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Date: Mar 26, 2010 | Know your Customer (KYC) guidelines - accounts of proprietary concerns | |
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Attachment(s) from Ashwin Nagar
1 of 1 File(s)
The Branch Manager, Dt. /03/2010
Dear Sir,
Sub: Audit of accounts of your Branch for the year 2009-10 – Audit Engagement /Management Representations.
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You have already been informed by your Management, that we have been appointed as the auditors to audit and report on the accounts of the Branch for the year 2009-10.
We have accepted the appointment, and we confirm that the audit shall be carried out in accordance with the applicable legal provisions and the regulatory requirements, besides the applicable authoritative pronouncements of the Institute of Chartered Accountants of India, with the objective of expressing an opinion on the Branch financial statements. For this purpose we will perform sufficient tests to obtain reasonable assurance as to whether the information contained in the accounting records and other source data is reliable and sufficient as the basis of the preparation of the financial statements; and whether the information is properly presented in the said statements.
You are aware that the responsibility for the preparation of the financial statements including adequate disclosure is that of the Management, and this includes the maintenance of adequate accounting records and internal controls, the selection and consistent application of appropriate accounting policies, including implementation of applicable accounting standards along with proper explanation relating to any material departures from those accounting standards. The management is also responsible for making judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Branch at the end of the financial year and of the profit or loss of the Branch for that period, and the safeguard of the assets of ;the Bank/branch.
We will conduct our audit in accordance with the auditing standards generally accepted in India and with the requirements of law. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the managements, as well as evaluating the overall financial statement presentation. However, having regarding to the test nature of an audit, persuasive rather than conclusive nature of audit evidence together with inherent limitations of any accounting and internal control system, there is an unavoidable risk that even some material misstatements of financial statements, resulting from fraud, and to a lesser extent error, if either exists, may remain undetected.
In addition to our report on the financial statements, we expect to provide you with a separate letter concerning any material weaknesses in accounting and internal control systems which might come to our notice through the Long Form Audit Report (LFAR), or otherwise.
We also wish to invite your attention to the fact that our audit process is subject to 'peer review' under the Chartered Accountants Act, 1949 and the reviewer may examine our working papers during the course such review.
We wish to complete some audit procedures even prior to the year-end, depending on your readiness / response.
In view of the severe time constraints imposed, we are confident you will make available to us, within the dates stipulated, the following Branch returns / statements duly completed, pre-reviewed and duly authenticated, to enable us to furnish our reports in the form and manner desired of us by law or by the Reserve Bank of India and not necessarily in the form and manner prescribed by the Bank.
Statements / returns:
a) the Balance Sheet as at 31.03.2010
b) the Profit and Loss Account for the year 2009-10
c) the statements relating to the particulars of Advances as at 31.03.2010 and
d) other supporting returns / statements / annexures.
(including those covering also the LFAR requirements)
Information / clarification as stated in Annexure 'I' to this letter in connection with our assignment, may please also be expedited.
To enable us to monitor the progress of the audit and completion of the assignment, please indicate / mentioned, the actual dates(s) of completion as well as handing over to us of each statement / return / confirmation or other information required to be prepared by your (as per the contents of the letter of appointment sent to us), by your endorsement on each such statement / return / confirmation, before the same (duly authenticated) are handed over to us on 1st April, 2010
We await your commitment.
As part of the audit process, we will expect to receive from the Management, written confirmation of the representations made to us and a written response (para-wise), to our requirements is imperative, and such response is to be based on your verification of facts.
We shall be greatful if your could confirmed the name(s) of the Officer(s) designated by the Branch to comply with our requirements in connection with the audit, so that our reports are expedited.
We shall appreciate your co-operation in the matter.
Thanking You
Yours faithfully
For Chartered Accountants
Proprietor / Partner
Membership No.
