Careers in Accountancy 2007

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Careers in

July 2007

Accountancy Supported by

IN THIS ISSUE Success Stories Lord Karan Bilimoria - Cobra Beer Gita Patel - Stargate Capital India News An overview - S.Jagadeesan, Minister Economic, High Commission of India, London.

Retail opportunities - Ernst & Young Tax reforms - Rajesh Dhruva

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Winning respect as a chartered accountant Nina Kabra Trainee chartered accountant, Adler Shine See page 9

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A C OMPETITIVE ADVANTAGE. The ACA represents achievement across a breadth of financial and business skills that other qualifications can only aspire to.

It gives you and your business the edge.

And the figures prove it: 67% of FTSE 100 qualified accountants acting as Finance Director or CEO have an ACA. That’s more than four times the number holding any other single qualification.

So whether you’re looking for top quality trainees, employees or business advice, look to the ACA, the sign that inspires business confidence. www.icaew.com/acompetitiveadvantage

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Comment

World of Accountancy - In exciting times he world of accountancy and finance offers a number of lucrative career opportunities.The profession today is modern, uses the latest technology, offers attractive salaries and draws some of the best talent. It is a truism to say that the traditional role of accountancy has gone through a sea change and accountants impact on every aspect of business.

Accountancy is a profession that requires good communication and people skills as well as the ability to work through complex multidisciplinary problems. That is what makes it such a rewarding and challenging profession.

A recognised accounting qualification opens many doors: to top jobs in business and industry, to management and financial consulting roles and beyond. Opportunities in the UK, both in the private and public sectors, abound, whether within the ‘square mile’ of London or elsewhere in the country.

In this issue we have endeavoured to drive interest in the profession through case studies, real life success stories and the latest industry news. The Institute of Chartered Accountants in England and Wales (ICAEW), has contributed a copious amount of valuable information to the magazine and I am confident that readers will greatly benefit from it. The Institute is also the sponsor of this edition and surely this demonstrates its commitment to raise awareness about the growing importance of the profession and promote excellence within it.

In the past decade India has emerged as a major player in the international community. The country holds unlimited possibilities as the Indian government has liberalised several sectors and opened up the economy for private investment . Clearly for those within the professional services industry including financial services, legal and accounting, India is an opportunity not to be missed. If you are looking to do business with India there is a wealth of expertly written information in the magazine.

There has never been a better time for the accounting profession and the future is certainly bright.

It certainly isn’t an easy path to becoming a chartered accountant - it takes a lot of hard work, commitment and determination and the opportunities to enhance your competitiveness through continuous learning and training are several. But the results are worth the effort and you will cherish the fruits of your labour for a lifetime. I do hope that the contents of this magazine will provide some useful insights and add to your knowledge.

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C B Patel

Summing up, at a time when all over Britain and especially in London, ‘India Now’ is being celebrated with spectacular cultural fare it is my privilege to commend this special issue to all those within the profession and particularly to those looking for an exciting career. I am impressed with the leadership of Cecil Soans and the efforts of the ABPL team in putting together another excellent edition of Careers in Accountancy.

CB Patel Publisher / Editor Asian Voice and Gujarat Samachar

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Opening doors There is no doubt that the role of accountants in the world’s economies is more important than ever before.

Accountancy has become the global language of business. hat was obvious at the ICAEW’s recent B2B event on Anglo-Indian trade held at Chartered Accountants’ Hall in the City of London. The ICAEW is a member of both the UK and India Joint Economic and Trade Committee and the Indo-British Partnership Network founded by ICAEW member Lord Bilimoria (who spoke at the event). We are as keen to promote bi-lateral trade as we are to build on our historic ties with the Indian profession.

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Inspiring confidence Trade is important. But as I’ve travelled internationally, I’ve been most struck by the commitment of local institutes and governments to building strong indigenous accounting professions. They recognise it’s crucial to economic development and sustainability because a high quality accounting profession inspires confidence in markets.

All of the ICAEW’s 128,000 members around the world – whether in industry, practice or public services – are in the business of inspiring confidence. With our expertise, we challenge organisations to think and act differently, to provide clarity and rigour and help create and sustain prosperity. Our reputation for such qualities is why, for instance, the Chinese government is committed to training its nationally qualified elite with our ACA qualification.

The ACA is the premium qualification for business leaders. Many of the world’s leading companies are driven by chartered accountants: over 90% of FTSE 350 companies have at least one on their board, many at FD or CEO level. It also explains the interest in India for international qualifications like our IFRS and Corporate Finance diplomas, not least because Indian business is becoming global and local, as shown for example by the Tata Steel acquisition of Corus.

