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WILL The Buck Stop — May be This One Works

Comments Off on WILL The Buck Stop — May be This One WorksPosted by on August 1, 2011

Olympic Gold Medalist of Corruption in recent olympics Mr. Suresh Kalmadi-led CWG fiasco became India’s shame; A Raja will have made the CWG affair look petty if it turns out that he has indeed caused national loss and brought global shame for India in the 2G scam as charged. Now B S Yeddyurappa and Janardhan Reddy are BJP’s A Raja, standing accused of being the shameful faces of mafia-like corruption. Now is the time to ensure that buck must stop.

The good news is that citizens are finally refusing to accept corruption as routine anymore and are demanding immediate accountability from those who they elect. Today, for the first time in independent India’s history five corporate CEOs, one IAS officer and several senior politicians find their new address as Tihar Jail No. 1. This could well be dubbed as India’s second  independence struggle, but this time it’s not against foreign rule, but for for freedom from corruption by our own rulers, and has begun in right earnest in 2010.

There are four immediate steps, which can be taken to control corruption.

First, the government must notify the rules for the confiscation of assets of corrupt officers in the Benami Transactions (Prohibition) Act, 1988. This will allow the state to confiscate properties into an escrowed account where no claimant shows up, and if he does, then the tax laws can be invoked to inquire into the source of income for purchase of the property.

 Second, India must enact strong anti-perjury laws to stop frivolous, false complaints under oath; this would be a necessary step to prevent witnesses and complainants from frequent retractions which one currently observes in court.

Third, reversing the onus of proof. The accused must demonstrate why illegal cash
or real estate suspected to belong to them is not theirs or face confiscation. Today, the standard of evidence followed is cumbersome. Taking cues from the US system, one must trace the money trail rather than paper trails of files of decision-making.

Lastly, posting the right man for the right job. When one outstanding officer, Bishwajit Mishra, was posted in Bellary, he disciplined Reddy’s minions and recovered dues of Rs 20 crore in 10 days flat before he was transferred out.

Justice Santosh Hegde, U V Singh, Vipin Singh and their team have done yeoman service. They have painstakingly sifted through voluminous bank records of over 40 lakh entries, reconciling millions of transactions from one benami account to the other, one benami company to the other, till it reached the eventual beneficiary, as is shown in the report.

It recounts how Reddy started the ‘zero-risk system’ whereby he would use government officers to procure permits for other mining companies, ensuring safe transport of illegally mined ore to a destination of their choice. For a payment of 40% of the prevailing global market price of iron ore or sharing an equal amount in volume, he had created a different kind of single-window system – for bribes!

Companies that initially refused were later forced to sign zero-risk contracts with Reddy. Rs 40,92,88,860 was the amount paid as ‘risk amount’, Rs 62,92,36,810 was paid for illegal iron ore trading and about Rs 2,46,62,377 was paid to 617 officials in just five years.

This apart, the report says Rs 4,79,03,917 was paid to “G J Reddy Sir” by cheque (and many times more by cash). Now, the time has come to use the fullest extent of various penal provisions of the law to recover the money. Thus, perhaps for the first time, actual value has been imputed to the extent of bribery in just one sector of the economy, that too in one state.

It also appears from the report that Yeddyurappa brought enormous transparency into bribe-taking by having his sons take the bribe by cheque into a family trust, turning a blind eye to the rape of the treasury by his colleague and his own family.

He was clearly told in writing on file by his outstanding team of officers including the chief secretary and others that denotifying land after a Section 16(2) stage of Land Acquisition Act is violative of Supreme Court judgments. Yet, he brazenly went ahead, denotified it, sold it back to the same mining company and received a ‘donation’ by cheque! Despite L K Advani’s repeated sane counsel and warnings, the misdemeanour continued for he thought the buck would never stop. But it did.

 It remains to be seen that India’s second war for independence would spread further or soon the principal culprits will be forgotten, witnesses will be purchased or will ‘voluntarily’ withdraw their statements, bail would be granted by friendly judges, back-door deals for mutual protection will be struck across party lines, some elections will be won, and the same people will be back in power. And show  must keep going on and on.

These view reflect the agreement with views presented are vies of the author.

Always Yours — As Usual — Saurabh Singh

 

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US Prez Barack Obama as well as The rest of the world, too, is having nightmares about a possible US debt default

1 CommentPosted by on August 1, 2011

Last Seven Sleepless Night of United States President Mr. Barack Obama

The Reason Behind the Phenomenon has been detailed below in Issue and It’s possible reason Format.

What is the crisis about?

Since 1917, the US Congress has stipulated that there has to be a statutory limit on US public debt (debt of US federal govt). This limit has been periodically raised and now stands at $14.3 trillion (95% of the US GDP). The US will hit this limit on Tuesday, Aug 2, unless Congress approves a fresh hike. But the Republican-controlled House of Representatives and Democrat-controlled Senate haven’t been able to work out a consensus

Why are they fighting?

The Republicans want any debt limit hike linked to deep cuts in govt spending. They want the increase to be effective for a year, with fresh discussions after that. The objective is obviously to make it an issue ahead of the 2012 presidential elections. Democrats favour tax increases and a one-shot raising of the ceiling. They are also opposed to any cuts that could jeopardize the economic stimulus and welfare payments

What happens if debt ceiling is not raised?

US govt can’t pay     employees, social security benefits, defence contractors, medical insurance bills and interest to lenders. Credit rating will plunge from top ‘AAA’ to bottom D’
What will be the global impact?

Govts, investors and businesses across the world will stop investing in US bonds. There will be panic in financial markets globally, with investors exiting equities for safe havens like liquid cash and gold

Does it affect India?