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CA. V.M.V.SUBBA RAO
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Date : 23 Mar 2010 | RBI issues Revised Guidelines on Uniform Accounting for Repo/Reverse Repo Transactions | |
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Dear sir,
Ref : Web based registration of Chartered Accountant firms for empanelment for Concurrent Audit assignment for the year 2010 - 11
We have pleasure in informing you that our Bank has invited online applications for empanelment for Concurrent Audit assignment for the year 2010 - 11. The registration for the same will be open on our website www.denabank.com from 25.03.10 to 15.04.10. The details of the same are available on our website .
This is for your information.
Dy. General Manager
Inspection and Internal Audit Department,
4th floor, 17, Horniman Circle, Fort,
Mumbai -23
Attachment(s) from Ashwin Nagar
1 of 1 File(s)
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Date: Mar 15, 2010 | Additional Disclosures by banks in Notes to Accounts | |
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March 4, 2010
All Regional Rural Banks
Dear Sir,
Provisioning Requirement for Standard Assets
Please refer to paragraph 2 of our circular RPCD.RRB.No.BC.97/03.05.34/2000-01 dated June 11, 2001 regarding provisioning requirements for 'standard assets'.
2. In this connection, a reference is invited to paragraph 158 of the Second Quarter Review of Monetary Policy for the year 2009-10 announced on October 27, 2009 (copy enclosed). It was proposed to increase the provisioning requirement for advances to the Commercial Real Estate (CRE) sector classified as 'standard assets' to 1.00 per cent with a view to building cushion against likely non-performing assets (NPAs). Accordingly, it has been decided to increase the provisioning requirement for advances to the CRE Sector classified as 'standard asset' to 1%. As regards other standard assets, it has been decided that while the provisioning requirements for direct advances to agriculture and SME sectors would remain unchanged at 0.25%, the same for all other loans and advances would be 0.40%.
3. The standard asset provisioning requirements for all categories, after the above changes, are summarised below.
Sr.No. | Category of standard asset | Rate of provisioning |
(a) | Direct advances to Agriculture and SME sectors | 0.25 % |
(b) | Commercial Real Estate (CRE) sector | 1.00% |
(c) | All other loans and advances not included in (a) and (b) above | 0.40% |
4. Please acknowledge receipt to our Regional Office concerned.
Yours faithfully
(R.C.Sarangi)
Chief General Manager
Encl: 1
Paragraph 158 of the Second Quarter Review
Of Monetary Policy for the year 2009-10
In view of large increase in credit to the commercial real sector over the last one year and the extent of restructured advances in this sector, it would be prudent to build cushion against likely non-performing assets (NPAs). Accordingly, it is proposed to increase the provisioning requirement for advances to the commercial real sector classified as 'standard assets' from the present level of 0.40 per cent to 1 per cent.
Companies (Central Government's) General Rules and Forms (Second Amendment), 2010 - Insertion of rule 20G(1) and Form No. 68
Notification No. G.S.R. 177(E), dated 5-3-2010
In exercise of the powers conferred by sub-section (1) of Section 642 read with sub-section (1) of 61OB of the Companies Act, 1956, the Central Government hereby makes the following rules further to amend the Companies (Central Government's) General Rules and Forms, 1956, namely:—
1. (1) These rules may be called the Companies (Central Government's) General Rules and Forms (Second Amendment), 2010.
(2) They shall come into force with effect from the 14th day of March, 2010.
2. In the Companies (Central Government's) General Rules and Forms, 1956, hereinafter referred to as the said rules,
(i) after Rule 20F, the following rule shall be inserted, namely :—
"20G(1) An application for rectification of mistakes made while filing Form No.1, Form No.1A and Form No.44 electronically, on the Ministry's website, shall be made to the Registrar of Companies in Form No.68 and such application shall be accompanied by fee of rupees one thousand for rectification of mistakes in Form No.1 and Form No.IA and rupees ten thousand for rectification of mistakes in Form No.44 respectively;
(2) An application in Form No.68 complete in all respects shall be made to the Registrar within a period of three sixty-five days from the date of approval of Form No.1, Form No.IA and Form No.44 respectively by the Registrar:
Provided that the provision relating to the rectification of mistakes as is referred to in sub-rule (1) shall also be made applicable to the Form No.1, Form No.1A and Form No.44 filed and approved electronically on the Ministry's website, prior to the 14th day of March, 2010.
