PUNE BRANCH OF WICASA OF ICAI - PuneICAIpuneicai.org/wp-content/uploads/Newsletter_Dec_15_Student.pdf · Pravin Babar Joint Editor Pune Branch Of WICASA of ICAI 2 I can't change the

2015

DECEMBER

PUNE BRANCH OF WICASA OF ICAIDECEMBER 2015 - E NEWSLETTER

Dear friends,

'A good expectation is better than a bad possession.' We all know that our exams aren't so easy but all of us work very hard in order to achieve success, but somewhere some of us feel that we might not clear in this attempt. My dear friends, I request you to stop filling up your mind with such negative thoughts and at least expect positive as this will keep us satisfied and keep us going forward which will be much better than a negative thought about our exams.

As far as November is concerned, a seminar on 'Company Valuation and Company Law' was conducted by CA Anand Totala Sir and CA Riddhi Chandak Ma'am on 29th and the response was quite good.

Friends, this month, December is the last month of the year and has to be full of excitement, activities, fun and much more, in addition to academics. After a long time, Pune WICASA has organized a Residential Refresher Course (RRC) on 12th & 13th of this month. Matheran is the place finalized & all the details are available on the website. I am sure most of you will surely participate in this activity. The whole Pune WICASA team assures you that this RRC will surely be a historic one and all of you will enjoy it to the maximum.

We have planned many educational visits this month and also one industrial visit. Educational visits have been planned to the 'Jankalyan Rakhtapedhi', the 'Sudit K. Parekh Group of Companies', the 'Vaikunth Mehta Educational Institute'and the 'Kotak Mahindra Bank Ltd'.

Grievance cell meeting for students is also organized on the 26th of this month which will be held at the ICAI Bhavan.

One of the most awaited seminar � Article Development

Program is been organized by the team on 19th and 20th of this month. As this is gonna be a very different thing and will teach you many things as far as our profession and academics and especially articleship is concerned, so please attend it in huge numbers and get full benefited from it.

We will end the year with the youth festival 'Youngotsav- The Cultural Carnival'. The way the planning is been done, I am sure that this has to be a promising event & will surely be wonderful one. Looking forward for your participation in all the events. Also if anyone of you would like to volunteer for the youth festival, you can surely contact anyone of us.

All the updates are being circulated in the whatsapp groups & also are posted on the official page of Pune WICASA facebook. If you haven't still liked it, do like it now�!

I would also like to wish all the very best to all my friends attempting for their Common Proficiency Test (CPT) exam the next week.

Keep contributing by sending your articles to [email protected]

Singing off�.

Yours'

Vice-Chairman�s Communication

Managing Committee Members

Pune Branch of WICASA

CA. Anand JakhotiyaChairman

Mr. Vaibhav PingaleVice- Chairman

Ms. Anchila OzaSecretary

Mr. Anand GuptaTreasurer

CA. Radhesham AgrawalStudent Co-ordinator

Mr. Rupendra TholiyaJoint Secretary

Mr. Pravin BabbarJoint Editor

ICAI BHAWAN, Plot No. 8, Parshwanath Nagar, Munjeri, Opp. Kale Hospital, Bibwewadi, Pune - 411037. Tel: 020 24212251 / 52 | Web: www.puneicai.org | email: | Facebook: Pune [email protected]

Vaibhav PingaleVice-ChairmanPune Branch OfWICASA of ICAI

2

�I can't change the direction of the wind, but I can adjust my sails to always reach my destination.�

Dear friends,

It has been an awesome year so far, full of excitement, joy, fun & lots of activities. It has been so very good to work for you all the whole year. Your support has always let us grow & has energized us to work more & more all the way. Thanks for all your active participation.

I am very happy to share this news with you that we have planned a RRC to Matheran this 12th & 13th. This would really be a memorable one. I request all of you to participate and make this RRC a grand success.

Moving further, another major event is going to be the youth festival this month. Youngotsav � The Cultural Carnival. The whole schedule of it is available in the newsletter elsewhere.

Friends, you all have a wonderful opportunity of getting your visit reports and articles published in the WICASA � E-Newsletter. And as you all know, this opportunity comes every month. So just write your visit reports & even any other event report to us at [email protected] & the selected ones will be published in the newsletter of the

respective month.

Thanks for all your cooperation and support continuously.

