23 December 2008

Compliance of CPE Credit Hours for the Calender Year 2008

Compliance of CPE Credit Hours for the Calender Year 2008 - (20-12-2008)
Important Announcement for Members holding Certificate of Practice (COP) with regard to Compliance of CPE hours requirements for the Calendar Year 2008
We would like to inform you that the Council at its 283rd Meeting held on 18th – 20th December 2008 noted the following CPE hours requirements for the members holding Certificate of Practice (COP):
Members holding Certificate of Practice (except those members who are residing abroad and senior members), unless exempted are required to:
  • complete at least 90 CPE credit hours in each rolling three year period starting from the calendar year 2008, of which 60 CPE credit hours should be of structured learning.
  • complete minimum 20 CPE credit hours of structured learning in each year.
The Council advised all the Members holding Certificate of Practice (COP), who have not so far completed the minimum 20 Structured CPE credit hours, to complete the same by 31st December, 2008. In cases, where members holding Certificate of Practice (COP) do not complete the CPE credit hours requirements, the Council decided as follows:

"In cases where members do not complete the CPE credit hours as above, the Council has decided that names of such members be not included in any panel that is forwarded by the Institute, on or after 1st January, 2009, to any regulators or other authorities. In the case of a firm, if any partner/paid assistant had not completed the requisite CPE credit hour for the year 2008, the names of such partner/paid assistant will not be included while considering the eligibility criteria and this fact will also be stated in case the firm is otherwise found eligible after excluding name(s) of such partner(s)/paid assistant(s).

This is for information and compliance of all members concerned."


CPE Advisory


8.     Unstructured CPE Learning Activities


8.A         Introduction


8. A.01   The CPE learning activities, which are eligible for CPE Credits are divided into Structured and Unstructured Learning Activities (ULAs). This Advisory is meant as guidance and direction to the members who want to avail CPE Credits through ULAs


8.A.02    As per the Statement on CPE, the indicative list of Unstructured CPE Learning Activities that are eligible for CPE Credit is as follows:

Ø      Web-based learning modules (e-learning)

§         e-learning is "instructional content or learning experiences delivered or enabled by electronic technology". Electronic technology encompasses everything from Computer-Based Training (CBT), to compact disks (CDs), to Web-based applications."

Ø      Self-learning modules and courses (use of audiotapes, videotapes, correspondence courses, computer based learning programmes)

Ø      Reading and individual home study

§         Reading and Individual Home Study may constitute reading articles in the Journal, 'The Chartered Accountant' of the Institute, reading technical, professional, financial or business literature.

Ø      Group or bilateral discussion on technical issues

Ø      Acting as visiting faculty or guest faculty at the various Universities / Management Institutions / Institutions of National Importance

Ø      Participation in CPE Teleconferencing Programmes without the supervision of the POU

Ø      Providing solutions to questionnaires / puzzles available on Web / Professional Journals

Ø      Internal Training Programmes being organised by firms of Chartered Accountants having seven or more partners


8.A.03    The Members would be required to fulfill the documentation requirements as mentioned in this advisory, to avail respective CPE Credits. The Members would also be required to maintain and retain proper records of ULAs undertaken by them, i.e. Type of unstructured activity, topic, date and the number of CPE hours requested by them.


8.A.04    The members are required to submit a Self-Declaration Form to the concerned Decentralized Office once in a year to avail the CPE Hours Credit for the ULAs undergone by them.


8.B         Basic Components of Unstructured Learning Activities (ULAs)


8.B.01     The members are advised to devote time to ULAs in continuity so as to maximize the benefits of learning activities.


8.B.02     The topics studied should be of relevance to the work profile of member/s and/or Chartered Accountancy Profession. The indicative list of topics is given in the CPE Calendar, which is announced by the CPE Committee every year.


8.B.03     The study material used for ULAs like Self-Learning Modules / Courses and Individual home study etc., should be of adequate standards and comprehensive in nature.


8.C         Self-Declaration Form


8.C.01    The Self Declaration Form has to be completely filled in and signed by the members.


8.C.02    The Members are required to indicate the time devoted to the ULAs in the areas that are related or relevant to the profession, in the Self Declaration Form.


8.C.03    A blank Self-Declaration Form would be sent to the members along with the Membership Fee Circular.  The same could also be downloaded by the members from the CPE Portal.


