Workshop and Sumposium on Union Budget - 2002
A workshop on the Union Budget - 2002 was held in New Delhi on 22nd March, 2002. Shri S.K. Sarma Chairman, CBDT attended the Workshop. Shri A.N. Prasad, Joint Secretary (TPL I), Shri G.C. Srivastava, Joint Secreatary (Foreign Tax Division) and Shri Akhlesh Ranjan, Director (TPL IV) also attended the Workshop. The Chairman of the CBDT promised to look into some of the issues raised in Workshop.

The Committee organised a Symposium on 2nd March, 2002 in Chennai to elicit views from experts and public on the proposals contained in the Union Budget. Impact of the policy matters on Indian economy, changes in Direct and Indirect Tax Laws were analysed in the Symposium

Post-Budget Memorandum - 2002
The Pos Budget Memorandum - 2002 was submitted to the Government

Guidance Note on Audit under Section 115JB of the Income-tax Act, 1961
The above guidance note was finalised by the Fiscal Laws Committee after extensive deliberations and exchange of views with a cross section of members. It clarified many significant issues concertning audit under section 115JB of the Income-tax Act.

Suggestions on the proposed amendment to Rule 3 of the Income-tax Rules, 1962 regarding valuation of perqusities
The CBDT initially nitofied draft guidelines for amending the rules relating to valuation of perquisites. The Institute forwarded its suggestions on the same.

All India Conference on Taxation and Corporate Laws - 2001, Indore
The Fiscal Laws Committee and the Corporate Laws Committee jointly organised an All India Conference on Taxaton and Corporate Laws on 1st and 2nd October, 2001 in Indore.Around 700 delegates from all over the country attended the conference.

Conference on Taxation and Corporate Laws - Jammu
The Fiscal Laws Committee and the Corporate Laws Committee jointly organised an All India Conference Taxation and Corporate Laws in Jammu

Seminar on Value Added Tax -Pondichery
The Fiscal Laws Committee organised a seminar on Value Added Tax at Pondichery. The semina was attendd by more than 200 delegates

Guidance Note on audi of Public charitable institutions under the Income-tax Act,, 1961
The existing publication entitled A Guide to Audit of Public Charitable Trusts under the Income-tax Act published earlier was throughly revised, expanded and upgraded into a full-fledged Guidance Note on Audit of Public Charitable Institutions under the Income-tax Act.

Taxation of charitable trusts and institutions -A Study
While the Guidance Note on Audit of Public Charitable Institutions under th Income-tax Act, 1961 covers all the essential aspects of audit of such institutions, this publication discusses in detail the law relating to taxation of charitable trusts and institutions.

Guidance Note on Report on International Transactions under Section 92E of the Income-tax Act, 1961 (Transfer Pricing)
Under Section 92E a chartered accountant has give a report in the prescribed form and verify in the prescribed manner setting forth prescribed particulars. The Committee has brought out a Guidance Note on Report on International Transactions under Section 92E of the Income-tax Act, 1961 (Transfer Pricing)

Conference on taxation and corporate laws - 2001 at Jammu
A two-day conference on taxation and corporate laws was organised by the Jammu & Kashmit Branch of the Norther India Regional Council jointly with the Fiscal Laws Committee and the Corporate Laws Committee.

All Kerala Tax Conference - Kochi
The Fiscal Laws Committee, SIRC of ICAI and Ernakulam Branch of the SIRC of ICAI, have jointly organised an all Kerala Tax Conference at Kochi, The Conference was atended by more than three hundread delegates

Draft form of audit report under State VAT
Measures are being undertaken to bring unifor Value Added Tax System in the country. The State Governments have been advised to enact VAT legislation as a first step towards the ultimate synchronization of State VAT into central VAT. Several States like Delhi, Maharashtra, Andhra Pradesh, Madhya Pradesh etc, have brought out draft Value Added Tax Acts. Since it is expected that the State VAT legislations would provide for audit by chartered accountants, the Fiscal Laws Committee is actively involved in evolving a uniform and comprehensive form of audit report under various State VAT legislation and preparing draft guidance not on the same.

Seminar on Transfer Pricing - Chennai
The Fiscal Laws Committee organised a Seminar on Transfer Pricing on 21.6.2002 in Chennai. The then Hon'ble Union Minister of Law, Justice & Company Affairs Shri Arun Jaitley gave a special address on Meeting Public Expectations througn Legislation Changes. The seminar was attended by a large number of delegates.

