Say Yes to Yes Bank- Results of Q1 FY 17declared.


Amidst the rise of bad loans and severe doubts plaguing performance of banking industry, last weekend of July has brought cheers in stock market with splendid performance of Yes Bank. Investors who had faith in Yes Bank management were rewarded with Net Profit of Rs 731.8 Crores for the quarter ending June 2016 compared to Net Profit of Rs 551 Crores for the quarter ending June 2015. The growth of 32% is remarkable given the whole economy is reeling under cascading effects of bad loans, Yes Bank seems unharmed.

Why am I emphasising on Yes Banks results?

yes1Let me explain why this 32%  needs big applause.

  • Firstly the provisions for the bad loans (which leads to reduction in profits) was raised by 110% (Rs 206 Crs during Q1 FY 2017 and Rs 98 Crs during Q1 FY 2016). Rise in provision proves that bad and doubtful loans are taken care of through provision.
  • Return on Interest income has increased by 24.2% and Non interest income (which includes syndication and asset management) has increased by 65%. Operating profit of the Bank has increased by 43.9% which is a splendid margin.yes 2
  • There we see the another reason for the better performance. The spike in CASA (Current accounts and Savings accounts) by 63% and other factors led to reduction in cost of funds for the bank.

What matters most while reviewing the performance is the Asset Quality. The quality of the loans in the books of the bank is pivotal for profits of bank and managing it has always been the secret ingredient of Yes Bank. By focusing on corporate credit and diversifying the industries in loan book, Yes Bank is racing ahead of top nationalised and big private banks. High time other banks learn Yes Banks tricks!

yes 3

Sectoral Distribution of Loans.


Recently SEBI has provided in-principle approval to Yes Bank to set up an Asset Management company which will add in the value to the company’s revenues.

So if you are looking for the investment option in Banking industry, definitely my take is on Yes Bank! Say Yes to Yes Bank! 🙂


For more information :

Opportunity to turn your black money to white!


I have used a common parlance of Black money to white money, and I agree there is nothing black or white about any money. Black money is the nomenclature to state the income which was never disclosed and hence never taxed. Indian Government has launched that scheme, Income Declaration Scheme 2016 has received the assent of President on 14th May, 2016, for voluntary disclosure of undisclosed income.

What is this Scheme about?

It is the opportunity to persons who have not disclosed their income ever which was liable for taxation, to come forward and declare the undisclosed income and pay tax, surcharge and penalty (i.e Income Tax @ 45%)

You would be wondering why would someone voluntarily pay that tax? This privilege will shield people from the hefty penalty and litigation if their property is raided by the tax sleuths.

Offer Period?

Well this benevolent offer of our Government has begun at 1st June, 2016 and it valid upto 30th September.

The declaration under this scheme is to be made by September, 2016. The time frame for payment of taxes, surcharge and penalty is 30th November, 2016. (Don’t plan to submit declaration and not to pay tax. It will simply disqualify your submission, and tax officers will know you hoard some money).

Procedure for Declaration?

Step 1 : Submit Form-1  on or before 30th September, 2016.

Step 2 : After receipt of Form-1, the CIT (Commisioner of Income Tax) will issue  an acknowledgment in Form-2 to the declarant within 15 days from the end of the month in which the declaration under Form-1 is made.

Step 3: The declarant shall furnish proof of payment made in respect of tax, surcharge and penalty to the jurisdictional CIT in Form-3.

Step 4: After this, the CIT shall issue a certificate in Form-4 of the accepted declaration within 15 days of submission of proof of payment by the declarant.

Why this Scheme?

GOI has often released these kind of Voluntary Disclosure Scheme to bring the hidden income in to economy.  Though it seems to be an unconventional step, it has been successful in bringing the income in to tax net. VDIS succeeded more than the India finance ministry expected. Over 350,000 individuals, with a sprinkling of companies and firms, disclosed their undisclosed incomes. Sequestered assets worth was over INR 260 billion. With tax levied at 30 per cent of the disclosed asset, the inflow of around INR 78 billion to the treasury is a good one-fifth of what the Government had collected in direct taxes in the past financial year. Watching the success, then Union Finance Minister, P. Chidambaram commented, “It is my faith that, given a chance, the people of India come clean”. He claimed that his team of Income Tax officials had got INR 330 billion to turn white.

