ICAI has been making keen efforts to regularly upgrade the quality of education, training and examination and today the Indian CA qualification is the best in the world. However, in view of the fact that India is growing at a rapid pace, businesses are becoming larger and regulations are becoming complex, expectations from Indian chartered accountants are increasing phenomenally not only in India but also internationally. It has also been noted that the legal profession has significantly upgraded their level of education in the recent past by introducing national law schools and universities in various parts of the country, specially through their 5 year programme. The CA education has been primarily delivered as a distant education coupled with training under a chartered
accountant firm. The successful model followed by the profession for more than 6 decades has been recently impacted by a section of students and members by not undertaking their training and education seriously and by concentrating only on somehow qualifying the CA final examination. It is important for the Institute to examine the following suggestions :

• To significantly upgrade the level of examination at the CPT (enter) level, IPCC (CA intermediate) level as well as in the final level by ensuring high level practical oriented questions in the examination papers. This may include case studies and projects.
• ICAI may also consider to make it mandatory that all the students undergoing training are required to take permission of the Institute, on the recommendation of the chartered accountant concerned (Principal) before undertaking any kind of coaching or tuition.
• It may very import to ensure that the quality of such coaching institutions are up to the mark and they meet various norms prescribed by the Institute including  teaching timing, number of students in a class, number of hours for which continuous education can be give, level of fee charged and the quality of education is at high level on the lines prescribed by ICAI and compliance of similar other parameters as may be decided based on consensus arrived at after a debate.
• ICAI may also consider mandating class room teaching by ICAI itself by creating necessary infrastructure, all across India to ensure high quality education at reasonable cost. It is important to ensure that a minimum 3 months to 6 months class room education is provided to every CA final students, before the final examination by the Institute itself. This may require small restructuring and if necessary training period can be curtailed to 2years 6 months, which may be followed by the class room training of about 3 to 6 months before the CA Final examinations. This will require massive financial resources. This is not difficult to achieve over a period of 2 years from the date of the finalization of the blue print plan and once the council is convinced through consensus.

There has been a recent newspaper report wherein banks have been advised to file disciplinary case against auditors in case of default by the borrower. It is appears that there is a significant gap in the understanding among various regulators, government and society about the actual and real role of an auditor and how to effectively utilize the audit work undertaken by the Auditors and the Audit report
issued on the financial statements. Auditors clearly understand that there is an expectation of the society that once an audit is undertaken, it will prevent occurrence of frauds and manipulation in the books of account or in the financial statements and the audit will ensure true and fair presentation of financial statements and statement of affairs of the audited entity. It may, however, be clearly noted that the transactions, documents or actions which are not brought on record, are extremely difficult for an auditor to identify. More particularly, when a fraud or manipulation is undertaken with the active connivance of top management team, it may still become more difficult to identify and pin point the fraud. Even the documentation, supporting vouchers as well as approval of the competent authorities are brought on record by such fraud team. Auditor is not a blood hound nor is the Auditor
an investigator. The following points are necessary to be kept in mind by all the users of the audit services:

• Auditors do not undertake verification of all the transactions (100%) and highly rely on testing of internal control mechanism and scientific audit sampling. Auditor is present at the time of transactions and he has to rely on documentary and circumstantial evidence.
• Audit will ensure detection and prevention of most of  the fraudulent and manipulative practices. However, it  cannot guarantee a complete absence of fraud.
• The audit report, notes to accounts and other disclosures in the financial statements authenticated by the auditors are very important to be examined and understood carefully, If necessary, with the help of an expert who understand such documents and disclosures and their implications.
• There are large numbers of instances where some miscreants may even forge the signatures and / or stamp of the auditors. It may therefore, be very necessary to confirm from the chartered accountant concerned as to whether he has authenticated such certificate or financial statements.
• Only a full-fledged audit provide a safety from the risk and compilation of accounts or a copy of certified financial statements, without a proper audit report is of no value.
• Obtaining the signatures of a chartered accountant on provisional/draft financial statements or obtaining similar signatures on projected balance-sheets/ financial statements are completely foolish on the part of the user, as in the absence of full-fledged audit report, such certification has no legal validity.
• In case a client (Borrower) , subject to audit is not able to repay debt, it may arise due to genuine business reasons or siphoning of funds by the promoters through colorful devices. It is, therefore, very important for all lenders to not only verify the audited financial statements but also to physically examine the progress of the project, verification of relevant assets, documents, papers.
• In desirable cases, may be beyond a specified size of exposure, the lenders should appoint special auditors to examine the books of accounts and records of the borrower at the time of disbursement as well as during the currency of loan with a well defined scope, coverage and reporting requirement, so that all the requirement of lenders are duly met.
• It has been noted that in certain cases the lenders are not undertaking due diligence and their credit monitoring is very poor. It is also important to undertake detailed training program for all the lenders' officials, in consultation with the Institute of Chartered Accountants of India so that lack of knowledge and diligence should not result into non performing assets.

On Direct Tax

1. The Bangalore ITAT held that deduction under section 80-IA is to be allowed unit-wise without deducting losses in other unit.
2. The Hyderabad ITAT held that the developer following "Percentage Completion Method" would also be entitled to deduction under section 80-IB(10).
3. The Hyderabad ITAT held that : -

A drug maker found overcharging will have to shell out the entire sales revenue of the medicine
from the date of its launch as penalty. National Pharmaceutical Pricing Authority (NPPA)
said that if a company has not been booked for overcharging for selling the product without price
approval, if any, pertaining to the period prior to fixation of the price of the said formulation, the
entire sale amount from the date of introduction of the product till issue of the price notification
order shall be recovered from the company, treating the entire sale proceeds as 'unauthorized
sales.

Insurance companies may now be able to acquire up to 15% stake in a single corporate house. The
board of the insurance regulator, Insurance Regulatory and Development Authority, which
met recently, has cleared a proposal to increase the investment limit currently capped at 10%.

Capital markets regulator Securities and Exchange Board of India (Sebi) has said spillover from the
retail category to the qualified institutional buyers (QIBs) category in initial public offerings (IPOs)
will not be permitted. Any public offering will need compulsory participation from QIBs, which, among others, includes foreign institutional investors (FIIs), mutual funds and insurance companies.

To keep a check on unauthorized trades through investor accounts, stock exchanges will now send
SMSs to all investors. The investor will also be able to inform the bourse in case of an 'unauthorized' trade.

The CBDT appointed committee has recommended 14 tax accounting standards. These standards, also known as Tax Accounting Standard (TAS), if and when adopted, will have a significant impact on computation of income chargeable to tax. The Central Board of Direct Taxes (CBDT) had
in December 2010 set up this committee to study the harmonization of accounting standards issued by the CA Institute with the direct tax laws in India.

All foreign investors will have to produce Tax Residency Certificates (TRC) of their base nation
to claim benefits under the double taxation avoidance treaty from April 1, 2013.

The Finance Minister approved the much awaited Rajiv Gandhi Equity Saving Scheme (RGESS)
with one change. Now this scheme will also provide tax benefits through investment in mutual
funds and exchange trade funds, besides blue-chip shares.

The rate of withholding tax has been slashed to 5 per cent from 20 per cent. The lower rate will be
applicable for overseas borrowings made after July 1, 2012 and before July 1, 2015. Borrowings
under a loan agreement or by way of issue of long- term infrastructure bonds that comply with
External Commercial Borrowings (ECB) regulations as administered by the Reserve bank
of India (RBI) would be eligible for benefits of the concessional tax regime.

The Authority for Advance Ruling (AAR) said that gifts given by one company to another need
to be probed into by the tax authorities.

The Authority for Advance Ruling (AAR) said that gifts given by one company to another need
to be probed into by the tax authorities.

The government's decision to allow foreign supermarket chains will not be allowed to sell
products through e-commerce, the official in the Department of Industrial Policy & Promotion.
While foreign investment is allowed in various non-store format activities such as mail order
and e-commerce as long as it is B2B (business-to-business), we are not permitting it for B2C
(business-to-consumer) activities.