Indirectly, though much less than countries/blocs with big trade and debt dealings with US, like EU and China. Still, a worldwide downturn could hit Indian exports and FDI flows

When did this debt accumulate?

 Barack Obama (fighting recession, wars in Afghanistan and Iraq) $2.4tn

George W Bush (wars and tax cuts) $6.1tn

Bill Clinton $1.4tn

George Bush $1.5tn

Ronald Reagan $1.9tn

Earlier $1tn

Whose money has the US taken?

Foreign countries (including China $1.2 tn) $4tn

US public and cos $3.6tn

US federal system $6.2tn

 

Always Your — As Usual Saurabh Singh

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FEELING HEAT ON US DEBT : EARNINGS AND INDEX POISED TO EXHIBIT UNWANTED OSCILLATIONS

Comments Off on FEELING HEAT ON US DEBT : EARNINGS AND INDEX POISED TO EXHIBIT UNWANTED OSCILLATIONSPosted by on July 24, 2011

Wrangling over the US debt ceiling and questions marks over corporate earnings mean markets are unlikely to get a break any time soon.

Wall Street is set to close its worst three months in a year as July draws to a close next week after a roller coaster ride for markets. Whacked out fund managers hitting the beach in August may find themselves fiddling with their BlackBerrys more than the little umbrella in their cocktails.

“I need a vacation, man. After all the stuff that’s happened in the last three months I’m pretty much shot, I’m getting weird,” said one New Jersey-based fund manager, who was packing his bags for a destination in the Caribbean as temperatures topped 100 degrees Fahrenheit in New York City.

With euro zone leaders having reached a deal for yet another bailout for debt-laden Greece, investors will be free to chew over the rancor in Washington with even more attention.

Negotiations between President Barack Obama and the top Republican in the House of Representatives, John Boehner, still looked far from a deal to avert a looming US default, lawmakers said on Friday, raising the likelihood of more volatility next week if no solution is reached over the weekend.

“It’s likely an agreement in any form will cause a relief rally for equities,” said global head of sales trading at Dahlman Rose in New York.

“Coming on the heels of overall pretty good earnings numbers and some sort of resolution in Greece and that could make for a rally in the market,” he said.

But on the other side of the coin, the prolonged and partisan dispute over solving the country’s debt crisis means there is still a big downside risk.

“Who knows where that is going to go,” as per an analyst at MF Global in Chicago. “We’re vulnerable to a buyers’ strike if we don’t get any news.”

In addition, the corporate earnings season suggests other risks could dog the market. Despite generally good results so far, there have been some worrisome signs. The S&P 500 rallied 6% in the run-up to reporting season, but earnings misses from big industrial names like Rockwell Collins and Caterpillar Inc weighed on the Dow and S&P 500 on Friday.

Earlier in the week several big consumer names such as Whirlpool and Pepsi warned about sluggishness in developed markets, sending their shares sharply lower.

“The market still has a high degree of skepticism in it,” said the analyst, summing up the earnings season so far.

As per him, he will be closely following earnings from sector and economic bellwethers next week. Those include the package delivery company UPS, chipmaker Texas Instruments, and online retailer Amazon.

Around 30 percent of the S&P 500’s USD 12.3 trillion market caps have reported earnings so far. They have outpaced consensus estimates by 3.8%, and only 7% have missed estimates, according to data from Morgan Stanley.

But share prices of those that have fallen short of estimates have taken a severe beating. Given the fragile sentiment a few more prominent misses could derail the market.

“The market is punishing these misses more than it is rewarding beats, an asymmetry we have been calling for and we forecast will continue,” wrote Morgan Stanley’s US equity strategist in a note to clients.

“Our view remains that first half of the year numbers are achievable but the second half of the year looks challenged,” he said.

Next week is also a big week for economic data. Fears of a slowdown in the economy have been a large driver of market volatility over the last few months, and the coming releases will be parsed very closely.

They include early regional manufacturing data from Chicago and New York, a reading of consumer sentiment, and a first reading of US growth for the second quarter, expected to show the economy grew just 1.9% in the period.

Bob Doll, chief equity strategist at Blackrock, one of the world’s largest fund managers with around USD 1.6 trillion of equities under management, said this week that the US economy is at a critical juncture.

Doll points out that since 1960 every time year-on-year growth has fallen under 2% the US economy has gone into recession.

“Our bottom line view is that investors should maintain a reasonably constructive bias toward risk assets, but should also be prepared to scale back exposure if evidence of economic growth acceleration does not materialize.”

Always Yours — As Usual —- Saurabh Singh

Note: Compiled from published News and Views

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OIL POLITICS, SPECULATION, CHAIN REACTION AND MANAGEMENT

Comments Off on OIL POLITICS, SPECULATION, CHAIN REACTION AND MANAGEMENTPosted by on July 23, 2011

It requires quantum of intelligence, to infer from what is happening in the markets, or politico-socio-economic across the globe, to why it is happening. Things are never as simple as they seem to be. This would become comprehendible and evident as soon as one reads, relates and analyses the instances mentioned hereunder:

“Crude oil prices peaked to US $ 100 – 115 a barrel in April and May 2011 and moved downwards after that to touch a rate of US $ 90 – 92 per barrel in June 2011. In such a scenario, price increase by the Union Government should have been announced in April – May 2011, but the same did not occur. The Government found June 2011 to be the auspicious time for announcing price hike when the prices had nearly normalized. What could have been the motive for doing so? Simple answer is that April – May 2011 was the time when five states were going to elect the assembly members. The states being, West Bengal, Tamil Nadu, Assam, Kerala and Puducherry. ”

“If one goes by what the campaign managers of Congress had to say on the Rahul Gandhi’s much publicized kisan padyatra-(which as claimed was undertaken to champion the cause of the farmers of the region) –  was conceived to detract the public attention from the issue of hike in petroleum products and their possible spiraling effect on inflation. This yatra detracted the lot of electronic media attention from the campaign that opposition forces such as BJP and Left were seeking to build up on the oil price hike related issues. ”