8.D.        Submission of Self-Declaration Form by the member


8.D.01    The members are required to submit their Self-declaration in the form enclosed as Annexure-I, once in a year before 31st May, to avail the CPE Hours Credit for the ULAs undergone by them in the previous year. These forms would have to be submitted to the concerned Decentralized Offices. The members could also submit the same to the Sub-Decentralized Offices for onward submission to the concerned Decentralized Offices.



8.E          Monitoring and Recording of CPE Credit Hours of Unstructured Learning Activities (ULAs)


8.E.01     The Decentralized Offices of the Institute are entrusted with the task of monitoring and recording the CPE hours Credit for the ULAs.  On the basis of Self Declaration submitted by the Members, the concerned Decentralized Offices would enter the CPE Hours Credit on the CPE Portal under the Head `Unstructured Learning Activities (ULAs)'.  The necessary provision for recording the CPE Hours for the ULAs has been provided on the CPE Portal.






























Annexure I


Self-Declaration Form to avail CPE Hours Credit for Unstructured Learning Activities
For the Calendar Year _________



Membership No.:



Contact No.

E-mail id:


Details of Unstructured Learning Activities Undergone

Type of ULAs





Requested CPE hours



Web-based Learning modules







Self-learning Modules and Courses

(1)     Audio-tapes/video-tapes.

(2)     Correspondence courses.

(3)     Computer based learning programmes





Home study

Reading and Individual Home Study






Discussion on Technical Issues

Group or Bilateral Discussion on Technical Issues






Acting as Faculty

Acting as visiting faculty or guest faculty at various Universities / Management Institutions / Institutions of National Importance





Teleconferencing Programmes

Participation in CPE Teleconferencing Programmes without supervision of the POU


















Providing solutions to questionnaires / puzzles available on Web / Professional Journals

















Internal Training Programmes

Internal Training Programmes being organised by firms of Chartered Accountants with seven or more partners




Total CPE Hours requested





I, _______________________________________________, (name of the Member) hereby declare that I have undergone the unstructured learning activities as indicated by me in this form above.


I also confirm that the information given by me for claiming CPE credit hours for each unstructured activity is correct.




Signature of the Member



Note:               Members may annex a separate sheet if the given format is not sufficient for filling in complete details.


| Ashwin Nagar | India +91-9833015352  |  
Success is not permanent and failure is not final

19 September 2008

Why Lehman Bros went bust; what it means for you......

Why Lehman Bros went bust; what it means for you

September 16, 2008

Lehman Brothers is no more. Merrill Lynch has gone down the Bank of America maw. AIG too could go belly up. With a doubt, these developments in America are the most shocking events to have hit global financial markets. So where did it all begin? And what does it mean for the Indian stock markets? Find out. . .

What is (or was) Lehman Brothers?

America's fourth-largest investment bank Lehman Brothers Holdings Inc has filed the biggest bankruptcy petition known to mankind.

The 158-year-old firm was founded by brothers Henry, Emanuel and Mayer Lehman, Jewish immigrants to the US from Germany, in 1850. Henry set up a general store in Alabama in 1844 and was later joined by his brothers. In 1850 they set up the merchant bank in New York after having made money in railway bonds. So what went wrong?

Image: The headquarters of the investment bank Lehman Brothers in Manhattan in New York C

Lehman Bros, which till June 2008 had not reported a quarterly loss even once, had earlier survived many an economic crises, like railroad bankruptcies of the 1800s, the Great Depression in the 1930s, and the collapse of Long-Term Capital Management in the 1990s.

Thus the collapse of the giant investment bank came as a major shock for the entire world markets that plunged after Lehman filed a Chapter 11 petition with US Bankruptcy Court in Manhattan.

The $613 billion (some estimates put the size at $639 billion) bankruptcy thus throws up the question: why did the Wall Street giant go bust? Here's why. . .

Image: The Wall Street bull. Photograph: Mario Tama/Getty Images

Why did Lehman Brothers go bankrupt?

The giant investment bank succumbed to the sub-prime mortgage crisis that has rocked the United States and the global economy. Lehman was strangled by a massive credit crisis and fast plummeting real estate prices.

The gargantuan $60 billion loss in bad real estate loans forced the bank to file for bankruptcy.

However, the fall of the 158-year-year institution that started cotton trade in US before the American Civil War and financed the railroad that built a nation, got hit by a large dose of bad luck, pride, arrogance and greed. Primarily, the pride of its chief executive office Richard Fuld.

But there were more reason. Check out what they were. . .

