ICAI President's Message - February 2013

Dear Friends,

Let me begin my last message from the prestigious office of the President of the Institute, i.e. our alma mater, with Irish wishes for my dear membership fraternity:

May the road rise up to meet you, May the wind be ever at your back. May the sun shine warm upon your face and the rain fall softly on your fields. And until we meet again, may God hold you in the hollow of his hand. May the sun shine, all day long, Everything go right, and nothing wrong. May those you love bring love back to you, And may all the wishes you wish come true!

Let me acknowledge that I am moving away from this office with love, warmth and faith you have bestowed on me throughout my tenure in this sacred space. Let me wish that the profession will reach higher, farther and broader to places where we dream of-higher than the place we have come up through the last year. My tenure gets over and this does not take away the contentment from me in the least; while I am happy with the growth and enrichment our profession has achieved, I will never ever let this contentment come in the way of my endeavours to take our profession further ahead. I am happy that we could achieve this condition together.

Membership strength is at an all-time high. Allround facets of the profession have been consolidated. We have constantly been available to our Government in sharpening and updating the accounting and auditing skills of their officials. The initiatives of spreading awareness about accountancy in the nation have helped our profession and professionals in creating a special space in academia, and this could be witnessed in the growing number of recognition of our qualification by various universities, institutions , etc., both private as well as governmental. Infrastructure initiatives are in top slot on our agenda-being a fundamental requirement for social and professional standing of our profession. We have reached our international stakeholders with our technical expertise. We have extended our technical infrastructure to the nations where accountancy education has just taken off, or, it has wished to take off. MRAs and MoUs have grown in number, both nationally as well as internationally, showing our empowerment procedures on a rising curve. Organising international conference year after year is another such effort towards spreading the word about competence of our fraternity besides to register our active presence with international stakeholders. Our efforts of convergence with the IFRSs have already started producing results. It is satisfying that we have decided to converge and not to change fundamentally. Our codes of standards will have national flavour. Since its inception, our profession has really come a long way with a tremendous growth under the vision of its Presidents and the guidance of its Councils. Throughout, our journey of growth and progress has maintained a pace, and it continues unabated under the guidance of 21st Central Council as well. The motto for 2012-13 Inclusive Growth of Professionals and Exhaustive & Exclusive Growth of the Profession sums up the initiatives undertaken during 2012-13, which has taken the CA Profession to a new height, besides bringing glory to our status as a Partner-in-Nation-Building. List of significant achievements is quite huge which in a selective manner has been published elsewhere in this issue of Journal. However, let us pay attention to some of the significant developments that took place in profession over the last one month:

Elections 2013

I am glad to inform you that the triennial elections to the Council and Regional Councils were held successfully in December 2012. Counting of votes began in December 2012 and got concluded in early January 2013. Results of elections were declared on 7th January, 2013. As per the requirement of Rule 36 of the Chartered Accountants (Election to the Council) Rules, 2006 read with regulation 134(10) of the Chartered Accountants Regulations, 1988 two notifications containing results of election to the Central Council and Regional Councils have been published in the Gazette of India, dated 7th January, 2013. The new, i.e. twenty second, Council will be constituted effective from 12th February, 2013. Out of 1,92,641 voters, 90228 voters exercised their franchise, with 46.83 all-India voting percentage. Region-wise voting percentage was 49.81 (for Western Region), 44.07 (for Southern Region), 42.23 (for Eastern Region), 46.14 (for Central Region), and 47.45 (for Northern Region). In all, 509 polling booths were set up all over India, out of which in 123 polling booths the voting was held on two consecutive days in December 2012. There were 83 candidates for Central Council from different Regional Constituencies and 163 candidates for five Regional Councils.