“Since the Oil shock of 1973, USA strategically took measures to control the oil market by keeping continued focus on West Asian Region. In 1980, Jimmy Carter, the then President of USA declared Persian Gulf an exclusive zone of American influence and created a rapid deployment of forces, which latter turned into what is known as US Central Command or CENTCOM.  ”

“As is being believed by majority that skirmish in Libya is behind recent spurt in prices, should correct their facts. Libya produces less than 3 per cent of global petroleum output. Where as Saudi Arabia has already made up for the current shortfall and its excess stocks are more than that of Libya and Algeria put together. In fact in present situation too oil production at many of Libyan facilities continues even in civil war there. ”

“The argument being forwarded by few is that rising demand from China and India has forced an upward trend in oil prices is also unjustified. Though these two countries do account for growing share of global demand, but then same is counterbalanced by slower demand from USA and Europe.”

“There is still a wide spread perception that cartel of Oil Exporting Countries can manipulate and influence the prices by changing the level of their supplies. Reality today is much different. The OPEC has turned from being a cartel to being a minor player today. Non OPEC countries now account for increasingly significant proportion of global supply. Russia has already snatched the title of being largest supplier of crude oil from Saudi Arabia since 2009.  ”

Many more such instances may be quoted. It’s not being quoted in anticipation that the variety of above instances is good enough to comprehend that nearly none of the factors assumed or arguments forwarded are capable of forcing any kind of hike in prices of the crude oil.

 

Then what is it, which is responsible for hike in crude oil price?

 

…….any guesses, if not, then storm your grey matter and keep visiting this place in hope of getting answer to this simple question.

 

Always Yours — As Usual —- Saurabh Singh

 

 

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FY 2012 – 13 AND FCCB – IS IT GOING TO BE A SPEED BREAKER FOR INDIA’S GROWTH STORY

Comments Off on FY 2012 – 13 AND FCCB – IS IT GOING TO BE A SPEED BREAKER FOR INDIA’S GROWTH STORYPosted by on June 29, 2011

Global hedge funds and offshore investors are closely tracking the response of Corporate India, the judiciary and financial market regulators as 16,000 crore of convertible bonds sold by local top 500 companies come up for repayment by March 2012. With some Indian firms trying to wriggle out of their commitments, overseas bondholders are beginning to question the creditworthiness of India Inc. They are also anxious to figure out whether Indian courts will uphold creditors’ rights. The Reserve Bank of India had raised concerns about high overseas borrowings in its recent Financial Stability Report. Shares of many companies are trading at a fraction of the price at which Foreign Currency Convertible Bonds (FCCBs) are to be converted into shares. If prices recover, investors can convert the bonds into equity shares. That looks unlikely. If prices don’t recover, the companies can redeem the bonds by paying off investors. That appears impossible given the stretched balance sheets of many companies. Then, companies will have to issue fresh bonds in lieu of the old ones, negotiating a new set of conditions — revised conversion price, extended tenure and reset interest rates. Most companies worth their salt will try to work out some solution either by raising fresh money to redeem the FCCBs along with redemption premium or by restructuring the bonds. This is because they know a default or legal tussle would blacklist them in the foreign market. It will also downgrade their credit rating. That’s why the companies, whose stocks are trading at a discount to the conversion price, are already in talks with investors, says Ashutosh Maheshwari, head of investment banking at Motilal Oswal. Assam Company and Suzlon are two such examples. “We are looking at restructuring our outstanding FCCBs,” says Sanjay Sharma, finance head of Assam Company, whose FCCBs worth $32 million will mature in November. Offshore Investors Watching Closely .

Image on Economy

The stock of the Kolkata-based tea company has been hovering at around15, a good 48% discount to the conversion price of 28.75 that the company had fixed when it issued bonds in 2006. The Suzlon spokesperson says the company does not foresee any problems with FCCBs. Suzlon’s $300 million worth FCCBs will mature in June and October next year. The Suzlon stock is quoting at 50% discount to the conversion price. Reliance Communications has the largest chunk of outstanding FCCBs worth $925 million (about 4,150 crore). These bonds are unlikely to be converted into equity shares when they mature in March, as the stock is trading at 86% discount to the conversion price of . 661. RCOM will try to raise bank loans to repay bondholders, says a person close to the company. That will add to the company’s ballooning debt burden of 35,000 crore. RCOM did not comment on the issue. “Offshore investors are watching how India Inc behaves. If pragmatism prevails over greed, then invariably restructuring will work,” says H Jayesh, founder-partner of law firm Juris Corp. At the same time, there is a lingering fear that this could easily turn into a minefield of disputes. “We fear some Indian promoters will neither agree to convert at a lower price — as it will dilute their stake, nor repay the money,” says a bondholder, who had subscribed to FCCBs of a handful of companies in 2007. Akil Hirani, managing partner of legal firm Majmudar & Company, expects some bondholders to have disagreements with the promoters on revision of the conversion price, leaving them with no option but to take legal recourse against the companies. If the companies want investors to give heavy discounts, the matter is likely to go to courts, according to Huzefa Nasikwala, managing partner, Nasikwala Law Office. “Agree to a conversion at a realistic price and most investors will effectively extend the maturity period by a few years, if not more,” is what Juris Corp’s Jayesh advises companies. A month ago, a Singapore-based hedge fund, 3 Degrees Asset Management, moved the RBI against Karur KCP Packagings, a Tamil Nadubased cement bag maker. Karur KCP had raised $10 million in April 2006 through FCCBs bearing a 2% interest rate and conversion price at 75. The bonds were due to expire on April 27, 2011. Backed by majority of the bondholders, the tenure of the security was extended by another 10 years and coupon was cut to zero. The hedge fund has alleged fraud and manipulations in the company’s exemption scheme. The foreign fund is planning to initiate legal proceedings against the issuer. Two years ago, US-based hedge funds DE Shaw and Citadel Investment Group had filed a winding-up petition against Chandigarh-based Venus Remedies after the company defaulted on an FCCB issue. However, the matter was resolved last year. Beginning 2006, FCCBs captured the imagination of promoters of Indian companies who exploited it as the cheapest source of finance. It was a simple bet: the stock market will continue to rise and issuers will not be driven to a point where they will have to pay back the money; once the stock of the issuing company touches a pre-agreed price (conversion rate), the bonds will be converted into shares. The bet backfired as the stock market dipped — the bellwether Sensex has fallen 15% this year — and the stocks are struggling at a fraction of the conversion price. Some small and mid-caps are now trying different ploys to hold back payment. A few have entered into messy court feuds, one of the firms has allegedly falsified accounts to overstate losses and moved the BIFR while another has taken refuge in complaints by local investors. Bonds worth 31,500 crore are due for redemption by March 2013, according to a Crisil Research study of S&P CNX 500 and BSE 500 companies. Of this, Rs 16,000 crore of bonds will mature by March 2012. Market participants say the numbers could double if all mid and small-cap companies are taken into consideration. Among the top 500 companies, it looks like 70% of outstanding bonds may not be converted, says Crisil’s Koparkar. Of this, the “real worry” is bonds worth 2,000 crore, he adds. But the figure is at least 5,000 crore if all small and mid-cap stocks are taken into account, says a bondholder, not wanting to be named. Three years ago, some companies defaulted in paying FCCB investors. The bondholders, in turn, took them to courts. The list included Wockhardt. Its bondholders had filed a winding up petition against the company.