Securities Appellate Tribunal (SAT) has directed International Paper Company to pay the non
compete fee of  Rs 130.73 a share to public share- holders in the AP Paper Mills open offer case.

The Delhi High Court reiterated the above words of the Supreme Court, while setting aside the
arbitration award without correcting the patent mistakes therein in Bharti Cellular Ltd vs
Department of Telecommunications. While doing this, the court pointed out that it was open for the petitioner to seek appropriate legal remedies.

The world's largest paper company, International Paper, and its Singapore-based subsidary IP
Holding Asia Singapore PTE moved to Supreme Court, challenging the sectoral tribunal's order
that directed companies to hike the open offer price to shareholders of Andhra Pradesh Paper
Mills. NYSE-listed International Paper and IP Holdings in March last year had acquired 53.46% stake by striking a deal with the promoters of Andhra Pradesh Paper Mills for around Rs 1,112 crore.
Subsequently, it made an offer to shareholders of the company as required under the law, but had paid non-compete fees selectively to the founders - the Bangur family.

The Ministry of Corporate Affairs (MCA) has suggested to companies that they disclose details
of executive pay and shareholding patterns of promoters on their websites. The ministry's
guidelines for voluntary disclosure on companies' websites are aimed at improving corporate
governance practices and spreading awareness among investors. They also require companies
to provide details about share transactions by their directors and relatives on their websites.

The Pension Fund Regulatory and Development Authority (PFRDA) have approved a scheme for
corporate subscribers. The scheme will follow the government investment guidelines issued from time to time. The new scheme will be offered by only public sector PFMs, who have obtained registration under the PFRDA.

The Ministry of Labour and Employment recently issued a notification amending the Provident Fund
scheme as applicable to 'International Workers': International Worker covered under a social
security agreement entered between India and another country can withdraw contributions from
the Provident Fund on termination of employment with Indian employer. International Worker can withdraw from the Provident Fund either directly or through the employer. The amendment will benefit foreign nationals who have contributed to the Provident Fund in India before the agreement between their home country and India came into force. However, those from countries with which India does not have a social security agreement will still be eligible to withdraw from the Provident
Fund after reaching the age of 58.

Bharti Airtel, the country's largest telco by revenue and customers, is planning its most significant
restructuring by combining its Indian and African operations into a single business entity under a
global CEO.

The Central Electricity Authority (CEA) has said that Coal India's independent directors' observation that the miner would incur losses of Rs 3,000 crore by implementing the proposal for pool pricing is "not correct". The CEA, which furnished details to the Power Ministry said that it is "not favouring the power companies" and if fuel supplies at 80 per cent of plants' demand have to be met, some of that gap has to be met by imported coal. The independent directors alleged that CEA is favouring power companies and their price pooling proposal will benefit them by offering cheaper imported coal.

Chief Financial Officers (CFOs) from Europe and the US see India as an attractive investment
destination, with its appeal lying in market size, higher growth rates, and access to new customers.
While China tops the league of most attractive investment destinations, India ranks fourth in a global survey. Four in every ten global CFOs plan to invest in India next year. 10 per cent say they plan to enter the Indian market, and 24 per cent has plans to increase their investments in India. Another 6 per cent plan to keep investments at the same level, according to the BDO Ambition Survey, which
surveyed CFOs from mid-sized companies planning foreign expansion.

After a gap of two years, Private Equity (PE) investors are again stacking investments in the
micro finance sector. This time, it is the diversity of the portfolio that is attracting PE investors
rather than profits from the core business of lending. Drifting away from Micro finance Institutions
(MFIs) operating under the traditional group lending model, PE firms are now investing in MFIs with strong distribution networks to market a gamut of products and services - from insurance, pension plans, chit funds to smokeless cooking ovens and bicycles. 

In a recent order, the UAE's Securities & Commodities Authority (SCA) has instructed distributors and investment advisors to seek its approval before selling a product that SCA in a circular said that prior to any promotion, an application for the promotion of foreign mutual fund units must be submitted to the SCA by the local promoter (product distributor, banks selling third-party investment products, etc) enclosing the documents stated in the form for each fund wishing to promote its units within the UAE. The UAE regulator has further said it would review product prospectuses and give approvals within 30 days of receiving the submissions. The SCA has also retained the right to disallow products that could potentially be detrimental for investors in the UAE.

The finance ministry's proposal to allow insurance companies to invest in AA-rated securities will
broaden investment options for insurance companies. Currently, insurance companies only invest in
AAA-rated securities, which restricts their choice to government bonds and debt instruments of
top government-owned companies and a handful of the country's largest private sector firms. The
AA-rated universe is several times bigger and various kinds of companies are its members.
Rating agencies and insurance companies, however, say the new norms will help insurers provide better returns to policyholders without sacrificing safety. AA-rated securities give 50-100 basis points higher returns than AAA-rated paper and there's no great difference in risk profile.

Market regulator Securities & Exchange Board of India (SEBI) plans to hire professional
investigating agencies to help it probe matters relating to Sahara group for implementation of a
Supreme Court order about refund of money collected from 3 Cr investors. The Securities and Exchange Board of India (SEBI) has already asked these investors against yielding to any pressure from "Saharas or their agents" for switching over their investments in two Sahara companies – Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation Ltd (SHICL) – to other group companies.

APG Asset Management, one of the world's largest pension asset managers, and at least two
sovereign wealth funds Abu Dhabi Investment Authority and The Government of Singapore
Investment Corp will invest directly in the Indian real estate market, moving away from their earlier
strategy of routing investments through private equity funds. 

The finance ministry is set to review the process adopted by state-run banks to assess loans after
it found that these lenders are saddled with the biggest cases of corporate defaults amounting
Rs 13000 Cr. by way of loans given by banks to Deccan Holdings, Kingfisher Airlines and Zoom
Developers.

After a gap of two years, Private Equity (PE) investors are again stacking investments in the
micro finance sector. This time, it is the diversity of the portfolio that is attracting PE investors
rather than profits from the core business of lending. Drifting away from Micro finance Institutions
(MFIs) operating under the traditional group lending model, PE firms are now investing in
MFIs with strong distribution networks to market a gamut of products and services - from dampen economic growth and harm the competitiveness of the U.S. banking system.

In a recent order, the UAE's Securities & Commodities Authority (SCA) has instructed
distributors and investment advisors to seek its approval before selling a product that SCA in a
circular said that prior to any promotion, an application for the promotion of foreign mutual
fund units must be submitted to the SCA by the local promoter (product distributor, banks selling
third-party investment products, etc) enclosing the documents stated in the form for each fund
wishing to promote its units within the UAE. The UAE regulator has further said it would
review product prospectuses and give approvals within 30 days of receiving the submissions. The
SCA has also retained the right to disallow products that could potentially be detrimental for
investors in the UAE.

The finance ministry's proposal to allow insurance companies to invest in AA-rated securities will
broaden investment options for insurance companies. Currently, insurance companies only invest in
AAA-rated securities, which restricts their choice to government bonds and debt instruments of
top government-owned companies and a handful of the country's largest private sector firms. The
AA-rated universe is several times bigger and various kinds of companies are its members.
Rating agencies and insurance companies, however, say the new norms will help insurers
provide better returns to policyholders without sacrificing safety. AA-rated securities give 50-
100 basis points higher returns than AAA-rated paper and there's no great difference in risk
profile.

Market regulator Securities & Exchange Board of India (SEBI) plans to hire professional
investigating agencies to help it probe matters relating to Sahara group for implementation of a
Supreme Court order about refund of money collected from 3 Cr investors. The Securities and Exchange Board of India (SEBI) has already asked these investors against yielding to any pressure from "Saharas or their agents" for switching over their investments in two Sahara companies – Sahara India Real Estate Corporation Ltd (SIRECL) and Sahara Housing Investment Corporation Ltd (SHICL) – to other group companies.