International Initiatives

Nominations on International Institutions: ICAI Vice-President CA. Subodh Kumar Agrawal has been nominated on the IFAC’s SMP (Small and Medium Practices) Committee for 2013-15, and appointed SAFA Vice-President for January-December 2013. ICAI past-President CA. Amarjit Chopra has been nominated as Deputy Chairman, PAODC for the period January-December 2013. SAFA Assembly & Board Meeting in Dhaka: ICAI past-President and my Central Council colleague CA. Amarjit Chopra attended the SAFA Assembly and Board meeting held recently in Dhaka, which was attended by the representatives of accountancy bodies from SAARC countries namely India, Pakistan, Bangladesh, Sri Lanka and Nepal. SAFA Committee Meeting in Colombo: My Central Council colleague CA. Vijay Kumar Garg attended the meeting of SAFA Committee for Improvement in Transparency, Accountability & Governance held recently in Colombo. The winners of SAFA Best Presented Annual Report Awards and SAARC Anniversary Awards for Corporate Governance Disclosures Competition were finalised during the meeting. Certificate Course on International Taxation in Dubai: We have launched our Certificate Course on International Taxation for our overseas members too, particularly for those in the Middle East region. I, along with my Central Council colleague CA. Mahesh P. Sarda visited Dubai to inaugurate the launch of this short-term Certificate Course recently. I sincerely hope that this initiative would facilitate our members-inindustry as well as those in practice in understanding the recent trends in international taxation. Conference of Council of CBSE-Affiliated Schools in Dubai:I along with the ICAI Vice-President CA. Subodh Kumar Agrawal visited Dubai where the Silver Jubilee Conference of the Council of CBSE Affiliated-Schools was organised. This Council consists of 53 schools from UAE, 15 schools from Kuwait, 6 schools in Bahrain, 28 schools in Kingdom of Saudi Arabia, 17 schools in Oman, 8 schools in Qatar, and one school in Yemen. This Conference was inaugurated by the Ambassador of India to UAE Shri M. K. Lokesh. I addressed the participants on our CA program as gateway to a sunrise career during the Conference. Examination for Members of Foreign Accounting Bodies: A special examination for members of foreign accounting bodies with whom the ICAI has entered into a mutual recognition agreement/memorandum of understanding was held in New Delhi recently. Workshops/Seminars/Training Programmes ISA Professional Training was recently organised in Nepal.

Mega International Conference in Mumbai

We organised a mega-International Conference on Accountancy Profession: Enablers of Economic Growth in Mumbai. This was an elaborate conglomeration of experts and leading lights from the fields of financial reengineering, economics, governance, accounting standards, etc., from both academia and industry. About 1200 national and international stakeholders attended this Conference. Chief Guest Union Cabinet Minister of Law & Justice Dr. Ashwani Kumar inaugurated the Conference. In his eloquent address, he complimented our fraternity and said that financial accountability and fiscal prudence and sustainability need to be preserved and translated in businesses of our nation. In his thought provoking special address on Strengthening Public Governance Mechanism-Meeting Aspirations, MP (Rajya Sabha) CA. Piyush Goyal said: Aspirations of young and dynamic India can be realised only through strong and effective public governance mechanism and its effective implementation.Union Minister for Minority Affairs CA. K Rahman Khan addressed the participants and found the Conference relevant in present scenario, and said: we CAs are indeed enablers of growth; we make the growth presentable and understandable; we are important segment of economic growth. I am sure that this mega event must have expanded the knowledge horizon of our members and all other stakeholders of the profession. Detailed report is published elsewhere in this issue of Journal.