Always Yours — As Usual — Saurabh Singh

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IFRS ——- What is IFRS ?

Comments Off on IFRS ——- What is IFRS ?Posted by on June 7, 2011

IFRS for SMEs  — What is IFRSs and IFRSs for SME

Scope of IFRS All International Accounting Standards (IASs) and Interpretations issued by the former IASC (International Accounting Standard Committee) and SIC (Standard Interpretation Committee) continue to be applicable unless and until they are amended or withdrawn. IFRS sets out recognition, measurement, presentation and disclosure requirements of transaction and events in general purpose financial statements. IFRSs apply to the general-purpose financial statements and other financial reporting by profit-oriented entities i.e. those engaged in commercial, industrial, financial, and similar activities, regardless of their legal form. Entities other than profit-oriented business entities may also use IFRSs with certain changes in terminologies. General purpose financial statements are intended to meet the common needs of shareholders, creditors, employees, suppliers, government and the public at large for information about an entity’s financial position, performance, and cash flows. IFRS apply to consolidated as well as separate financial statements. If an IFRS allows both a ‘benchmark’ and an ‘allowed alternative’ treatment none of them is preferred treatment. However, in developing Standards, IASB intends not to permit choices in accounting treatment. Further, IASB intends to reconsider the choices in existing IASs. IFRS presents fundamental principles in bold face type and other guidance in non-bold type (the ‘black-letter’/’grey-letter’ distinction). Paragraphs of both types have equal authority. IFRS does not prescribe as who should apply IFRS. It left upon the national standard setters to decide which entities would be bound to comply with IFRS. The focus of international standard setting is on profit-oriented reporting entities, including non-corporate entities such as mutual funds. Despite concentrating on profit-type entities, the IASB envisages that non-profit entities in the private and public sectors may nevertheless find its Standards an appropriate basis for financial reporting. The specific needs of the public sector have been acknowledged by the International Federation of Accountants (IFAC), whose Public Sector Committee has on its agenda the preparation of standards based on IFRS, for use by public sector entities. However, a non-profit entity that states compliance with IFRS should comply with IFRS in full. A profit-oriented reporting entity is one that reports to users, who rely on the financial statements as a major source of financial information about the entity. Financial Statements are directed to the information needs of users such as investors and potential investors, employees, lenders, suppliers, creditors, customers, governments and the public at large. The term financial statements refer to statements that display different aspects of the entity’s financial performance and position. Financial position is reflected in the statement of financial position and a statement of changes in shareholders’ equity (excluding transactions with shareholders). Financial performance is reported in the income statement and liquidity position in the cash flow statement. These statements are supplemented by a series of detailed notes. Some Standards permit different treatments for certain types of transactions or events. One treatment is designated as the benchmark treatment, and the other the allowed alternative. Neither is designated as the IASB’s preferred approach. The Board intends to develop future Standards that require similar transactions and events to be accounted for in the same way. The IASB intends to reconsider the choices given in current IFRS with a view to reducing and potentially eliminating them. Structure of IASB The IASB is organised under an independent Foundation named the International Accounting Standards Committee Foundation (IASCF). That Foundation is a not-for-profit corporation created under the laws of the State of Delaware, United States of America, on 8 March 2001.