(3) After receiving the application for rectification of mistakes, the Registrar shall examine the said application based on the relevant documents filed and available on record and thereafter approve the application and intimate the mistakes rectified to the applicant within a period of sixty days from the date of filing of the said application:
Provided that the rectification of mistakes shall be allowed only once in respect of one company."
India Budget: Sundry Debtors and share of Pakistan
THERE is one item consistent and uniform in all Union Budgets from 1950. If you look at the Annexure-3 to the Receipts Budget of India, 2010-11, you will find certain interesting figures.
India ' s debt by the end of March 2011 is expected to be nearly 40 Lakh Crores.
As per the Statement of the Liabilities of the central Government, the Total Liabilities are Rs. 39,44,598 Crores. From this an amount of Rs. 300 crores is deducted and the net liability is shown as Rs. 39,44,298 Crores.
What is this amount of Rs. 300 Crores?
This is supposed to be “Amount due from Pakistan on account of share of Pre-partition debt (Approx)�.
This same amount had been shown consistently in all our budgets since 1950.
In 1950-51, when our total liability was Rs. 2865 Crores, this 300 Crores was deducted to arrive at Rs. 2565 Crores. That is the dues from Pakistan constituted slightly more than 10 percent of our debts. Ten percent of the present liabilities would amount to about 4 Lakh Crores, about 40% of today's budget.
Even at 6% interest per annum, this would amount to approximately Rs. 10,000 Crores now.
The fact is that we are not able to collect this amount from Pakistan for the last 60 years. Why to keep showing it in the budget year after year. Is it to show our inability to collect from Pakistan or do we send a copy of our Budget to Pakistan to remind them gently that they owe us Rs. 300 Crores? Why can't we simply write off this 300 Crores and be done away with it instead of having this blot in all our annual budget year after year? As a goodwill gesture, can't we tell Pakistan that their dues are written off? May be there are diplomatic problems!
Why are Dues from Pakistan shown in Statement of Liabilities of Central Government?
THE position of the undivided Government as on the date of partition was that its outstanding liabilities exceeded its assets so that ultimately it was the debt that was being divided between the two Governments. On a rough estimate the outstanding debt of the Central Government as on the 14th August, 1947, included in this is not merely the outstanding public debt but all its obligations to outside parties such as deposits in Postal Savings Banks, outstanding balances of Post Office Cash and National Savings Certificates, Provident Fund Deposits of Government servants, the amount likely to be paid to the British Government for surplus stores and other property acquired by the Defence Services and the capitalised value of the liability for pensions in payment on the date of partition and pensions earned by serving officers upto that date, was likely to be of the order of Rs. 3,300 crores.
In his Budget Speech of 1948, Finance minister Shanmukham Chetty said, “On a very rough estimate this debt is likely to be of the order of Rs. 300 crores and the rate of interest may be near about 3 per cent. Pakistan's total debt is to be repaid in Indian rupees in fifty annual equated instalments for principal and interest. As a measure of assistance to the new Dominion in its earlier years it has been agreed that the first repayment should commence only in 1952. In addition to the Rs. 75 Crores given to her out of the cash balance of the undivided Government it has also been agreed that India would make available to Pakistan a further sum of Rs. 6 crores for meeting the expenditure on the setting up of Ordnance factories and similar special institutions required by her. This amount will also be added to Pakistan's debt. With this settlement, the terms of which, as the Deputy Prime Minister has already told the House, are generous and conceived in a real spirit of assistance to Pakistan, the purely financial problems arising out of the partition may be said to have been satisfactorily solved.�
That was in 1948, but when it came to payment, nothing came from Pakistan.
In the 1952-53, budget, credit had been taken for a recovery of Rs.9 crores from Pakistan as the first instalment of its debt repayment to India, but not a paisa came.