Partner-in-Nation-Building Initiatives

Spreading Awareness on Public Finance & Government Accounting: Baroda Branch of WIRC recently organised Awareness Programme on Rising to the Challenges in Public Finance & Government Accounting under the aegis of ICAI, particularly for the Audit Department of Vadodara Mahanagar Seva Sadan and our members. The objective was to update them on the development in public finance and government accounting. ICAI past-President CA. Amarjit Chopra discussed the importance of audit. Pre-Budget Memoranda Submitted to Government: I am happy to inform that ICAI’s Pre-Budget Memoranda 2013 for direct tax and indirect taxes, prepared after incorporating valuable suggestions from membership at large, has been submitted to the Government. The recommendations in Pre-Budget Memorandum, 2013 have been finalised on the basis of representations, suggestions received and subsequent discussions held. The suggestions given by us in the memorandum do not only relate to just fiscal laws but also pertain to overall economic development, in line with our being a true Partner in Nation Building. Summary of the Pre-Budget Memoranda for Direct Taxes and Indirect Taxes have been published elsewhere in the journal. I am sure our memoranda would prove to be highly useful to the Government. Meeting with DPE Secretary: Subsequent to the ICAI’s submission of the draft Model Role and Responsibilities of Non-Official Directors of CPSEs to Shri O. P. Rawat, Secretary of Department of Public Enterprises (DPE), Ministry of Heavy Industries and Public Enterprises, the same had been forwarded to all the PSUs for comments and opinions. Later, ICAI had received comments from DPE as well as some 35 PSUs, and prepared the final draft by including those comments. The same was handed over to Shri O. P. Rawat recently. Submissions of Suggestions/Comments: To CBDT on Section 194 LC of the Income-tax Act, 1961. To CBDT on difficulties being faced by taxpayers with regard to requirement of audited balance sheet as on valuation date for the purposes of Section 56(2)(vii)/(viia) read with Rule 11UA(1) of Incometax Rules, 1962. We have submitted that a common definition of ‘balance sheet’ for entire Rule 11UA be provided in 11U to avoid any discrimination between taxpayers covered by Section 56(2)(vii)/ (viia) and Section 56(2)(viib). To CBDT on difficulties being faced by members with regard to furnishing details of foreign assets in Schedule FA of the income-tax return forms. To CBEC to introduce Service Tax Audit on the lines as prescribed under Section 44AB of the Income-tax Act, 1961. To Committee on Foreign Tax Credit (FTC) on issues relating to foreign tax credit and some measures including drafting of FTC Rules under Section 207 of the Proposed Direct Tax Code. Requests from Ministries/Government Offices: From MCA to consider the issue regarding accounting for dry dock expenses incurred on a ship which has been forwarded by Indian National Shipowners’ Association (INSA). We forwarded our views to the NACAS, who after going through our views has requested us to reconsider them in the light of their suggestions. From DPE (Assam), to conduct a 2-day orientation programme on new accounting and auditing procedures for members of Board of Directors/ MDs/CEOs and other executives of the State-level public-sector undertakings. From DPE to organise training programmes in the series for the SLPEs of Haryana and Tripura. From National Institute of Technology, Rourkela, to organise a training programme for their officials on managing overall finance, accounts, budgeting, accrual system of accounting and taxation, etc. From MCA to provide details of the proposed amendments to be made in the CA Act for implementing the Overseas Citizen of India (OCI) scheme and supplementary comments, if any, to our recommendations on OCI scheme for becoming a member of the Institute. We have already submitted our recommendations to MCA. From National Skills Development Council to associate and support their BFSI (banking financial services and insurance) Skills Development Council and Accounting Sector Skills Development Council. From MCA to provide information on a questionnaire received from the European Commission on Independent Oversight Mechanism in the Country. Workshops/Seminars/Training Programmes: One-day training programme on cyber crimes and forensic investigations was recently organised for the Vadodara Police Department recently in Baroda, where about 100 police officials were also present. Baroda Police Commissioner Shri Satish Sharma, Crime Branch Additional Secretary Shri P. P. Pandey, Noida Cyber Crime Cell Deputy Supritendent of Police Dr. Triveni Singh were also present during the session. We recently extended our technical support to the UGC for organising a workshop on Implementation of Accounting Standards in Educational Institutions in Hyderabad under the aegis of Ministry of Human Resource Development.