Finance Minister had quoted during interviews that this Scheme would not the VDIS launched by P. Chidambaram in 1997, but it is open for discussion.

Why few honest tax payers hate this scheme?

After disclosure under Voluntary Disclosure Scheme, the income-tax defaulters get clean chit from prosecution under various Acts (read FEMA, Benami Transactions act, many more.) Anyways, keeping personal opinion aside, this Scheme is considered to be the golden opportunity for tax-evaders to come clean. Better use it.

For more details of this scheme click here.

Why Adani would abandon Charmichael project?


In 2010, Adani group initiated the Charmichael project with plans to develop a coal mine and a rail link with Abbot  Point port. It captured headlines, as it was a big overseas investment running to multi billion dollars. The Company had acquired 100% interest in the Galilee Coal Tenement in Queensland, Australia having estimated resource of 7.8 billion tonnes. The mine is capable of producing up to 60 million tonnes of coal at peak capacity. The coal mine is located in Central Queensland, approx. 300 km south of Townsville and 280 km west of Mackay. The proposed investment by the Company in Australia represented the largest ever Indian investment in Australia. Their target was first coal by the end of FY 2015 and a production of between 50 and 60 MMTPA to be achieved by FY 2022.

But, what we read now is his plan to exit the project. “You can’t continue just holding. I have been really disappointed that things have got too delayed,’’ – Gautam Adani, Chairman of Adani Group.

According to Richard Denniss, Chief Economist of The Australian Institute, a think tank, every objective analysis of the project has found the project unviable. There were many protests by the environmentalists after the declaration of the project

Mr Adani said if there were no more unexpected delays he had confidence the project would get financing and “still be competitive’’ against other alternative sources of coal in India and Indonesia. Would a person like Gautam Adani step in to a project without  feasibility assessment? Hard to believe.

Something changed.

Was it Coal Price? Bloomberg reports that Coal prices are steadily rising, so markets are good for coal.

Delay? Can’t agree, Adani has run his empire in the country with longest red tapes. A delay of a year or two, is acceptable, especially when you are dealing with a long-term project.

So what is the mysterious cause for the reluctance to continue now? Is it the change in the power sector outlook?

Government all over the world are focusin towards renewable, clean source. Reasons could be reduced dependence on Oil Exporting countries, reduced imports, reduced pollution, environmental groups, whatever. But the entire world is focusing towards solar, wind, hydra as green field projects. It questions the viability of the thermal power projects.

Last month energy minister Piyush Goyal made a statement that has been quoted widely in the global media, that solar is already cheaper than coal. HSBC Global Research quotes, “Wind is now cost competitive with new coal while solar will likely reach parity over 2016-18, in our view; we raise our solar installation forecasts .”  Now who would want to try the dirty, expensive coal?

Bloomberg Renewable Energy 2016 report shows the investment trend in renewable energy:



Investments have now tilted towards green energy and many doubt the viability of thermal coal energy for long run. The campaigns all over the world like Germany’s Ende Gelande, Break Free 2016, Climate protestors in UK-US, Japan and many more are making financiers difficult to lend to fossil fuels. Over 10 international banks, including Adani’s former chief financier for Carmichael, Standard Chartered, and the Commonwealth Bank of Australia, have said that they have withdrawn from Carmichael project. In a separate news report, The Sydney News Herald had reported that Adani Mining had lost one of its two big external customers with Korean giant LG confirming it would not be purchasing coal from the Carmichael mine.

With commentators predicting the nightfall of coal era, it is hardly a surprise, that Mr Adani is rethinking about Australian coal mines citing delays as reason.

Framework for Presentation & Preparation of Financial Statements


Purpose of this statement?

The purpose of this statement is to :

  • assist in development of new Ind AS and review of existing Ind AS;
  • assist in harmonisation of regulations, procedures and standards in preparation of financial statements;
  • assist in dealing with matters which are yet to be covered by Ind AS;
  • assist auditors in forming opinion on financial statements;
  • assist users in interpreting the financial statements prepared by Ind AS;
  • to provide information about the formulation of Ind As.

