 31.10.2015.
amount. The cumulative service tax and Swachh However, the same will apply from November,
Bharat Cess liability would be [14% ST + 0.5% SBC] 2016 examination onwards.
of 40% of the total amount, i.e., 5.8% of the total
amount charged. (Board of Studies)

KNOWLEDGE UPDATE
Auditor’s Qualified Report on

Consolidated Financial Statements
under the Companies Act, 2013
To provide guidance on how an auditors’ report on llustrative Format of Independent Auditor’s
Consolidated Financial Statements (herein after Report on The Consolidated Financial Statements
referred as CFS) may be prepared, the Auditing and of a group under The Companies Act, 2013 and
Assurance Standard Board of ICAI has issued some the rules thereunder
illustrative formats on the same covering some of the
clauses of section 143(3) of the Companies Act, 2013. Independent Auditor’s Report
These formats may be applied for the Financial Year
2014-15 and onwards until further announcement. It is To the members of ABC Company Limited
hereby mentioned again that the auditors of CFS may
suitably amend these formats to suit the circumstances Report on the Consolidated Financial Statements
of their audit engagement. In the previous edition
of this Journal, we had given illustrative format - We have audited the accompanying consolidated
Unmodified Opinion on CFS, herein this edition financial statements of ABC COMPANY LIMITED
we are giving illustrative format - Qualified Opinion (hereinafter referred to as “the Holding Company”)
on CFS. and its subsidiaries (the Holding Company and its
subsidiaries together referred to as “the Group”), its
Illustration: Qualified Opinion on CFS associates and jointly controlled entities , comprising
The following illustrative format is based on the of the Consolidated Balance Sheet as at 31st March,
assumptions that: 20XX, the Consolidated Statement of Profit and
The Group has- Loss, the Consolidated Cash Flow Statement for the
• Certain components which have been audited by year then ended, and a summary of the significant
auditor/s other than the Principal Auditor and such accounting policies and other explanatory information
component/s is/ are material to the consolidated (hereinafter referred to as “the consolidated financial
financial statements of the Group. The auditors statements”).
of such components which are Indian companies,
there is no requirement to report on section 143(3) Management’s Responsibility for the Consolidated
(i) of the Companies Act, 2013. Financial Statements
• Certain components which are unaudited and The Holding Company’s Board of Directors is
such component/s is/ are not material to the responsible for the preparation of these consolidated
consolidated financial statements of the Group. financial statements in terms of the requirements
The independent auditor of Consolidated Financial of the Companies Act, 2013 (hereinafter referred
Statements: to as “the Act”) that give a true and fair view of the
• Has issued a Qualified Opinion with respect to consolidated financial position, consolidated financial
the true and fair view of the financial statements performance and consolidated cash flows of the
on account of misstatement of inventories and Group including its Associates and Jointly controlled
unaudited financial statements of a branch of entities in accordance with the accounting principles
a subsidiary. The misstatement is deemed to generally accepted in India, including the Accounting
be material but not pervasive to the financial Standards specified under Section 133 of the Act, read
statements. with Rule 7 of the Companies (Accounts) Rules, 2014.
• Disclosed the aforementioned facts about the The respective Board of Directors of the companies
Components in the “Other Matters” Paragraph included in the Group are responsible for maintenance
in accordance with the Announcement issued by of adequate accounting records in accordance
the Auditing and Assurance Standards Board with the provisions of the Act for safeguarding the
under the authority of the Council of ICAI in assets of the Group and for preventing and detecting
February 2014. frauds and other irregularities; the selection and
• Does not have the responsibility to report on application of appropriate accounting policies;
internal financial controls pursuant to section making judgments and estimates that are reasonable
143(3)(i) of the Companies Act 2013. and prudent; and the design, implementation and

KNOWLEDGE UPDATE
maintenance of adequate internal financial controls, Basis for Qualified Opinion
that were operating effectively for ensuring the (a) The inventories are carried in the Consolidated
accuracy and completeness of the accounting records, Balance Sheet at ` XXX (As at 31st March 20YY:
relevant to the preparation and presentation of the ` YYY). In one of the subsidiaries of the Holding
financial statements that give a true and fair view Company, the other auditor who audited the
and are free from material misstatement, whether financial statements/financial information of the
due to fraud or error, which have been used for the subsidiary has reported that the Management
purpose of preparation of the consolidated financial has not stated the inventories at the lower of cost
statements by the Directors of the Holding Company, and net realisable value but has stated them solely
as aforesaid. at cost, which constitutes a departure from the
Accounting Standard - 2 “Valuation of Inventories”.
Auditor’s Responsibility The report of the other auditor states that had the
Our responsibility is to express an opinion on these Management stated the inventories at the lower
consolidated financial statements based on our audit. of cost and net realisable value, an amount of
While conducting the audit, we have taken into ` XXX (As at 31st March 20YY: ` YYY) would have
account the provisions of the Act, the accounting and been required to write the inventories down to
auditing standards and matters which are required to their net realisable value. Accordingly, cost of sales
be included in the audit report under the provisions of would have been increased by ` XXX (Previous
the Act and the Rules made thereunder. year ended 31st March, 20YY: ` YYY), and income
We conducted our audit in accordance with the tax, profit for the year, minority interest and
Standards on Auditing specified under Section 143(10) shareholders’ funds would have been reduced by
of the Act. Those Standards require that we comply ` X, ` XX, ` AA and ` XXX, respectively (Previous
with ethical requirements and plan and perform the year ended 31st March, 20YY: ` Y, ` YY, ` ZZ and `
audit to obtain reasonable assurance about whether YYY, respectively). This matter was also qualified in
the consolidated financial statements are free from our report/ the report of the predecessor auditors
material misstatement. on the consolidated financial statements for the
An audit involves performing procedures to year ended 31st March 20YY.1
obtain audit evidence about the amounts and the (b) In case of one of the subsidiaries of the Holding
disclosures in the consolidated financial statements. Company not audited by us, the other auditor who
The procedures selected depend on the auditor’s audited the subsidiary has reported that they did
judgment, including the assessment of the risks of not audit the financial statements/information
material misstatement of the consolidated financial of ________(number) branches of the subsidiary
statements, whether due to fraud or error. In making whose financial statements / financial information
those risk assessments, the auditor considers internal reflect total assets of `______ as at 31st March, 20XX
financial control relevant to the Holding Company’s and total revenues of `_______ for the year ended
preparation of the consolidated financial statements on that date, as considered in these consolidated
that give a true and fair view in order to design audit financial statements. The financial statements/
procedures that are appropriate in the circumstances information of these branches is pending audit by
but not for the purpose of expressing an opinion their branch auditors whose reports have not yet
on whether the Holding Company has an adequate been furnished to the auditors of the subsidiary,
internal financial controls system over financial and their opinion in so far as it relates to the
reporting in place and the operating effectiveness amounts and disclosures included in respect of
of such controls. An audit also includes evaluating these branches, is based solely on the unaudited
the appropriateness of the accounting policies used information provided by the Management of
and the reasonableness of the accounting estimates the subsidiary.
made by the Holding Company’s Board of Directors,
as well as evaluating the overall presentation of the Qualified Opinion
consolidated financial statements. In our opinion and to the best of our information
We believe that the audit evidence obtained and according to the explanations given to us,
by us and the audit evidence obtained by the other except for the effects of the matter described in the
auditors in terms of their reports referred to in Basis for Qualified Opinion paragraph above, the
sub-paragraph (a) of the Other Matters paragraph aforesaid consolidated financial statements give the
below, is sufficient and appropriate to provide a basis information required by the Act in the manner so
for our qualified audit opinion on the consolidated required and give a true and fair view in conformity
financial statements. with the accounting principles generally accepted in
1
Where applicable and only in such case, disclosure of previous year figures is required - Attention of the readers
is drawn to the provisions of Standard on Auditing (SA) 710, Comparative Information—Corresponding Figures
And Comparative Financial Statements.