APG Asset Management, one of the world's largest pension asset managers, and at least two
sovereign wealth funds Abu Dhabi Investment Authority and The Government of Singapore
Investment Corp will invest directly in the Indian real estate market, moving away from their earlier
strategy of routing investments through private equity funds.

The finance ministry is set to review the process adopted by state-run banks to assess loans after
it found that these lenders are saddled with the biggest cases of corporate defaults amounting
Rs 13000 Cr. by way of loans given by banks to Deccan Holdings, Kingfisher Airlines and Zoom
Developers.

U.S. banks are protesting capital rules proposed by regulators to comply with international
standards and have asked that rules for assessing risk in their assets be replaced with something
easier to follow. Financial industry groups via letter to Federal Reserve also said that hinder credit availability, dampen economic growth and harm the competitiveness of the U.S. banking system.

Banks may be forced to write off about three-fourths of their Rs 4,000-crore loans to media
company Deccan Chronicle Holdings due to skimpy collateral, and slow progress in the
investigation into possible fraud due.

Banks and corporate are hopeful that the Reserve Bank of India (RBI) will change rules to allow
many infrastructure and unlisted companies to lower the cost of their dollar loans. Large private
sector and MNC lenders recently met senior central bank officials to discuss the possibility of
allowing all companies access to certain simple derivatives to reduce financing cost. At present
not all companies are allowed to carry out these transactions, better known as cost reduction
derivative strategies. Banks are not asking for reintroduction of complex and exotic products which are barred by RBI regulations. However, allowing simpler and safer structures to a wider universe of
companies over and above the plain vanilla options will enable many corporate borrowers to prune
cost and take advantage of the global dollar liquidity. At present, most companies are going for
straight-forward option deals that give them an opportunity to buy dollars at the end of three to
four years when the foreign currency loan has to be repaid. But the premium they pay on such
options largely offsets the cost advantage of a cheaper External Commercial Borrowing (ECB).

To protect the returns of investors from the vagaries of inflation, The Reserve Bank of India
(RBI) plans to introduce inflation-indexed bonds (IIBs). The principal on the IIBs will be indexed to
inflation and the coupon will be calculated on the indexed principal. H.R. Khan, Deputy Governor, Reserve Bank of India (RBI) explained that the capital (principal) will be adjusted (to inflation) and investors will earn interest on the enhanced capital based on the reference rate. He also said that IIBs is being discussed between the joint group of the RBI and the Government It will be notified soon.

The Reserve Bank of India (RBI) has made it easier for Foreign Institutional Investors (FIIs)
to invest in the domestic equity and debt markets. Foreign institutional investors (FIIs) can now
approach any Category I dealer banks, authorized to deal in foreign exchange, for hedging their
currency risk on the market value of their entire investment in equity and/or debt.

The Reserve Bank of India (RBI) has directed all the banks to put in place a mechanism to evaluate
the risks from un hedged foreign currency exposure of companies. Banks will also be allowed to charge a premium on the credit offered to companies that have not taken cover for currency fluctuation risks.

After putting curbs on Non-Banking Finance Companies (NBFCs) lending against gold, the
Reserve Bank of India (RBI) has banned banks from lending for purchase of gold by jewelers.

When a bank inadvertently omits to upload the stop payment instruction issued by its account
holder and the cheque is thus credited to the account of the payee despite such instruction,
the bank is well within its rights to freeze the account of the payee till he returns the money
with interest.

Wind turbine manufacturer Suzlon Energy has defaulted on $221 million worth of foreign
currency convertible bonds (FCCBs) maturing on October 11, 2012, after it failed to get an
extension from bondholders. This is the biggest FCCB default by an Indian corporate, topping
Sterling Biotech's $184-million delinquency in May and takes the quantum of defaults on convertibles to $664 million this year.

The profession has seen various initiatives in the recent past, those brought in new avenues and opportunities for the chartered accountants. The profession is getting geared up to re position itself to a higher level; and, besides its regulatory, compliance's and control functions, the Chartered Accountants are now playing a very important  role in strategic management, creation of new businesses, resource raising, sustainable growth, corporate planning, and so on and so forth.

International Recognition

The Central Council of the Institute has been able to finalize Mutual Recognition Agreement with the Institute of Chartered Accountants in England and Wales, Scotland, Australia, Canada, CPA Australia as well as with CGA Canada. The negotiations for mutual recognition with European Union nations are in advanced stages. In respect of recognition with USA and Singapore advanced level discussions are underway and the Central Council of the Institute is in the process of structuring a consensus.
The demand for Indian chartered accountants in various parts of the world is increasing with rapid pace especially in the banking sector, financial services sector, information technology sector as well as in manufacturing sector. The demand for professional services as practicing chartered accountants and business advisers is also very large in various parts of the world. We need to  structure and channelize the international demand to the benefit of all the interested chartered accountants and CA

firms in India.

Opportunities in the field of Finance and Management

The Council of the Institute had launched several new Certificate Courses including Certificate Course in Valuation, Certificate Course in Forex and Treasury Management and derivative and Certificate Course of Masters in Business Finance (MBF), one year course. Another major initiative taken is to develop Leadership Skills among CAs through residential programme.

A significant number of members across India have qualified and benefited from these initiatives. The industry, banks, insurance, service sector both in India and overseas have recognized these initiatives as major successful penetration of Indian chartered accountants as CFOs, upcoming CFOs,
treasury managers, merchant bankers, investment bankers, private equity players, private equity funds and most importantly as part of the top management team as well as the middle management layers.
The chartered accountants both in practice as well as in industry are playing a very important role now as part of the top management team to develop new avenues, ideas, initiatives, plans, projects and build new innovative business models. Chartered Accountants with their Prudence,
Excellence and Integrity are ensuring sustainable growth with new management philosophy - "We create value, Valuations will follow". The advent of this niche area for chartered accountants in practice as well as in industry is poised to grow at a very fast pace, within India and overseas, providing larger demand for Indian chartered accountants as well as substantial increase in the salary
and professional remuneration levels in a very near future.

CA Curriculum

The CA Curriculum has been further strengthened by mandating 2 slots of 15 days each as GMCS course. The inclusion of advanced level IT training up to 250 hours, as a mandatory part of the CA training (in addition to the existing 100 hours), including therein working level knowledge of SAP, Oracle, ERP, Advanced Excel and Data Management Techniques will further strengthen the
capabilities of chartered accountants. These advanced techniques will be offered to the members too.
The CA profession is also actively considering major initiatives of a mandatory 3 months residential/ day scholar course before completing chartered accountancy final examination with a view to achieve a major leap to place Indian chartered accountants in middle management  and top management positions, in India as well as outside India. The profession is actively in touch with top most HR institutions and advisors. The depth of knowledge and commitment to work hard with integrity, efficiency and excellence has been clearly established by chartered accountants. With appropriate positioning of the profession, major opportunities can be taken up fully to the hilt, by the  chartered accountants with a substantial increase in professional earnings as well as major hike in salaries.
The potential for a major leap for chartered accountancy profession is to be fully harnessed by a
visionary effort.

The branding of Indian chartered accountants in India and overseas is to be initiated at the level
of the Institute as well as at the level of all chartered accountants as torch bearers to enable
us to leap into a successful and highly promising era. It is also very important for each chartered accountant to plan and implement positioning at a high level. Let's all Aspire and Accomplish!

Any importer paying customs duty of  Rs 1 lakh or more, will have to use electronic payment
method compulsory from September 17, 2012.

Securities Appellate Tribunal has directed International Paper Company to pay the non
compete fee of ` 130.73 a share to public share-holders in the AP Paper Mills open offer case.

In a judgment that has far reaching implications for foreign arbitration awards, the Supreme Court
ruled that Indian courts have no jurisdiction to grant any relief or enforce an international arbitration award arrived at in a foreign country. Putting at rest an important issue, the apex court ruled only the courts of the country in which the seat of arbitration is located have the jurisdiction to entertain any matter relating to such arbitration. And it is only in the absence of choice of seat of arbitration that the country whose law is chosen by the parties has jurisdiction to entertain the matter.

