|DIRECTORS REPORT 2009|
TO THE MEMBERS OF ICAI ACCOUNTING RESEARCH FOUNDATION
The Directors have pleasure in presenting the Tenth 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 on 31st March 2009.
The ICAI ARF promoted by the Institute of Chartered Accountants of India (ICAI) has accelerated its work programme during the year as an academy for imparting, spreading and promoting knowledge, learning, education and understanding in the various fields related to the profession of accountancy. The ICAI ARF has undertaken many projects involving basic and applied research. The ICAI ARF believes that proper research inputs are necessary condition for raising the level of corporate governance, management, accounting and financial reporting. High quality research projects based on practical experience with theoretical extrapolations would also provide valuable inputs in formulation of policies and implementation thereof at macro and micro levels.
The ICAI ARF has completed another successful year, 2008-09, in establishing the Foundation as a core research body 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.
Recognizing the impetus required promoting quality research in the country; Board has adopted and pursued a multi - pronged action plan to support research projects of contemporary national and international significance in the areas related to accountancy profession. The ICAI ARF has extended an open invitation to undertake research to various institutions, research bodies, research scholars and the practitioners. Focussed advertisements were also put up on the website of ICAI ARF, and ICAI, and in the Journal of ICAI The Chartered Accountant, inviting expression of interest from the members and others to carryout research in the areas of contemporary interest with requisite financial support from ICAI ARF with an option of pursuing the research or for taking up of systematic study in relevant areas. As a consequence, during the year number of research projects has been commissioned, including those with bodies like IIM, Bangalore, Institute of Public Enterprises, Oxford University and other researchers.
New value added projects will continue to be the fundamental part of subsistence of ICAI ARF. Accordingly, projects that would add value and help in spreading, promoting and advancement of various disciplines in the fields of accountancy, auditing, fiscal laws and policy, corporate and economic laws and policies, economics, financial management, financial services, capital and money markets, management information and control systems and other allied fields are being undertaken.
The main objective of the establishment of ICAI ARF is to undertake, conduct, foster, promote and provide aid and facilities for prosecuting core, fundamental, empirical, applied and other kinds of research work, projects and studies. The research work undertaken by ICAI ARF has been divided amongst two branches of research, viz., (i) Basic Research, and (ii) Applied Research. The status of major projects completed during the year and presently under implementation under basic and applied research is given below along with particulars of proposals that are under consideration:
(I) BASIC RESEARCH:
Basic research is designed to add to an organized body of scientific knowledge and does not necessary produce results of immediate practical value. It is concerned with formulation of a theory or a contribution to theory. The ICAI ARF involves carrying out basic research projects pertaining to subjects requiring enquiring into problems and issues significant to accounting and auditing and allied disciplines such as economics, finance and business laws through outsourcing research projects by inviting applications from research bodies/scholars and providing them financial assistance. In view of the above, the following projects have been undertaken by ICAI ARF:
The following research projects undertaken earlier have successfully been completed:
The following research projects have been undertaken/continuing during the year:
Thus, sustainability reporting is thus a vehicle to communicate with stakeholders on a companys economic, environmental and social management and performance.
The research studies on the following topics have been approved in principle by ICAI ARF subject to modification in methodology/scope for the research:
(II) APPLIED RESEARCH:
Applied Research is directed towards the solution of immediate specific and practical problems. It is performed in relation to actual problems and under the conditions in which they are found in practice. The applied research requires systematic study to gain knowledge or understanding necessary to determine the means by which a recognized and specific need may be met.
In view of the above, ICAI ARF has undertaken projects related to conversion of accounts from cash basis to accrual system of Accounting for Municipal Corporation of Delhi, Kolkata Municipal Corporation involving conceptualizing a new accounting system including the incorporation of methodologies and procedures not current in India and same had been successfully completed. The Foundation has also undertaken DFID Project relating to Strengthening Rural Decentralization (SRD) suggesting a detailed methodology and road map for under pinning the issues on a logical framework. In continuation to above, the following projects have further been undertaken by ICAI ARF:
The following research projects undertaken earlier have been successfully completed:
The following research projects have been undertaken during the year:
To further promote the applied research, ICAI ARF is working on the lines of the aforesaid projects to undertake a new project for implementation of Accrual Accounting system in All India Institute of Medical Sciences, as given below:
During the year the revenue from research activities has been Rs. 12.95 lakh as against Rs. 60.66 lakh in the previous year. During the previous year three projects, viz. KMC, CGA & DFID were completed and, therefore, income 60.66 was recognised in that year. The revenue surplus during the year was about Rs. 11.66 lakh as compared to about Rs. 70.69 lakh during the year 2007-08. A sum of Rs. 11 lakh has been appropriated towards the building reserve. Financial results for the year 2008-09 compared with those of previous year are summarized below:
(Amount in Rs.)
