President's Message - July 2009

A golden chapter of ICAI history would unfold before the nation on July 1, 2009 th when our Institute completes 60 year of its glorious existence. It is indeed a truly momentous occasion, an occasion to bask in the glory of our six-decade long tradition of excellence and service to the nation.

ICAI has made giant strides in professional excellence in all these years as it has transformed into the second largest accounting body in the world. It has left an impregnable foot print on not only the accountancy profession worldwide but also on the entire nation and society which are the true stakeholders of our noble profession.

The Institute has come a long way. Today it has a strong base of over 154933 members and 518798 students and has spread its wings beyond the shores of our country and is now getting global recognition. The ICAI today has 118 braches and 21 foreign chapters. Our members have also grown in stature from accountants or tax advisors to complete business advisors to clients from all parts of the world.

As we celebrate our Diamond Jubilee, it is also time for anewbeginning....a time to look beyond. There is never room for complacency. This historical moment should act as a springboard to catapult our profession to greater heights.

Diamond Jubilee Celebrations: Planet Alert

In the last 60 years, the Institute has led a stupendous growth of our profession. This year, as part of our Diamond Jubilee Year, the Institute thought it fit to take up initiatives that have global implications for society at large and has thus launched a mega initiative called Planet Alert to spread awareness in India to tackle climate change, both at individual and government policy level. I am happy to inform you that our first module,the Radiothon was successfully launched on June 5, 2009, World Environment Day.

The Radiothon was an 18-hour initiative across 45 cities in India to spread awareness on issues that India faces with respect to climate change and steps that individuals and the government can take to make India a pioneer in environmental leadership.

Prominent celebrities such as Deepika Padukone, Sushmita Sen, Dino Morea, Kunal Khemu, Rahul Bose, Minissha Lamba, Luke Kenny and Amrita Rao among others pledged their support to this cause by expressing their concerns on air. The Radiothon comprised a series of interviews, games, quizzes and green facts throughout the course of the day.

Our next initiative under Planet Alert is the Go Green Run at Agra and New Delhi, scheduled to take place on July 5, 2009 and July 12, 2009 respectively. Our motto is to highlight that it is not about winning, it is about uniting and running for a greener tomorrow.

We have received overwhelming response for the Run and eminent celebrities from the industry would also be participating. I hope that you will enrol yourself for this noble endeavour and become part of the solution!

The formation of a stable government at the Centre augurs well for our economy and would create more opportunities which would steer the economy on a sustainable growth path. We are indeed fortunate to have Hon’ble Shri Salman Khurshid as our new Minister of State (Independent Charge) for Corporate Affairs who had earlier held the portfolio of Minister of State for External Affairs. I am sure that under his dynamic leadership we would reach greater heights of professional excellence and corporate governance. During my first interaction with him, he appreciated the role of our Institute and assured us all his support.

Congratulations

The formation of a stable government at the Centre augurs well for our economy and would create more opportunities which would steer the economy on a sustainable growth path. We are indeed fortunate to have Hon’ble Shri Salman Khurshid as our new Minister of State (Independent Charge) for Corporate Affairs who had earlier held the portfolio of Minister of State for External Affairs.

I am sure that under his dynamic leadership we would reach greater heights of professional excellence and corporate governance. During my first interaction with him, he appreciated the role of our Institute and assured us all his support.

I Welcome Newly Nominated Members

The government has nominated two new members to the Council. Shri Krishna Kant, Retired Chief Commissioner of Customs and Central Excise has been nominated in place of Dr. Pritam Singh with effect from April 24, 2009 and Smt. Renuka Kumar, IAS, Joint Secretary, Ministry of Corporate Affairs has been nominated in place of Shri Jitesh Khosla, IAS with effect from May 13, 2009. I welcome both these members and I am sure that our Council would vastly benefit from their rich experience.

I also welcome Shri P.K. Mishra who has been nominated by the Central Government on the Disciplinary Committee constituted under Section 21B in place of ShriR.K. Handoo with effect from April 29, 2009. I express mysincere gratitude to the outgoing nominated members for their contribution and guidance to the Institute.