Accounting Regulator the Institute of Chartered Accountants of India (ICAI) has urged the
government to let the Reserve Bank of India appoint auditors of private banks, citing the
inherent conflict of interest when auditors are chosen by the bank management. The institute
had flagged the issue earlier as well pointing out that auditor independence is particularly relevant
for banks as they raise deposits from public. The trigger for renewed request comes after the
government has decided to select auditors for state run banks.

The Reserve Bank of India (RBI) has said that the interest subvention scheme for providing short
term loans to farmers at 7 per cent interest per annum will be continued in 2012-13. An additional
subvention of three per cent will be available to prompt paying farmers. In addition, the same
interest subvention on post harvest loans up to six months against negotiable warehouse receipt
will also be available. This will encourage the farmers to keep their produce in warehouses.
Similar to the previous year (2011-12), the benefits of interest subvention will also be available to
small and marginal farmers having Kisan Credit Card (KCC) for a further period of up to six
months post harvest on the same rate as available to crop loan against negotiable warehouse receipt
for keeping their produce in warehouses.

The corporate India would have to take their forex losses, if any, on short term foreign currency
loans to their profit and loss account every quarter/ year. The centre has turned down industry
request to extend an accounting relief granted to a long term debt to short term debt as well.

The Reserve Bank of India (RBI) has clarified that for sale of foreign exchange to a person within
his/her eligibility on single drawal, APs may receive payment only by crossed cheque drawn
on the bank account of the applicant's firm / company sponsoring the visit of the applicant /
Banker's cheque / Pay Order /Demand Draft / debit cards / credit cards / prepaid cards, if the
rupee payment exceeds Rs 50,000/-

The Reserve bank of India (RBI) has decided to permit the use of cost reduction structures for
hedging the exchange rate risk arising out of foreign currency loans availed of domestically
against FCNR(B) deposits.

The Reserve bank of India (RBI) has clarified that permission to establish offices, in India by
foreign Non-Government Organisations/ Non- Profit Organisations/ Foreign Government Bodies/
Departments, by whatever name called, are under the Government approval Route as specified in
A. P. (DIR Series) Circular No. 23 dated December 30, 2009. Accordingly, such entities are required to apply to the Reserve Bank for prior permission to establish an office in India, whether Project Office or otherwise.

The Reserve bank of India (RBI) has decided that n addition to the reporting prescribed to the
Reserve Bank of India (RBI), all the new entities setting up LO/BO/PO shall also:

• Submit a report containing information as per Annex within five working days of the LO/BO/PO becoming functional to the Director General of Police (DGP).
• A copy of the report as per the form shall also be filed with the DGP concerned on annual basis
• A copy of report thus filed as above shall also be filed with AD by LO/BO/PO concerned.

The Reserve Bank of India (RBI) has decided that in cases, where non-residents (includingNRIs) make investment in an Indian company in compliance with the provisions of the Companies
Act, 1956, by way of subscription to Memorandum of Association, such investments
may be made at face value subject to their eligibility to invest under the FDI scheme.

Export Credit Guarantee Corporation of India (ECGC) is developing a rating system to grade
foreign importers for its insurance cover. The modified scorecard will be based on quantitative
and qualitative scores and will look at turnovers, repayment history and defaults to rate the buyers.

Britain's market regulator unveiled proposals for sweeping reforms of the much maligned London
Inter bank Offered Rate (LIBOR) but stopped short of recommending a replacement of the rate or basing it entirely on actual submissions by banks. The financial Services Authority, announced the 1 point reform plan to the rate used as a benchmark for the pricing of assets globally.

In a move that could give a further fillip to the economic reforms kick started by the Centre,
the government has now told commercial banks to fund partially completed residential projects,
as well as projects in small towns on a priority basis.

Requirements to be met by originating NBFCs :-

1. All on-balance sheet standard assets are eligible for securitisation except followings :-

• Revolving credit facilities (e.g. Credit Card Receivables).
• Assets purchased from other entities.
• Securitisation exposures (e.g. Mortgage- backed/asset backed securities).
• Loans with bullet repayment of both principal & interest.

The Supreme Court has directed resumption of operations by 18 mining companies in Karnataka
on the basis of the recommendations of the Central Empowered Committee (CEC). Last year, the court had banned all mining operations holding that right to life under Article  21 of the Constitution would include a pollution-free environment. It had also ordered a CBI probe into alleged illegal mining activities.

Standard Chartered, the British bank at the center of accusations that it illegally funneled money
for Iranian banks and corporations, is expected to sign a settlement with New York's top banking
regulator.

Coal India's board has approved import of coal for power producers that are ready to accept it
on a cost-plus basis until there is a consensus on the price cooling mechanism in which customers
are charged a uniform average price for domestic and foreign fuel.

European Central Bank (ECB) president Mario Draghi has unveiled a long-awaited programme
to buy up sovereign bonds and help bring down the borrowing costs of euro zone's struggling
governments. The plan envisions no set limit on the amount of bonds the ECB could buy, making the programme "a fully effective backstop".

State bank of India cut its base rate by 25bps to 9.75% effective from September 20, 2012.

Inflation uppermost on its mind, The Reserve Bank of India (RBI) refrained from lowering key
rates and restricted itself to a token 25-basis- point cut in the amount of cash that banks need
to park with it.

The Reserve bank of India (RBI) has said in a notification that all the over the counter (OTC)
call / notice / term money deals, currently being reported over negotiated dealing system (NDS)
will be reported over the reporting platform of NDS- Call by the parties who are having NDS-
Call membership from November 1, 2012.

The Reserve bank of India (RBI) has asked banks to provide one per cent interest subsidy to home loans up to Rs 15 lakhs as announced by the government. The limit of subsidy for an individual borrower would be Rs 14,912 for a loan of  Rs 15 lakhs and  Rs 9,925 for a loan of  Rs 10 lakhs.

The Securities and Exchange Board of India (SEBI) has relaxed the Know Your Clients (KYC)
norms for various overseas entities including Foreign Institutional Investors (FIIs) and has
done away with in person verification requirements for non-individual clients. This would be applicable for Sovereign Wealth Fund, foreign governmental agency, international or multilateral organization and Central or State Government pension fund, among others.

The Reserve Bank of India (RBI) has ruled out allowing mobile network operators from offering
cash-out or mobile wallet facility unless they convert their services as banking business correspondents.

The Reserve Bank of India (RBI) has decided: -

• To enhance the maximum permissible limit of ECB that can be availed up to 75 per cent of the average foreign exchange earnings realized during the immediate past three financial years or 50 per cent of the highest foreign exchange earnings realized in any of the immediate past three financial years, whichever is higher;
• In case of Special Purpose Vehicles (SPVs), which have completed at least one year of existence from the date of incorporation and do not have sufficient track record/past performance for three financial years, the maximum permissible ECB that can be availed  of will be limited to 50 per cent of the annual export earnings realized during the past financial year; and
• The maximum ECB that can be availed by an individual company or group, as a whole, under this scheme will be restricted to USD 3 billion.

The Reserve bank of India (RBI) has decided to allow companies in the infrastructure sector,
where "infrastructure" is as defined under the extant guidelines on External Commercial
Borrowings (ECB) to avail of trade credit up to a maximum period of five years for import of
capital goods as classified by DGFT subject to the following conditions: -

• The trade credit must be abinitio contracted for a period not less than fifteen months and should not be in the nature of short-term roll overs; and
• AD banks are not permitted to issue Letters of Credit/guarantees/Letter of Undertaking (LoU) /Letter of Comfort (LoC) in favour of overseas supplier, bank and financial institution for the extended period beyond three years.

The Reserve Bank of India (RBI) has clarified that Suppliers' and Buyers' credit (trade credit)
including the usance period of Letters of Credit opened for import of gold in any form including
jewelry made of gold/ precious metals or/ and studded with diamonds/ semi precious / precious
stones should not exceed 90 days, from the date of shipment.

