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  DIRECTORS REPORT 2006 - 2007

To the Members of ICAI Accounting Research Foundation

The Directors have pleasure in presenting the Eighth Annual Report of the ICAI Accounting Research Foundation (ICAI ARF), together     with the Audited Balance-sheet, Income and Expenditure Account and Cash Flow Statement for the Financial Year ended 31st March 2007.

The Institute of Chartered Accountants of India (ICAI) promoted ICAI ARF with the main objective to make it an academy for imparting, spreading and promoting knowledge, learning, education and understanding in the various fields related to the profession of accountancy.  Recognizing that not enough emphasis has been laid, so far, in India on research in the areas of accounting, auditing and other related disciplines, and that the level of research needs to be raised at the international level, the Board has decided to support research project of contemporary national and international significance in the aforesaid areas and has extended an open invitation to various institutions, research bodies, research scholar and the practitioners. 

Performance Highlights:

The ICAI ARF has completed another successful year, 2006-07 and has actively pursued the objectives of establishing the Foundation as a core research body with facilities to undertake research in the areas of Accounting, Auditing, Fiscal Laws and policy, corporate and economic laws and policies, economics, financial management, financial services, capital and money markets and other related disciplines. In financial terms, during the year the revenue from research activities has been account for Rs. 60.41 lakh (2006-2007) against the revenue booked for the year 2005-2006 was Rs. 135.93 lakh. The reason for the decline is that major portion of the MCD project was completed in the year 2005-2006 and though the scheduled completion of the KMC project has been extended to September 2007, for the reasons attributable to KMC. As a result of the above the revenue surplus during the year 2006-2007 was about Rs. 54.36 lakh as compared to about Rs. 99.57 lakh during the year 2005-2006. During the year a sum of Rs. 40.00 lakh has been appropriated towards building reserve. Further the ICAI ARF together with ICAI has taken up during the year research project with the office of  Controller General of Accounts (CGA) The primary scope of this World Bank aided project is introduction of accrual accounting on pilot basis, in identified units, The another important project undertaken by ICAI ARF is Strengthening Rural Decentralization under the aegis of DFID, the prime object of the project is the capacity building of Gram Panchayat (GP) and Gram Unayan Samiti in the state of West Bengal.

Accounting, financial, Management Reforms in Municipal Corporation of Delhi Project (MCD): 

Project taken up in March 2002 had been successfully completed on 31st May, 2006.  During the duration of this period ICAI ARF assisted MCD in preparing and presenting their financial statements for the year ended 31st March, 2006.  Additionally, ICAI ARF was also involved in comprehensively restructuring the budget heads and in refining the accounting process in the various Zones of the MCD.  This work included a number of training programmes which were conducted by the team of ICAI ARF.   The final residential programme for MCD officers was held in early May, 2006 and closure of the project was also announced thereat.

Kolkata Municipal Corporation Project (KMC) was taken up by ICAI ARF in July, 2004 and is proposed to be completed the end of September, 2007.  The nature of contribution of ICAI ARF was to assist KMC in the preparation of its final accounts, carrying number of studies on business processes, conducting training programme for capacity building, etc.  In the work relating to final accounts, ICAI ARF has provided a number of technical inputs which assisted KMC in dealing with a large number of legacy problems as a part of this project   

The Project relating to Strengthening Rural Decentralization (SRD) Gram Panchayat Levels in West Bengal primarily involved field visits to various Gram Panchayats (GPs) and Gram Unnayan Samitis (GUSs) spread across the six SRD Districts and other non-SRD Districts of West Bengal .  The field visits concerned study, accounting, auditing, and procurements system and procedure in place of GPs and GUS as a deliverable accounting manual, internal audit manual, and the procurement manual for the GP and GUS.

During the year, the ICAI ARF has initiated/ continued with the following research projects:-

  • Research Study on Disclosure issues in Bio-Technology and other life science companies, Information Technology (IT) Companies and advertisement companies  

  • Study of Fixed Income Securities Market in India

  • Impact of Accounting Standards on Indian Stock Market by UTI Institute of Capital Markets

  • Goods & Service Tax  

  • Developing a code of Governance for Non-Profit Organisations (NPOs)

  • Financial and Accounting Reforms, Capacity Building and Related Strategies (EU Project): 

  • Impact of International Accounting Standards/ international Financial Reporting Standards on the wider stakeholders by Oxford University of Business School 

  • Outcome Budget  ICAI ARF had constitute a high committee on the outcome budget under the chairmanship of Sh. Suresh P. Prabhu FCA and former minister Govt Of India to study the outcome budgetary system introduce by the Govt of India, make suitable recommendation to the system to achieve the define objective, the committee expected to give its report during the course of the year 

In order to promote research in accounting, auditing and allied areas, ICAI ARF has extended a general invitation to Indian Universities, research organizations, management institutions and research scholars for making research proposals to be assisted by ICAI ARF.  A comprehensive format for expression of interest has also been hosted on the website of ICAI ARF and advertised through Institute’s Journal.