Hopes Riding High on the Budget

The whole country awaits the Budget with bated breath. The new Finance Minister Hon’ble Shri Pranab Mukherjee would have to walk the tight rope in balancing various issues that may bring the economy back on a 8-9 per cent growth trajectory. While it is generally expected that the Budget would be by far a populist budget, certain hard measures would have to be taken to arrest the economic decline, give a fillip to exports and usher in second generation reforms.

Our Institute has always played a proactive role in shaping government policies through representations and suggestions by way of pre and post-budget memoranda. This year, I had the opportunity to present the pre-budget memorandum for Direct Taxes to Shri S.S.N. Moorthy, Chairman, CBDT and for Indirect Taxes to Shri P.C. Jha, Chairman, CBEC and earnestly hope that our suggestions such as restoration of standard deduction and bringing corporate carrying out agricultural activities into the tax net find place in the forthcoming Budget.

ICAI and G-20

I believe that there has to be a greater penetration of our Institute in various Government departments and representation of ICAI on various Government constituted committees and panels. To achieve this, there is a need to create greater awareness of the role ICAI can play in the compliance and monitoring issues under the statutory framework.

Recently, I had the opportunity to attend rd the 3 meeting of the High Level Committee constituted by the Government of India to follow up on G-20 issues wherein I raised issues regarding funding of the IASB and non-representation of ICAI at such an important Board. I further pointed out that while there was a great emphasis on setting more and more standards, the monitoring mechanism neededmuchto be desired.

Progress on XBRL

As you are aware, eXtensible Business Reporting Language (XBRL) is a novel way of the communication of business and financial data that is of immense utility to the government, regulators, stakeholders, etc. As such, we at ICAI are committed to development and promotion of this technology in India and have moved forward to not only develop the taxonomy of XBRL-based reporting but also establishing ICAI as Indian jurisdiction of XBRL International, which is a non–profit consortium of a large number of organisations and government agencies worldwide.

In this regard, I recently attended a meeting of the High Level Steering Committee for implementation of XBRLbased data submission by banks at the RBI Office, Mumbai.

While the Steering Committee was primarily concerned with implementation of XBRL-based data submission by banks which is presently done by sending various returns to the RBI for regulatory purposes, the role of the ICAI in establishing and organising the XBRL India Jurisdiction of the XBRL International was also discussed in relation to the requirements of the RBI as well as the forerunner of establishing XBRL Taxonomies in the country.

Keeping in view the usefulness of XBRL financial statements of borrowers to the banks, the Committee also suggested that the Indian Banks Association (IBA) should organise awareness workshops on the usefulness of XBRL for banks in collaboration with the ICAI.

I informed the meeting that since themembers of the Institute would also need training in the preparation of XBRLbased financial statements, the ICAI would hold awareness programmes and also shortly bring out a publication on the subject for the benefit ofmembers.

DND Link

Though we are keeping in touch with all our members and students constantly and keeping them apprised of various activities through SMS, there may be some members and students who do not wish to receive such messages. In order to enable such members and students to not get such SMSs,wehave decided to create aDND link on our website.

Global Network& Collaborations

This year I have dedicated myself to create a global footprint of our Institute. As you are aware, the Institute has signed a MoU with the Institute of Chartered Accountants in England andWales (ICAEW). To follow up on this, I visited London for an informal meeting. In the past we have had discussions with the ICAEW regarding the high cost of fees that ICAI members have to pay.

Keeping this issue in mind, I brought up the issue and am pleased to inform you that ICAEW has agreed to consider reduction in the fees by offering scholarships to our more talented members. Following another round of discussions, the ICAEW also agreed to offer its services on technologies already in place at its end.

I am sure that our members will immensely benefit from this kind of international cooperation. The most heart warming experience during this visit was the tremendous response received from our members in London, which convinced me to take positive steps to activate the London Chapter, including arrangements to hold elections at the earliest.