The Reserve bank of India (RBI) has said that prepaid payment instruments (PPI) of up to RS 10000, up to Rs 50000 permitted with facility of domestic money transfer from one PPI to another PPI. The non - bank entities issuing prepaid payment instruments are required to maintain the outstanding balance in an escrow account with any scheduled commercial bank.

The Reserve bank of India (RBI) has said that an NBFC-Factor shall ensure that its financial assets
in the factoring business constitute at least 75 percent of its total assets and its income derived from factoring business is not less than 75 percent of its gross income. Banks can henceforth extend financial assistance to support the factoring business of Factoring Companies.

In the backdrop of a big shortage of chartered accountants from 2001 on wards, the entry level of CA course was relaxed in 2006. As a result of direct entry after 12th std. examination and Common Proficiency Test (CPT), a large number of bright students joining the profession increased manifold resulting into a significant number of students qualifying CA Final Examination. The increased availability of Chartered Accountants have enabled a larger number of CA firms to employ chartered accountants, whereas arising out of slowdown in the economy, poor state of capital market and
lesser demand from industry, the campus placement from the Institute have not been able to meet the expectations of a large number of young members joining the profession during last about one year.
It is very important for the profession to undertake a macro level study and undertake a fair assessment of chartered accountants needed by the industry, service sector, large businesses and of-course as practicing professionals.

It is our responsibility to ensure that the entry level for chartered accountants at the level of Common Proficiency Test (CA entrance exam) as well as at the level of Integrated Professional Competence Course (CA Intermediate Course) are adequately tough and are of high level.

It is also important for us to ensure that the expectations of the industry and the businesses that the Chartered Accountants have expert level of domain knowledge is met. The skills of applying the domain knowledge is required to be adequately inculcated in all those who qualify CA Final Examination. This will ensure that the chartered accountants are able to get a high level of remuneration and a clear growth path.

The profession can also consider that the practical experience developed by training is periodically assessed by the Institute by written and oral viva process. Also the 30 days GMCS courses (2 slots of 15 days) is also followed by adequate evaluation process so as to ensure development of presentation and applied skills in respect of the profession of at least a high level. The IT training of advanced level ERP i.e. SAP, Oracle, Net-vision as well as advanced MS Excel and data base management skills are also need to be developed within the training period. ICAI has already made advance IT training by ICAI now mandatory for students.

A comprehensive 3 to 4 months residential or day scholar classroom teaching to CA Final students after training and before final examination also need to be mandated to ensure that the professionals of top level are developed by ICAI, which can compete with top MBA Institutes in India and overseas. Efforts are being made for international recognition of Indian CA qualifications for employment as well as for practice in all developed and developing countries. MRAs have been
signed with Australia, Canada, and England and with EU it is being negotiated. It is expected that such recognition in next 3 to 5 years will ensure a very large demand for Indian chartered accountants from various parts of the world. In the long run, CA profession has a very bright future. 

Statutory audit

The audits of banks have been a significant professional opportunity for a large number of Chartered Accountants Firms. The Government of India has now in principle decided to withdraw the power of bank management to appoint statutory auditors. A committee consisting of nominees from Government of India and CAG, with an approval of Reserve Bank of India will appoint Central Statutory Auditors. The modus operandi and the criteria of selection are being finalized. The appointment of branch auditors is also being expected on the same lines. The proposed system of appointment of statutory auditors of bank shall ensure transparency, fairness and equity.

Concurrent audit

The government of India has recommended that for all concurrent audits Chartered Accountant Firms should be appointed from the RBI Panel as per the gradation based on the size of the branch. The remuneration for concurrent auditors has been recommended to be enhanced adequately based on coverage of audit, quality of audit; skill set required, number of staff etc. It has been noted by the
government that the current fee scale paid for concurrent audit is too low and need rationalization to ensure quality. It is also recommended by Reserve Bank of India that a larger number of branches need to be covered under the concurrent audit.

The profession has to prepare itself to address the needs of these assignments, to deliver its best and to ensure value addition in the process.

Risk Based Internal Audit

Reserve Bank of India as well as Government of India are of the view that risk based internal audit is the need of the hour and should be carried out in all branches uniformly between 9 months to 18 months depending on degree of risk involved. ICAI need to develop a framework and programme for banks and also train our professional CAs to effectively and efficiently undertake this.

Internal inspections

The government has also recommended that the internal inspection, risk management and surveillance department should be strengthened by appointing more and more chartered accountants and other financial professionals. This shall be a good employment opportunity for young CAs who

wants to make banking as their forte.

Expectations from bank auditors

The government as well as RBI are very keen to ensure that the quality of statutory audit and its value addition to the banking sector should increase significantly. It should ensure proper financial discipline as well as risk management. The banks are making significant efforts to streamline centralized banking system (CBS) over a period of next few years so that the audit function can be rationalized meeting the requirements of the banks and ensuring adequate professional audit to
ensure that a strong audit system and an effective internal audit mechanism work as a strong deterrent and preventive mechanism for fraud. The Institute and the profession are fully committed and
geared up to meet new challenges and opportunities and to tackle the changing scenario more effectively.

• 5% tolerance in arm's length pricing continued for the current assessment year.
• Finance Act 2012 has fixed a 3% upper limit from the next assessment year on wards.
• APA norms expected to be notified.

When an Indian company provides interest-free funds to its wholly-owned subsidiary, the
Transfer Pricing Officer (TPO) should not add the prevailing interest rates in India but the ones
in the country where the subsidiary is located.

The Delhi High court has set aside the arbitral award in a dispute between Shakti Bhog food
Ltd. and Kola Shipping Ltd. as the constitution of the arbitral tribunal was held to be invalid. One
of the main grounds for quashing the award was the main arbitrator failed to disclose the fact
concerning his having been an arbitrator on a related issue involving it. It gave rise to "justifiable
doubts as to his independence and impartiality." The High court further stated that the award was
also opposed to public policy on a collective reading of Sections 12 (3), 13 (5) and 34 (2) (b)
(ii) of the Arbitration and Conciliation Act.

Mutual Funds

• Total expense ratio for MFs made fungible.
• Extra TER of up to 30bps for new inflows beyond top 15 cities.
• Service tax to be borne by investors.
• Exit loads to be credited to the scheme, AMCs can charge extra TER of 20 bps.
• Long-term policy for MFs on the anvil.
• E-IPOs a reality.
• Incentives for ASBA.

The Supreme Court has ruled that an arbitration clause in a deed which is compulsorily registrable
but not registered and insufficiently stamped cannot be enforced.

If the government does not issue a public notification regarding acquisition of land, the
acquisition will be invalid and illegal. Notification in the official gazette is not enough. On the
reasoning, The Supreme Court has quashed a land acquisition by the Maharashtra government
as it did not issue public notification to that effect. The land acquisition act makes it mandatory to
announce the acquisition in the official gazette as well as publicly.

Foreign Institutional Invbestors (FIIs) can now buy up to $5 billion in corporate bonds. It has
been decided that entities like NHB, housing finance cos. will be included as eligible borrowers
for financing such low-cost housing projects. Refinancing of buyers' credit for import of capital
goods in infrastructure sector will be put on the automatic route subject to certain conditions. The
maturity for such credit has been increased to five years. The official said SIDBI will be allowed
to tap the ECB market for funding the MSME sector subject to some conditions to be finalised
by the Reserve Bank of India (RBI) shortly. The government also hiked the maximum limit
of funding rupee loans via ECBs to 75% of forex earnings recorded in the previous three years or
50% of the highest forex earnings recorded in one of the previous three years. Special purpose
vehicles will also allowed to avail this facility. Also, eligible non-resident entities will now be
allowed to credit enhances the issue of rupee bonds by all companies.

The Delhi High Court has issued a fresh notice to Bharti Walmart on a petition seeking
investigation of alleged violation of Foreign Direct Investment (FDI) policy by the company.