KNOWLEDGE UPDATE
India, of the consolidated state of affairs of the Group, /financial information. In our opinion and
its associates and jointly controlled entities as at 31st according to the information and explanations
March, 20XX, and their consolidated profit/loss and given to us by the Management, these financial
their consolidated cash flows for the year ended on statements /financial information are not material
that date. to the Group.
Our opinion on the consolidated financial statements,
Other Matters and our report on Other Legal and Regulatory
(a) We did not audit the financial statements/ Requirements below, is not modified in respect of the
financial information of ______ subsidiaries, above matters with respect to our reliance on the work
and ______ jointly controlled entities, whose done and the reports of the other auditors and the
financial statements/financial information reflect financial statements/financial information certified
total assets of `______ as at 31st March, 20XX, by the Management.
total revenues of `_______ and net cash flows
amounting to `______ for the year ended on that Report on Other Legal and Regulatory Requirements
date, as considered in the consolidated financial 1. As required by the Companies (Auditor’s Report)
statements. The consolidated financial statements Order, 2015 (“the Order”), issued by the Central
also include the Group’s share of net profit/loss Government of India in terms of sub-section (11)
of ` _____for the year ended 31st March, 20XX, of Section 143 of the Act, based on the comments
as considered in the consolidated financial in the auditors’ reports of the Holding company,
statements, in respect of ____associates, whose subsidiary companies, associate companies and
financial statements/financial information have jointly controlled companies incorporated in
not been audited by us. These financial statements India, we give in the Annexure a statement on
/ financial information have been audited by other the matters specified in paragraphs 3 and 4 of the
auditors whose reports have been furnished to Order, to the extent applicable.
us by the Management and our opinion on the 2. As required by Section 143(3) of the Act, we report,
consolidated financial statements, in so far as it to the extent applicable, that:
relates to the amounts and disclosures included (a) We have sought and, except for the possible effect
in respect of these subsidiaries, jointly controlled of the matter described in sub-paragraph (b) of the
entities and associates, and our report in terms of Basis for Qualified Opinion above, obtained all the
sub-sections (3) and (11) of Section 143 of the Act, information and explanations which to the best of
in so far as it relates to the aforesaid subsidiaries, our knowledge and belief were necessary for the
jointly controlled entities and associates, is based purposes of our audit of the aforesaid consolidated
solely on the reports of the other auditors. financial statements.
(b) We did not audit the financial statements / (b) In our opinion, except for the effect of the matters
financial information of ______ subsidiaries, and described in the Basis for Qualified Opinion
______ jointly controlled entities, whose financial paragraph above, proper books of account as
statements / financial information reflect total required by law relating to preparation of the
assets of `______ as at 31st March, 20XX, total aforesaid consolidated financial statements have
revenues of `_______ and net cash flows amounting been kept so far as it appears from our examination
to `______ for the year ended on that date, as of those books and the reports of the other auditors.
considered in the consolidated financial statements. (c) Except for the matter described in sub-paragraph
The consolidated financial statements also include (b) of the Basis for Qualified Opinion paragraph
the Group’s share of net profit/loss of ` _____ for above, the reports on the accounts of the
the year ended 31st March, 20XX, as considered in branch offices of the Holding Company, and its
the consolidated financial statements, in respect subsidiaries, associate companies and jointly
of ____associates, whose financial statements / controlled companies incorporated in India,
financial information have not been audited by us. audited under Section 143 (8) of the Act by branch
These financial statements / financial information auditors have been sent to us / the other auditors,
are unaudited and have been furnished to us by as applicable, and have been properly dealt with in
the Management and our opinion on the preparing this report.
consolidated financial statements, in so far as it (d) The Consolidated Balance Sheet, the Consolidated
relates to the amounts and disclosures included Statement of Profit and Loss, and the Consolidated
in respect of these subsidiaries, jointly controlled Cash Flow Statement dealt with by this Report are
entities and associates, and our report in terms of in agreement with the relevant books of account
sub-sections (3) and (11) of Section 143 of the Act, maintained for the purpose of preparation of the
in so far as it relates to the aforesaid subsidiaries, consolidated financial statements.
jointly controlled entities and associates, is based (e) In our opinion, except for the effect of the matters
solely on such unaudited financial statements described in the Basis for Qualified Opinion