Other activities
Apart from the above, detailed suggestions were submitted to the Central Direct Taxes Advisory Committee. The members of the Committee exchanged views with the Government In-house Committee on Depreciation and MAT provisions.

The Continuing Professional Education Committee continued its efforts to impart education to the members on the topics of contemporary relevance through its Continuing Professional Education Programmes.

The Committee held the following programmes / seminars for the benefit of the members and others:

• Residential programme on Accounting Standards and US GAAPs Interpretation & applications to Oil & Natural Gas Section, at Nainital
  
  

• Programme for Audit Committee of Public Sector Undertaking (Round Table Conference) jointly with Committee for Members in Industry at New Delhi.
  
  

• Residential Programme on Accounting Aspects of Disaster Management at Rishikesh
  
  

• Chain Seminars on NBFCs in association with RBI at various places across the country.
  
  

• Organised Orientation / In-company, programmes for MTNL, ITEDA, NHPC, NPC, PNB etc.
  
  - Executive Development programme on Detection & Prevention of Fraud in the Era of E-commerce at New Delhi
  
  - Residential Refersher Couse on Accounting Standards, Corporate Laws & Taxation jointly with the Fiscal and Corporate Laws Committees at Puri Orissa.

The Committee proposes to conduct Professional Education Programmes in the areas of:

• Bank Audit
• Accounting Standards
• Statement on Auditing Practices
• Audit of Local Urban Bodies
• Forensic Accounting
• Service Tax
• Public Sector Audit
• Code of Ethics
• Excise Audit
• FEMA
• Corporate Governance & Reporting & Disclosure Practices
• Energy Audit
• Arbitration
• Merger & Acquisition
• Project Finance
• Time Management
• Transfer Pricing
• Tax Audit
• Treasury Management
• Companies Amendment Act
• Information Technology Act
• Value Added Tax
• Capital Market Reforms
• International Finance
• International Taxation
• WTO Related Issues
• Environmental Accounting
• Insurance Audit
• Sales Tax Audit
• Audit of Charitable Trust
• Stock & Receivable Audit
• Audit in computerised Environment
• Commercial Due Diligence
• Financial Due Diligence
• E-Commerce / Governance

During 2001-2002, Continuing Professional Education Pogrammes were conducted, inter alia, on the following topics:-

• Accounting Standards and Reporting Requirement
• Statement on Standard Auditing Practices
• Opportunities in IT
• Implications of Mergers , Acquisition
• Double Taxation avoidance agreement
• Income tax surveys, search & seizure proceedings
• Transfer pricing rules
• Forex & Risk management
• Disaster Management
• Issues on Tax Audit under Income Tax Act
• Outsourcing and emerging issues
• New Professional Opportunities and avenues
• Frauds & White collar crimes
• Communication Skills
• Service Tax - Issues & Implications
• Audit of Co-operative Societies & Charitable Trusts
• Emerging scenario in the Insurance Sector and the Challenges ahead
• Recent changes and amendments in Companies Act
• WTO - Impact on India Economy
• E-Commerce and its impact on Accounting Profession
• Digital signature verification
• Foreign Exchange Management Act.

The background materials published by the Continuing Professional Education Committee during the year 2001-02 likely to be published during the year 2002-03 as well as past publications are given below respectively:

• Audit of Bank Branches - Current Developments
• Accounting Aspect of Disaster Management
• Financial Due Diligence
• Energy Audit and Management for the Indian Industry
• Foreign Exchange Management Act, 1999
• A readeer on Accounting Standards
• Bank Audit in Computerised Enviornment
• Stock and Receivable Audit
• Bank Branch Audit Programme

• Service Tax (Since released)
• Value Added Tax
• Environmental Auditing
• International Taxation
• Project Finance (Revision)
• Forensic Accounting
• Excise Audit (Revision)
• FEMA(Revision)
• Time Management
• Information Technology Act
• Arbitration
• Communication Skill - II

• System Audit
• Project Evaluation
• Environmental Accounting and Reporting
• Case Studies in Accounting Standards and Auditing
• Issue in Information Technology
• Opertaionan and Management Audit
• Taxation of Charitable Trust and Institutions
• Concurrent Audit of Banks
• Audit of General Insurance Companies
• Communication Skills -I
• E.D.P. Audit Pitfalls & Safeguards
• Credit Rating
• Background material on Central Excise
• Background material on Taxation of Deemed Sale Transactions
• Background material on Central Sales Tax

