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To the Members of ICAI Accounting Research Foundation:

The Directors’ have pleasure in presenting the Fifth Annual Report of the ICAI Accounting Research Foundation (ICAI-ARF) ogether with the Audited Balance Sheet, Income and Expenditure Account and Cash Flow Statement for the Financial Year ended 31st March, 2004.

The Institute of Chartered Accountants of India promoted ICAI-ARF with the main objective to make it an academy for the purpose of imparting, spreading and promoting knowledge, learning, education and understanding in the various fields related to the profession of chartered accountancy. The vision of ICAI-ARF is to establish it as a core research body with facilities  to undertake research in the areas of Accounting, Auditing, Capital Markets, Fiscal Policies and other related disciplines and to develop quality pronouncements, documents, research papers on the above mentioned subjects.

Performance Highlights:

The Foundation has completed another successful year, 2003-04 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 and other related disciplines. The efforts of the Foundation at building a base of expertise in specialized areas has also been acknowledged by senior government officials in public forums where they have stated that the Foundation’s efforts have encouraged the government to introduce accrual accounting systems in Government. During the current financial year, the Foundation has registered a net surplus of Rs. 99.25 lakhs out of which, a reserve of Rs. 75 lakhs has been appropriated for construction of building at Noida.

Compared to last year, there has been an increase in expenses. This is due to the fact that, following the overall objectives of the Foundation, special emphasis was laid on publication of books which would disseminate acquired knowledge widely among the members of the Institute, and on holding seminars in various parts of the country. Major portion of the costs of these seminars was borne by the Foundation.

As far as ongoing Municipal Corporation of Delhi (MCD) Project relating to conversion of accounts to accrual basis of municipal bodies is concerned, we are working on its Second Phase relating to implementation of the system in three zones of MCD. The half yearly Financial Statements of MCD for the year 2003-04 has already been prepared. The ICAI-ARF in addition to its MCD project for conversion of Accounts to accrual basis, has agreed to accept additional assignments relating to setting up of office of Management and Budget, setting up of Asset Information Management System and the introduction of accrual system of accounting in the remaining nine zones of MCD. Continuing the initiative to develop new areas of applied knowledge, ICAI-ARF has taken up the project from Kolkata Municipal Corporation (KMC) in the month of June, 2004 for application of advance concept in financial monitoring reforms in KMC. The research study on Legal Protection of Intellectual Property Rights in Information Technology Industry under ICAI-ARF– Infosys Fellowship programme is continuing.

The Foundation continued to pursue and promote research in the various fields related to the profession of Chartered Accountancy through the Universities and other Institutions as well.

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

Conservation of energy : The level of energy consumption is negligible and therefore, there are no matters to report.

Technology absorption : There are no matters to report. Foundation, as stated earlier, being a research organisation, all the functions and resources are devoted towards research purposes. The MCD project has been instrumental in building expertise in conversion of accounts to accrual basis and related areas of municipal bodies.

Foreign Exchange earnings: There were no foreign exchange earnings during the year.
& outgo The foreign exchange expenditure during the year was Rs. 4,45,883/-.


There are no employees on the payroll of the Foundation and the activities are being pursued through a team of consultants and researchers supported by staff from ICAI.

Director’s Responsibility Statement :

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

(i)                  In the preparation of annual accounts, that applicable accounting standards have been followed with no material departure;

(ii)                We have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the income and expenditure of the company for that period;

(iii)               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

(iv)              We have prepared the annual accounts on a going concern basis.

M/s. P Aggarwal & Associates, Chartered Accountants, the Foundation’s auditors retire at the conclusion of this Annual General Meeting. They have signified their willingness to accept appointment and have further confirmed their eligibility under 224(1B) of the Companies Act, 1956.

On behalf of the Board

(Sunil Goyal)

New Delhi
14th September, 2004


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