KNOWLEDGE UPDATE
paragraph above, the aforesaid consolidated consolidated financial position of the Group,
financial statements comply with the Accounting its associates and jointly controlled entities.2
Standards specified under Section 133 of the Act, ii. Except for the possible effect of the matter
read with Rule 7 of the Companies (Accounts) described in sub-paragraph (b) of the Basis of
Rules, 2014. Qualified Opinion above, provision has been
(f ) The matters described in the Basis for Qualified made in the consolidated financial statements,
Opinion paragraph above, in our opinion, may as required under the applicable law or
have an adverse effect on the functioning of the accounting standards, for material foreseeable
Group. losses, if any, on long-term contracts including
(g) On the basis of the written representations received derivative contracts – Refer (a) Note XX to the
from the directors of the Holding Company as on consolidated financial statements in respect of
31st March, 20XX taken on record by the Board of such items as it relates to the Group and (b)
Directors of the Holding Company and the reports the Group’s share of net profit/loss in respect of
of the other statutory auditors of its subsidiary its associates.
companies, associate companies and jointly Or
controlled companies incorporated in India, Except for the possible effect of the matter
except for __ (number) director/s of ___(number) described in sub-paragraph (b) of the
of the Group’s subsidiary company /ies /, associate Basis of Qualified Opinion above, the Group,
company/ies and jointly controlled company/ies its associates and jointly controlled entities
incorporated in India who are disqualified from did not have any material foreseeable losses
being appointed as a director in terms of Section on long-term contracts including derivative
164(2) of the Act, none of the other directors of contracts.3
the Group’s companies, its associate companies iii. There has been no delay in transferring
and jointly controlled companies incorporated in amounts, required to be transferred, to the
India is disqualified as on 31st March, 20XX from Investor Education and Protection Fund by
being appointed as a director in terms of Section the Holding Company, and its subsidiary
164 (2) of the Act. The list of subsidiary company/ companies, associate companies and jointly
ies, associate company/ies, jointly controlled controlled companies incorporated in India.
companies incorporated in India where the Or
disqualification arose and the respective directors Following are the instances of delay in
are stated below: transferring amounts, required to be
XXXXXXXX transferred, to the Investor Education and
(h) The qualification relating to the maintenance of Protection Fund by the Holding Company, and
accounts and other matters connected therewith its subsidiary companies, associate companies
are as stated in the Basis for Qualified Opinion and jointly controlled companies incorporated
paragraph above. in India.
(i) With respect to the other matters to be included in Or
the Auditor’s Report in accordance with Rule 11 of There were no amounts which were required
the Companies (Audit and Auditor’s) Rules, 2014, to be transferred to the Investor Education and
in our opinion and to the best of our information Protection Fund by the Holding Company, and
and according to the explanations given to us: its subsidiary companies, associate companies
i. Except for the possible effect of the matter and jointly controlled companies incorporated
described in sub-paragraph (b) of the Basis in India.
of Qualified Opinion above, the consolidated
financial statements disclose the impact Place of Signature:
of pending litigations on the consolidated Date:
financial position of the Group, its associates For XYZ & Co
and jointly controlled entities – Refer Note XX Chartered Accountants
to the consolidated financial statements. (Firm’s Registration No.)
Or
Except for the possible effect of the matter Signature
described in sub-paragraph (b) of the Basis (Name of the Member Signing the Audit Report)
of Qualified Opinion above, there were no (Designation4)
pending litigations which would impact the (Membership No. XXXXX)
2
Where applicable.
3
Where applicable.
4
Partner or Proprietor, as the case may be.

ADVISORY
E-mail and Telephonic Queries:

An Advisory for Students
I
t has always been the endeavour of Board of (iv) Apart from academic queries, the Faculty
Studies to facilitate the students, in every possible also answer general queries like applicability
manner, in their studies as also the preparation of Accounting Standards, Standards
for examination. Answering queries of the on Auditing, legislative amendments,
students is one among the many services being Finance Act, Assessment Year etc. for any
provided by the Board of Studies to its students. particular examination, the manner of
Students can seek the answers of their academic preparation for examination and presentation
queries from the BoS Faculty through emails and of answers etc.
other general queries on preparation for examination, (v) Mail should be marked to the Faculty of the
applicability of Finance Acts/Pronouncements/ respective subject. Where there are more than
Legislative Amendments etc. either by sending an one Faculty in the subject, mail should be
e-mail or by making a telephone call. marked to all of them.
(vi) The queries will generally be answered within
It is being observed that many a time it becomes three - five working days.
very difficult to give satisfactory replies to the (vii) Queries can also be asked over telephone on
queries for reasons like incomplete information, all working days preferably, from 10.30 am to
lack of required clarity, generic nature of the query, 11.30 am in the morning and from 4 pm to 5
queries beyond the scope of Board of Studies etc. In pm in the evening. While on the call, students
order to ensure that queries raised by the students may be asked to provide the details given in
receive an appropriate response within a reasonable point (i) above at any point in time.
time period, it has been decided to streamline the (viii) Queries of general nature relating to applicability
process and bring out a standardised format for of Accounting Standards, Standards on
raising queries. In this context, students are advised Auditing, legislative amendments, Finance
to note the following: Act, Assessment Year etc. for any particular
examination, the manner of preparation
(i) Students should necessarily provide the for examination etc. may be raised over
following details in their mail: telephone or through e-mail. However,
Registration Number academic queries should be raised only
Residential Address through e-mail.
Name and Address of the Principal and the (ix) Care should be taken to use an appropriate
firm (if undergoing practical training) salutation while addressing the Faculty both in
Level of CA Course (CPT/IIPCC/Final) the mail and over telephone.
Attempt Due
(ii) The query should be clearly worded and all Please note that only the mails raising questions
the relevant information should be provided within the scope of points (iii) and (iv) above and
therein. containing the details specified in (i) above will
(iii) BoS Faculty answer academic queries be duly answered by the Faculty.
requiring simple explanation of content
contained in the latest edition of any of its Students are also welcome to meet the Faculty,
publications as well as queries relating to in person, to seek their guidance. Personal
any specific question solved in the latest meeting with the Faculty can be scheduled
editions of its Study Material, Practice on any working day at the Noida Office of the
Manual or any other publication of BoS. Board of Studies. In order to derive the
Accordingly, the students are advised to optimum benefit out of such meeting, students
confine their academic queries within the are advised to fix a prior appointment with the
scope defined above. concerned Faculty.