The Reserve Bank of India (RBI) has said that the ODI form has been revised to include a
declaration from the company. The Auditors are also required to certify investment being as per Foreign Exchange Management Act (FEMA) norms, within limits, correct valuation and
submission of annual reports in a revised format. The Reserve Bank of India (RBI) has also decided
to add the following items in Section 'F' of Form ODI Part I, to be submitted by every Indian party
while undertaking ODI transaction.

The Reserve Bank of India (RBI) has said that a person who is a citizen of Pakistan or an entity
incorporated in Pakistan may, with the prior approval of the Foreign Investment Promotion
Board of the Government of India, purchase shares and convertible debentures of an Indian
company under Foreign Direct Investment Scheme, subject to conditions provided the Indian
company, receiving such foreign direct investment, is not engaged or shall not engage in
sectors / activities pertaining to defence, space and atomic energy and sectors/activities
prohibited for foreign investment.

The Reserve Bank of India (RBI) has decided to extend the facility of non-resident guarantee under
the general permission for non-fund based facilities [such as Letters of Credit/Guarantees/
Letter of Undertaking (LoU) / Letter of Comfort (LoC)] entered into between two persons resident
in India. The method of discharge of liability by the non-resident guarantor under the guarantee
and the subsequent repayment of the liability by the principal debtor would continue, as hitherto.

The Reserve bank of India (RBI) has decided to allow qualified Foreign Investors (QFIs) to hedge
their currency risk on account of their permissible investments (in equity and debt instruments)
subject to conditions.

The auditors of Bartronics India have indicated a "material uncertainty" on the absence of a
concrete plan or financing arrangement to address foreign currency convertible bonds (FCCBs) to
the tune of ` 377 crore that are coming up for redemption in next year.

The Comptroller and Auditor General (CAG) has found that oil and Natural Gas Corporation
(ONGC) did not put adequate efforts to complete its committed work in 75 percent of the highly
prospective blocks acquired through bidding. It also could not monetize the discoveries during
2002 to 2011, which led to low production.

The Comptroller & Auditor General (CAG) has said that allocation of blocks without bidding
would lead to financial benefits, totaling Rs 1.8 lakh crore, to private companies.

Capital market regulator the Securities and Exchange Board of India (SEBI) is looking to
bar audit firms from certifying accounts of listed companies for a certain period if accounts of
books, certified by them earlier, are found to have been manipulated.

India's nuclear power regulator Atomic Energy Regulatory Board (AERB) has downplayed
observations made by the Comptroller and Auditor General (CAG) in its report, as rose in
the national auditor's report, Bhattacharya said that there are many instances when AERB took
actions on the nuclear power plants to stop operation and construction of some units. The
auditor also pulled up AERB for failing to prepare any safety policy for the country even after three
decades of its existence.

The Listed companies shall now be required to submit the following forms, as may be applicable,
along with copies of annual reports submitted to stock exchanges:

• Form A: Unqualified/Matter of Emphasis Report
• Form B: Qualified/Subject To/Except For Audit Report

The Delhi High Court has issued notices to the Securities and Exchange Board of India (SEBI)
and Ministry of Finance on a petition seeking a ban on automated and algorithm trading. The
petition sought a direction to the Finance Ministry and the Securities and Exchange Board of India
(SEBI) to immediately abolish or suspend such trading. The petition also seeks removal of co-location servers that were allowed to be established by some brokers.

The Securities and Exchange Board of India (SEBI) has introduced a no-frills or basic trading
account for small shareholders. The regulator has directed all depository participants to provide a
"basic services demat account" (BSDA), which would have a substantially lower cost and come
with basic services. BSDAs will have no annual maintenance charges if the value of securities
held in the account is less than Rs 50,000. If the value of securities is between Rs 50,000 and
Rs 2 lakhs, the investor will have to pay an annual charge of Rs 100.

The Securities and Exchange Board of India (SEBI) is making it mandatory for all listed
companies to update every year the offer documents filed at the time of their IPOs and
wants a much stricter disclosure regime to safeguard the interest of investors. As per the
proposed measure, which has been approved by the Securities and Exchange Board of India (SEBI)
board and would be soon notified, all the listed companies would have to file a comprehensive
annual disclosure statement, in addition to the existing requirements, to provide updated
information to investors.

Capital markets regulator the Securities and Exchange Board of India (SEBI) has cleared the
proposal for the launch of AMFI's mutual fund transaction routing platform. The platform will
provide investors with a Common Account Number (CAN) so that investors can invest across
schemes and fund houses using this number. The MFs utility platform will also have a single
cheque payment system and common account statement for all the schemes that investors have
invested in across fund houses. At present, investors need to have to give separate cheques
for making investments in each scheme. The platform, called MF utility is expected to go online
in the first half of 2013.

The Securities and Exchange Board of India (SEBI) has cracked down on the misuse of
Employee Stock Option Plans (ESOPs) and other employee benefit schemes by promoters. In its
latest board meeting, the regulator decided such schemes would not be allowed to make purchases
from the secondary market.

The Securities and Exchange Board of India (SEBI) has said PE funds can pitch in to fill the
shortfall in promoters' lock-in during initial public offerings (IPO). According to the Securities and
Exchange Board of India (SEBI) rules, promoters have to lock in a minimum of 20 per cent of the
post-issue capital for three years.

The Securities and Exchange Board of India (SEBI) has made Business Responsibility (BR)
reporting mandatory for the top 100 listed companies by market capitalization on the NSE
and the BSE. This report will disclose steps taken by listed companies from an environmental,
social and governance perspective. The circular will come into force for financial year ending
December 31, 2012 on wards.

The Securities and Exchange Board of India (SEBI) has said that sub-brokers wishing to
become authorised persons (of the same broker and the same exchange) are not required to
advertise in newspaper regarding surrender of sub-broker registration.

The Securities and Exchange Board of India (SEBI) has issued a circular on manner of
achieving minimum public shareholding requirements. According to the circular, the
following additional methods shall be available:-

• Rights Issues to public shareholders, with promoters/promoter group shareholders forgoing their rights entitlement.
• Bonus Issues to public shareholders, with promoters/promoter group shareholders forgoing their bonus entitlement.

The Reserve Bank of India (RBI) has removed the twelve months repayment period on the loans
taken by farmers on Kisan Credit Cards (KCC). The Reserve Bank of India (RBI) also said that
now the banks might fix repayment period according to the anticipated harvesting and
marketing period for the crops for which a loan has been granted. The Central bank also said the
extent prudential norms for income recognition, asset-classification and provisioning would
continue to apply for loans granted under revised KCC schemes.

As a buyer of immovable property, you may soon be able to electronically check whether the
property concerned is free of encumbrances. CERSAI, a Government company, plans to soon
allow individuals to access the information recorded with the central registry. CERSAI was
examining the possibility of enlarging the scope of the registry to cover search on title status and
the credit profile of borrowers, for which it is in talks with State Government authorities (sub-
registrar of assurances).

Lanco Infratech is engaged in talks with private equity firms Bain Capital and Kohlberg Kravis
Roberts (KKR) to sell stake in its power business.

Standard Chartered, the British bank, has agreed to pay New York's top banking regulator $340
million to settle claims that it laundered hundreds of billions of dollars in tainted money for Iran
and lied to regulators.

The International Finance Corporation (IFC) has announced a commitment of $20 million in
Nereus India Alternative Energy Fund, a new private equity fund domiciled in Mauritius.
Billed as India's first renewable dedicated fund, the offshore vehicle will invest in companies
engaged in development, construction and operation of renewable and clean energy power
generation assets in India.

Europe, which is battling a financial crisis, is progressing on the right track and the results will
start coming in after a year, Klaus Regling, chief executive officer, European Financial Stability
Facility based in Luxembourg, EFSF is set up and financed by the 17 member countries of the
European Union in 2010 to address the sovereign debt crisis in the region.

The fuel supply tussle between Coal India Ltd (CIL), the near-monopoly producer, and power
companies moved a step closer to an end after the board of the state-owned miner relented on
the contentious issue of a penalty in new supply pacts.