ICAI University :

The ICAI/ICAI ARF is continuously pursuing with the Govt of Rajasthan for allowing ICAI to use the land allotted to ICAI ARF for university for setting up centre of excellence by the ICAI personnel to the stand taken by the Ministry of Corporate affairs as intimated in the last annual report, in this regard the meeting have been held with the Honourable Chief Minister Govt of Rajasthan and senior officials. Suitable intervention of ministry of corporate affairs Govt of India has also been sought, the intervention with the commissioner JDA and commissioner bureau of industrial promotion is continuing and board expect favourable outcome

Future Plans:

Recognising the fact that considerable efforts are required to promote research in accounting in India , ICAI ARF has taken a number of proactive measures for undertaking applied research, and carrying out research studies.  ICAI ARF contemplates to take strategic initiative to accelerate the process. ICAI ARF would launch a promotional campaign for establishing direct contact with the Universities and other bodies on the one hand, and reaching out to the potential researcher through out the country, on the other. A list of proposed research projects of contemporary national and international significance has been identified and expression of interest invited. In selected areas, ICAI ARF may directly undertake research. Possibilities for networking with research organisation of repute, within and outside India is being are explored , based on the expression of interest invited from members a data  bank has been created for associating them in research programme. Series of technical documents are proposed to be published and focussed training programmes organised for dissemination of technical knowledge and skills to the Chartered Accountants and other stakeholders. Initiative for applied research in newer areas including one already initiated with office of Controller General of Accounts on the lines of those taken up under MCD and KMC projects would also be considered, because they provide good field experience.

 Conservation of energy, technology absorption, foreign exchange earnings and expenditure: 

Conservation of energy & Technology Absorption: 

level of energy consumption is minimal 

Being a research organization, all the functions and resources are devoted towards research purposes. The MCD, KMC and CGA projects have   been instrumental in building expertise in conversion of accounts to accrual basis

Foreign Exchange earnings & Outgo:   There   were no   foreign exchange   earnings and foreign    exchange      expenditure    during    the   year.    

 Director’s Responsibility Statement:

.As required by section 217(2AA), Board of directors confirms that:  

  1. In the preparation of annual accounts, applicable accounting standards have been followed with no material departure;

  1. We have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Foundation as at 31st March 2007 and of the income and expenditure of the Foundation  for the year ended 31st March 2007;

  1. We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

  1. We have prepared the annual accounts on a going concern basis.



There was no personal employee for the whole and /or part of the year in the foundation drawing remuneration exceeding Rs.24 lakh per   annum or Rs.2 lakh per month for the purpose of Section 217 (2A) of the Companies Act 1956.

Industrial Relation

The foundation maintained the Cordial and harmonious relation on all level.  Efforts were made to inculpate team spirit and motivate the employee of fully develop there potential.

Human Resource Development

During the year 2006-07 in order to professionals the executive strength of foundation and also to infuse fresh blood two Management Trainee were appointed in foundation.

Staff welfare

Welfare of the employee received due attention during the year.

Board of Director

During the year CA. S. L. Daga, CA. Amarjit Chopra and CA. Anuj Goyal were inducted in the Board of the foundation w.e.f. 19th March 2007.  The Board of Director presently comprises of fourteens Directors. 

Statutory Auditor M/s Bubber Jindal & Co. Chartered Accountants was appointed as Statutory Auditor of the foundation for the year 2006-07.

The Statutory Auditor have audited the accounts of the foundation for the year ended 31 March 2007 the audited accounts, cash flow statements for the said year together with the auditor report thereon are annexed to this report.


The Board take this opportunity to place on record their appreciation for the continued assistance, support and co-operation received from the Ministry of Corporate  Affairs- Government of India, The  Institute of Chartered Accountants of India, State Governments and their urban local bodies, MCD, KMC, European Commission, multilateral agencies, M/s Infosys Technologies Ltd,  The office of Controller General of Accounts and other authorities, experts, research scholars and individuals during the course of execution of the research projects and in other disciplines

The board acknowledge the contribution made by Shri S.C. Santhanagopalakrishnan.

The Director sincerely appreciate and commend the valuable contribution made by the employees of the foundation at all level in the pursuit of achieving excellent result for another year in succession.  



                                                                                               On behalf of the Board 

                                                                                                   (CA. Sunil Talati)  






Place: New Delhi

Date:  10/09/07


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