ADVISORY
The e-mail ids and telephone numbers of the Faculty of various subjects are given below for the reference of the
students:
Sl. Subject Faculty e-mail id Landline no.
No.
1. Accounting (CPT, CA. Seema Gupta, Deputy Director [email protected]
IIPCC and Final)
CA. Shilpa Agrawal, Assistant Secretary [email protected] 0120-3045916
CA. Asha Verma, Executive Officer [email protected]
2. Auditing (IIPCC and CA. Karuna Bhansali, Assistant Director [email protected]

Final) 0120-3045925
CA. Rajeev Sachdeva, Assistant Director [email protected]
3. Law (CPT, IIPCC and Dr. P. T. Giridharan, Joint Director [email protected] 0120-3786881
Final)
Ms. Nisha Gupta, Sr. Executive Officer [email protected]
0120-3045939
CA. Shraddha, Executive Officer [email protected]
4. Financial Dr. N. N. Sengupta, Deputy Director [email protected] 0120-3045919
Management (IIPCC)
CA. Ashish Gupta, Senior Assistant Director [email protected] 0120-3045956
CA. Deepak Kumar Gupta, Assistant Director [email protected]
0120-3045937
CA. Sanjit Lal Sharma, Executive Officer [email protected]
Strategic Financial CA. Ashish Gupta, Senior Assistant Director [email protected] 0120-3045956
Management (Final)
5. Management Dr. N. N. Sengupta, Deputy Director [email protected] 0120-3045919
Accounting /Cost
Accounting (IIPCC CA. Deepak Kumar Gupta, Assistant [email protected]
and Final) Director
0120-3045937
CA. Sanjit Lal Sharma, Executive Officer [email protected]
6. Information Ms. Sukriti Arora, Assistant Secretary [email protected] 0120-3045939

Technology (IIPCC
and Final)
7. Direct Taxes (IIPCC CA. Priya Subramanian, Deputy Director [email protected] 0120-3045913
and Final)
8. Indirect Taxes (IIPCC CA. Smita Mishra, Deputy Secretary [email protected]
and Final)
CA. Shefali Jain, Assistant Secretary [email protected] 0120-3045906
CA. Swati Aggarwal, Executive Officer [email protected]
9. Strategic Dr. T. Paramasivan, Joint Director [email protected] 0120-3045917

Management: (IPCC)
Mr. Shaleen Suneja, Deputy Director [email protected] 011-30110490
Dr. Ruchi Gupta, Sr. Executive Officer [email protected] 0120-3045907

10. Economics (CPT) Ms. Prem Bhutani, Joint Director [email protected] 0120-3045911
11. Quantitative Aptitude Dr. N. V. Ravi, Sr. Executive Officer [email protected] 0120-3045949
(CPT)

22nd & 23rd JANUARY, 2016
National Convention for CA Students - Mumbai
YOGI SABHAGRUHA, NR. DADAR
Organized by: Board of Studies, ICAI STATION, DADAR EAST, MUMBAI
Hosted by: WIRC of ICAI & WICASA
THEME: EMPOWERING EXCELLENCE
DAY-1
10:00 am to 11:00 am Inaugural Session
Guest of Honour- CA. V. Murali, Chairman, Board of Studies, ICAI
11:00 am to 12:00 pm Interaction and Open House with CA. V. Murali, Chairman, Board of Studies, ICAI
12:00 pm to 1:30 pm Technical Session- I: Accounts & Taxes
Session Chairman: Eminent Expert
(i) Scrapping Wealth Tax & Increasing Service Tax to 14% - Revenue Impact
(ii) IND AS or AS given by ICAI
2:30 pm to 3:30 pm Special Session - I: Cloud Computing& Emerging Technologies by an Eminent Expert
3:45 pm to 5:30 pm Special Session – II: Debate Discussion: Worth of 3 years Articleship Training.
DAY-2
10:00 am to 11:30 am Technical Session - II: Law, Audit & IT
(i) Money Laundering Act
(ii) Taxation on Permanent Establishments
11:30 am to 1:00 pm Technical Session - III: Finance
(i) Social Media as an Emerging Financial Opportunity
(ii) How to win a better deal for your company?
2:00 pm to 3:00 pm Special Session – III: Untapped Opportunities for Chartered Accountants by an
Eminent Expert
3:00 pm to 4:30 pm Technical Session - IV: Indian Economy
(i) Indian Infrastructure & its comparison with the world
(ii) Swacch Bharat Abhiyan: One Year Later (Current Scenario)
4:30 pm - 5:30 pm Special Session – IV: Panel Discussion: CAs as Entrepreneurs
The Valedictory Session will be held on Day – 2

Students are hereby requested to register for the Convention as per the following details:
Registration fees `350/- per student

Payment Mode DD/ Cheque to be drawn in favour of WIRC of ICAI, payable at Mumbai.
For registration queries contact:

