The Insurance Regulatory Development Authority (IRDA) has decided that the data must be provided
separately for NAV-guaranteed and other products (both for existing and withdrawn), which are in your books as of December 31, 2010.

The Indian affiliate of Price water house Coopers routinely failed to follow the most basic audit
procedures. The United States (US) Securities and Exchange Commission (SEC) penalized the firm
for its failed audits of Satyam Computer Services, the Indian company that falsely reported more than
$1 billion profits. The Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB) fined PWC India of $7.5 million, which is the largest American penalty ever against a foreign accounting firm. Securities and Exchange Commission (SEC) stated that failures in the confirmation process on the Satyam audit were not limited to that engagement but cease-and-desist order also issued against the firm.

CENVAT Credit of services to setting up of a business premise will not be allowed w.e.f. 01/
04/2011 to the manufacturer of final products or output service provider. Scope of input services has also been restricted by deleting the phrase "activities relating to business such as". Therefore w.e.f. 01/04/2011 CENVAT Credit of only services covered under specified activities is eligible under inclusive part. The definition of "Input" has been totally revised. The new definition would be as under (with effect from 01-04-2011):

The Central Board of Excise and Customs (CBEC) has tweaked service tax rules, making service
providers liable to pay tax as soon as they issue an invoice to their clients or has completed the
service, whichever is earlier. Under the earlier rules, service tax became due only when a provider
received payment for the service. This was at variance with the taxation of goods. States levy
sales tax (value-added tax) on goods when the invoice is issued. Excise duty is also paid at the
factory gate when the goods leave the factory on issuance of an invoice. The new rules provide a
consistent regime for taxation of goods and services and aim to set the stage for the Goods
and Services Tax (GST), which the government intends to roll out from April 2012. The Central
Board of Excise and Customs (CBEC) had put out a draft of these rules for discussion in August last
year. But, the Chartered Accountants and other notified professions will continue to pay service tax on cash basis.

The Government hopes roll out of Direct Tax Code by April 2012 but things are not on track in case
of Goods and Services Tax (GST). Revenue Secretary Sunil Mitra has said that DTC will be
rolled out in April 2012 but for GST I think the date seems 'optimistic' under the present
circumstances.

The Government rolled back the controversial 5% service tax on high end hospitals and certain diagnostic services:

• Concessional tax of 15% on dividends for firms from foreign arms to apply where the former holds more than 26%, as against 50%.
• Employer's share in NPS to be tax exempt.
• MAT rules for SEZ tightened further.

The Central Board of Direct Taxes (CBDT) has now made it mandatory for all stock exchanges to
furnish a monthly statement of all transactions in which client codes have been modified.

Senior citizens and individual taxpayers whose gross total income does not exceed Rs.10 lakh
will now not face the hassle of an income tax scrutiny. They will be subject to scrutiny only if the income tax department is in possession of credible information.

In a bid to contain manipulation of shares prices on the domestic equity bourses, the capital market
regulator has directed all Securities & Exchange Board of India (SEBI) registered market intermediaries to put in place proper internal code of conduct and controls to check the flow of unauthenticated news circulated by them.

The Securities and Exchange Board of India (SEBI) sought to give more teeth to its new guidelines on dissemination of news by market intermediaries, by holding compliance officers of such firms liable for breach of duty in case of a failure to check contents forwarded by employees. Failure by any employee to seek approval from the compliance officers before forwarding market-related news had already been made liable for action.

Securities & Exchange Board of India (SEBI) has said that mutual funds should segregate the load
balance into two accounts - one to reflect the balance on July 31, 2009, and the other to reflect
accumulation since August 1, 2009. Securities & Exchange Board of India (SEBI) said that funds
can use the exit load accumulated after July 31 to pay fees to distributors. The regulator, in an order
on June 2009, had placed restrictions on the use of exit load proceeds.

Securities & Exchange Board of India (SEBI) makes it mandatory for listed companies to have
a functional website with latest details of various investor-sensitive information about them.This
will come into effect from April 1 2011.

As a next step towards simplification in allotment of DIN (after allotment of DIN online if the DIN
e-form digitally signed by an appropriate professional), the MCA has decided to make the following fields mandatory in the DIN 1 e form:-

• Name of applicant
• Father's name of the applicant
• Date of birth
• PAN in place of all Indian Nationals
• Passport in case of all Foreign Nationals

The Government will announce stricter guidelines for board appointments at state-run companies and
simplify succession planning in them. There is need to upgrade the quality of independent directors in the boards of Public Sector Undertakings (PSUs). Around 70 posts of CMDs and full-time directors
and 300 posts of independent directors are currently lying vacant at PSUs.