The ICAI ARF had acquired land from Jaipur Development Authority for setting up of University. An amount of Rs. 5,54,69,619/- was paid to Jaipur Development Authority by ICAI on behalf of ICAI ARF. The aforesaid project was later on dropped pursuant to the stand taken by the Ministry of Corporate Affairs, Government of India. Subsequently, the Government of Rajasthan had cancelled the land allotted to ICAI ARF for setting up of University and instead, allotted 25 acres of land to ICAI itself for setting up of Centre of Excellence at village Chosala, Tehsil Chaksu, District Jaipur at 50% of DLC rates. Accordingly, an amount of Rs. 2,84,19,519/- has been refunded by Jaipur Development Authority after adjusting Rs.70,00,100/- payable towards the land allotted to ICAI out of Rs.3,54,19,619/- paid towards the land earlier allotted to ICAI ARF. The balance amount of Rs.2 crore along with the interest accrued amounting to Rs. 39 lakhs was recoverable from Jaipur Development Authority as on 31st March 2009. In the month of June 2009, the amount of Rs.2.39 crore has been received from Jaipur Development Authority.
STRENGHTHENING OF INFRASTRUCTURAL BASE:
THE WAY FORWARD:
Recognising the fact that considerable efforts are required to promote research in the field of accounting in India, ICAI ARF has taken a number of proactive measures for undertaking applied research, and carrying out research studies. The ICAI ARF would further intensify promotional campaign for establishing direct contact with the Universities and other bodies on the one hand, and reaching out to the potential researchers throughout the country, on the other.
The list of proposed research projects of contemporary national and international significance and proposed research projects for PhD degree would be further expanded, 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 would be explored. Series of technical documents are proposed to be published and focussed training programmes organised for dissemination of technical knowledge and skills to various stakeholders.
Initiative for applied research in newer areas including already initiated with the office Department of Posts on the lines of those taken up under MCD, KMC and CGA projects would also be considered, because they provide good base for applied research.
To further promote the applied research, ICAI ARF is working on the lines to undertake a new project for implementation of International Financial Reporting Standards (IFRS) in NHPC Limited.
To become a globally respected foundation that shapes research practices in India and abroad by creating new frontiers of knowledge, it is imperative that ICAI ARF is manned by research experts from the streams relevant to the accounting and allied professions. Research being the core function, the structure of ICAI ARF should revolve around the other functions providing support to this core function. Accordingly, a Vision Document has been prepared, wherein emphasis has been laid down on the future working of ICAI ARF and a re-defined structure for ICAI ARF has been finalized, divided into three separate divisions, namely,
ICAI ARF aims to provide high quality academic and research results. Within this view, it is proposed that, renowned faculty would be appointed from within the country and possibly from abroad also, commensurate with other research bodies. The faculty would also undertake in-house research on subjects which are of importance to the accountancy profession or those referred to the ICAI ARF by the ICAI itself. The faculty would be involved in guiding the outside researchers, where required, throughout the period of the project with a view to ensure that the outcome of the result is of high quality.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND EXPENDITURE:
The foreign exchange outgo of 3000 GBP has been made on account of payment made to researcher under the project, namely, Impact of International Accounting Standards/ International Financial Reporting Standards on the wider stakeholders by Dr. Tomo Suzuki, Oxford University
Particulars of Employees: Pursuant to provisions of section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, it is stated that no employee was in receipt of remuneration exceeding Rs.24 lakhs per annum or Rs.2.00 lakhs per month during the year 2008-09.
DIRECTORS RESPONSIBILITY STATEMENT:
As required by section 217(2AA), Board of Directors hereby confirm that:
The foundation has maintained the cordial and harmonious relations at all levels. Efforts were made to inculcate team spirit and motivate the employees to fully develop there potential.
HUMAN RESOURCE DEVELOPMENT
The Foundation has always considered that its core strength lie in quality of its human assets. Keeping in view the emerging needs for a competent and passionate leader, during the year 2008-09 in order to professionalise the executive strength, Dr. Avinash Chander was appointed as the Dean cum - Director of the foundation.
Welfare of the employees had received due attention during the year.
BOARD OF DIRECTORS
During the year CA. Ved Jain relinquished the charge of Chairman held by him as Ex-Officio. The Board places on record its appreciation for the commendable services and contribution made by CA. Ved Jain.
M/s. Bubber Jindal & Company Chartered Accountants, retire as Auditors at the conclusion of this Annual General Meeting. The Board places on record its appreciation for the services and co-operation received from the Auditors.
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, State Governments and their Urban Local Bodies, M/s. Infosys Technologies Ltd, Office of Controller General of Accounts (CGA), Government of India, Department of Posts, Government of India, Guru Gobind Singh Indraprastha University, Bank of India and other authorities, experts, research scholars and individuals during the course of execution of the research projects and in other disciplines. The Board also placed on record their appreciation for the sincere efforts of Senior Advocate Shri N.K. Poddar along with Advocate Shri Pramod Dayal for successfully representing the case on behalf of ICAI ARF before Delhi High Court for allowing exemption u/s 10(23c)(iv) of the Income Tax Act, 1961 and CA. Shyam Lal Agarwal for providing continued assistance for the realization of Rs.2.39 crore from Jaipur Development Authority
The Board of Directors sincerely appreciate and commend the valuable contribution made by the employees of the foundation at all levels in the pursuit of achieving excellent result for another year in succession.
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