This statement is not a standard, hence nothing written in this statement will over ride the  provisions specifically mentioned in the Ind AS.


The Framework deals with:

(a) the objective of financial statements;

(b) the qualitative characteristics that determine the usefulness of information in financial statements;

(c) the definition, recognition and measurement of the elements from which financial statements are constructed; and

(d) concepts of capital and capital maintenance.

What is the objective of financial statements?

The objective of financial statements is to provide information about the financial position, performance and cash flows of an entity that is useful to a wide range of users in making economic decisions.

Underlying assumptions?

To create a uniform financial statements, like any economic theory, generally a financial statement is made under following Assumptions:

Accrual basis

Under this basis, the effects of transactions and other events are recognised when they occur (and not as cash or its equivalent is received or paid) and they are recorded in the accounting records and reported in the financial statements of the periods to which they relate. eg: Electricity bill for the month of March 2016 is received and paid in April 2016, yet it is accounted as expense for the month of March 2016.

Going concern

It is assumed that the entity has neither the intention nor the need to liquidate or curtail materially the scale of its operations; if such an intention or need exists, the financial statements may have to be prepared on a different basis and, if so, the basis used is disclosed

Qualitative characteristics of financial statements?

The four principal qualitative characteristics are understandability, relevance, reliability and comparability.


What are elements of financial statements?

Financial statements portray the financial effects of transactions and other events by grouping them into broad classes according to their economic characteristics. These broad classes are termed the elements of financial statements.

The financial position of an entity is portrayed by Balance sheet, its elements are : assets , liabilities, and equity.

The financial performance of an entity is portrayed by Statement of Profit and loss, its elements are : income and expenses.

The presentation of these elements in the balance sheet and the statement of profit and loss involves a process of sub-classification.


An asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity. The future economic benefit embodied in an asset is the potential to contribute, directly or indirectly, to the flow of cash and cash equivalents to the entity.


A liability is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits. An obligation is a duty or responsibility to act or perform in a certain way. Obligations may be legally enforceable as a consequence of a binding contract or statutory requirement. A distinction needs to be drawn between a present obligation and a future commitment.


Equity is the residual interest in the assets of the entity after deducting all its liabilities.


Profit is frequently used as a measure of performance or as the basis for other measures, such as return on investment or earnings per share. The elements directly related to the measurement of profit are income and expenses.

The elements of income and expenses are defined as follows:

(a) Income is increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants.

(b) Expenses are decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants.

Income and expenses may be presented in the statement of profit and loss in different ways so as to provide information that is relevant for economic decision-making

The definition of income encompasses both revenue and gains. Revenue arises in the course of the ordinary activities of an entity and is referred to by a variety of different names including sales, fees, interest, dividends, royalties and rent. Gains represent other items that meet the definition of income and may, or may not, arise in the course of the ordinary activities of an entity. Gains represent increases in economic benefits and as such are no different in nature from revenue.  When gains are recognised in the statement of profit and loss, they are usually displayed separately because knowledge of them is useful for the purpose of making economic decisions. Gains are often reported net of related expenses.

The definition of expenses encompasses losses as well as those expenses that arise in the course of the ordinary activities of the entity. Expenses that arise in the course of the ordinary activities of the entity include, for example, cost of sales, wages and depreciation. They usually take the form of an outflow or depletion of assets such as cash and cash equivalents, inventory, property, plant and equipment. Losses represent other items that meet the definition of expenses and may, or may not, arise in the course of the ordinary activities of the entity. Losses represent decreases in economic benefits and as such they are no different in nature from other expenses. When losses are recognised in the statement of profit and loss, they are usually displayed separately because knowledge of them is useful for the purpose of making economic decisions. Losses are often reported net of related income.

What is the concept of Capital?

Capital concept has two view points : (a) financial perspective (b) Physical perspective.

Under a financial concept of capital, such as invested money or invested purchasing power, capital is synonymous with the net assets or equity of the entity.  Under a physical concept of capital, such as operating capability, capital is regarded as the productive capacity of the entity based on, for example, units of output per day.