Meanwhile, a MoU between CGA (Certified General Accountants Association of Canada) and ICAI to work together to develop a mutually beneficial relationship in the best interest of members, students and respective organisations is on the anvil.

The ICAI is also holdings talks with Canadian Institute of CharteredAccountants (CICA) to have MRA with CICA and we are working to expedite this process.Similarly, dialogue with ICA Ireland for an MRA has also been initiated. A MRA with ICA Australia is also likely to be finalised soon.

The Institute is also adding new Chapters in Thailand and Ireland which would be up and running soon.

On the Middle East front, our Bahrain chapter has a 500 strong ICAI member base.To support these members, a delegation from ICAI visited Bahrain to meet the authorities there to start an office of ICAI in Bahrain. A number of releated positive occurrences made the trip worthwhile. The first was that we had the Ambassador of India to Bahrain address one of the Council Meetings.

The second had a far greater significance as it was a request from the Kingdom of Bahrain stating that they wanted the ICAI qualification to start in Bahrain. The ICAI delegation held a series of meetings with various ministries and regulatory banks in which the focus was on what ICAI could do for Bahrain. They welcomed the ICAI initiatives and we have requested both the Minister of Finance and Minister of Commerce for allotment of land for the ICAI Bahrain office in Bahrain.

While ICAI would be formally launching its CA programme in Bahrain, discussions with Bahrain Institute of Banking and Finance, Tamkeen and Ministry of Finance have focused on having specific MoUs with the three organisations for providing them expertise / accounting modules and other training modules.

A seminar was organised which was attended by over 300 participants across the region and was addressed by myself, Vice President CA. Amarjit Chopra and Chapter Mentor wherein some of the local organisations highly praised the role of ICAI in building sound financial systems for Bahrain.

The members informed us of their desire to collect Rs. one crore and more for the ICAI building project at Bahrain. We decided to reciprocate this voluntary gesture by assuring them a matching contribution to assist them in their activities.

Personal Invitation to the President of India

As informed to you in my earlier communication, I had the privilege to be a part of the business delegation to Spain and Poland, presided by Her Excellency Smt. Pratibha Devisingh Patil, Hon'ble President of India. During a business session on Investment Opportunities between Spain and India I discussed the possible avenues where our CAs and Accounting Technicians could provide their services and expertise.

I also had the opportunity to meet Mr. Jose Ramon Gonzalez Garcia, President, Instituto De Contabilidad Y Auditoria De Cuentas (the Institute of Accounting and Audit, Spain) and discussed the possibility of having an MRA with them on the lines of ICAEW.

During this visit I had the opportunity to have a one-on-one interaction with Her Excellency Pratibha Devisingh Patil. I took this chance to appraise her about the various initiatives taken by the ICAI as a regulatory body. I also extended to her an invitation to attend the Diamond Jubilee International Conference at Agra and requested her to inaugurate our new building in Sector 62, Noida.

The International Federation of Accounting Technicians

I have been keeping you posted on the developments on forming the Federation of Accounting Technicians. We have received national and international support for the International Federation of Accounting Technicians (IFAT). We have already received letters of support from Bangladesh, Nepal, Sri Lanka and Canada. The steps are being taken for its early incorporation.

Satyam Fiasco

During the course of the Satyam investigation we had received a request of assistance from the CBI. Knowing that we could provide the requisite expertise, I constituted a group of local senior Chartered Accountant professionals from Hyderabad under the convenorship of CA. Shanti Lal Daga for providing required support to the CBI.

The group rendered honorary professional services and submitted their report to the CBI investigation team on April 5, 2009. I wish to thank the members of the group for their selfless work.

The Financial Reporting Review Board appointed a Panel of Reviewers to review five years’ general purpose financial statements of Satyam Computer Services Ltd. The Panel has already held six meetings and is presently considering the general purpose financial statement of the company.

Meanwhile, the High Powered Committee set up by us to look into entire gamut of Satyam fiasco, has submitted its draft report to the Council. Based on the deliberations and discussions in the Council, the Committee would submit its final report soon.

