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!