Encouraging diversity All of which is why we want our students to succeed.

Obviously, we provide them with practical support to get them through some of the toughest professional exams there are. But the inspirational story of Nina Kabra who perhaps, against the odds, aspires to be a young business leader, shows that chartered accountancy is a career that opens doors and wins respect –

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Richard Dyson, President, The Institute of Chartered Accountants in England and Wales

whatever your background.

We are a profession that is becoming increasingly more open and celebrates excellence wherever we find it. We are particularly keen to encourage women who currently comprise roughly half our students and, often, the majority of prize winners. It’s a career with life-long relevance and flexibility as our career casestudies demonstrate.

World leading This year, the ICAEW celebrates its 127th anniversary.

History shows why the Victorians felt it necessary to found an institute in 1880: accountants’ reputation wasn’t always so high. Today, we are a world-leading professional body with a reputation for high standards and working in the public interest. It is why international regulators such as the US Securities and Exchange Commission will talk with us and why we are the only international professional body invited to be a member of the World Economic Forum.

There’s never been a better time to become a chartered accountant. Amazingly, in a country that produces a quarter of the accountancy profession in the EU, there’s a real shortage. Employers are crying out for such expertise. Our new salary and benefits benchmarking survey demonstrates that they place enormous value on retaining and nurturing that talent.

The ICAEW’s historic legacy lives on in our new ACA qualification which is continually evolving to ensure its market relevance. We invite you to share in that success wherever you are.

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A valued ACA In September the ICAEW launches its new ACA qualification, aiming to keep the institute at the head of the profession. he new qualification – ACA 2007 – is the outcome of a two-year consultation with many interested parties, including industry, practice, tutors and students. This, the institute says, was ‘to ensure that the ACA continues to meet the needs of employers, trainees and the wider business world as the foremost qualification for business’. Gaining the new ACA requires the completion of two stages – Professional and Advanced – through training and examinations.

Rather than simply revising the existing syllabus, the institute wanted to create an enhanced qualification. The changes are radical, aimed at the roots of the qualification – providing trainees with a deeper foundation of technical knowledge and a stronger sense of its practical business applications; ensuring they demonstrate professional as well as technical skills; and creating flexibility via a new modular syllabus, together with e-based exams and assessments.

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ledge. It’s arrived at sooner and applied when students have more experience.’

The new accent on flexibility is particularly welcome. Students gain from the modular syllabus which allows trainers more scope to cater to individual needs; more time can be spent preparing for some papers, while others can be taken more quickly. Some exams can now be taken online and on-demand, giving employers far more choice of exam timing and location – a particular boon for smaller and medium-sized practices and businesses. Together with online assessment, the package is likely to stimulate a shift from purely classroom-based training to teaching via e-learning products.

Professional ethics has also become more fundamental to the qualification. It features in the majority of papers, allowing students to test their understanding in a series of practical, everyday situations. Ethics are also covered via a Structured Training in Ethics online assessment programme.

User-friendly Students should benefit. Shaun Robertson, head of learning at the ICAEW, describes ACA 2007 as more user-friendly. ‘The Professional Stage of the qualification can be digested in more bite-sized chunks but also has a stronger focus on the early development of skills,’ he says.

Employers are also enthusiastic. Michael Walby, senior manager of KPMG’s national exam training programme, likes the fact that the new ACA ‘acknowledges that there are different phases in student development and thus to the qualification itself. The first is the acquisition of technical knowledge; the second is its application to practical scenarios; and the third is the bringing together of the learning and applying it to complex business scenarios’.

Workplace knowledge Business and smaller firms are also enthusiastic about the new focus on building knowledge needed in the workplace. Indeed, they appreciate a break with what they perceive as Big Four-oriented thinking. Jill Robinson, head of finance business management at Barclays (which has just become an ICAEW accredited employer), says that the ACA has particularly improved its offer on financial control and audit. Helen BessantRogers of the North West accountancy firm Hurst & Co feels: ‘The syllabus is more practice driven and there is more, rather than less, emphasis on technical know-

Employer demand Recruitment experts give positive feedback about the on-going appeal of accountants trained by the ICAEW. Kath Roberts, south-east MD of recruiters Michael Page, reports that demand for new ACA graduates is high. ‘It’s still the premier accountancy qualification,’ she says. ‘At the moment there’s a hideous shortage from 0-3 years after graduation. As a result they can command a premium salary, especially at the newly qualified end of the market. FTSE 250 companies want them particularly for internal audit, back and front offices and group accounting, areas of traditional demand intensified as a result of regulation.’