Further, the High Powered Committee has so far written letters to 94 firms of Chartered Accountants, which are known to have affiliation with international entities. The Committee has noted that the response from the firms to its letters has been generally poor, despite reminders.

As such, it has been decided to give one more opportunity to the firms to reply to the Committee’s letter, failing which the provisions contained in First Schedule of the Chartered Accountants Act, 1949 will be invoked and the matter will be referred to the Disciplinary Directorate. This information will also be hosted on the Institute website.

Infrastructure

This year I am placing a lot of emphasis on improving and building world-class infrastructure in order to be able to offer better services to members and students.

I am glad to share with you that the Institute’s Office at Kolkata has acquired an additional 10800 sq. ft. of land at Hatisur for development of ‘ICAI Bhawan’ Kolkata. I thank my colleague in the Council CA. Kashi Khandelwal for his sincere and fruitful efforts tomake this happen.

Also, our Ahmednagar Branch of WIRC of ICAI has acquired a plot of land admeasuring 4990 sq. ft. and the registration of documents has been completed. The construction work for building of Nashik Branch of WIRC has also been started.

Furthermore, the construction work at our Centre of Excellence in Jaipur and Bangalore is in full swing. Very soon our students and members of these regions would be able to use the services available through these centres.

Now our members and students of Moradabad Branch would also be able to access better facilities through its own building proposed on a land of an approximate area of about 137.475 sq.m. We recently performed the Bhoomi Poojan ceremony in this regard.

The state-of-the-art building shall be having a Conference Hall, Library /Reading room, Information Technology Lab, Administrative block , Managing Committee Room, class room for coaching of CPT, IPCC and CA final, Store for Institute’s publications, etc.

I compliment the Chairman and other members of the managing committee of the Branch of realising the dream of acquiring land for its own branch building. I also recently inaugurated the renovated Mangalore branch premises with more facilities for members and students.

Some other branches are also in the process of acquiring land for construction of their own buildings which, I amsure, will give a further fillip to my drive to have vast and world class ICAI infrastructure.

CA Examinations

Better infrastructure has greatly helped in adding to the strength of our CA Pariwar every year. The Chartered Accountants examinations were conducted smoothly st th from 1 June, 2009 to 15 June, 2009 at 221 centres located in 111 cities in India and 3 cities abroad.

A total of 1,24,341 candidates were admitted to various examinations out of which 39,603 were admitted in the Finals, 473 in the (New Course) Finals, 22,243 in Professional Education – II, & 62,022 in the Professional Competence Exam.

Due to the general elections, the chartered accountancy examinations were held in the month of June instead of usual month of May. The delay in last examinations has put pressures on scheduling of the next examinations. However, it has been decided that the forthcoming examinations will be held on schedule in the usual monthof November.

Convocation Ceremony

To confer certificates and to welcome our new members into the profession we had started convocation ceremonies last year. I believe that the convocation ceremonies instill a sense of pride and belonging in each and every new member. As such, enthused by the overwhelming response from our newly qualified members this year, convocation programmes for Associate Members for the period from September 2008 to February 2009 were organised recently for Western, Northern and Southern Regions at Mumbai, New Delhi and Chennai respectively.

We were fortunate to have with us Mr. Kishore Biyani, Managing Director, Pantaloon Retail (India) Limited&Future Group; Shri Nitin Gadkari, Member of Legislative Council, Maharashtra Shri S. K. Chattopadhyay, Chief Commissioner of Income Tax-IV at our Mumbai Convocation and Shri Sanjay Singh, Member of Parliament and Shri A.N. Chatterji, Deputy C&AG and Chairman Audit Board at our Delhi Convocation. Dr. Justice A.R. Lakshmanan, Chairman Law Commission of India and former judge Supreme Court, graced the Chennai convocation. The convocation programs for other Regions are scheduled in near future.

Women Steering Group: A Major Step towards Women Empowerment

To achieve the goal of empowering women, ICAI has established a Women’s Steering Group which aims to define better roles for women CAs. This Group will focus on building women’s capacity and position them as competent, capable and collaborative partners in all facets of professional and allied activities.