Components of the new structure of IASB are as follows:

1. International Accounting Standards Board (IASB) – has sole responsibility for establishing International Financial Reporting Standards (IFRSs). 2. IASC Foundation – oversees the work of the IASB, the structure, and strategy, and has fundraising responsibility. 3. International Financial Reporting Interpretations Committee (IFRIC) – develops interpretations for approval by the IASB. 4. Standards Advisory Council (SAC) – advises the IASB and the IASCF. 5. Working Groups – expert task forces for individual agenda projects. 6. Monitoring Board of Public Authorities- effective 01.02.2009 Accounting Standards in India are issued by Accounting Standard Board (ASB) of Institute of Chartered Accountants of India and are largely based on IFRS. However, India has not been able to keep pace with the amendment and additions made in IFRS from time to time. This is largely because of its sensitivity to local conditions including the conflicting legal and economic environment. However, with the opening of Indian economy in near past, the convergence to IFRS has become unavoidable. Keeping this in view, ASB decided to form an IFRS task force in August 2006. Based on the recommendation of this task force, the Council of ICAI, in its 269th meeting decided to fully converge with IFRS from the accounting periods commencing on or after 1st April 2011. At initial stage, this convergence will be mandatory for listed and other public interest entities like banks, insurance companies, NBFCs, and large sized organizations with high turnover or annual income.

Why this convergence?

Converging with IFRS will have multiple benefits for Indian entities especially those who aspire to go global. Some of the benefits of convergence with IFRS are explained below:

a) Accessibility to foreign capital markets

The force of globalization has enabled the concept of ‘open economy’ and increasing numbers of countries has opened doors for foreign investment and foreign capital. Many Indian entities expanding and making their presence felt in international arena. Huge amount of capital commitment are required in this process for which entities have to list their shares in various stock exchanges around the world. Majority of stock exchanged either require or permit IFRS complaint accounts. Adaptation of IFRS will enable Indian entities to have access to international capital markets.

b) Reduced Cost

At present when Indian entities list their securities abroad they have to make another set of accounts which are acceptable in that country. Convergence with IFRS will eliminate this need for preparation of dual financial statements and thereby reduce the cost of raising capital from foreign markets.

c) Enhance Comparability

If the Financial statements of Indian entities are made in lines of IFRS, they will have greater comparability and will enable foreign companies to have broader and deeper understanding of the entities relative standing. This will also facilitate mergers, amalgamation and acquisition decisions.

d) Boon for multinational group entities

Entities in India may have a holding, subsidiary or associate company in some other nation. Compliance with IFRS for all group entities will enable the company management to have all the financial statements of the group in one reporting platform and hence will facilitate the consolidation process.

e) New Opportunities for the professionals

Migration to IFRS will not only be beneficial for Indian corporate, it will also be a boon to Indian accounting and other associated fields. India is a country with immense human resource. With knowledge of IFRS Indian professional can immerge as leading accounting service provider around the globe. This convergence will also open the flood gate of opportunities for valuers and actuaries as IFRS is fair value based accounting standard.

What is IFRSs?

 International Financial Reporting Standards comprise: – IFRSs – standards issued after 2001 – IASs- standards issued before 2001 – Interpretations originated from the International Financial Reporting Interpretations Committee (IFRIC) – issued after 2001 – Interpretations of Standing Interpretations Committee (SIC) – issued before 2001

Effective IFRSs as on date

• No of standards issued – effective 29 (total 41) IASs , 8 IFRSs • No of interpretations – effective 15 (total 18) IFRIC Interpretations, effective 11(total 33)SIC Interpretations • No of Financial Reporting Standards in force as on date – 63

 Grouping of IFRSs into eleven parts:

 1. Preface and framework

 Preface a. Objectives of the IASB b. Scope and authority of IFRSs c. Due process d. Timing of application of IFRSs e. Language

Framework a. Introduction b. Qualitative characteristics of financial statements c. The elements of financial statements d. Recognition of the elements of financial statements e. Measurement of the elements of financial statements f. Concepts of capital and capital maintenance

2. Other literature

 a. IASC Foundation Constitution b. Due process Handbook of IASB c. Due process Handbook of IFRIC d. Glossary

3. Presentation of Financial Statements

 Standard Number Standard Name IAS 1 Presentation of Financial Statements IAS 7 Statement of Cash Flows IAS 33 Earnings Per Share IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors IAS 10 Events after the Reporting period IAS 21 The effects of changes in foreign exchange rates IAS 29 Financial Reporting in Hyperinflationary economies SIC 7 Introduction of the EURO IFRIC 7 Applying the restatement approach under IAS 29 Financial Reporting in Hyper inflationary Economies

4. IFRSs on Interim Financial Statements

IAS 34 – Interim Financial Reporting

 5. IFRSs on Group Reporting Standard

 Number Standard Name IFRS 3 Business Combinations IAS 27 Consolidated and separate financial statements IAS 28 Investment in Associates IAS 31 Interest in joint ventures

 6. IFRSs on Assets

 Standard Number Standard Name IAS 2 Inventories IAS 16 Property, Plant & Equipment IAS 40 Investment Property IAS 38 Intangible Assets IAS 32, IAS 39, IFRS 7 Financial Assets / Financial Instruments IAS 41 Biological assets IFRS 5 Non-Current Assets held for sale & Discontinued operations IAS 17 Leases IFRS 6 Exploration and Evaluation of Mineral Assets

 7. IFRSs on Expenses and Liabilities

 i. IAS 19 – Employee Benefits ii. IFRIC 14- IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction iii. IAS 37 – Provisions, Contingent Liabilities and Contingent Assets iv. IFRIC 1 -Changes in Existing Decommissioning, Restoration and Similar Liabilities v. IFRIC 5- Rights to Interests Arising from Decommissioning, Restoration and Environmental Rehabilitation Funds vi. IFRIC 6- Liabilities Arising from Participating in a Specific Market – Waste Electrical and Electronic Equipment vii. IAS 12- Income Taxes viii. SIC 21 – Income Taxes – Recovery of Revalued Non-Depreciable Assets ix. SIC 25- Income Taxes – Changes in the Tax Status of an Enterprise or its Shareholders x. IFRS 2- Share-based Payment xi. Financial liabilities / Financial Instruments a. IAS 32 Financial Instruments: Presentation b. IAS 39 Financial Instruments: Recognition and Measurement c. IFRS 7 Financial Instruments: Disclosure