To promote the interest of members serving in Industry and to develop opportunities available, the Committee of Members in Industry has been given a separate identity w.e.f. 19th March 2002 and it has been authorised to deal independently with matters relating to members in Industry. The Committee has undertaken following activities during the year:

As a measure to develop employment opprtunities for newly qualified members, the Committee has been succesfully organising Campus Interviews twice a year during the past seven years, wherein prospective employers and new members interact and explore the possibility of taking up employment careers in various organisations. The Campus Interviews organnised during the year received an impressive response from both the employers and our young members as is evident from the fact that in all 61 teams of the employers evaluated the bio-data of about 4020 young members. Orgnisations from aborad and all over the country, both from the public and private sectors including mulnationals, participated in the scheme. Orientation Programmes were conducted for new members at various Interview centres to provide skills to face Interview boards which were appreciated by the members

The Committee felt that the existing employment assistance Scheme which is very much important for the members in Industry at all levels needs to be strengthened. The Committee has therefore approved the maintenance of Employment Register and providing of Placement Service to members in industry, who are seeking jobs/better employment. The Committee is also exploring the possibilities of creating fesh avenues of Employment for members in Industry.

An All India Conference for Members in Industry was organised at Baroda on 14th and 15th September, 2001 which was hosted by Baroda Branch of WIRC. The theme of the Conference was Restructuring For the Future.

The Committee has also organised an All India Industrial Conference for Members in Industry on 22nd September, 2001 at Chennai; hosted by the Committee for Members in Industry of the Southern India Regional Council of the Institute

A Round Table Conference for Audit Committee was organised on December 4-5, 2001 New Delhi in association with Continuing Professional Education Committee

The Committee had also organised a Seminar on In-depth Study of Accounting Standards on 29th and 30th December at Jamnagar for Reliance Petroleum Ltd.

The Seminar on The Razor's Edge in Accountancy was also organised on April 26-27, 2002 at Mumbai

The Committee continues to make more efforts in improving the status and role of members in Industry.

In the emerging scenario of globalized world, the Committee has taken a holistic approach to promote the professional Ethics with the edge of competitiveness and excellence and to safeguard the independence of the auditors in the interest of good corporate governance. The Committee continued to examine and dispose off various important ethical issues queries, relating to ethical standards & professional conduct of members; and the allegations of unjustified removal of auditors. The Committee has made its recommendations on some pertinent ethical issues most of which have been considerd by the Council and some of which are under considrations of the Council. Important decisions taken by the Council during the Year based on recommendations of the Committee, are breifly given as follows:-

Ethical Issues

• To ensure the independence of auditors, the Council has considerd the recommendations of the Committee in the matter of putting restriction on then auditors of public sector undertakings / Govt. Companies / Lised Companies and other public companies having turnover of Rs. 50 crore or more in a year for not accepting any other assignment of the same company / entity / unit. By Notification No. 1 CA(7)/60/2002 dated 8th March, 2002, the Council has specified, inter alia, that a member of the Institute in practice shall be deemed to be guilty of professional misconduct, if he accepts the appointment as statutory auditor Public Sector Undertaking(s) / Government company(ies) / listed company(ies) and other public company(ies) having turnover of Rs. 50 crore or mroe in a year and also accepts any other work(s) or assignment(s) or service(s) in regard to the same Undertakin(s) / Company(ies) on a remuneration which in total exceeds the fee payable for carrying out the statutory audit of the same Undertaking / company. This notification shall apply for any appointments(s) on or after 1st April 2002.
  
  

• The Council has approved the Mission Statement of the Committee, Terms of Referrence and Procedure to be followed by the Committee for dealing with the cases of Unjustified Removal of Auditors.
  
  

• The Council has approved the Mission Statement of the Committee, Terms of Reference and Procedure to be followed by the Committte for dealing with the cased of Unjustified Removal of Auditors
  
  

• The Council has revised its earlier guidelines ofr determination of main occupation of a member for the purpose of training articled / audit clerks under Regulations 43&68 of the Chartered Accountants Regulations, 1988
  
  

• The Councils considered the Issue relating to members answerable with respect to employee Chartered Accountants or partners in the firm and vis-a-vis their responsibility. The Council accepted the recommendations of the Committee, to the effect that office should wirte to the firm against which a complaint or information has been received that while disclosing the name of the member /s whose name has/have been disclosed by the firm, about his/her answerability to the charge/s in the complaint/ information
  
  

• The Council considered the issue of the existing decision of the Council on the scope of Section 25 of the Chartered Accountants Act, 1949 and after detailed discussion, broadly agreed in principle with the recommendation of the Committee subject to formulaion of the regulations for whicht the Council decided to form a Study Group
  
  

• The Council considerd the issue relating to change in firm name / seniority when two or more firms merge and decide to adopt a name by combining the name of said firms.
  