WIRC Office, 8th floor, ICAI Tower, Plot no C-40, G Block, Opp. MCA Academy, Besides Standard Chartered Bank,
Bandra Kurla Complex, Bandra (East), Mumbai - 400 051, Ph : 022-33671421 / 24
For more details/Online Registration visit https://www.wirc-icai.org/students-events-registration.aspx
Outstation students shall confirm their participation by 25/12/2015 for making accommodation arrangements accordingly
by sending email to [email protected] and they should send their payment in DD/at par Cheque along with duly filled in delegate
registration form to above mention registration address.
Students are invited to contribute papers for presentation (1500 to 2000 words in MS Word) on topics of Technical sessions and
submit for approval a soft copy of the Paper at Email ID - [email protected] by 15/12/2015 along with students scanned photograph,
Registration number, Course Pursuing, Complete Postal Address, Mobile/Landline Numbers and Email ID. Selected outstation Paper
Writers shall be reimbursed actual travelling Expenses equivalent to 2-tier AC and DA @ `1500/- per day for lodging and incidental
expenses etc. It is suggested that the students submitting the papers may tentatively book train tickets pending selection of their
papers. This may enable them to have confirmed train tickets.
CA. V. Murali CA. Sanjeev Maheshwari CA. Sunil Patodia

Convention Chairman & Convention Convener & Chairman, Convention Coordinator &
Chairman, Board of Studies, ICAI Accounting Standards Board, ICAI Chairman, WIRC

23rd & 24th JANUARY, 2016
National Conclave for CA Students - Amritsar
SHREE RAM ASHRAM SCHOOL,
Organized by: Board of Studies, ICAI MAJITHA ROAD, AMRITSAR-143001
Hosted by: Amritsar Branch of NIRC of ICAI
THEME: “SPARK THE LIGHT IGNITE THE DREAM”
DAY-1
10:00 am- 11:00 am Inaugural Session
Chief Guest: Shri Kunwar Vijay Pratap Singh, IPS-DIG Border Range, Amritsar*
Guests of Honour: CA. Manoj Fadnis, Hon’ble President, ICAI
CA. V. Murali, Chairman, Board of Studies, ICAI
11:00 am- 11:30 am Special Session-I:- Interaction and Open House with CA. V. Murali, Chairman,
Board of Studies, ICAI
11:30 am- 12:00 noon Special Session-II: Opportunities for CAs in Public Administration
CA. Sanjeev Arora-IPS-DSP-Cuttack
12:00 noon- 01:30 pm Technical Session-I: Direct Taxes Session Chairman: CA. (Dr.) Girish Ahuja
1. MAT & Allied Issues 2. Taxability of Gifts 3. Tax Issues relating to Business Restructuring
02:30 pm- 03:30 pm Technical Session-II: Banking & Finance Session Chairman: CA. Ajay Kumar Jain
1. Risk Based Internal Audit under CBS 2. Credit Analysis & Credit Management
03:30 pm- 04:00 pm Motivational Cum Theme Session- SPARK THE LIGHT IGNITE THE DREAM
04:00 pm - 05:00 pm Technical Session-III: Indirect Taxes Session Chairman: CA. Bimal Jain*
1. Reforms of Indirect Tax System under GST
2. Reverse Charge Mechanism in Service Tax
05:00 pm - 06:00 pm Special Session-III: Mock Income Tax Tribunal
DAY-2
10:00 am - 11:30 am Technical Session-IV: Corporate Laws Session Chairman: Eminent Expert
1. New Companies Act, 2013-Burden or Opportunities for CA’s
2. Related Party Transactions-Procedures & Compliances
3. Roles & Responsibilities of BOD
11:30 am- 12:30 pm Special Session IV: Use of Finacle under CBS Environment by CA. Kuntal P. Shah*
(Confirmation Awaited)
12:30 pm- 02:00 pm Technical Session-V: Accounts & Audit Session Chairman: Eminent Expert
1. Shift Towards IND-AS
2. Forensic Accounting & Auditing -Tools of Investigation
3. Due Diligence
03:00 pm-04:30 pm Special Session V: DREAM BIG, THINK BIG & ACT BIG
The Valedictory Session will be held on Day – 2. *Confirmation Awaited

Students are hereby requested to register for the Conclave at the earliest as per the following details:
Registration fees `500/- per student till 5th January 2016 and Accommodation (if Required) `1000/- per
thereafter `600/- per Student student additional on Triple Sharing Basis
Payment Mode Cash/DD/Cheque to be drawn in favor of “NIRC Amritsar Branch “, payable at Amritsar
AMRITSAR BRANCH of NIRC of ICAI, ICAI BHAWAN, BHAI GURDASS JI NAGAR (NEW AMRITSAR),
G.T. ROAD, AMRITSAR -143001, PHONE NO. (0183) 2506361,9115003864/65/66/67, Email: [email protected]
Students (pursuing Practical Training/Industrial Training) are invited to contribute papers for presentation (1500 to 2000 words) for topics
in Technical-Sessions and submit for approval a soft copy of the Paper at [email protected] by 05th January, 2016, a hard copy and
an Audio CD of the same along with Student’s Photograph (with his/her name on the back of the photograph), ICAI Students’ Registration
Number, Course pursuing, complete postal address, Mobile, Landline numbers and e-mail ID be also sent to the Amritsar Branch at the
aforesaid address. It is suggested that the students submitting the papers may tentatively book train tickets pending selection of their
papers. This may enable them to have confirmed train tickets.
CA. V. Murali CA. C S Nanda CA. Gaurav Gupta CA. Bhavesh Mahajan
Conclave Chairman & Chairman, Conclave Convener & Conclave Coordinator & Conclave Coordinator &
Board of Studies, ICAI Chairman, Internal Audit Standards Chairman, Amritsar Branch of NIRC Secretary, Amritsar Branch of NIRC
Board & Committee for Members in 09216990010, 07837330391 09815856186, 09780649824
Industry, ICAI