 8. IFRSs on Income

 i. Construction contracts (IAS 11) ii. Revenue (IAS 18) iii. Agriculture income (IAS 41) iv. Service concession arrangements – IFRIC 12 & SIC 29 v. Customer loyalty programmes – Customer reward credit or points IFRIC 13

 9. IFRs on Disclosure

 A.  IAS 24 Related Party Disclosures B. IFRS 8 Operating Segments

 10. IFRSs on Industry

 i. IFRS 4 Insurance Contracts ii. IAS 26 Accounting and Reporting by Retirement Benefit Plans

 11. IFRSs on First time adoption – IFRS 1

 IFRSs for SME

 History

 In Sept 2003: World Standard Setters survey n June 2004: Discussion Paper (117 comments) n April 2005: Questionnaire on recognition and measurement (94 responses) n Oct 2005: Roundtables on recognition and measurement (43 groups) n Feb 2007: Exposure Draft (162 comments) n Nov 2007: Field tests (116 real SMEs) n Mar – Apr 2008: Board education sessions n May 2008 – Apr 2009: Redeliberations n May 2009: Near-final draft posted on IASB website n 1 June 2009: Ballot draft sent to the Board n 9 July 2009: Final IFRS for SMEs issued

Why IFRSs for SME

A. Topics not relevant to SMEs are omitted. B. Where full IFRSs allow accounting policy choices, the IFRS for SMEs allows only the easier option. C. Many of the principles for recognizing and measuring assets, liabilities, income and expenses in full IFRSs are simplified. D Significantly fewer disclosures are required. E the standard has been written in clear, easily translatable language.

 What is SME as per IFRSs

 SME Small and medium-sized entities are entities that:  Do not have public accountability, and o Publish general purpose financial statements for external users. Examples of external users include owners who are not involved in managing the business, existing and potential creditors, and credit rating agencies. General purpose financial statements are those that present fairly financial position, operating results, and cash flows for external capital providers and others. An entity has public accountability if: o Its debt or equity instruments are traded in a public market or it is in the process of issuing such instruments for trading in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets), or o It holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses. This is typically the case for banks, credit unions, insurance companies, securities brokers/dealers, mutual funds and investment banks.

 Contents of IFRSs for SME – divided into 35 sections

 1. Small and Medium-sized Entities 2. Concepts and Pervasive Principles 3. Financial Statement Presentation 4. Statement of Financial Position 5. Statement of Comprehensive Income and Income Statement 6. Statement of Changes in Equity and Statement of Comprehensive Income and Retained Earnings 7. Statement of Cash Flows 8. Notes to the Financial Statements 9. Consolidated and Separate Financial Statements 10. Accounting Policies, Estimates and Errors 11. Basic Financial Instruments 12. Additional Financial Instruments Issues 13. Inventories 14. Investments in Associates 15. Investments in Joint Ventures 16. Investment Property 17. Property, Plant and Equipment 18. Intangible Assets other than Goodwill 19. Business Combinations and Goodwill 20. Leases 21. Provisions and Contingencies 22. Liabilities and Equity 23. Revenue 24. Government Grants 25. Borrowing Costs 26. Share-based Payment 27. Impairment of Assets 28. Employee Benefits 29. Income Tax 30. Foreign Currency Translation 31. Hyperinflation 32. Events after the End of the Reporting Period 33. Related Party Disclosures 34. Specialised Activities 35. Transition to the IFRS for SMEs Glossary Derivation Table Basis for Conclusions – published in a separate booklet Illustrative Financial Statements and Presentation and Disclosure Checklist – published in a separate booklet

 Omitted topics in IFRSs for SME The IFRS for SMEs does not address the following topics that are covered in full IFRSs: n Earnings per share n Interim financial reporting n Segment reporting n Special accounting for assets held for sale

 Examples of options in full IFRSs NOT included in the IFRS for SMEs n Financial instrument options, including available-for-sale, held-to-maturity and fair value options n The revaluation model for property, plant and equipment, and for intangible assets n Proportionate consolidation for investments in jointly-controlled entities n For investment property, measurement is driven by circumstances rather than allowing an accounting policy choice between the cost and fair value models n Various options for government grants.

 Conclusion

 To conclude IASB put lot of efforts in coming out IFRSs for SME. IASB has received 162 comments on Exposure Draft for IFRSs for SME. IASB follows transparent approach for formulation of standards.

Always Yours —- As Usual — Saurabh Singh

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Draft Lokpal Bill Ready for Consultation with Citizen of India – Comments Requested

1 CommentPosted by on May 15, 2011

The drafting of the Jan Lokpal bill, which is to be finalized by June 30th, 2011, is underway. You can play your part in this historic moment by giving your invaluable comments/suggestions about the different provisions in the draft of the Jan Lokpal bill which will make it the effective, accountable and independent anti-corruption body that India needs right now. Otherwise, it will remain a law which exists only on paper and has no impact on the ground. Please provide your comments. The provisions and options for submitting comments are as detailed below:

  • Online : To fill your comments directly in the form on the Website it hosted Click Here
  • Email : Send us an email at lokpalbillcomments@gmail.com
  • Postal mail : Mail your comments to the following address
        Lokpal Bill Public Consultation
        A-119, Kaushambi
        Ghaziabad – 201010

To download the Full Text Draft of Jan Lokpal Bill Version 2.2 Click Here 

To download English Summary of Jan Lokpal Bill version 2.2 Click Here

[To Read These Documents You Will Require a Adobe Reader. It can be downloaded free from Adobe’s Website]

Your Participation is must…..Do not forego such Options…..This will help in bringing Good governance.