In super session of all earlier circulars, it is clarified that no independent or nominee shall be held liable for any act of omission or commission by the company or by any officers of the company
which constitute a breach or violation of any provision of the Companies Act,1956, and which
occurred:

• Without his knowledge attributable through Board process includes meeting of any committee of the Board and any information which the Director was authorized to receive as Director of the Board as per the decision of the Board,
• Without his consent or connivance or
• Where he has acted diligently in the Board process

The United States (US) Supreme Court (SC) said that companies have no right to personal privacy.
In a ruling that contains an extended discussion of the exact meaning of the word 'personal', the US Court ruled that only individuals can have such a right, not companies or other similar bodies.
A right to privacy petition, filed by Ratan Tata, group chairman Tata Sons, is currently pending
in the Indian Supreme Court. The petition argues that his right to privacy was violated by the leaking
of taped conversations he had with lobbyist Niira Radia. AT & T had argued that the release of documents violated its 'personal privacy'.

Besides ICICI Bank, other lenders who have more than 50% foreign equity holding are HDFC Bank,
Yes Bank, IndusInd Bank, Federal Bank, ING Vysya and Development Credit Bank. As these banks are classified as foreign entities, they will have to follow Foreign Direct Investment (FDI) guidelines.

Government of India (GOI) has released Consolidated Foreign Direct Investment (FDI)
policy effective from 1 April 2011. The key changes / liberalizations introduced by the revised Foreign Direct Investment (FDI) policy are:

Pricing of Convertible instruments

The earlier Foreign Direct Investment (FDI) policy required the conversion price of equity convertible instruments (debentures and preference shares) to be determined upfront at the time of issue of such convertible instruments. With an intention to provide better valuation based on performance, the revised Foreign Direct Investment (FDI) Policy permits the option of using a conversion formula for such convertible instruments subject to FEMA/SEBI guidelines on pricing.

Issue of Shares permitted against specified non-cash considerations under Approval Route

Apart from conversion of ECB/lump-sum fee/ Royalty into equity under the Approval Route, the
revised Foreign Direct Investment (FDI) policy now permits issue of equity / equity convertible
instruments under the Government / Approval route in the following cases:

• Import of capital goods/ machinery/ equipment (including second-hand machinery)
• Pre-operative/ Pre-incorporation expenses (including payments of rent etc.).

A.P. (DIR Series) Circular No. 57 dated June 29, 2010 enhanced the period of realization and repatriation to India of the amount representing the full export value of goods or software exported, from six months to twelve months from the date of export. This relaxation will be now September 31, 2011.

The nomination facility is available for joint deposit accounts also. Banks are advised to ensure that their branches offer nomination facility to all deposit accounts including joint accounts opened by the customers. Signatures of the account holders in forms DA1, DA2 and DA3 need not be attested by witnesses.

It has now been decided to include "Telecom Towers" also as an infrastructure facility for availing credit facility and have obtained a minimum credit rating 'A' or equivalent of CRISIL, FITCH, CARE, ICRA or equivalent rating by any other credit rating agency accredited by Reserve Bank of India (RBI).

The Primary Dealers (PDs) are allowed to undertake Securities or Derivatives transactions among themselves or with clients through the members of the BSE, NSE or OTCEI. These brokers are accredited by the FIMMDA.

Addressing the demand from banks for complete automation of the cheque clearing exercise including automation of non-MICR clearing houses, the Reserve Bank of India (RBI) has decided to implement a new express cheque clearing system (ECCS).

It has been decided to introduce Interest Rate Futures on 91-Day Treasury Bills issued by the Central Government. At present, only 10-year government bonds are traded in the Interest Rate Futures Market.

In a move expected to improve liquidity and deepen the securitized debt market, the Securities and Exchange Board of India (SEBI) introduced a 'Listing Agreement for Securitized Debt Instruments'. This is expected to make these instruments more transparent and improve their secondary market liquidity. The decision was taken to enhance information available in the public domain on performance of asset pools on which securitized debt instruments are issued. It will help bring transparency in listing of securitized debt instruments, as issuers would now need to disclose information of three levels - the pool level, tranche level and select loan information.

Over 4.7 crore employees will get 9.5 per cent interest on provident fund deposits for the year 2010-11.