25th and 26th January, 2016
National Conclave for CA Students - Tirupur
ICAI BHAWAN, NO. 46,
Organized by: Board of Studies, ICAI PETHICHETTIPURAM, 1ST STREET,
Hosted by: TIRUPUR and ERODE Branch of SIRC of ICAI and TIRUPUR and ERODE RAYAPURAM, TIRUPUR
Branch SICASA
THEME: STAND UP! STAND OUT!
DAY-1
10:00 am – 11:00 am Inaugural Session
Guest of Honour: CA. V. Murali, Chairman, Board of Studies, ICAI
11:00 am – 11:30 am Interaction and Open House with Board of Studies, ICAI
CA. V. Murali, Chairman, Board of Studies, ICAI
11:30 am – 1:00 pm Technical Session I: Current Issues in Accounting
1. Schedule III of the Companies Act, 2013
2. Financial Reporting and Financial Frauds
3. Towards Greener Accounting World
2:00 pm – 3:30 pm Special Session I - Motivational Talk By Eminent speaker
3:30 pm – 5:00 pm Technical Session II: Developments in Financial Management
Session Chairman: CA. B. Saravana Prasad, Chennai
1. Raising money for your new startup
2. Inflation - Influence a nation’s economy
3. Capital Budgeting – Planning it long
DAY-2
10:00 am - 11:30 am Technical Session III: Taxation
1. Taxation of Capital Gains
2. Survey, Search and Seizure under Income Tax Act
3. GST – a “Game Changer”
11:30 am - 1:00 pm Special Session II – Winning Strategies for CA Examinations By Eminent speaker
2:00 pm - 4:00 pm Technical Session IV: Corporate and Other Laws
1. MCA 21 : Service Transformation
2. Directors under Companies Act, 2013
3. Right to Information Act, 2005

Students are hereby requested to register for the Conclave at the earliest as per the following details:
Registration fees ` 300/- per student Accommodation (if required) ` 250/- per student
Payment Mode Cash/DD/Cheque to be drawn in favour of Tirupur Branch of SIRC of ICAI, payable at Tirupur.

Tirupur Branch of the ICAI, No. 46, Pethichettipuram, Ist Street, Rayapuram, TIRUPUR-641 601. Ph: 9894082482
Email: [email protected], Website: www.tirupur-icai.org
Students (pursuing Practical Training/Industrial Training) are invited to contribute papers for presentation (1500 to 2000 words) for topics
in Technical -Sessions and submit for approval a soft copy of the Paper at [email protected] by 31st December, 2015 and a hard copy of the
same along with Student’s Photograph (with his/her name on the back of the photograph), ICAI Students’ Registration Number, Course
pursuing, complete postal address, Mobile, Landline numbers and e-mail ID be also sent to the TIRUPUR Branch. It is suggested that the
students submitting the papers may tentatively book train tickets pending selection of their papers. This may enable them to have confirmed
train tickets.
CA. V. Murali CA. S. Rajesh Kannan CA. Sonia Kumari Gupta

Conclave Chairman & Convener & Conclave Coordinator & Conclave Coordinator &
Chairman, Board of Studies, ICAI Chairman, Tirupur Branch of SIRC Chairperson, Tirupur Branch of SICASA

26th & 27th JANUARY, 2016
Sub Regional CA Students Conference - Trichur
HOTEL MERLIN INTERNATIONAL, NEAR
Organized by: Board of Studies, ICAI RAILWAY STATION, TRICHUR
Hosted by: Trichur Branch of SIRC of ICAI and Trichur Branch of SICASA
THEME: “BODHI 2015”
DAY-1
10:00 am - 10:45 am Inaugural Session
Guest of Honour: CA. V. Murali, Chairman, Board of Studies, ICAI
10:45 am – 11:30 am Special Session - I: Interaction and Open House with CA. V. Murali, Chairman,
Board of Studies, ICAI
11:30 am – 1:15 pm Technical Session - I: Goods and Services Tax
1.Impact on Indian Economy
2.GST - International Experiences
2:00 pm - 3:00 pm Special Session – II: Motivational Session by Eminent Speaker
3:00 pm - 4:30 pm Technical Session – II: Income Computation and Disclosure Standards (ICDS)
Session Chairman : Eminent Expert
1. Analysis of ICDS II- Valuation of Inventory & ICDS III – Construction Contracts
2. Analysis of ICDS IV- Revenue Recognition & ICDS IX- Borrowing Cost
4:30 pm - 5:30 pm Technical Session III - Companies Act, 2013
1. Exemptions to Private Company, Small Company and One Person Company
2. Provisions of Companies Act relating to Auditors
DAY-2
9:00 am - 10:30 am Technical Session – IV: Limited Liability Partnership
1. LLP vs. Private Company
Accounting and Tax implications on Conversion of Companies in to LLP
10:30 am - 12:15 pm Technical Session – V: International Taxation
Session Chairman : Eminent Speaker
1. Basics of International Taxation
2. Concept of Arms length price in International Transfer Pricing
12:15 pm - 1:30 pm Technical Session – VI: Foreign Exchange Management Act (FEMA)
1. Analysis of FDI Policy in the back drop of MAKE IN INDIA
2. Capital and Current Account Transactions
2:30 pm - 3:30 pm Success Strategies for CA Examinations – A Winner’s Perspective
The Valedictory Session will be held on Day – 2.
Students are hereby requested to register for the Conference at the earliest as per the following details:
Registration fees `300/- per student Accommodation @ `200/- per Student on twin sharing basis
Payment Mode Cash/DD/Cheque to be drawn in favour of Trichur Branch of SIRC of ICAI, payable at Trichur
TRICHUR BRANCH of SIRC of ICAI, ICAI BHAWAN, Alum Vettu Vazhi, Chiyyaram, Thrissur – 680 026
Phone: 0487-2253400, 2253800 Email: [email protected], Website: www.icaitrichur.org
Students (pursuing Practical Training/Industrial Training) are invited to contribute papers for presentation (1500 to 2000words) for topics
in Technical-Sessions and submit for approval a softcopy of the Paper at [email protected] by 05th January 2016 and a hard copy
of the same along with Student’s Photograph (with his/her name on the back of the photograph), ICAI Students’ Registration Number,
Course pursuing, complete postal address, Mobile, Landline numbers and e-mail ID be also sent to the Trichur Branch of ICAI so as
to reach on or before 05th January 2016. The selection process of Paper Presenters shall be completed upto 5:00 PM of 10th January
2016 and Selected Paper Presenters shall be intimated through Email as well as phone on the same date. Students who are interested to
participate in the cultural programme are requested to register before 15th January 2016 at Trichur Branch of the ICAI. It is suggested that the
students submitting the papers may tentatively book train tickets pending selection of their papers. This may enable them to have confirmed
train tickets.
CA. V. Murali CA. Joseph TI CA. Vipin K K