CA Final and CPT Results Declared

CA Final and CPT results have been declared and hosted on http://www.caresults.nic.in/, as scheduled. While I take this opportunity to congratulate the successful candidates, I would also like to assure those who could not qualify that consistency and hard work pays always. All they are required to do is to work harder and intelligently and I am sure they will definitely succeed next time with flying colours. They must start their preparation now without thinking much about what happened in the last examination. Pass percentage in Both Group category of the Final Examination November 2012 is 12.97, whereas that in Group I and II are 27.30 and 21.85 respectively. I would like to congratulate particularly Ms. Jayakumar Prema of Mumbai (Maharashtra), who has got the first rank in Finals with 75.88%. Mr. Indiana Ashok Kumar of Rajamahendravaram (Andhra Pradesh) and Mr. Gnanasampath M. of Coimbatore have secured second and third place in the Finals with 75.25% and 74.13% respectively. I congratulate them for their achievements. In CPT of December 2012, overall 27.07% candidates have been declared passed; pass percentage of female candidates is better than that of male, i.e. 27.87 and 26.68 respectively. I would like to congratulate particularly Mr. Sai Brahma Teja Madala of Guntur (Andhra Pradesh) for securing the first rank in CPT December 2012. Mr. Aviral Shrimal of Jaipur and Ms. Appasani Seetabhavani of Kakinada (Andhra Pradesh) have secured second rank together with 96%, and Mr. Bommana Vamsidhara Reddy of Guntur has secured third rank with 95%.

Initiatives for Profession

Rising Membership Strength: I am glad to inform you that the membership strength has gone up to 2,05,564 as on 16th January, 2013, indicating a growth of 4.7% in membership. Meeting of Experts on Accounting Standards: To consider the draft of revised AS 1, Disclosure of Accounting Policies, and AS 5, Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies, a meeting of the experts was held recently in Indore. The Drafts of revised Accounting Standards are being finalised on the basis of the discussion at the meeting held and will be re-considered. Live Webcasts on Professional Issues: Nine live Webcasts were organised on contemporary topics, viz. Skills of CA-CFO, CA-CEO & CA-entrepreneur, domestic transfer pricing, legal aspects and documentation, amalgamation, merger and structuring for business growth, entrepreneurship for women (on Redefining Attitude, Redefining Destiny), FDI and outward investments for business growth and compliance of FEMA related aspects, understanding GAAP including Indian GAAP, IFRS, USA & UK GAAP, real estate industry, DCF approach to valuation and overview of Companies Bill 2012: New Regulatory Framework for NBFCs. Reporting CBDT on Membership Misuse: We had received the data on tax audit reports e-filed during 2011-12 to ascertain the misuse of membership numbers. Consequently, we recently submitted the details of fake and deceased memberships to the CBDT for appropriate action. We have reported that 652 membership numbers quoted by the assessees in e-returns do not subsist at all. Also, 2,503 tax audits have been conducted using the fake membership. 311 out of 652 membership numbers belong to the deceased who passed away before 31-3-2011. 759 out of 2,503 tax audits were conducted using the identity of the deceased members. Modified Guidelines of Provisions for Writer: As you are aware, we had in place guidelines for dealing with requests of differently-abled candidates of our examinations for grant of extra time and/or writers to them, which comment, inter alia, on who a writer should be. They have been modified further in response to a petition: For Final/IPC examinations, the writer should be an undergraduate and neither registered student of CA/CWA/CS course nor passed Final Examination and nor a member of the ICAI, ICWAI, and ICSI. For PQC examinations, the cap of undergraduate has been modified to graduate (other than in Commerce of Corporate Laws Stream) and neither a registered student of CA/CWA/CS course nor passed Final examination and nor a member of the ICAI, ICWAI, and ICSI. Earlier embargo on the age of ‘20 years’ on the writer and his relationship with the candidate has been dropped. Earlier condition that the writer should be same for all the papers has been modified to permit one change in the writer for reasons beyond the control of concerned examinee or writer. Exposure Draft on Power Sector Specific Elements Hosted: Exposure draft of the Power Sector specific elements had been hosted on the website of XBRL India and ICAI for comments. The Exposure Draft has also been sent to the industry chambers, viz. CII, ASSOCHAM, FICCI and the Association of Power Producers, for comments. CA Examinations Scheduled: May 2013 CA examinations will commence on 2nd May, 2013, and conclude on 16th May, 2013. CPT will be held on 16th June, 2013. New Examination Centres: For May 2013 examinations, two new examination centres have been notified-Navsari (Gujarat) and Jind (Haryana). In addition to the existing centre of Margao in the State of Goa, another centre in Mapusa will be set up in the State.