Image: Pedestrian and vehicular traffic pass the headquarters building of Lehman Brothers. Photograph: Michael

Lehman's collapse was also triggered by the refusal of other banks to do business with it because of its complex and, at times, opaque ways of trading. Housing loans made by the bank to people with little support made these loans very risky, and when interest rates rose, these borrowers could no more repay Lehman. This led to huge losses, the extent of which is not yet clear.

Thus other banks stopped trading with Lehman. This led to it losing almost all business and triggered its fall.

The final straw for Lehman was the fact that both Barclays Plc of the United Kingdom and Bank of America Corp pulled out of takeover talks. BofA bought out Merrill Lynch for $50 billion.

However, Barclays has now said that it is in discussions with Lehman Brothers about buying certain assets of the stricken US investment bank.

"Barclays confirms that it is discussing with Lehman Brothers the possible acquisition of certain Lehman Brothers assets on terms that would be attractive to Barclay's shareholders," Britain's third largest bank said in a statement.

Image: A Wall Street sign is seen in front of the New York Stock Exchange. Photograph: Mario Tama/Getty Images

When other banks do not want to buy Lehman, why is Barclays interested?

Barclays wanted to buy Lehman out at a discount, so to speak. But when Lehman CEO Fuld decided that his bank was worth much more than what Barclays had apparently offered, Barclays stepped back.

Now that Lehman has filed for bankruptcy, its assets are available fairly cheap. However, the biggest problem is to take on Lehman's enormous liabilities.

Image: A Barclays Bank branch signboard pictured in North London, and an ABN Amro signboard below. Photograph: Rick Nederstigt/AFP/ Getty

How far is the CEO of the company responsible for Lehman's fall?

Wall Street analysts believe that it was the 'hubris' of Richard Fuld, the 62-year-old CEO of Lehman, who did not take the telltale signs of impending doom very seriously. Fuld, nicknamed The Gorilla for his foul temper, intimidating presence and tough talk, rejected many bids to save Lehman because he thought that the sinking giant was much bigger than Wall Street was giving it credit for, and wanted to get more price for the sale of the company.

Analysts say if the bank was sold just a week before it went kaput, it could have been saved the ignominy of a bankruptcy, but Fuld was far too adamant to see reason. Result: the end of a 158-year-old financial giant.

Image: Richard Fuld, CEO, Lehman Brothers. Photograph: Mandel Ngan/AFP/Getty Images

Could the United States government helped, like it helped Bear Stearns in May this year, and Fannie Mae and Freddie Mac earlier this month?

The US government could have helped, but US Treasury Secretary Henry Paulson said that it would not use up any more taxpayer dollars to bail out Lehman Brothers as it would lead to investment banks getting away with their gambling ways. Paulson had bailed out Fannie Mae, Freddie Mac and Bear Stearns, saying that if the government had not done so, the US housing loan market would have collapsed leading to gigantic losses for hundreds of banks all over the globe that have invested in US property.

Paulson, however, believes that a brokerage major like Lehman, which does not have a direct connection with ordinary people who have taken on home loans, need not be bailed out as it would not cause any systemic damage to the US economy.

Image: US Secretary of the Treasury Henry Paulson. Photograph: Jim Watson/AFP/Getty Images

Will everyone in Lehman lose their jobs?

The bankruptcy administrators, PricewaterhouseCoop ers, feels that as Lehman's operations were essentially centralized at New York, the folding up of the investment banker in the US will have a telling impact on all its operations globally.

Over 5,000 employees in the UK have already lost their jobs, while about 20,000 in the US might as well forget going back to their work stations. About 2,500 Lehman employees in India too face the axe.

Image: Some Lehman Brothers' employees leaving the bank's Canary Wharf office in London, England. Photograph: Cate Gillon/Getty Images

Will the whole bank be liquidated?

Unlikely, at least for now. The US Chapter 11 that deals with bankruptcy says that PwC, the administrators, can go about taking its time to find good offers and buyers for Lehman's 'least affected businesses.'

The entire exercise can take months before all of Lehman's assets are sold, given the complexities linked to the bankruptcy.

Image: Pedestrians walk by the New York Stock Exchange in New York City. Photograph: Spencer Platt/Getty Images

What about the Bank of America and Merrill Lynch deal?

Merrill Lynch's buy out by Bank of America is also a shocking development. ML, saw the writing on the wall once it guessed that Lehman was going bust, and decided to sell out before it actually has to file a bankruptcy petition..

What about the insurance giant AIG?