The selection of the appropriate concept of capital by an entity should be based on the needs of the users of its financial statements. Thus, a financial concept of capital should be adopted if the users of financial statements are primarily concerned with the maintenance of nominal invested capital or the purchasing power of invested capital. If, however, the main concern of users is with the operating capability of the entity, a physical concept of capital should be used. The concept chosen indicates the goal to be attained in determining profit, even though there may be some measurement difficulties in making the concept operational

Concepts of capital maintenance and the determination of profit?

Financial capital maintenance. Under this concept a profit is earned only if the financial (or money) amount of the net assets at the end of the period exceeds the financial (or money) amount of net assets at the beginning of the period, after excluding any distributions to, and contributions from, owners during the period. Financial capital maintenance can be measured in either nominal monetary units or units of constant purchasing power.

Physical capital maintenance. Under this concept a profit is earned only if the physical productive capacity (or operating capability) of the entity (or the resources or funds needed to achieve that capacity) at the end of the period exceeds the physical productive capacity at the beginning of the period, after excluding any distributions to, and contributions from, owners during the period.

The concept of capital maintenance is concerned with how an entity defines the capital that it seeks to maintain. It provides the linkage between the concepts of capital and the concepts of profit because it provides the point of reference by which profit is measured.

The physical capital maintenance concept requires the adoption of the current cost basis of measurement. The financial capital maintenance concept, however, does not require the use of a particular basis of measurement.

How you & I breach Information Technology Act?



We do know Information Technology Act does exist, when some websites are blocked or when a common man is arrested for his political comments in Facebook or twitter! We do know the hype created by the so-called draconian Section 66A of IT Act.

But it is not the only section to worried about, our many ignorant daily nosey acts could someday land us in soup. Here is the list:


Section 43:

If any person without permission of the owner or any other person who is in charge of a computer, computer system or computer network, —

(a) accesses or secures access to such computer, computer system or computer network;

So that friendly snooping in to friends PC without permission could land you with some penalty .

(b) downloads, copies or extracts any data, computer data base or information from such computer, computer system or computer network including information or data held or stored in any removable storage medium;

So plagiarism and copy-pasting/downloading any data without outright permission is an offence to.

It does not restrict a persons right derived by Copyrights Act, 1957 or the Patents Act, 1970.

(c) introduces or causes to be introduced any computer contaminant or computer virus into any computer, computer system or computer network;

We tend to forward emails which is embedded with Virus, and our ignorance could lead to severe data loss. So be cautious, as ignorance is not pardonable.

(d) damages or causes to be damaged any computer, computer system or computer network, data, computer data base or any other programmes residing in such computer, computer system or computer network;

Our accidental mishandling of someone’s PC or un-installation of a software or a single deletion of cell in a shared workbooks could be penalised.

(e) disrupts or causes disruption of any computer, computer system or computer network;

Your accidental turning off a Wifi modem button could disrupt the work of your colleague which again is a punishable offence.

(f) denies or causes the denial of access to any person authorised to access any computer, computer system or computer network by any means;

Heard of a denial of service attacks in news? How the hacker groups stall the Governmental websites for hours? Well don’t try, if they trace it to your system, you are inside bars!

(g) provides any assistance to any person to facilitate access to a computer, computer system or computer network in contravention of the provisions of this Act, rules or regulations made thereunder;

Lending your friend your PC for the attacks is a crime too! 😀 Beware!

(h) charges the services availed of by a person to the account of another person by tampering with or manipulating any computer, computer system, or computer network;

So hacking in to anyones account, or sending them links which will help you secure access to their data, is also a crime. Even if you are playing a prank on your best friend.

(i) steal, conceals, destroys or alters or causes any person to steal, conceal,destroy or alter any computer source code used for a computer resource with an intention to cause damage;

This is for people who love to develop software cracks and embed them with malware.

he shall be liable to pay damages by way of compensation not exceeding one crore rupees to the person so affected. – consequences of all the above pranks.

These were some of the punitive sections I found. If there are more, please do share. Lets not accidentally breach any law!

How to incorporate One Person Company?


As mentioned in my previous post( Read here), One Person company  is a new form of Company introduced by The Companies Act, 2013, there by enabling entrepreneurs operating as Sole Proprietors to enter into Corporate Framework.