The ICAEW will continue to develop the ACA after its September launch. By doing so it aims to maintain the ACA’s market position and to continue meeting the needs of students and employers alike.

This article is edited from an article in Accountancy magazine, April 2007.

Visit www.icaew.com/careers for more information.

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I’m still loving it The ACA offers numerous career options.

Three ICAEW members and one trainee share their experiences

Hiranya Jayasinghe, trainee, Bird Luckin, Chelmsford.

Age: 21 I entered accountancy after my A levels and joined Bird Luckin, a medium-sized accountancy practice which is highly regarded in the region. After completing the AAT (Association of Accounting Technicians), I chose to fasttrack on to the ACA because it is a prestigious and internationally recognised qualification.

I work on preparing financial statements from the records of a business, auditing financial statements prepared by the client and calculating their business tax payable. No client is the same. They all sell different products, are different sizes and some, such as property management companies, have to be audited under different rules. The work is never dull.

One of the best things about the ACA training is that there will be so many options available to me once I qualify. The opportunities are endless!

Victoria Middleton, manager, Deloitte, London.

Age: 26 Having completed a statistics degree at University College London, I chose a career in chartered accountancy with Deloitte. The ACA seemed to be the most highly regarded qualification while the audit training offered the opportunity to get out of the office and work on-site with clients.

I gained my ACA and then applied for a secondment to the forensic and dispute services department.

I was almost immediately assigned to a business insurance consulting job. We had to assist the client in calculating an insurance claim following a fire at their warehouse. It involved elements of sales forecasting, giving me the chance to use my statistics degree.

Since then I’ve worked on many different types of assignment. I’ve even worked in Norway alongside engineers and economists on a consulting job for an oil and gas company. I joined the forensic department permanently in February 2006 and I’m still loving it.

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Sandeep Shanbhag, audit principal, National Audit Office.

Age: 33 After my physiology degree, I wanted to work in the public sector and was pleasantly surprised to find that ACA training would be available. Working for the National Audit Office appealed to me as it is an organisation committed to public accountability and helping the nation spend wisely.

Once qualified, I was promoted to audit principal.

The biggest challenge I’ve faced so far was taking on the responsibility of leading audits. It was down to me to deliver, but with this increase in responsibility came more satisfaction, opportunities and rewards.

I enjoy getting exposure to the different areas of government, understanding how they work and become more efficient. Projects have included commenting on how different agencies can increase the value for money they achieve. Along with the variety, knowing that what I do is in the public interest gives me great satisfaction.

Sheryl Miller, executive support manager, npower.

Age: 34 Post A levels, I initially wanted to go into practice. The fastest route to chartered status was by completing the AAT qualification first, which I achieved at Ernst & Young. My next challenge was to gain the ACA qualification. This wasn’t easy, particularly as I got married and found out I was pregnant during my training.

I decided to move into industry to gain a better understanding of commercial businesses. I have worked at the technology solutions company EDS as a new business analyst and at Compass Catering, where I was a commercial executive in the airport retail group.

I then moved to npower, one of the UK’s largest energy suppliers, where I am currently executive support manager to the CEO of npower retail. What I enjoy most is knowing that what I do makes a real difference to the success of the business.

For more information about routes to ACA career opportunities, visit www.icaew.com/careers, call the careers team on +44 (0)1908 248040 or email careers@icaew.com

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Benchmarking ACA salaries A new ICAEW annual salary and benefits survey shows ACAs command premium packages. It will help employers see how to retain talent and ACAs plan their careers. f you are an ICAEW -qualified chartered accountant in today’s market, the world is your oyster. Your blend of commercial know-how and technical skills are in great demand, you can pretty much state your terms when negotiating your remuneration package, and your promotion prospects have never been brighter.

This is reflected in the fact that 39% of ACAs are operating at board level with an average age of 43, and 67% of the qualified accountants in chief executive or finance director posts in the FTSE 100 companies are ACAs – four times as many as any other qualification.

A major new Career Benchmarking Survey – from the ICAEW and recruitment consultants Robert Half Finance and Accounting – shows that the ACA is now regarded as a premium business qualification around the world; it inspires business confidence internationally and ACAs are in demand ‘in an extraordinary breadth of business sectors’.