The Competition Commission of India (CCI) will now be able to vet and approve big mergers and acquisitions in the country, with the government notifying the key provisions of the Competition Act.
The provisions, Sections 5 and 6, would grant the competition watchdog the powers to scrutinize
amalgamation proposals of companies with a threshold of Rs.1,500 crore. The CCI would take a maximum of 180 days to vet mergers.

The coins of 25 Paise and below shall cease to be legal tender after 29th March, 2011.

Major Proposals in the Banking laws (amendment) Bill, 2011

• Allows nationalized banks to issue bonus shares and come up with rights issue to raise capital for expansion of business.
• Bank mergers not to come under CCI lens.
• Allows the RBI to supersede the board of directors of a banking company for a period not exceeding  12 months.
• Power conferred on the RBI to levy penal interest in case of non-maintenance of required CRR.
• The ceiling cap of 1% for voting rights will go and Shareholders have to take 10 % equity to grab voting rights.

The Bill also seeks to empower the Reserve Bank of India(RBI) to call for information and returns from the associate enterprises of banking companies and also inspect them

Making payments through cheques will now be a costly affair, as Reserve Bank of India(RBI) has allowed banks to levy higher service charges for their clearing, especially of high-value and outstation cheques. As per Reserve Bank of India(RBI) circular coming into effect from April 1,
2011, banks would be free to fix service charges on speed clearing of cheques of value above Rs.1 lakh. At present, RBI does not allow banks to charge more than Rs.150 per cheque for speed clearing of cheques worth over Rs.1 lakh, while there are no charges for value up to Rs 1 lakh.

The Reserve Bank of India (RBI) has formed a 15-members committee under its former Deputy Governor Mrs. Usha Thorat to address issues and complexities relating to Non Banking Finance Companies (NBFC) and suggest changes in the legislative framework. The working group will focus on the definition & classification of finance companies and address regulatory gaps and regulatory arbitrariness.

The profession of chartered accountants has committed to eradicate corruption from our social, economic and commercial system. The menace of corruption is becoming larger and larger in our
system and off late very serious charges of corruption at highest level are being examined by the investigating agencies. The size and nature of corruption has broken all previous records and the greed of corrupt is surmounting day by day. Not only at the level of babus, inspectors, junior engineers, SDO's, chief engineers, administration officers but also at higher and highest level of bureaucracy, corruption is getting so deep rooted that eradication of corruption is possible by a national movement with a complete commitment of the public at large, senior politicians, bureaucrats and of course most importantly the social activists.

Lokpal Bill :

The recent agitation at Jantar Mantar followed by constitution of a Committee consisting 5 Cabinet Ministers and 5 Representatives of a particular group has been mandated to complete the drafting of a New Lokpal Bill by 30th June, 2011. This Bill will be subjected to critical analysis by all sections of Society and if implemented in an effective manner will create a framework of prosecution of the corrupts persons at all levels.

Prosecution Not Enough :

It is important to prosecute the corrupt individuals at all levels, and punished them very severely including confiscation of assets of such person and their family It will not be enough to eradicate corruption from our political, economic commercial system just by prosecuting corrupt.

National Movement :

It is very important for the country to be led by a national movement against corruption so that corrupts are seen with great disrespect by the society and the current position of achieving esteem and stature, only with a barometer of wealth, have to be replaced by hatred and disapproval.

System Change :

To eradicate corruption it will be very important to ensure that the human intervention in processing various government applications, processes and approvals are replaced by automatic processes The interaction of assessees with the tax department is needed to be done away with and be replaced by electronic questioning where the identity of the officers raising questions is kept confidential and secret. The various officers of the government should be mandated to take decision on each matter in a time bound manner and without one to one personal interaction. All the process of the government including tendering, award of contracts, policy proposals, processing of applications are to be made completely transparent.

The criteria and norms for determining for allocation of licenses or for other similar purposes.
For example, telecom licenses, licenses for bank, allocation of particular assignments or contracts,
wherein net worth, experience or other technical and financial criteria are kept, which are many
times drafted to suit to certain specific parties. This is major source of breeding corruption. Every
government officials as well as the policy documents or tender documents and similar other papers prescribing for such requirements should be subjected to review by an independent judicial authority and any member of the public should be allowed to get the same examined at any time. The judicial authority should have vast powers similar to High Courts and national level judicial authorities' decision should also be subjected to review by Supreme Court. We invite suggestions from members of this great profession on specific aspects, where according to them corruption can be eradicated by change in systems and procedures, to enable us to take up the matter with appropriate authorities.