  

Issues concerning unjustified removal of auditors

• The Council has approved issuance of Notification regarding formulation of Guidelines in respect of cases of Unjustified Removal of Auditors, in which the direction is to be given to the incoming auditor not to accept the appointment.
  
  

• The Council considerd the issue of old and the present views of the Committee regarding the appointment / re-appointment of auditors and cases of unjustified removal of auditors. The Council accepted the recommendations of Committee to the effect that for appointment / re-appointment of auditors, passing of a resolution is necessary and in case of re-appointment, the retiring auditor will continue to hold the office of auditor unit the resolution relating of appointment of auditors is passed and the AGM is concluded
  
  

The Committees in its 6 meetings held during the period has considerd and decided, inter alia, on various allegation relating to unjustified removalof auditors in Banks, Private Sectors and other bodies and in appropriate cases actions have been taken to ensure the general interest of the profession. The Committee deliberated upon the various issues relating to Code of Ethics, Professional independence and itnerest of profession in the contest of liberalistaion and lgobalisation process.

The International Affiars Committee of the ICAI continued to pursue the Institute's strategy on Internationa Affairs and effectively carried out its work planned during the year. The corus was to represent and play active role on various internationl forums, to facilitate movement of members across the world, to facilitate interaction between the members living oversees through opening up of the chapters, to take part in innovative exercises in accounting profession around the world, and to pursue with various foreign accounting bodies for getting recogniition of its qualificaion.

Building professional relationship with other Institute

Significant progress has been made in augmenting the process underway with various foreign accountancy bodies including with the ICAEW, ICA Australia and Delaware State Board of Accountancy USA for establishing equivalence. Memorandum of Understandings (MOUs) have been entered into with ICA Bangladesh, AICP America ICAEW London, CICA Canada, ICAA&CPA Australia and CICPA Chine during the year. Initiatives are also under way for recognition of qualification with ICA New Zealand. The current progress of implementation of these MOU is on targeted lines

An applications has been filed with the National State Board of Accountancy in USA for evaluation of ICAI qualification. The matter has been followed up directly with the team of the Texas State Board of Accountancy and also through the AICPA under the terms of MOU signed between ICAI and ICAEW has completed the process of evaluation of ICAI qualification to a consultant for the purpose of granting recognition of qualification under the UK Companies Act. The International Qualification Appraisal Board of Cannda has also started the process of evaluation through its consultants and the preliminary review is expected to complete by September 2002. The Cnadian Institute has taken up the matter of recognising the trainig of Indian Chartered Accountants in India with the respective provincial institutes in Canada. The process of mutual recognition agreement has been initiated with the ICAI Australia and ICAI New Zealand. Recently (during the year 2002), the ICAI has also filed an application for recognition of its qualification for membership of Zambia Institute of Certified Public Accontants.

Regarding the process of professionals collaboration with the Institutes in South Asian Region, the ICAI qualification has been taken as the model for adoption by other institutes in South Asian region. The ICAI and ICAP have jointly organised a localised international seminar in the city of Amritsar on September 29,2001, which was attended by large number of Indian members including 23 participants from Pakistan. More such progrms are planned in the month of August, September and October 2002 in association with ICA Bangladesh, ICA Nepal and ICA Sri Lanka.

The ICAI is organising a joint conference in New Delhi in the month of September 2002 with the Institute of Chartered Accountants in England and Wales. The President of ICAEW, other office bearers along with more than 30 participants from UK will participate in the conference. The invitation is also extended to the Canadian Institute of Chartered Accountants for their delegation to visit India under the MOD signed with them.

The ICAI has opend a chapter in London during the month of July 2001 and action is initiated to open chapters in Canada and USA. On being approached the members in Canada and USA have shown great enthusiasm for such an initiative. The chapters in gulf region were very active in organising seminars, carre guidance programs for Indian students in their region, and sending vital inputs to head office from time to time on various matters of national and professional interest.