The world's largest insurer, American International Group, has been downgraded by credit rating agencies and is racing against time to find a multi billion dollar infusion to stay afloat. US Federal Reserve officials and two leading banks, JPMorgan Chase and Goldman Sachs, were negotiating to put together $75 billion package to save the insurance giant to stave off crisis.

AIG has sought $40 billion in bridge loan to stave off the crisis. But the Fed rebuffed the request. AIG's ills came to fore, when three leading credit rating agencies - Standard and Poor's Moody's and Fitch - lowered the company's credit scores.

Image: The American International Building, world headquarters of American International Group, in New York City.

Photograph: Chris Hondros/Getty Images

Who could be the next to fall?

Some Wall Street analysts, reports The Guardian, name Washington Mutual as the next financial major to 'find itself in serious trouble.'

However, the even bigger worry is whether the world's largest securities firms, Goldman Sachs and Morgan Stanley, would be able to survive this brutal financial crisis. But many say that these two gaints will not melt down as they have 'done a better job of spreading their bets across world markets and are also more diversified, less leveraged and have managed such risks much better.'

Image: A Morgan Stanley sign is seen at their world headquarters in New York City. Photograph: Stephen Chernin/Getty

What do Indian markets fear?

The fall of two global financial behemoths -- Lehman Brothers and Merrill Lynch -- is expected to dent India Inc's ability to raise resources via the equity route.

Experts feel that such events significantly increase the risk perception, which in turn will put all future investments by institutional investors such as pension or endowment funds, on the back burner.

While the public issue market has already dried up, the private equity funds are also becoming conservative in terms of pricing. This is resulting in either inordinate delays in concluding deals or transactions being called off.

There are many instances of private equity fund managers refusing to go ahead with deals after signing the term sheet. Sources said that a leading fund conducted due diligence on two companies in the last fortnight but did not close either deal primarily because of the developments in the US, their home country.

The crisis faced by Merrill Lynch and Lehman Brothers is expected to have a cascading effect on PE firms too.

Image: A man walks out of Merrill Lynch's headquarters in New York. Photograph: Nicholas Roberts/AFP/ Getty Images

Will it hit the Indian growth story?

The ongoing financial sector crisis in the United States and its repercussions on developed markets worldwide will result in lower capital inflows into emerging markets like India, economists and government officials said today.

At the same time, they called for the government to make it easier for Indian companies to borrow overseas by easing the restrictions that have been imposed in the past to reduce excessive liquidity in the system and control inflation.

This will, in turn, lead to a slowing in investment growth in the months ahead. As lending gets tighter and investment flows dry, corporate India will find it more difficult to raise both equity and debt.

Image: The entrance to the Bombay Stock Exchange. Photograph: Indranil Mukherjee/AFP/ Getty Images

Technology firms are shivering

Lehman Brothers' bankruptcy filing may well prove to be the last straw for Indian IT firms, which were expecting the second half of FY09 to be better. As a result of the US financial market crisis, analysts do not expect Indian IT firms to sign any significant contracts in the banking, financial services and insurance (BFSI) space in the months to come.

While IT firms do not disclose client-specific details, it's estimated that Lehman Brothers has outsourced deals amounting to anywhere between Rs 550 crore and Rs 700 crore (annually) to numerous IT firms, including majors like Tata Consultancy Services, Satyam Computer Services and Wipro. Lehman Brothers, say sources, works with 14 services providers in India - Wipro and TCS being the largest. It also has investments in a few IT firms. It's not clear if these holdings will be liquidated to raise funds.

Moreover, the sources add that Lehman Brothers' unit in India has issued termination letters to a majority of its 2,500 employees.

Image: A Indian stock trader reacts during intra-day trade at a brokerage house in Mumbai. Photograph: Indranil Mukherjee/AFP/ Getty Images

What kind of investment does Lehman have in India?

Lehman does not have direct large holding in the Indian stock markets. These holdings are estimated at around $200 million, including Participatory Notes. This figure is not enough to cripple the Indian stock markets.

But Lehman has exposure to the Indian stock market through special purpose vehicles. This exposure to real estate stocks is said to be of about $1.5 billion, enough to shake up the markets.

Image: Equity traders work on the floor of the New York Stock Exchange in New York. Photograph: Nicholas Roberts/AFP/ Getty Images

Never take some one for granted,Hold every person Close to your Heart because you might wake up one day and realise that you have lost a diamond while you were too busy collecting stones." Remember this always in life.

Ashwin Nagar India +91-9833015352
Success is not permanent and failure is not final

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