DELHI | MAHARASHTRA | GUJARAT | BENGALARU | KOLKATA

APRIL 2015

ICBC’s First Annual Gala Dinner 2015On March 13th ICBC held its First Annual Gala Dinner, in association with

the High Commission of Canada, at the official residence of Mr Nadir Patel,

High Commissioner of Canada in India, in New Delhi.

Dr. Mukund Rajan, Group Executive Council Member, Tata brand custodian &

chief ethics officer, Tata Sons & Chairman Tata Global Sustainability Council, was the

keynote speaker for the evening. The Canadian Trade Commissioner Services and

Export Development Canada, top management from corporate houses like TATA

and Aditya Birla Group and ICBC members, pan India, such as Bombardier, McCain,

Air Canada, Bell Helicopter etc. attended the event. Mr. Rana Kapoor, founder of

Yes Bank, was also the special guest at the event. There was also a stand-up comedy

performance by Vasu Primlani who is one of the leading top 3 stand-up comedians

of India at the moment. During the evening ICBC honoured Tata group, Aditya Birla

Group, Bombardier and Mr. Rana Kapoor for playing a major role in the economic

engagement between India & Canada.

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Events Roundtables/

Meetings @ ICBC

DELHI REGIONAL COUNCIL

4th March 2015

The High Commission of Canada and

the Indo-Canadian Business Chamber

jointly organized a business roundtable

on 4th March, 2015 at Club Canada, High

Commission of Canada with Canada’s

Parliamentary Secretary to the Minister

of International Trade, the Honourable

Parm Gill. The participating Canadian

companies in India discussed about

India’s evolving business climate, the

opportunities and challenges faced

by them in the Indian market and key

areas where Canada could play a role.

9th March, 2015Indo-Canadian Business Chamber in

association with The High Commission

of Canada jointly organized a

roundtable on 9th March, 2015 at Club

Canada, High Commission of Canada

with the Nepalese business delegation

led by Mr. Suraj Vaidya, Senior Vice

President of SAARC Chamber and

immediate past President of the

FNCCI.

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The delegates, comprising of the

CNBEC members, interacted with ICBC

members on emerging opportunities,

challenges and the role Nepal could

play in driving the bilateral trade

relations between the three countries.

24th March 2015Indo-Canadian Business Chamber in

association with The High Commission

of Canada and KPMG jointly organized

a Post Budget Session on 24th March,

2015 at Club Canada, High Commission

of Canada. Ms. Nitika Mehta, Director,

International Tax & Regulatory and

Mr. Harpreet Singh, Director, Indirect

Tax unravelled the impact analysis of

key highlights of direct and indirect tax

proposals. It was followed by a focused

session on Goods & Services Tax (GST)

legislation, covering current status of

GST, framework, specific impact areas

and next steps for readiness.

BANGALORE REGIONAL COUNCIL

25th March, 2015

The Indo-Canadian Business Chamber,

Bangalore Regional Council in

association with the Consulate General

of Canada, Bangalore and KPMG

organised a Post Budget session

on Wednesday, 25th March, 2015 at

Consulate General of Canada, Bangalore

office. Mr. Srinath S, Senior Advisor, KPMG

and Ms. Kanchan Dinakar, Technical

Director, KPMG, BSR & Co, LLP, discussed

the proposals and the devil in the fine

print with our members and guests.

MAHARASHTRA REGIONAL COUNCIL

3rd March, 2015During ICBC’s “Breakfast at the Bar”

series, the guest speaker, Samir Kanabar,

Partner, E&Y, on 3rd March, 2015 deftly

addressed the various limitations in the

budget from the “taxation” perspective.

He shed light on several facts that

had been missed by most voices in

the media. The Q&A session was quite

animated and had to be curtailed due

to a lack of time.

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Connecting with the High Commission of CanadaThe Canadian Trade Commissioner Service and ICBC jointly organized a workshop

titled “Shaping the South – Emerging Smart City Opportunities in Telangana and

Andhra Pradesh” on 30th March, 2015, Lemon Tree Premier, HITEC City, Hyderabad.

The workshop was well attended by leading Canadian Infrastructure and Clean

technology companies recognized globally for their leadership in project

management and engineering services (construction, architecture and design),

transportation, water management, waste management, and building materials.

The evening concluded with a Reception hosted by Mr. Arun Pandeya, on behalf

of Air Canada. As a result of the productive meetings in Hyderabad, the Chamber

will be signing an MOU with the Government of Andhra Pradesh on 29th April, 2015,

in Vishakhapatnam, in the presence of the Chief Minister, Shri Chandrababu Naidu.

Nitika MehtaDirector, International Tax & Regulatory, KPMG

For more information, contact:nitikamehta@kpmg.com

Income computation and disclosure standards (ICDS): A new framework for computation of taxable income

What is ICDS

On 31st March 2015, The Indian Ministry of Finance notified ten Income Computation

and Disclosure Standards, operationalising a new framework for computation of

taxable income. ICDS are applicable to taxpayers in India who follow the mercantile

system of accounting for the purpose of calculation of taxable income under

the heads ‘Profit and gains of business or profession’ and ‘Income from other sources’.