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It may be time to say goodbye from the Office, but it will never be from my heart to my fraternity or to the stakeholders of accountancy profession at large. Achievements and initiatives that we undertook with the help of the officials and staff of our alma mater, i.e. ICAI, will continue to matter to me, as the agenda of growth and development in profession will be on forever. I am happy that I have tried my best to act in the interests of my profession. I am happy that this goodbye certainly will not end our initiatives for the profession. I will keep trying and continue to act in the interests of my profession from all possible space and capacities. This is in fact a beginning of a new chapter of my life. I never intend to move away from my concerns for accounting fraternity, which will always be my top priority. This concern will remain sacred for me. Still, at some place, it hurts to depart from the Office, as this gave me an opportunity to get connected with the soul of our fraternity. Celebrated humourist Charles M. Schulz rightly observes that it is not possible to bring everybody we love together in this world and then just stay together. He says: I guess that wouldn't work. Someone would leave. Someone always leaves. Philosopher Henry David Thoreau says: Nothing makes the earth seem so spacious as to have friends at a distance....It is equally true that a bye leads to a hello. I will not consider this a moment of farewell, as we shall meet again. I believe Schulz: Absence makes the heart grow fonder...Some moments come and go from our life, some stay for sometime, and some occupy special place in our heart and they never leave actually, as they change us for our own good. I must say my last year and interaction and experiences with employees, Council colleagues and members and students at large are those special moments, which I would always cherish in my life. I would always preserve the love and respect with care that I have received from them. I heartily congratulate my colleague and ICAI Vice-President CA. Subodh Kumar Agrawal first for coming back to the Central Council with unparalleled success and support of the membership, i.e. claiming 56% of the votes polled that is a record in itself. The mandate with which he has come back shows the trust our professional fraternity has in his abilities. I feel quite relaxed too for the leadership of our profession will be in safer and deserving hands. It is not very common that we find a good and kind friend in a colleague. I must thank him for being that for me; he always extended his complete help and support in all the endeavours of our profession. I had the opportunity to know him quite closely while he as Vice-President of the Institute was putting in his efforts without coming in the fore along with me at every step during my tenure. I wish I could work more for the profession, along with him like an associate. It was actually very comfortable working with him. I wish him my best compliments while believing that under his vision and leadership, our profession will reach unfathomed corners of this world and record unprecedented growth. A new dynamic Central Council is already in place to support the endeavours of new leadership in realising the vision that CA. Subodh Kumar Agrawal has kept to his heart. 13 new members have joined the 22nd Central Council of the Institute. I would like to heartily congratulate and welcome them in advance. I would also congratulate others who have successfully defended their Central Council membership with a convincing triumph. I am sure that the 22nd Central Council will take our profession to a better height. I would like to thank the 21st Central Council colleagues for their willing help, cooperation and contribution in the agenda of accountancy profession. I will never forget their love, faith and respect that they have bestowed in my leadership. I am sure, being in profession and having similar goals and objectives for our dear profession, we will have to march with willingness to work in coordination and association. Before I conclude, I would like to quote our first ICAI President Shri G. P. Kapadia:

With humility and full dedication I salute my Institute - I adore my profession.

Best wishes

CA. Jaydeep Narendra Shah President, ICAI