Yours'

Joint Editor's Communication

Managing Committee Members

Pune Branch of WICASA

CA. Anand JakhotiyaChairman

Mr. Vaibhav PingaleVice- Chairman

Ms. Anchila OzaSecretary

Mr. Anand GuptaTreasurer

CA. Radhesham AgrawalStudent Co-ordinator

Mr. Rupendra TholiyaJoint Secretary

Mr. Pravin BabbarJoint Editor

ICAI BHAWAN, Plot No. 8, Parshwanath Nagar, Munjeri, Opp. Kale Hospital, Bibwewadi, Pune - 411037. Tel: 020 24212251 / 52 | Web: www.puneicai.org | email: | Facebook: Pune [email protected]

Pravin BabarJoint Editor Pune Branch OfWICASA of ICAI

2

�I can't change the direction of the wind, but I can adjust my sails to always reach my destination.�

Photo Gallery

4

�A person should not be too honest. Straight trees are cut first and Honest people are screwed first.�

Stay Connected with Pune WICASA @ http://puneicai.org/studentsLike Facebook page � 'Pune WICASA' Email address: [email protected] on Whatsapp � 7588687692 / 7276725949

29th November � Seminar for CA Students on Company Valuation and Company Law by CA Anand Totala and CA Riddhi Chandak respectively

5

�Even if a snake is not poisonous, it should pretend to be venomous.�


Upcoming Events & Activities - December 2015

Date Event Faculty / Chief Guest Venue Time Fees

11th to 13th December

Inter Firm One Act Play Competition -

Jawaharlal Nehru Auditorium, Ghole

Road, Pune

05:00pm to 08:00pm -

12th to 13th December

Residential Refresher Course (RRC) - Matheran

- - 7am -

19th & 20th December

Seminar for CA students on Article

Development Program

CA. Dhruv Doshi & CA. Suchit Loya - 10am to 5pm Rs. 200/-

17th December

Educational Visit to Janakalyan

Rakhtapedhi (Blood Bank)

- - 10am -

18th DecemberEducational Visit to

Sudit K. Parekh (SKP) Group

- - 9am -

21st DecemberEducational Visit to

Vaikunth Mehta Educational Institute

- - 10am -

23rd DecemberEducational Visit to

Kotak Mahindra Bank Ltd

- - 5.30pm -

26th & 27th December

Youngotsav � The Cultural Carnival - - - -

26th DecemberGrievance Cell

Meeting for students

- - 11.30am -

For registration and more details, visit www.puneicai.orgKeep yourself updated by pressing the like button of �Pune Wicasa� on Facebook.

7

�There is some self-interest behind every friendship. There is no friendship without self-interests. This is a bitter truth.�

Dealing with failures and their aftermath.A synopsis that runs through the Bankruptcy code.

Name: Hitesh T. SachdevRegistration no.: WRO 0405754

The finance minister in his budget speech mentioned about a law that would enhance ease of doing business with regards to fill the void that the Sick Industrial Companies Act (SICA) could not fill with the Board of Industrial and Financial Reconstruction (the BIFR). He stressed on a comprehensive law about speedy revival or closure of failed enterprises that would match the global standards and even then be an "entrepreneur friendly legal framework".

But �why do we need such a law?� would be the first question.

�Bankruptcy� the origin of the word can be traced back to ancient Latin with 'bancus' meaning a table or bench and 'ruptus' meaning broken. In short means inability to pay debts. �Insolvency� is a word used often in the business or corporate sector for any business or company that has failed and is in debt. When the cash inflow of the company freezes and is not able to meet its required financial commitments to continue its proper functioning, the company is called to be suffering from insolvency.

Insolvency could be through Economical

distress or Financial distress. Economic distress being inability to produce and sell goods while the later refers to capacity to service debts. As long as the company if suffering from financial distress alone, it could be a viable company and eligible for re-organization. When an enterprise defaults the first and foremost question should be whether to close or reorganize it. Failing which the management drags it on and the situations worsens with time adding to the woes of the stakeholders.