Expecting your full hearted participation…As it is basically non participation of learned and intelligence Citizen which Force Gifts a  Member of Parliament or Member of Legislative Assembly, who may not be most competent of all who are contesting polls. So, please let not the same happen again, and prove this by submitting your Comments or at least even by glancing through it.

Always Yours — As Usual — Saurabh Singh


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Sahara India Commercial Corporation (SICCL) — A MYSTRY — AN ENIGMA — OR — A LOOT

4 CommentsPosted by on April 23, 2011

2.6 m Shareholders, but Sahara Co Still Unlisted

Sahara India Commercial Not on Bourses Despite  3,000-cr Issue

In October 2009, Sahara India Commercial Corporation (SICCL), part of Sahara Group of Companies, decided to issue shares to a bunch of investors. While the size of the share issue— 3,000 crore—was substantial, what was really startling was not the amount, but the number of shareholders who were allotted shares: 2.6 million. Even if this were the only share issue by the company, it would make it the third-largest company in the country today in terms of number of shareholders—behind Reliance Power (4.9 million shareholders as of December 2010), and Reliance Industries (3.5 million). That share issue by SICCL placed it far ahead of other stellar names of India Inc such as Tata Steel and NTPC, in terms of the shareholder base.

But here’s the real surprise. Despite the share issue, SICCL is not listed on any stock exchange. According to filings by the company with the registrar of companies, West Bengal, the company issued 30 crore shares with a face value of 1, at a premium of 99, on October 29, 2009. The number of allottees were 26,89,935. The company has also uploaded, on the RoC site, a long list of the share allottees. The shares have not been listed on any exchange. “The companies act and SEBI regulations are clear,” says Tejesh Chitlangi, a senior associate with Finsec Law Advisors: “Section 67 of The Companies Act construes an offering of shares or debentures to 50 or more persons as an offer or invitation to the public, for which norms listed out in SEBI Regulations would need to be followed. These include issuing of prospectus, compliance with the procedures and other disclosure norms.”

In response to a questionnaire sent by ET, Sahara spokesperson, Abhijit Sarkar said: “SICCL is an unlisted public limited company and does not intend to list its shares at any of the stock exchanges as decided by the board of directors of the company. Compliances with the SEBI Regulations are applicable for the listed companies as well the company who intend to get their shares listed on the stock exchanges.”

He said necessary board and shareholder approvals were taken. Further, the fact that the return of allotment was duly approved by RoC West Bengal was evidence that “required compliances for allotment of equity shares by the company are fully complied with”. According to Sahara, an approval from the RoC was given in September 2010.

Staying Away from the Street Sahara arm not listed on any stock exchange
The company: Sahara India Commercial Corporation

Business: Real Estate and infrastructure

No. of shareholders: 2.6 million Funds raised: Rs 3,000 crore

Type of company: Public, but unlisted

•Third-largest company in India today in terms of number of shareholders—behind Reliance Power and Reliance Industries

• As of March 2009, SICCL posted a loss before tax of Rs 449 cr, on revenues of Rs 1,600 cr
• Its balance-sheet size, as of March 2009, was Rs 8,591 cr. Over 80% of this, Rs 6,922 cr, was raised through OFCDs Two Share Allotments

Says Jayant Thakur, a chartered accountant specialising in securities law: “When a company raises funds from more than 50 people, it does not remain a private placement, but is a public issue. For this, listing requirements, as well as other SEBI norms must be followed.” SICCL, according to other filings with the RoC, is primarily a real estate and infrastructure developer. Documents filed by the company describe it as ‘perhaps one of the largest infrastructure and housing development company in India.” As of March 2009, the company posted a loss before tax of . 449 crore, on revenues of . 1,600 crore. SICCL’s balance-sheet size, as of March 2009, was . 8,591 crore. Of this, . 6,922 crore (over 80%) was raised through the issue of optionally fully convertible debentures, or OFCDs. OFCDs are bonds, which on maturity, and at the option of the investor, can be converted into equity shares.
Between March 2009 and June 2010, SICCL completed two share allotments—one for . 3,000 crore to 2.6 million investors, and the other of . 2,000 crore, done on June 30, 2010, to five private limited companies. Thus the total amount of shares issued by the company, as a result of these two allotments, was . 5,000 crore. It could not be ascertained whether the two share allotments arose as a result of the conversion of OFCDs, issued earlier by the company, into shares or whether these were standalone issues of shares to investors. Sahara Group did not give details about the circumstances under which the shares were issued.

According to SICCL’s debenture prospectus, shareholder approvals for OFCDs were given at seven different meetings held between 1998 and 2005 and were to be on private placement basis to “friends, associates, group companies, workers/employees and individuals having their association with group companies”. The OFCD issue opened on July 6, 1998, and closed on June 30, 2008. According to the debenture prospectus, the total size of the issue, spread over five types of bonds, and 10 years, was . 17,250 crore. The funds raised were to be used to finance a number of projects, including the development of the Aamby Valley project.

Late last year, the Securities and Exchange Board of India (SEBI) had banned two other Sahara Group companies—Sahara India real estate corporation (SIRECL), and Sahara Housing Investment Corporation(SHICL)—from raising funds from the public through the issue of OFCDs, without going through the necessary approvals and procedures required. The two companies claimed that they had not made a ‘public offer’ (defined as an offer to more than 50 investors), as claimed by SEBI, but had placed the debentures privately and among a few friends, associates and others close to the group. Therefore, the companies claimed, SEBI had no jurisdiction. The market regulator, disagreeing with the claim of a ‘private placement’, had imposed the ban.

The SEBI ban on the other two Sahara companies was stayed by the Allahabad High Court but the stay order was lifted earlier this month. SEBI has filed a caveat in the Supreme Court against the issuance of any ex-parte orders in the case (which are issued without one of the parties being present). Sahara is reported to have filed a special leave petition in the Supreme Court as well, though this could not be confirmed.