In his 1954 Budget Speech, Finance Minister Deshmukh said, “the budget for the current year placed the revenue at Rs.439.26 crores and the expenditure at Rs.438.81 crores leaving a nominal surplus of Rs.45 lakhs. In balancing this budget, I had taken credit for a recovery of Rs.18 crores from Pakistan on account of two instalments due from that country in repayment of the partition debt. I have been having discussions on this subject with the Finance Minister of Pakistan and we both hope that it will be possible to commence the repayment of the debt in the coming year. This single factor has made for a deterioration of Rs.18 crores in the revenue budget for the current year, and converted the surplus of Rs.45 lakhs into a deficit of Rs.16. 96 crores.�
In the next year's budget speech, he said, “I am not taking any credit for repayment of partition debt by Pakistan in view of what has happened in the last two years.�
So the debt continues and do we hope to collect it some day?
Section 35A(3) of the Central Excise Act, 1944 / Section 128A(3) of the Customs Act, 1962 as it existed before 11.5.2001 provided that Commissioner (Appeals) shall, after making such further enquiry as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling decision or order appealed against or may refer the case back to the adjudicating authority with such direction as he may think fit for a fresh adjudication or decision as the case may be, after taking additional evidence, if necessary.
2. An amendment was brought out in the aforesaid sections vide Finance Act, 2001 w.e.f. 11.5.2001 deleting the phrase as mentioned in bold above with an intention to withdraw the powers to Commissioner (Appeals) to remand the cases for fresh adjudication to the original adjudication authorities. After the amendment in 2001, the said Sections read as follows:-
"The Commissioner(Appeals) shall, after making such further enquiry as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against."
3. The matter whether the Commissioner(Appeals) continues to have powers to remand beyond 11.5.2001 came up before the Gujarat High Court in the case of M/s. Medico Lab. The Hon'ble High Court of Gujarat, vide order dated21.9.2004 in the case of CCE, Ahmedabad-I Vs. Medico Lab, held that Commissioner(Appeals) continues to have the power to remand even after the amendment.
4. Hon'ble Punjab & Haryana High Court in the case of CC, Amritsar Vs. M/s. Enkay (India) Rubber Co. Pvt. Ltd. vide order dated 8.3.2007 and in the case of CCE, Jallandhar Vs. B.C. Kataria [2008(221) ELT.508 P&H] vide order dated 6.9.2007 had held that the Commissioner(Appeals) have been divested of the powers to remand the cases back to adjudicating authority after deletion of that power from Section 35A(3) of Central Excise Act vide amendment made in 2001. Hon'ble High Court has distinguished the judgement of the Gujarat High Court in the case of Medico Labs in this case and also stated that the reliance on the Hon'ble Supreme Court judgement in the case of Umesh Dhaimonde (1998(98) ELT 584 ) cannot be made as in that case Hon'ble Supreme Court was not dealing with the provisions where earlier power of remand was specifically conferred and subsequently taken away by amendment carried by Finance Act, 2001.
5. The Hon'ble Supreme Court in its judgement dated 1.3.2007 in Civil Appeal No. 6988/2005 in the case of MIL India Ltd. [2007(210) ELT.188(SC)] has observed that "in fact, the power of remand by the Commissioner(Appeals) has been taken away by amending Section 35A with effect from 11.5.2001 under the Finance Bill, 2001. Under the Notes to clause 122 of the said Bill it is stated that clause 122 seeks to amend Section 35A so as to withdraw the power of the Commissioner(A) to remand matters back to the adjudicating authority for fresh consideration." The said decision of the Supreme Court was brought to the notice of CESTAT in the case of CCE, Jallandhar Vs. Hawkins Cookers Ltd. reported in 2007(8)RLT.7, but the Tribunal held that the Supreme Court in the said case had only noted the provisions of amended law whereas the specific issue whether Commissioner(A) has power to remand after amendment to provisions of Section 35A has been considered by the Hon'ble Gujarat High Court in the case of Medico Lab and the High Court has held that the Commissioner (A) has power to remand under the amended provisions also. The appeal (CEA No.29/2008) filed by the Commissioner of Central Excise, Jallandhar against the said order in the Hawkins Cookers case stating that the said observations as quoted above are part of the ratio decidendi of the decision of the Hon'ble Supreme Court , has been allowed by the Punjab & Haryana High Court vide order dated 14.7.2008 relying upon its own judgement in the case of CCE, Jallandhar Vs. B.C. Kataria [2008(221)ELT.508].