In India there is no single comprehensive & integrated policy on corporate bankruptcy in India. As a result, four different agencies have overlapping jurisdiction leading to chaos and unnecessary delay.

i. The High courts,ii. The Company law board,iii. The Board for Industrial & Financial Reconstruction (BIFR) andiv. The Debt recovery tribunals (DRTs)

So when an enterprise caught in the eye of storm, and its future is not bright it is the lenders who will be left with sleepless nights. Apart from this it impacts employees,


8

�Once you start a working on something, don't be afraid of failure and don't abandon it. People who work sincerely are the happiest.�


shareholders and at macro levels the economy. Particularly in a country like India, because of delayed decision making on viability of business, tactics are employed by promoters to delay reorganization attempts, sell off assets or handover management to professionals. This goes on to block creation of new jobs, income and economic growth is restricted. Some mechanisms like BIFR and Corporate debt restructuring have failed to serve this purpose.

So how can the proposed modern law help?

Like in the west, a modern law with focus on identification and appraisal of enterprises on the brink of default and speedy closure or reorganization leading to either recovery or revival, respectively is aimed. It basically deals with questions like,

How to objectively define failure? (This in order to separate viable companies from unviable ones.)

Whether such a failure can be salvaged? Resorting to measures that would

speedily force in reorganization or closure, as appropriate.

Let's look at how the new bankruptcy code will change the life for lenders especially banks,

corporate borrowers, and the banking system as a whole and also for the economy.

Protect rights and interest of lenders. The new code would protect the rights

and interest of lenders, especially banks. In India, banks are the big source of funding the corporate sector as debt markets are not wel l developed. Under the current legal framework, the bankers are at the mercy of promoters or corporate borrowers who try every trick to delay the process of restructuring or recovery sometimes creating huge burdens of NPAs on banks.

Preservation of assets: At times, the asset loses its value

because of the delay in the process of restructuring. Timely action will minimize losses and help the asset regain its value or productivity.

Release of resources for banking system: Today, the stressed assets in the

system are over 10 per cent of the total loan books of the banks. Many of these assets are not paying interest or the principal amount. Some are locked in legal battles in various courts. This will

9

�The fragrance of flowers spreads only in the direction of the wind. But the goodness of a person spreads in all direction.�


help in re leasing such locked resources for other productive lending, which in turn will help in loan growth, profitability and employment.

Helps the economy: When a company fa i ls , i t has

i m p l i c a t i o n s f o r c r e d i t o r s , shareholders, suppliers, employees, etc. The corporate failure also has implications for the economy as there are hundreds of suppliers connected with the company or employees. The ease of resolving insolvencies is also a very critical factor affecting the ease of doing business in a country. In India, this can be a big stumbling block for foreign investors willing to set up factories in India (India ranks 137th worldwide and it takes on an average 4.3 years).

The current law is creditor unfriendly and the new law prima facie aims at balancing it as a crucial aspect of the code is to protect unsecured creditors. India's contemporary bankruptcy procedures are not so brutal, but they are not so efficient, either. The system operates at a painfully slow pace as courts try to interpret a variety of conflicting laws that cover insolvency. In the meantime, owners of

sick companies retain day to day management control and often prolong court proceedings as nervy creditors watch the value of their assets dwindle. It is also common for defaulters to start siphoning off business from the old one. Ailing companies have to wait until their net worth is reduced by half before they qualify as �sick�. As it appears Investor patience is running out, the government needs to push through at least one big banner reform. The bankruptcy code will help reorganize a stressed business in a short span of time without endless litigation which erodes the viability of an enterprise.

Failure is inevitable in a free enterprise system like India. This helps us conclude that the modern law aims at reducing the ill aftermath effects of failure. The new law would also add impetus to the ambitious �Make in India� regime by boosting investor's confidence. The efficacy of the code would depict the Gove rnment ' s commi tment t owards increasing ease of doing business.

10

�A man is great by deeds, not by birth.�


Across 1) Debtor

4) Equity

7) Fiscal

8) Divide

10) Inflation

15) Cost

17) Hire

18) Issue

19) Unknown

20) Trusts

21) Assets

Down 1) Defer

2) Base

3) Relief

5) Quid

6) Yield

9) Into

11) Lesson

12) Inherits

13) Account

14) Rebates

16) Trends

Answers to the crossword given in November 2015

Documents

PUNE BRANCH OF WICASA OF ICAI - PuneICAIpuneicai.org/wp-content/uploads/Newsletter_Dec_15_Student.pdf · Pravin Babar Joint Editor Pune Branch Of WICASA of ICAI 2 I can't change the