This has come into effect from the financial year commencing 1st April 2015.

Its impact

Presently, the extant provisions of the Indian Income-tax Act along with the

prescribed rules are the guiding principles to compute the taxable income under

different heads. With this notification, in addition to such provisions and rules,

appropriate adjustments may be required to be undertaken by taxpayers to the

profit/ loss reflected in their financial statements, to bring inconformity to the notified

ICDS, in certain cases. ICDS will not impact how the books of accounts are prepared.

The ten ICDS notified are in relation to:

• Accounting policies • Valuation of inventories

• Construction contracts • Revenue recognition

• Tangible fixed assets • Effects of changes in foreign exchange rates

• Government grant • Securities

• Borrowing costs • Provisions, contingent liabilities and assets

For example, under construction contracts, ICDS do not permit accounting under

the completed contract method, and mandate that only the percentage of

completion method should be applied for recognition of revenue from rendering

of services or construction contracts. This may result in significant difference in

revenue recognised for financial reporting and the revenue to be offered to tax.

Genesis and key features of ICDS

The notification of ICDS is quite timely and important, considering that the timelines

for adoption of Indian Accounting Standards – Ind-AS (standards converging with

IFRS), have also been notified, which permit voluntary adoption for financial year

2015-16, in relation to Indian financial reporting. The government felt a need to

ensure horizontal equity for smooth implementation of Ind-AS from this year,

given that many companies could report using Ind-AS, while others may continue

reporting using the older AS. It was also seen as an opportunity to address certain

accounting issues that have been a subject matter of tax litigation due to diversity

in accounting policies or divergence in views between tax payers and revenue

authorities.

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To help ensure harmony, ICDS are only meant to supplement the extant tax laws

and will not have an over-riding effect on the tax laws, in case of any conflict.

ICDS have been prepared taking existing AS as the base. ICDS emphasise that an

accounting policy should represent true and fair view of income generated from the

business and treatment along with presentation of transaction should be governed

by their ‘substance’ rather than legal form. Also, ICDS require that change in

accounting policy will not be made without reasonable cause, while AS require that

a policy may be changed if it helps in better presentation of the state of affairs of

the company. Another interesting feature is that ICDS do not consider the concept

of prudence. This could give rise to recognising certain income earlier and deferral in

recognition of expenses/provisions, etc. Additionally, ICDS have provided for various

disclosure requirements, though the prescribed form and manner of reporting has

yet not been notified.

Next steps for taxpayers

ICDS have now become a reality and India Inc. needs to gear up to this change:

• The taxable income may be visibly delinked from the accounting income as

they are expected to be based on different standards and principles. While these

standards are applicable for financial year 2015-16, however, immediate impact of

these standards can be witnessed while computing taxable income for advance

tax computation for the first quarter i.e. June 2015 by corporate taxpayers.

• While ICDS do not mandate maintenance of separate books of accounts, however,

a parallel information system may be required to be put in place in order to

comply with these standards and prepare reconciliations between taxable income

and accounting income, especially for large size corporates. This may require

upgradation/changes in IT processes for extracting financial information relevant

from ICDS’ impact perspective.

• To embrace the new change, stakeholders including the management, finance

and account teams may have to be trained and educated on the new framework

for better appreciation of its impact and aid in decision making for tax positions to

be adopted going forward in conformity to ICDS.

While ICDS may act as a facilitator in making IFRS convergence a reality, through

adoption of Ind-AS and reduce tax litigation in the medium term, its implementation

is expected to pose new challenges. As a first step, it is critical for corporates to carry

out a detailed impact analysis to determine the extent of impact and development of

a support system that may be required for smooth implementation of these standards.

With the evolving tax and regulatory landscape in India, be it IFRS converged Ind-AS,

ICDS or the probable game changer, Goods & Services Tax (GST) legislation knocking

on the doors, there can be a paradigm shift in how businesses are run and Indian

corporates certainly have their hands full to enable smooth implementation of these

changes.

Rahul Gupta Managing Director, Smile Security & Surveillance

Rahul Gupta is Managing Director of Smile Security & Surveillance; and is the Chairman of the SME chapter of MAIT (Manufacturers Association of Information Technology).

He is a recognized national leader and champion of the Indian Small & Medium Enterprise segment. His work, both with private enterprise and with government has been recognized and applauded by the industry, specifically by the Indian IT industry.

Dr. Raghava Rau CEO & CO-Founder Big Data Analytics India Pvt Ltd (BDA)

Dr. Rau has played an important role for developing Operations Research solutions for some of key initiatives that helped Dell’s success as a finalist in Franz Edelman Award in 2013.

Franz Edelman Award is a prestigious award from INFORMS that recognizes organizations who showcase excellence in Analytics and Operations Research that results in major impact on client organizations.