According to Robert Half Finance and Accounting managing director Phil Sheridan, a key challenge facing today’s boardroom is recruiting the right skill set to manage the rapidly changing business environment. ‘There is a strong belief that ACAs are technically capable of driving through change. Many of them have also held influential posts around the world, which places them very high up the list of desirable recruits.’ The demand for ACAs, he adds, is ‘almost insatiable’ and will continue for the foreseeable future.

a £10,000 bonus). Become a chief executive or managing director, though, and the basic salary more than doubles to £110,000, with a £53,000 bonus, boosting total earnings to £163,000. Chief financial officers and finance directors earn slightly less: their remuneration comes in at £130,000, covering a basic salary of £94,000 and a bonus of £36,000.

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How much you earn depends more on the sector you work in than the region. Not surprisingly, the highest basic salaries are on offer in financial services and energy, water and mining (both £85,000) and lowest in retail and wholesale (£70,000) and manufacturing and engineering (£71,000). ACAs working in London and the East of England will earn more (£83,000) than their peers in the North West (£72,000). But that’s where the differential ends: bonus amounts, which average £29,000, do not vary greatly wherever you work.

Most ACAs receive a fixed benefits package (69%), compared to only 20% who are given a menu of benefits. Key items in both types of packages include a company pension (76%), healthcare (73%), a bonus (64%) and life assurance (48%). While only 9% of fixed benefits packages provide childcare support, 50% of flexible benefit packages offer it as an option. Take-up among ACAs with a family is 53%.

Balancing satisfaction

Worth it More than 3,000 chartered accountants in business completed the survey, which is intended to benchmark their salary levels and employment benefits. It reveals that, on average, ACAs receive a basic annual salary of £79,000, plus a bonus of £29,000, which gives an average income of £108,000.

At the lower end of the earning scale, finance managers earn on average £61,000 (£51,000 in basic salary and

On the whole, ACAs feel that they are in an enjoyable and satisfying profession and 81% are happy in their current jobs.

Those who rate their job satisfaction most highly tend to earn more than their less satisfied counterparts (£88,000 v £71,000). However, ACAs whose work schedules allow flexibility to cater for personal needs, seem the happiest, even though they are on lower pay; this suggests that they have made a conscious trade-off between earnings and flexibility.

Two factors that are also likely to impact on job satisfaction include working with management and employees who have a positive attitude, and being able to see a clear career path and opportunities for promotion. 72% said that they had discounted the possibility of new job opportunities because they were unhappy about a prospective employer’s performance in these areas.

For further information, visit: www.icaew.com/careersurvey and see Accountancy magazine, August 2007

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Award-winning talent The ICAEW’s exams attract students from around the world. Three award winners who came top of the international field share their experiences.

Kaleem Mohammed: best mark in the world aleem, a corporate tax consultant with a Big Four firm in the East Midlands, won the first place prize and the Whinney prize for the Advanced Case study in the ICAEW’s November 2006 exams. The case study involved a four-hour exam in which he had to prepare a report on a fictitious company, as if he was acting as its professional adviser. Mohammed says he was ‘shocked’ to win the prize: ‘It’s such a big award – to have the best mark in the whole country and in fact, best mark in the world.’

Kaleem began his ACA training after completing an accounting and finance degree at Nottingham Trent University. ‘Chartered accountants I met told me the ACA was probably the premier qualification in the world for accountants,’ he says. ‘I did my own research and agreed.’ He expected the exams to be hard. ‘They are challenging, but provided you do the background reading and work, they are OK,’ Kaleem says.

Chris Burns, senior tax partner in Mohammed’s office, describes the award as ‘fantastic’ and recognition of his hard work. Of the ACA training, he notes: ‘If we want to quickly convert raw talent into people who can act as business – rather than just tax – advisers, the ACA route is unparalleled.’ It provides ‘understanding, confidence and gravitas’, he adds.

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Karandeep Deol: strong communication skills Karandeep, an audit executive with a Big Four firm, won first place and the Railton prize for the business management module of the Professional Stage of the ACA exams in March 2005. An auditor with a Big Four firm in London, Karandeep has now completed all her exams and expects to complete her training and gain her ACA this autumn. She chose the qualification partly because of the many doors it opens. ‘It’s an interna-

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tional qualification – you can go anywhere with it – and it’s highly recognised,’ she says.

Karandeep expected the exams to be easier than her maths degree, but the opposite was true because of the large amounts of technical knowledge to be learnt in a short time. ‘I succeeded through perseverance and having a lot of self belief,’ she says. ‘But it’s definitely worthwhile.’