 In case the paid up share capital of an OPC exceeds fifty lakh rupees or its average annual turnover of immediately preceding three consecutive financial years exceeds two crore rupees, then the OPC has to mandatorily convert itself into private or public company.

Who is eligible to act as member of OPC?

Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC.

For the above purpose, the term “resident in India” means a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one financial year.

A person can be member in only one OPC

Where a natural person, being member in One Person Company becomes a member in another OPC by virtue of his being a nominee in that OPC, then such person shall meet the eligibility criteria of being a member in only one OPC within a period of one hundred and eighty days, i.e., he/she shall withdraw his membership from either of the OPCs within one hundred and eighty days.

How to incorporate an OPC?

Name reservation: Form INC-1 shall be filed for name availability in case of normal procedure followed.

Incorporate OPC: Within 60 days of the name approval, form INC-2 shall be filed for incorporation of the OPC. This shall be accompanied by Form DIR-12 except if promoter is the sole director of the OPC. Once company is incorporated, form INC-22 is also required to be filed within 30 days in case the address of registered office was not mentioned in form INC-2.

Incorporation of OPC with single Integrated Incorporation form INC-29 is also allowed. For this, form INC-1 is not a pre-requisite.

How to inform ROC about change in member of OPC?

The company shall file form INC-4 in case of cessation of member of OPC on account of death, incapacity to contract or change in ownership. In the same form, user needs to provide details of the new member of the OPC.

What is the procedure for compulsory conversion in Private Ltd Company or Public Limited Company?

The OPC shall inform RoC in form INC-5, if the threshold limits is exceeded and is required to be converted into private or public company. Form INC-5 shall be filed within sixty days of exceeding threshold limits.

Form INC-6 shall be filed by an OPC for conversion of an OPC into private or public company.

Yes, a private company can also file form INC-6 for converting itself into an OPC. The paid up share capital of private company should not be exceeding fifty lakh rupees and should not have average annual turnover more than two crore rupees at the time of such conversion into OPC. The company shall be having one member and shall appoint one nominee to act as member in case of death or incapacity of the member at the time of conversion into OPC.

Pic Courtesy:

Starting a Company? Select which type suits your business.


Many of us who wish to incoporate our business tend to defer it due to fuzzy world of regulations, the never ending compliance requirements tend to make us step back. There are middlemens and agents who portray obscure regulations to escalate the billing and uninformed clients become the guinea pigs.

Ministry of Corporate Affairs has indeed eased the procedure for incorporating in India and every information you need is easily available.

First thing first, decide what type of Company you need:

  1. One Person Company – Enables an entrepreneur to start and manage a limited liability entity. OPC is formed to support single entrepreneurs and help them in running business with limited compliance requirement. (Procedure for starting OPC ) Following are its advantages:
    1. Less Regulations
    2. Legal identity for business
    3. Limited Liability
  2. Private Limited company -Private limited companies are the companies where minimum number of members is two and maximum 200. A private limited company has flexibility, greater capital combination of different and diversified ability, limited liability, greater stability and legal entity. In the grand of priveleges and exemptions, the Companies Act has drawn a distinction between an independent private company and other private company which is the subsidiary to the other public company.Following are its advantages:
    1. Separate legal entity
    2. Uninterrupted Existence
    3. Borrowing Capacity
    4. Limited Liability
    5. Owning property
  3. Public Limited Company –  A limited company grants limited liability to its owners and management. They have a right to raise money from public for operations of the business and minimum number of members to start the business is  7 and no maximum limit. It has all the benefits of private limited company and ability to raise high funds, but has to follow many regulations and compliance requirements. Following are its advantages:
    1. Separate legal entity
    2. Uninterrupted Existence
    3. Borrowing Capacity
    4. Limited Liability
    5. Owning property
    6. Ease of raising high funds
  4. Limited Liablity Partnership – It has been introduced in India by Limited Liabilities Act, 2008. The basic premise of the Act is to provide a form of business organisation that it is simple to maintain while at the same time providing limited liability to the owners. An LLP also limits the personal liability of a partner for the errors, omissions, incompetence or negligence of the LLP’s employees or other agents.  Following are its advantages:
    1. Separate legal entity
    2. Uninterrupted Existence
    3. Audit Not required
    4. Limited Liability
    5. Owning property