Auditors know it too well

According to Clause 49 of Listing Agreement, the Audit committee of a listed company is required to review the findings of any internal investigation conducted by internal auditors into matters where there is suspected fraud, irregularity or a failure of internal control systems of material nature and report the matter to the board.

According to Clause 49 of Listing Agreement, CEO and CFO of a listed company are required to certify that:

There are, to the best of their knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violate the company's code of conduct.

They have indicated to the auditors and the Audit committee instances of significant fraud of which they have become aware and the involvement therein, if any, of the management or an employee having a significant role in the company's internal control system.

The ICAI's Standard on Internal Audit 11 establishes the responsibilities of the internal auditor relating to the fraud prevention and detection and provides guidance to internal auditors regarding communication and documentation of fraud.

The revised Schedule VI

Schedule VI is a schedule under the Companies Act that sets out the requirement relating to presentation of financial statements and disclosures. It is as old as the Companies Act itself and came into existence in 1956 when there were no accounting standards and no accounting standard board. The accounting standard board of the Institute of Chartered Accountants of India was established in 1977 and the first Accounting Standard; AS 1 was issued in 1979. Schedule VI went through numerous changes, for example, capitalisation of foreign exchange losses arising out of devaluation of the rupee in the late 1960s. The fact that Schedule VI served us over a period of more than five decades is a testimony of its robustness. Nonetheless the world around us has changed rapidly, and ultimately old has to give way to the new. Rightly so the Ministry of Corporate Affairs felt that there was a need to overhaul Schedule VI. Revised Schedule VI is a good first step toward converging Indian Accounting requirements with global accounting practices, for example, the classification of assets and liabilities into current and non current.

Appetite for IPOs

After a sluggish 2009, the IPO market picked momentum in 2010. The trend slowed down to a certain extent in 2011, although it remained healthier than it was in 2009. Capital raised in global markets up to November 2011 is estimated at $ 155.8b (1117 IPOs). 72 per cent of global capital was raised in the first 6 months, prior to deepening of European sovereign debt crisis. Current estimates suggest that overall IPO pipeline has more than 700 companies globally seeking nearly $ 112b in fresh capital. In addition to that, lies a sizeable shadow pipeline of companies which are interested in going public but have yet to publicly file, and there exists a large accumulation of IPOs waiting for the right market conditions. Indian corporates have experienced significant PE activity over the last few years. Many PEs would be seeking exits in 2012 coupled with healthy domestic market conditions for Indian corporate that are raising their appetite for continuing fund raising during the coming years.

Growing renewable energy sector

The growth in renewable energy sector in the last few years has been phenomenal. Investment in renewable energy grew from $ 22 billion in 2004 to $ 211 billion in 2010 with renewables representing half of the newly installed electric capacity worldwide in 2010. Renewable capacity now comprises about a quarter of total global power generating capacity and supplies close to 20 per cent of global electricity. Jobs in renewable energy industry exceeded 3.5 million in 2010.

New wind power capacity added during 2010 reached 39 GW, more than any other renewable technology. Also for the first time, majority of new wind turbine capacity was added in developing countries and emerging markets rather than in wind's traditional markets. India was the third largest wind market in 2010, adding nearly 2.3 GW. As of June 2011, India with 14.55 GW of installed wind turbine capacity ranks fifth in the world. China leads the world with 52.8 GW capacity followed by the US, Germany and Spain. Wind power potential in India estimated by Centre for Wind Energy Technology (C-WET) is over 49 GW. Since the 2003 Electricity Act, the wind sector in India has registered a CAGR of about 29.5 per cent.

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