Conference Chairman & Conference Coordinator & Conference Coordinator &
Convener and Chairman, Board of Studies, ICAI Chairman, Trichur Branch of SIRC of ICAI Chairman, Trichur Branch of SICASA

29th & 30th JANUARY, 2016
National Convention for CA Students - Faridabad
ICAI BHAWAN, 43, SECTOR-20A,
Organized by: Board of Studies, ICAI FARIDABAD
Hosted by: Faridabad Branch of NIRC of ICAI
THEME: UNLOCK HORIZONS INCREASE OPPORTUNITIES
DAY-1
10:00 am to 10:45 am Inaugural Session
Guest of Honour –CA. V. Murali, Chairman, Board of Studies, ICAI
10:45 am to 11:30 am Interaction and Open House with CA. V. Murali, Chairman Board of Studies, ICAI
11:30 am to 1:00 pm Technical Session I: Indirect Tax Session Chairman: Eminent Expert
(i) GST a broad overview
(ii) Service tax – Reverse Charge Mechanism
(iii) Returns under Central Excise Act & Rules
2:00 pm to 2:45 pm Special Session I: Winning Strategies for CA Examinations by Eminent Speaker
2:45 pm to 4:15 pm Technical Session II: Direct Taxes Session Chairman: Eminent Expert
(i) Scrutiny Assessment under Income Tax Act – emphasis on possible disallowances.
(ii) Effective Direct tax Planning for salaried person including emphasis on increase of net worth.
(iii) Search and Survey under Income Tax Act, introductory view.
4:15 pm to 5:45 pm Technical Session III: Self Development Session Chairman: Eminent Expert
(i) CA as a complete business service provider
(ii) Unlock your potential, create value, face challenges
(iii) Path for a newly qualified CA – Attaining heights step by step
DAY-2
10:00 am to 11:30 am Technical Session IV: Information Technology/Economics
(i) ERP Implementation – Role of CA
(ii) Cloud Computing
(iii) Competition Act, 2002 – Opportunities for CAs
11:30 am to 1:00 pm Technical Session V: Corporate Law Session Chairman : Eminent Expert
(i) Companies Act, 2013 – emphasis on financial reporting aspects.
(ii) Appointment, Removal and Resignation of Auditors under Companies Act, 2013.
(iii) NFRA – Critical Analysis.
2:00 pm to 3:30 pm Technical Session VI: Self Motivation to Succeed Session Chairman : Eminent Expert
(i) “Get-Set-Go” – A Journey towards achievement of goal.
(ii) “Secret of Success” – learn from others – Improve yourself
(iii) 3 D (Dream, Desire, Do) – “Win”
Students are hereby requested to register for the Convention at the earliest as per the following details:
Registration fees `300/- per student Accommodation (if required) @ `1000/- per student
Payment Mode Cash/DD/Cheque to be drawn in favour of Faridabad Branch of NIRC of ICAI, payable at Faridabad.

Faridabad Branch of NIRC of ICAI, Plot No. 43, Sector - 20A, Opp. Magpie Tourist Complex, Faridabad -121002
Phone 0129-2223343, 2264343 & Email: [email protected]: fbdicai.org, Mobile: 8826296456/8447080816
Students are invited to contribute papers for presentation (1500 to 2000 words) for topics in Technical-Sessions and submit for
approval a soft copy of the Paper at [email protected] by 14th January 2016 and a hard copy of the same along with Student’s
Photograph (with his/her name on the back of the photograph), ICAI Students’ Registration Number, Course pursuing, complete postal
address, Mobile, Landline numbers and e-mail ID be also sent to the Faridabad Branch. Outstation students shall be reimbursed
actual travelling expenses equivalent to 2 tier AC and DA @ 1500/- per day for lodging and incidental expenses etc. Students who
are interested to participate in the cultural programme are requested to register before 14th January 2016 at Faridabad Branch of
the ICAI. It is suggested that the students submitting the papers may tentatively book train tickets pending selection of their papers.
This may enable them to have confirmed train tickets.
CA. V. Murali CA. C. S. Nanda CA. Santosh Kumar Agrawal CA. Pradeep Kaushik
Convention Chairman & Convention Convener & Convention Coordinator & Convention Coordinator &
Chairman, Board of Studies, Chairman, Internal Audit Standards Board & Chairman, Faridabad Branch of Secretary, Faridabad Branch of
ICAI Committee for Members in Industry, ICAI NIRC 9891071122 NIRC of ICAI 9811323940