The central board of trustees of the Employees' Provident Fund organisation (EPFO) approved
Reliance Capital Asset Management Ltd's plan to sell a 26% stake to Japanese insurer Nippon Life,
amid objection from some of the trade union members. EPFO appointed Reliance AMC, State Bank of India, HSBC Asset Management (India) Private Ltd and ICICI Securities Primary Dealership Ltd
as fund managers with a rider that companies have to take written permission for any mergers,
takeover or stake sale.

Existing power purchase agreements (PPAs) can be reopened by the concerned regulator for
revision of tariff, but the interests of consumers must also be taken into account. The attorney
general has provided this clarification in reply to a reference received from the Forum of Regulators (FOR), a body of electricity regulators.

British regulatory authorities are preparing to overhaul Libor, the now discredited inter bank
lending rate that serves as a benchmark for the pricing of trillions of dollars of assets globally.
The review will examine whether banks should be required to submit actual figures on the trades
they make rather than the notional data as well as an improved governance system.

India plans to drop a controversial clause from its proposed telecom security policy that
mandates at least 50% of all 'core telecom network equipment' to be indigenous developed.

Government approved the policy document for National Electric Mobility-2020 Mission plan, an
ambitious plan that entails to set up an 'electric vehicle' ecosystem around the country with public
investment of around Rs 14,000 crore by 2020. The auto industry is expected to invest another
Rs 6,000 crore in the project taking the entire investment to about Rs 20,000 crore. Government
was also eying sales of close to 6 million vehicles with the help of the plan. Initial projections estimate a saving of as much as Rs 30,000 crore in fuel costs through this plan.

The Reserve Bank of India (RBI) has tightened the Non-banking finance company (NBFCs) securitization norms. The Reserve bank of India (RBI) has said that a loan up to two years can be
securitized only after payment of three monthly installments by the borrower. The limit for loans
between two and five years is six monthly installments and above five years, 12 monthly installments. With regard to minimum retention requirement (MRR) for securitization, the
guidelines said the NBFCs selling loans will have to retain five per cent of the amount if the loan is
for less than two year period and 10 per cent if it is of over two years.

MCX Stock Exchange (MCX-SX), which recently got the regulatory approval for operating as a
full-fledged equity bourse, has launched trading in currency options, which is currently dominated
by the National Stock Exchange (NSE).

With a view to improving customer services and speeding up fund transfer, the Reserve Bank has
asked all core banking solutions (CBS) enabled banks to issue multi-city cheques to all eligible
customers and refrain from levying clearing charges on them. A 'payable at par' or 'multi-city' cheque of a bank can be cleared by any branch of the same bank in the country. The process has significantly
reduced the outstation cheque clearance time.

The Reserve Bank of India (RBI) has directed banks to incorporate the "either or survivor" or
"former or survivor" clause in their account opening forms. The central bank has also asked
banks to inform their existing as well as future term deposit holders about the availability of such
an option. The Reserve Bank of India (RBI) also said that if such a mandate ("either or survivor" or "former or survivor") is obtained, banks can allow premature withdrawal of term/fixed deposits by
the surviving depositor without seeking the concurrence of the legal heirs of the deceased joint deposit holder.

The Reserve Bank of India (RBI) has directed banks to incorporate the "either or survivor" or
"former or survivor" clause in their account opening forms. The central bank has also asked
banks to inform their existing as well as future term deposit holders about the availability of such
an option. The Reserve Bank of India (RBI) also said that if such a mandate ("either or survivor" or "former or survivor") is obtained, banks can allow premature withdrawal of term/fixed deposits by
the surviving depositor without seeking the concurrence of the legal heirs of the deceased joint deposit holder.

The chartered accountants have been playing very important role in sustained growth of Indian businesses, service sector, and manufacturing sector and have also been providing the key support in tax administration and compliance of various laws and regulations.The expectations of the businesses and stakeholders are increasing with increasing size of business, complexity, financial and regulatory requirements. In this backdrop it is very important for the profession and specially the Institute of Chartered Accountants of India to ensure that education and training are integrated in such a manner that the quality of chartered accountants is significantly upgraded to meet the increasing complexities
and expectations of various stake holders. On the one hand ICAI examination system needs to ensure to include practical case studies, comprehensive coverage of all theoretical and practical aspects of various subjects in a deep manner. The syllabus may be revised to exclude un required modules and
to have adequate and in depth coverage of all important subjects to enable chartered accountants to play a direct role in adding significant value to their clients, employers and other stake holders.
An in depth practical training with tough discipline is the backbone of the profession. The focus on classes need to be shifted outside office hours and should not disturb training.It is important to ensure by the Institute, chartered accountants and the entire student fraternity that training is taken very
seriously by all the students and is inculcated in a very effective and efficient manner while ensuring complete commitment and discipline among students. The students need to be convinced that an in depth study of ICAI study material, text books and reference books is a must to ensure their development as a complete and able chartered accountant. The tendency of studying only with the objective of passing the examination will defeat the basic objective of creating competent and able professional chartered accountants. The success of CA students entirely depends on level of expertise
and competence to solve practical problems and to effectively deal with all kinds of business situations. ICAI also need to ensure that only high quality students are able to pass the entry level examinations so that effective training can be provided to all such persons. A swift strategic move at this stage is very necessary to ensure a long term survival and growth of the profession and to ensure high level of value addition, reputation, salaries and fee scale for all the members. We need to give adequate time and attention for exam preparation and theoretical studies and balance it with training
needs. Effective and tough steps are immediately required in all the aforesaid areas.

CAG : A HIGH PERFORMING AUDITOR

The Comptroller & Auditor General of India is a sovereign institution primarily set up under the Constitution of India to undertake proprietary audit of all financial transactions undertaken by the government. The CAG have wide power of access to all government records, policies and procedures
and is expected to critically examine various decisions taken by the government for ensuring financial propriety and financial discipline in various organs of the government.

2G Scam

CAG has indicted the government and specially the telecom ministry for awarding 2G telecom licenses on the basis of a faulty policy and procedure of allocation on first come first serve basis. CAG had estimated a loss of more than Rs. 1.76 lakh crore towards the revenue of the government due to allocation of licenses without an open bidding process. It is clearly observed by the society that several ministers and other VIPs have been undergoing prosecution in this regard. Also it is noted that the government is re-issuing the 2G licenses on Supreme Court Directive and it is expected that a sum of Rs. 1,36,000 crore approximately may be received by the government towards the licenses. This is a direct gain to the Indian treasury arising out of CAG observation.

Coal Block

The CAG has now questioned the manner in which coal mine blocks have been allocated by the government to various private sector organizations on the basis of review by a screening committee and without an open bidding process. CAG has estimated a loss of more Rs.1.86 lakh crore to the
government due to faulty and non transparent process. There is an allegation made by the media that certain parties have been favoured on the basis of political recommendations. It is also alleged that certain companies having no prior track records and without having any captive usage have been
granted the mining leases for providing undue gains to such parties.

Positive outlook

Hon'ble CAG have been doing a very significant professional job in highlighting proprietary and policy issues in respect of government working and it will be important for the government to positively react to such observation by ensuring that transparent and fair processes are brought in
force, wherever any licenses or rights are being allocated. The audit process of CAG ensures an independent review and should be construed as positive critic. A corrective action and punitive process need to be initiated wherever it is appropriate. The coal block mining leases provided to parties will need closer and transparent scrutiny by the government to enable the government to take necessary appropriate action. CAG had also made important comments in respect of PPP Projects including Delhi High Court, few highways etc. Rather than criticising CAG for politicalising the issue or creating unending litigation and / or prosecution, it is very important to take necessary preventive and corrective action in the systems and processes by the government, in consultation with CAG on all crucial matters. Advance consultation with CAG on critical issues will ensure non recurrence of such revelations, embarrassing the government.The profession of chartered accountants is also ready to support the government in designing various systems and procedures which will ensure transparency, integrity, fairness and eradication of corruption.