Always Yours — As Usual — Saurabh Singh

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Pakistan’s ISI spy agency has ‘militant links’ — Says US Military’s Top Officer

1 CommentPosted by on April 21, 2011

The US military’s top officer, Adm Mike Mullen, has accused Pakistan’s spy agency of having links with militants targeting troops in Afghanistan.

He said Pakistan’s Inter-Services Intelligence (ISI) had a “long-standing relationship” with a militant group run by Afghan insurgent Jalaluddin Haqqani.

USA Top Officer Adm Mike Mullen

The comments came as he held talks in Islamabad on Wednesday. Pakistani officials are also in the US for talks.

Pakistan routinely rejects charges of collusion with militants.

The BBC’s M Ilyas Khan in Islamabad says that US officials have in the past spoken anonymously or in circumspect terms about associations between the Pakistani establishment and insurgents.

But that with this blunt statement Adm Mullen has for the first time claimed a clear link between the two, our correspondent says.

“It’s fairly well known that the ISI has a long-standing relationship with the Haqqani network,” Adm Mullen told Pakistan’s Dawn newspaper.

“Haqqani is supporting, funding, training fighters that are killing Americans and killing coalition partners. And I have a sacred obligation to do all I can to make sure that doesn’t happen.”

He said the spy agency’s support of the network remained at the “core … and the most difficult part of the relationship” and that he would take it up with Pakistan’s army chief Gen Ashfaq Kayani.

‘Negative propaganda’

But a senior Pakistani intelligence official told the Reuters news agency that the accusation was unfounded.

“If he means we’re providing them with protection, with help, that’s not correct,” the official, who wished to remain unnamed, told Reuters.

A statement from Gen Kayani, released after their meeting, rejected what it termed as “negative propaganda of Pakistan not doing enough”.

But the statement also said that the strategic relationship between the countries was important for their mutual security.

On Thursday Pakistan’s Foreign Secretary Salman Bashir is scheduled to hold talks with US State Department officials in Washington, in what is being billed as an effort to improve relations.

US-Pakistan ties have struggled to recover following the row over CIA contractor Raymond Davis – who was arrested and later released after shooting dead two Pakistani men in Lahore. The case stoked anti-American feeling across Pakistan and led to angry demonstrations

Recent reports following a meeting between the heads of the countries’ spy agencies in Washington, suggested that Pakistan had demanded certain restrictions to the CIA’s activities in Pakistan.

Anti-US sentiment has also been exacerbated by US drone strikes targeting militants in the north-west of the country.

Drone anger

US drone attacks have escalated in north-west Pakistan since President Barack Obama took office. But they are hugely unpopular with the Pakistani public. Many militants, some of them senior, have been killed in the raids, but hundreds of civilians have also died.

The US does not routinely confirm it is conducting drone operations in Pakistan, but analysts say only American forces have the capacity to deploy such aircraft in the region.

Analysts believe that Haqqani’s insurgent network has been based in Pakistan since 2001, and that the ISI still exerts considerable influence over it.

The group has been blamed for some of the deadliest attacks on foreign troops across the border in Afghanistan.

Though the Pakistani military has routinely rejected any ties with the militants operating in Afghanistan, many analysts believe collaboration between the two is an open secret, our correspondent says.

Indeed analysts argue that Pakistan has always maintained links with some militant groups in order to try to influence events in neighbouring Afghanistan..

The timing of these remarks, our correspondent adds, suggests that the US is stepping up pressure on Pakistan to relinquish any links with Afghan militants ahead of the US forces’ impending withdrawal from Afghanistan.

Always Yours — As Usual — Saurabh Singh

Source: BBC

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Wish HC gave him chance to present case: GBUAT V-C… [Every Body Has Right to be Heard]

1 CommentPosted by on April 12, 2011

Wish HC gave him chance to present case: GBUAT V-C… [Every Body Has Right to be Heard]

The Vice Chancellor of the GB Pant University of Agriculture and Technology (GBUAT), Pantnagar, Dr BS Bisht, in his reaction to the high court’s direction to register a case against him and his predecessor and some other senior officials of the university in a case of financial irregularities, has said that he has great respect for the judiciary and the court at least should have given him a chance to present his case also.

‘I have great respect for the court. But it did not give us any chance. Had the court given us an opportunity, we could have also been able to present our case,” the VC maintained, while talking to The Pioneer.

“I would like to state that since the same case had been dismissed by the district court some time back, so my request was had the court given us a chance, I myself or any other concerned officials could have appeared before it with all the facts and necessary documentary materials so that we could also have put our side before the court,” he said.

“The fact is that why should anyone indulge in such activities that may cause any kind of loss to the Government exchequer. So I am deeply hurt at this juncture,” Bisht further said. When asked what could be the next course of action of the university in this connection, the VC maintained: “I have not so far received the original copy of the case. So only after going through the original copy of court’s direction, we would decide.”

It is worth mentioning that Uttarakhand High Court in its judgment on a case of alleged financial irregularities filed by a person of Pantnagar against the GBPUAT has directed to file a case against Bisht, his predecessor, present finance controller and his processor and contractors.

In the complaint, it had been alleged that all the above mentioned officials in connivance with some private recruitment firms that used to supply labourers to the university caused a huge loss to the Government exchequer.

The complainant also alleged that a complaint was earlier also lodged at the local police station, but no action was taken. He also alleged that contractual labour system was introduced only to make quick bucks.

Always Yours — As Usual — Saurabh Singh

 

Source: Retrieved from http://www.dailypioneer.com/330044/Wish-HC-gave-him-chance-to-present-case-GBUAT-V-C.html on April 08, 2011

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