ANNOUNCEMENT
Online Mentoring on ICAI Cloud Campus - http://cloudcampus.icai.org
The ICAI Cloud Campus enables Students to learn anytime and from anywhere using e-Learning, Audio Lectures,
Video Lectures and Online Mentoring. Students can even learn through Mobile Enabled e-Learning facility on the
Students Learning Management System (LMS) on their Mobile Phones/Smart Phones/ Tablets. Online Mentoring is
one of the major value added features on the Cloud Campus. The schedule of online mentoring sessions for January,
2016 from 3.00 p.m. to 4.00 p.m. is as follows:
Online Mentoring Schedule
Date Course Paper Topic Faculty
January 6 IIPC Paper-6 Auditing and Company Audit CA. Karuna Bhansali and
Assurance CA. Rajeev Sachdeva
January 7 Final Paper-5 Advanced Linear Programming – Simplex Dr. N. N. Sengupta and
Management Accounting Method CA. Deepak Gupta
January 8 Final Paper-1 Financial Reporting Accounting and Reporting of CA. Seema Gupta and
Financial Instruments CA. Shilpa Agrawal
January 20 Final Paper-6 Information Systems Information Systems Development Ms. Sukriti Arora
Control and Audit Life Cycle, Controls and Audit
January 22 IIPC Paper-2 Business Laws, Preliminary Introduction to Company Ms. Nisha Gupta and
Ethics and Communication Law Ms. Megha Goel
January 27 IIPC Paper-7B Strategic Business Environment, Business Dr. T. Paramasivan and
Management Policy and Strategic Management Dr. Ruchi Gupta
January 29 IIPC Paper-3 Part-I Cost Marginal Costing Dr. N. N. Sengupta and
Accounting CA. Sanjit Sharma
Students are advised to register for Online Mentoring Sessions on the ICAI Cloud Campus and provide specific questions/
queries that they need to be discussed at least 48 working hours before the session. Links to access the aforementioned
Online Mentoring Sessions are also available on the http://cloudcampus.icai.org under Online Mentoring.
Additional Secretary
Board of Studies

A poem written by CA.V. MURALI, Chairman, BOS of ICAI
Dedicated to the CA Students
RESOLUTIONS FOR THE NEW YEAR

This New Year it’s time to make fresh resolutions!
It’s time to resolve to do the very best you can;

To work diligently according to your set plan.
Resolve to help those in need;

To be a loving friend regardless of caste or creed.
Resolve to strive to be a loving and respectful child;

To your beloved parents and elder ones around.
Resolve to face every challenge with tenacity;

To dream big and turn it into reality.
Resolve to go beyond the call of duty;

And be of succour to humanity.
Resolve to be optimist, dynamic and positive;

And to be empathetic, value adding and sensitive.
Resolve to take all tasks with sincerity;

And to be a ultimate winner in the society.
Resolve to thank the Lord who paves your way;

Be happy and cherish each day.
34
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GLIMPSES

RNI NO. 66180/1997 Registered: DL-(C)-01/1280/2015-2017
D. NO. MH/MR/TECH-47/3/2016
License To Post Without Prepayment
WPP Licence No.: MR/TECH/WPP-247/DL(C)/2016
Posted at Mumbai Patrika Channel Sorting Office, Mumbai
Posting Date: 26th - 30th of Advance Month
Date of publication: 26th of previous month
If undelivered, please return to: The

Institute of Chartered Accountants of
India, ICAI Bhawan, Indraprastha Marg,
New Delhi-110104
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VOL 19 NO.

08 PAGES 36 JANUARY 2016 R50

EDITORIAL BOARD INSIDE

Addl. Secretary - Board of Studies 09 Article: Swachh Bharat Cess

15 Article: Anatomy of Learning: Leaning How to Learn

22 Knowledge Update: Auditor’s Qualified Report on Consolidated

SWACHH BHARAT - A STEP TOWARDS CLEANLINESS

The views and opinions expressed or implied in THE CHARTERED ACCOUNTANT

02 January 2016 The Chartered Accountant Student

The Chartered Accountant Student January 2016 03

04 January 2016 The Chartered Accountant Student

Unlock your Potential and Shape your Destiny

All through the journey of your life, be grateful to your

The Chartered Accountant Student January 2016 05

Takeovers Are No Child’s Play

06 January 2016 The Chartered Accountant Student

The Chartered Accountant Student January 2016 07

08 January 2016 The Chartered Accountant Student

Swachh Bharat Cess

Jaspreet Kaur Shaily Singhania

Introduction Thus, the funds raised through the imposition

The Chartered Accountant Student January 2016 09

10 January 2016 The Chartered Accountant Student

How to Approach Questions in Interviews

The Chartered Accountant Student January 2016 11

On Introduction Responding to what your weaknesses are is a

12 January 2016 The Chartered Accountant Student

The Chartered Accountant Student January 2016 13

14 January 2016 The Chartered Accountant Student

Anatomy of Learning: Learning how to learn

The Chartered Accountant Student January 2016 15

16 January 2016 The Chartered Accountant Student

The Chartered Accountant Student January 2016 17

18 January 2016 The Chartered Accountant Student

Swachh Bharat Cess (SBC)

The Chartered Accountant Student January 2016 19

Q.14 Whether CENVAT credit of the SBC is

20 January 2016 The Chartered Accountant Student

The Chartered Accountant Student January 2016 21

Auditor’s Qualified Report on

22 January 2016 The Chartered Accountant Student

The Chartered Accountant Student January 2016 23

24 January 2016 The Chartered Accountant Student

The Chartered Accountant Student January 2016 25

E-mail and Telephonic Queries:

26 January 2016 The Chartered Accountant Student

2. Auditing (IIPCC and CA. Karuna Bhansali, Assistant Director [email protected]

6. Information Ms. Sukriti Arora, Assistant Secretary [email protected] 0120-3045939

9. Strategic Dr. T. Paramasivan, Joint Director [email protected] 0120-3045917

Dr. Ruchi Gupta, Sr. Executive Officer [email protected] 0120-3045907

The Chartered Accountant Student January 2016 27

The Valedictory Session will be held on Day – 2

Registration fees `350/- per student

For registration queries contact:

CA. V. Murali CA. Sanjeev Maheshwari CA. Sunil Patodia

28 January 2016 The Chartered Accountant Student

The Valedictory Session will be held on Day – 2. *Confirmation Awaited

The Chartered Accountant Student January 2016 29

The Valedictory Session will be held on Day – 2