The Authority of Advance Rulings (AAR) has said that the tax residency certificate given by
Mauritius authorities is adequate to avail tax benefits under the India-Mauritius tax treaty and
rejected tax authorities attempt to apply principles of anti-avoidance akin to proposed General Anti-
Avoidance Rules (GAAR).

The Supreme Court has asked Essar Oil to pay Rs 1,000 crore to the Gujarat Government by July 30 to avoid any coercive action. The directive came on the company's plea that it may be allowed to pay the amount towards the first instalment of its total sales tax / VAT liability.

Parthasarathi Shome, one of the architects of the proposed goods and service tax, does not expect
the government to implement GST regime before 2014 as the next Lok Sabha election may delay
preparations for the eagerly awaited tax reform.

The Supreme Court has held that appeals against the findings of the Authority of Advance
Rulings (AAR) must be made for the high courts. The Authority of Advance Rulings (AAR)
findings can't be challenged directly before the apex court.

Prime Minister Manmohan Singh has indicated the General Anti-Avoidance Rules (GAAR) would
be written afresh, as the government strove to undo the damage to investor sentiment seen after
the rules were proposed in the Budget. A new panel headed by taxation expert Parthasarathi Shome, the head of Indian Council for Research on International Economic Relations (ICRIER) and a former adviser to the finance minister during P Chidambaram's tenure between 2004 and 2008, will draft fresh GAAR guidelines and prepare a road map for its implementation to be submitted to the government by Sep. 30. Meanwhile, Foreign institutional investors (FIIs) have sought an unqualified exemption from the application of General Anti-Avoidance Rules (GAAR).

A large number of entities, which have been used for investing billions of dollars in the Indian
markets, have come under the scanner of financial sector regulators The Securities Exchange Board
of India (SEBI) and the Reserve Bank of India (RBI) for possible routing of illicit wealth of
Indians and NRIs back into the country.

The Central Board of Direct Taxes (CBDT) has extended the due date for filing income tax returns
for assessment year 2012-2013 by a month to August 31, considering the power failure in many
parts of the country.

After six years of deliberations, Mauritius has finally agreed to tweak its tax treaty with India to
address the issue of round tripping of funds. However, the affirmation came with a rider that
any domestic legislation like the General Anti-Avoidance Rules (GAAR) should not override the
treaty. Mauritius has proposed a limitation of benefit (LoB) clause in the three-decade old double
taxation avoidance agreement (DTAA) between the two countries. The clause limits tax benefits
under the treaty to resident investors who fulfill certain conditions. India's treaty with Singapore
has this clause.

• Draft Complaint carefully; don't leave clues about your identity
• Submit Specific details in your complaint that can be verified
• Don't send any follow-up letters or expect acknowledgements
• If more details are, the CVC will contact you
• Anonymous and pseudonymous complaints won't be examined
• Mention your name and address on either the top or bottom of the complaint or in an attached letter
• Send complaints in sealed envelopes, marked 'Under public Interest Disclosure'

Ministry of corporate affairs (MCA) has integrated LLP system into MCA21 system with effect from
11th June 2012. LLPs incorporated under earlier LP system (i.e.before 11.6.12) which functions with both designated partners and Ordinary Partners are required to update /verify the detail prior to filing/
uploading forms. This can be carried out from any login; however, it should be authenticated by
DSC of designated Partners of the LLP at the final submission. For LLPs which function only
with designated partners, the above process is not required.

The Competition Commission of India (CCI) has approved the proposed amalgamation of Maruti
Suzuki India Ltd (MSI) and Suzuki Powertrain India Ltd (SPIL) on the grounds that the proposed
combination is not likely to have an appreciable adverse effect on competition in India.

NDTV has sued the global TV rating agency, Nielsen, for billions of dollars for allegedly
manipulating viewership data.

1. Service provided or agreed to be provided by a director of a company to the said company is 100% taxable vide notification no. 30/2012 - Service tax, dated 20.06.2012, vide GSR no. 472(E)
2. "Security services" means services relating to the security of any property, whether movable or immovable, or of any person, in any manner and includes the services of investigation, detection or verification, of any fact or activity vide notification no. 36/2012 - Service tax dated 20.06.2012 vide GSR no. 478 (E)

The Reserve Bank of India (RBI) has allowed Qualified Foreign Investors (QFIs) to invest in debt
securities on a "Repatriation Basis". The eligible securities that foreign investors have been permitted
to buy are listed non-convertible bonds of Indian companies and listed units of MF debt Scheme
among others.

To boost the micro insurance sector, the Insurance Regulatory and Development Authority (IRDA) has proposed to allow broadening of the product portfolio and distribution network, by allowing
more entities to sell the products. It has proposed to allow cooperative banks, regional rural banks, primary agricultural co- operative societies and individuals (shopkeepers,medical store owners, petrol pump owners, public telephone operators) to act as micro insurance agents. Noting the sector's business performance was far below the potential, the regulator has decided to revisit the regulations. The Micro Insurance Regulations prescribe a framework within which insurers can offer affordable
products in this regard. Insurance Regulatory and Development Authority (IRDA) notes a majority of the products offered are basic ones, and mostly term assurance. It has asked insurers to consider diversifying the portfolio of micro insurance products by including savings-linked and health cover features.

The Securities Appellate Tribunal (SAT) has asked the Securities Exchange board of India
(SEBI) to note that synchronized trading is unfair only if it leads to price manipulation.
The Securities Appellate Tribunal (SAT) said that synchronized trades were not illegal. They turn
illegal only if used to manipulate scrip prices. The fact that trades were carried out only for four
days during investigation period and were spread over three months with substantial time
difference between trades was ignored by Securities and Exchange board of India (SEBI).

The Securities and Exchange Board of India (SEBI) has said that shares owned by ex-employees, allotted through ESOPs (Employee Stock Options), cannot be sold for a period of one year pursuant to an initial public offering (IPO) by the company.

The new eligibility criteria for the derivatives segment given by the Securities Exchange Board
of India (SEBI) will weed out about a fifth of the current crop of stocks in the futures and options
(F&O) segment.

The Securities and Exchange Board of India (SEBI) has decided in that in consultation with
Registrars Association of India (RAIN), Stock Exchanges and market participants to reduce the
time-line for registering the transfer of shares to 15 days. The same time-line shall also be
applicable for transfer of debt securities.

The Supreme Court has said that mines and minerals are part of the nation's wealth, upholding
the Jharkhand government's decision. This judgement may have wide ramification.

Standard Chartered Bank, the largest foreign bank in the country in terms of branch presence, has
sold Rs 900-1,000 crore of distressed assets to Mumbai-based International Asset Reconstruction Company (IARC), in an all-cash deal.

The government is set to allow Asset Reconstruction Companies (ARCs), such as
Arcil, Pegasus and Reliance ARC, to convert the bad loans they acquire from banks into equity in
the debtor company in a move aimed at making corporate turnaround an easier and remunerative
business in the wake of slowing economic growth.

Private equity player Bain Capital Partners has agreed to buy 30 per cent stake in Genpact for
$1 billion, valuing India's largest business process outsourcing and Technology Company at $3.29
billion (Rs 18,095 crore).

The finance ministry has directed the Public Sector Banks (PSBs) to continue providing loans and banking facilities to exporters, whose shipments are passing through the ports of Iran for onward shipment to other countries. This move is intended to prevent the newly imposed US sanctions on Iran from impacting country's trade as a lot of exporters use Iranian ports as transit point for onward movement of goods to the markets in the Middle East and CIS countries. Except the state-owned UCO Bank, other PSBs cannot do business with Iranian companies, or with Indian companies having commercial dealings with Iran, as fallout of sanctions imposed by the US on Iran. But PSBs have also been denying credit facilities to even those exporters who use the Iran ports such as Bandar Abbas as
a transit point. The official sources have said that the department of financial services has directed
banks to provide seamless credit services and other facilities to such exporters. Exporters use
Iran as a transit point for sending shipments to many other countries such as Afghanistan.