6. In the light of the observations of Hon'ble Supreme Court in the case of MIL India Ltd. and the judgement of Hon'ble High Court of Punjab & Haryana in the case of M/s. Enkay (India) Rubber Co. Pvt. Ltd., M/s. B.C. Kataria and M/s. Hawkins Cookers Ltd., you are requested to issue suitable instructions to the Commissioners(A) working under your jurisdiction to follow the said judgments strictly. It may also be brought to their notice that Hon'ble Supreme Court in the case of MIL India Ltd., while noting that the powers of remand had been taken away, has also categorically stated that the Commissioner (A) continues to exercise the power of adjudicating authority in the matter of assessment and the Commissioner(A) can add or subtract certain items from the order of assessment made by the adjudicating authority and the order of Commissioner (A) could also be treated as an order of assessment. Board instructions dated 25.7.2008 (copy enclosed) may be referred in this regard.
7. The receipt of this instruction may please be acknowledged. A copy of the instruction issued to the Commissioners(Appeals) under your jurisdiction may also be endorsed to the Board. The issue may also be monitored at your level.
Procedure in Appeal under Sec. 35A of the Central Excise Act/Section 128A of Customs Act/Sec. 85 of the Finance Act, 1994 - reg.
Section 35A of the Central Excise Act, 1994 prescribes the procedure in appeal to be followed by Commissioner (Appeals) while deciding the appeals filed before him under Section 35/35E of the Central Excise Act 1944. Similar provisions exist under Section 128A of the Customs Act, 1962 and Section 85 of the Finance Act, 1994.
2. Sub-Section (3) of the Section 35A of Central Excise Act, 1994 reads as follows-
The Commissioners(Appeals) shall, after making such further enquiry as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against;
3. The Board has noted that Commissioner (Appeals) do not resort to the mechanism of further enquiry as provided to them under the appeal procedure as above in such cases where it may be necessary before passing the order. Sub-Rule 4 of Rule 5 of Central Excise (Appeals) Rules, 2001 provides that nothing contained in said rule shall affect the power of the Commissioner (Appeals) to direct the production of any document, or the examination of any witness to enable him dispose of the appeal.
4. In the light of the provisions as contained in the statute and the rules made there under, I am directed to request you to advise Commissioners(Appeals) working in your jurisdiction to resort to enquiry in such appeals as may be necessary in the facts and circumstances of the case before passing a just and fair order in accordance with the provisions of the Act.
Processing of returns of A.Y. 2008-09 - Steps to clear the backlog
Instruction No. 1/2010, dated 25-2-2010
The issue of processing of I.T. returns for the A.Y. 2008-09 and giving credit for TDS has recently been considered by the Board and following decisions have been taken, in order to clear the backlog of returns pending for processing:
i) In all the returns filed in ITR-1 and ITR-2 for the A. Y. 2008-09, where the aggregate TDS claim does not exceed Rs four lakh and where the refund computed does not exceed Rs.25,000; the TDS claim of the tax payer concerned should be accepted at the time of processing of return.
ii) In all the returns filed in forms other than ITR-1 and ITR-2 for the A. Y. 2008-09, where the aggregate TDS claim does not exceed Rs four lakh and the refund computed does not exceed Rs.25,000, and there is 70% matching of TDS amount claimed, the TDS claim of the tax payer concerned should be accepted at the time of processing of return.
iii) In all remaining cases, TDS credit shall be given after due verification.