We will constantly strengthen and broaden the role of this Group and launch a series of initiatives in times to come for the benefit of our women members in particular and CA Pariwar in general. As part of this initiative, the first women steering conference on the theme “Women – taking a lead” is scheduled th to be held on 29 June 2009 at New Delhi, wherein Delhi Chief Minister Mrs. Sheila Dikshit will deliver a key note address.

Aiding Government in Good Governance

Continuing with the ICAI’s tradition of being a ‘proactive partner in nation building’ and promoter of good governance, our Indirect Taxes Committee recently organised a two weeks training course on ‘Use of Financial and Accounting Tools in the area of Indirect Taxes’ for the Indian Revenue Service (Customs&Central Excise) Group ‘A’ th Probationers of 60 Batch at NACEN Complex, Faridabad.

You will appreciate that as many as 135 delegates attended the course as compared to 60 last year. We have also revised the Training Manual for Central Excise and Service Tax Officers titled ‘Study of Financial Records and Understanding of Audit Techniques, which was used as a background material during the training course. I amsure that this course would have immensely added to knowledge and skills of the participants.

Meanwhile, on a request from the Ministry of Corporate Affairs, the ICAI also recently organised a training programme for the officers and staff working in the office of official liquidator, Delhi. Hon’ble Justice Gita Mittal inaugurated the Training Programme.

New Initiatives

The importance of Enterprise Risk Management (ERM) in a contemporary organisation working in a dynamic environment fraught with uncertainties and volatility cannot be overstated. Considering this, the Internal Audit Standards Board started the first batch of the Certificate Course on Enterprise Risk Management on June 6, 2009 at New Delhi.

This course is a landmark course of the Institute which will go a long way in creating a pool of risk managers from the chartered accountant fraternity. In due course, the Board will start this course at Mumbai, Chennai,Kolkata and Hyderabad.

I, along with the representatives of ICSI, ICWAI and NIC, recently attended a meeting on Limited Liability Partnership Act, 2008 called by Ministry of Corporate Affairs. The Ministry informed that a large number of queries are being raised by the end users regarding policy issues related to LLP Act and rules and e-portal issues.

For the purpose, a National level Master trainers’ workshop followed by State and District level Workshop(s) in association with NIC, professionals of three Institutes and Ministry of Corporate Affairs are proposed to be organized soon.

For this purpose, different modules on LLP are to be developed for the benefit of the services and professional sectors. As such, a panel of experts/ faculty/ resource persons, including Chartered Accountants, Company Secretaries, Cost Accountants, Advocates, Management experts having multi disciplinary experience & expertise in the matter, is being prepared to act as trainers for theLLPworkshops.

I am happy to inform that the ICAI has become Corporate member of Netherland based International Fiscal Association (IFA) which specialises in spreading the knowledge of International Taxation. It has got membership of over 100 countries all over the world. The Corporate membership of IFA would help in getting access to information relating to developments on InternationalTaxation.

You will be pleased to know that a Special Campus Placement Programme was recently organised for those who have undergone three months Residential Programme on Professional Skills Development at NIFM Faridabad as well as at L.N. Mittal, Institute of Information Technology, Jaipur. In this Campus 29 candidates were offered jobs by seven recruiting entities.

As part of ICAI hi-tech drive, the Infosys recently started working on Project Parivartan of the ICAI, which is aimed at adding to the dynamism and efficiency of the Institute.

Let’s Celebrate

Our Diamond Jubilee calls for national celebrations with a difference. So join the festivities and help ICAI showcase our rich heritage and tradition of excellence and service to the nation before theworld at large.

On this occasion, I also wish to emphasize on the crucial need of not only keeping intact the glory of our past achievements but also amplifying it in future by meticulous and objective planning and efficient execution. Rather than adapting to the changes,we need to lead the changes in the business environment to conquer the future.

Let’s continue to benchmark ourselves against the best global practices and explore the tremendous opportunities on the horizon. I wish you all happy festivities which will unfold in the coming days.