Stephen Mathias Partner, Kochhar & Co. Advocates and Legal Consultants

Stephen is a general commercial lawyer with experience in foreign investment, mergers and acquisitions, joint ventures, technology law, venture capital investment and aviation law. Stephen is the co-chair of the firm’s technology law practice and is rated by Global Counsel 500 as the No. 1 lawyer in India for information technology work. He speaks regularly at conferences around the world on doing business in India and outsourcing to India.

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New Member Updates

Hanuman Sharma Executive Director & Group CFO, Dynamatic Technologies Ltd

Hanuman Sharma is an Executive Director and Group CFO of Dynamatic Technologies Limited.

In his current role, he is responsible for Investor Relations, Corporate Structuring, Mergers & Acquisitions, Capital Management, Risk Management, Treasury & Finance, Performance Management, Tax Strategy and Corporate Governance

Sheryl Slater Chief Financial Officer, HSBC India

Sheryl Slater joined HSBC India in November 2013 as Chief Financial Officer with functional responsibility for Finance for all legal entities in India.Sheryl joined HSBC in London in 2001 in the Regulatory reporting team within the Head Office Finance function and from 2007 – 2010 she was Head of Group Capital Planning until she moved to Hong Kong.

From 2010 - 2013, she was Head of Asset, Liability & Capital Management (‘ALCM’) for the Asia-Pacific region. Prior to joining HSBC, she spent three years working at the Office of the Superintendent of Financial Institutions (‘OSFI’) in Canada. Sheryl has a Bachelor’s degree with Honours in Mathematics from University of Waterloo in Canada.

Vijendra Gairola Founder, InCa Synergy Advisory LLP

A graduate of Schulich School of Business (Toronto), VJ has over 18 years of experience in Banking and Trade Creation in North America, South America and Asia where he held progressively senior positions, shaping and supporting business interests of various organizations. Under VJ’s leadership, EDC grew its Indian portfolio to over USD 2 billion in debt with India becoming third largest revenue contributor to EDC. A well-recognized expert in Canada-India trade and Banking, VJ is a frequent speaker at large gatherings of Canadian businesses organized by the Canadian federal and provincial governments and is often quoted by CBC radio, The Globe and Mail and other trade magazines. VJ also sits on the Board of Indo-Canada Business Chamber as well as on the Advisory Board of Zone Start-up (a start-up accelerator that is a JV between Bombay Stock Exchange and Ryerson of Canada) as well as PE fund run by ZS.

On the Horizon

ICBC’S HEALTHCARE DELEGATION TO CANADA, MAY 18 – 23 MAY, 2015, CANADA

Canada India Foundation (CIF) is organizing a Canada India Healthcare Summit 2015 on May 19-20, 2015, in Toronto, in partnership with Ontario and the Indo-Canadian Business Chamber (ICBC).

Click here for more information

Contact Us DELHI REGIONAL COUNCIL4-7C, DDA Shopping Centre,New Friends Colony,New Delhi 110025Fax: + 91 11 4710 7399Email: icbc@icbc.org.in

GUJARAT REGIONAL COUNCIL 14, Aaryans Corporate Park, Near Shilaj Railway Crossing, Thaltej-Shilaj Road, Thaltej, Ahmedabad 380 059 Tel: +91 98 2467 5954 Email : icbc@icbc.org.in

MAHARASHTRA REGIONAL COUNCIL D-25, Dhanraj Mahal, CSM Road, Apollo Bunder, Mumbai 400001Fax: +91 22 6654 5666 Tel: +91 22 6654 5660 Email: icbc@icbc.org.in

BANGALORE REGIONAL COUNCIL CGI Information Systems and Management Consultants Pvt Ltd,Tower 2. Electronic City Phase I (West), Bangalore 560100Fax: +91 080 6642 1200Tel: +91 080 6642 2222Email: icbc@icbc.org.in

EAST & NORTH EAST REGIONAL COUNCIL‘VISA House’, 4th floor,8/10 Alipore Road,Kolkata 700 027Fax: +91 33 3011 9003Tel: +91 33 3011 9000Email: icbc@icbc.org.in

ICBC TeamNadira Hamid Chief Executive OfficerEmail: icbc@icbc.org.in

Rashmi Mallick Manager, Finance & AdminEmail: icbc@icbc.org.in

Pallavi Saxena Manager, Bangalore Regional CouncilTel: +91 080 6642 2222Email: icbc@icbc.org.in

Pikee Sharma Manager, Coordination & Communication, Delhi Regional CouncilEmail: icbc@icbc.org.in

Ms. Bina Awasthi Executive Director, Gujarat Regional CouncilTel: +91 98 2467 5954Email: icbc@icbc.org.in

Ms. Olinda D’mello Executive Co-ordinator, Maharashtra Regional CouncilTel: +91 22 6654 5660 Email: icbc@icbc.org.in

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