During the year the ICAI has been succesfully able to palce itself as a member of the team of major foreign accounting bodies to constitute an international Innovative Network (IIN). The ICAI has become the founder member of IIN. The President of the Institute has signed the IIN Charter in the first meeting of IIN held in New York from July 22-24, 2002. The objective of the IIN is to promote the development of new products and services relating to the accounting profession and to facilitate international marketing of those products and services through its members. Earlier the ICAI has actively particpated in drafting of its Charter and Master License Agreement. Innovative products developed by the members of network could be licensed through the IIN to other members of the network. Example of Products / Service could be licensed through the IIN to other members of the network. Example of Products / Services could be Web trust, sys Trust, Software to plan, perform and document complete audit, Library software to provide access to CPE material, articles, On line job facility, On line Quiz programs, Trust services, Elder care etc.

Internatioal Federation of Accountants:

The immediate past President of the ICAI was elected to the newly constituted board of the IFAC, which is an exclusive position under the restructured IFAC. The IFAC Board is the governing authority of IFAC and by election of the immediate past president on the IFAC Board, the ICAI has got privilege to take up the matters of professional interest directly at the highest level internationally. He attended the meetings of the board held in November 2001 at Miami, March 2002 in Tunisia and July / August 2002 in Spain / New York. The Secretary of the Institute acted as Technical Advisor.

The hen Vice-President, the technical advisor to the ICAI nominee on IFAC Ethics Committee, had participated in its meeting held on September 10-12, 2001 at Paris

The ICAI has successfully taken up the matters relating to protecting the interests of Small and Medium Practitioners and Small and Medium Enterprises with the IFAC. The President represented the ICAI on IFAC Working group on SMEs / SMPs and attended its meeting held on July 5-6, 2001 in London. The ICAI has made all round efforts for the formation of a task force to look after the matters relating to SMPs and SMEs. The immediate then Vice-President of the ICAI represented on he IFAC Task Force on the SMPs and attended the first meeting of the task force held in January 2002 in Milan, Italy. The concern has been raised on the functioning of IFAC, IASB with a view to ensuing that they truly represent the accoutancy profession as it exists worldwide. The ICAI has been successfully able to pursue with foreign accounting bodies including those in UK, USA , Australia, Japan and those in South Asian Region and also the regional organistaions like CAPA, SAFA to participate in the meeting of SMP Chairs in India. The objective of the meeting ws to gather thoughts on the issues concerning SMPs - Issues and challenges was also organised in Mumbai after the SMP Charis meeting. Eminent speakers from 10 different countries participated in the seminar. The ICAI continued to work towards getting recognition of the needs and interests of SMPs in the world wide profession. The President and the Vice-President attended the meeting of Edinburgh group held on February 26, 2002 in London to discuss the issues relating to SMPs

The ICAI has sent its comments from time to time on the project of UNCTAD on Accounting for Small and Medium Enterprises. Separate accounting framework is suggested for three different levels of Small and Medium Enterprises under this project. The President is a member of the Intergovernmental working group of experts of International Standards of Accounting and Reporting (ISAR) on SMEs.

Regional Organisations like SAFA and CAPA

The permanent secretariat of the SAFA continues to be located at the ICAI, New Dehi. The 45th and 46th meetings of SAFA were held in Kandy and GOA respectively durinig the year which were duly represented by the ICAI representatives.

SAARC has elevated SAFA from the status of its recognized body to the Apex body during its 22nd session of its council of ministers hled in January 2002.

Various centres of excellence established by SAFA have started working as per their terms of reference. A comparative exercise was undertaken on the curriculum of each member body in the SAFA region for the purpose of aachieving equivalence. Significant progress has been made by other centres of excellence in theri respective areas.

The ICAI representative also attended the meetings of Confederation of Asian and Pacific Accountants, a regional organization of IFAC, heldon May 26-30, 2001 in Kaulalumpur and October 8-9, 2001 in Sydney as as observers. The ICAI has actively participated in the project of CAPA relating to the Structure of SMPs and SMEs in CAPA region. The papers on SMP Structure in CAPA region and Corporate Governance were presented at the CAPA meetings during the year.

The Committee on Commerce Education & Career Counselling has recently decided to create endowments in the following nine universities as well. These endowments will also be for the award of Gold Medal / Prize to those students who secured highest marks in the paper of Accountancy in their B.Com Final Examination