During her audit training, Karandeep feels she has not only gained technical accounting knowledge but also strong communication skills. ‘It makes you an allround business adviser,’ she says.

Kirsty Long: understanding practice and business Kirsty, a management accountant at Lloyds TSB, is the youngest prizewinner in recent ICAEW history. She passed all her ICAEW exams at age 20 before completing her training contract. She gained her ACA in November 2006 when she was 21.

Kirsty won the first place prize (equal) for the business management paper in the ICAEW’s December 2004 Professional Stage exam sitting, and took fourth place overall.

Now working in London at Lloyds TSB in the bank’s IT and operations finance team, she initially trained in the Southend on Sea office of accountancy firm Wilkins Kennedy. ‘Working in practice was helpful for the exams,’ Kirsty says. ‘My audit training also helps me now. When we have the auditors in, I understand why they want things.’

Kirsty began her ACA training after completing her A levels. ‘My dad and uncle were both accountants,’ she explains. ‘The exams were as hard as I expected. My dad did them and warned me. They were very different to A levels in terms of style. But the hardest part was motivating myself to do a couple of hours study in the evening, after a full day’s work.’ She advises potential ICAEW students: ‘Plan your studying so you have enough time – and make sure you do have some time off’.

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Student support ICAEW students are in close contact with their institute – and able to influence its strategic direction. round the UK, the ICAEW’s district student societies support their local institute trainees. ‘One of our main functions is to help networking,’ says audit trainee Safia Saeed, chair of the Liverpool chartered accountants students’ association. ‘We organise events – many of them social – so people can meet and share their experiences.’ Trainees of smaller firms find this access to other students particularly helpful, feels Safia.

Each district can send a representative to the ICAEW’s national student council. ‘We form a link between the grass roots students and the institute,’ explains Simon Hoolihan, the council’s chair and an audit trainee at KPMG. ‘The institute often consults us on strategic issues affecting students.’ For example, the council was involved in developing the syllabus for the new ACA qualification, which starts in September.

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Winning respect ACA trainee Nina Kabra appreciates the ICAEW support she has received as she works towards her goal of becoming a business leader, despite her family’s concerns.

Now training with the firm of Adler Shine LLP in North London, Nina Kabra is full of ambition. She is currently treasurer of CASSL, the London ICAEW student society, and is an active representative of the institute’s national student council. She sounds like a success story – and she is. But her journey has not been easy.

‘It’s been a fight,’ Nina admits.

Nina comes from a Hindu Rajasthani family. Her parents would have preferred her to have settled down into an arranged marriage with children by now. ‘They are not pleased that at 26 I am still pursuing my dream to become a chartered accountant specialising in tax,’ she says.

Her ability to give her father tax advice is now helping to win respect however. ‘I often remind daddy that I developed my passion for business growing up and learning everything from him in his shop – I loved that!’

Support against pressure Family pressures have affected her progress. ‘In 2004 my parents wanted me to join them on pilgrimage in India,’ Nina says. ‘It was expected of me. My grandfather also had a stroke. I was there supporting my fami-

Valuing student opinions One member of the student council – currently Simon – also sits on the ICAEW’s main council.

‘It’s struck me how much the institute is interested in listening to us, and that it really values our opinions,’ he says.

Central support for students is also available from the ICAEW itself, through its learning and professional development team, which helps with any particular issues or concerns.

As Nina Kabra’s story shows, this support can be invaluable.

Nina Kabra

ly through that. With Asian families, you have to pull together. I had to give them a lot of time.’

Nina’s studying was affected. She failed an exam and her then firm terminated her contract. Subsequent employers failed to provide ACA study support.

Nevertheless, she persisted, and this summer joined Adler Shine LLP, which she calls ‘a very supportive training firm’. She believes the ICAEW’s support has been invaluable. Christine O’Leary from the ICAEW’s learning and professional development team provided essential phone and email encouragement.

Staying on track ‘When I was going through emotional turmoil, Christine was there for me,’ says Nina. ‘During the hard times she kept me focused and on track.’ A fellow national student council member, Lawrence Edwards, also provided huge support. ‘Lawrence’s strength of character and honesty encouraged me to challenge my own belief system and subsequently my family’s expectations.’

As for the future, Nina says: ‘I definitely want to pursue my career to fulfil my potential and become a business leader. And I definitely want to be a wife and mother at the right times. But I’m taking everything one step at a time.’

Visit www.icaew.com/students for details of student support. For information about recruitment and training places, contact our student recruitment team on +44 (0)1908 248040.

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From ridicule to respect The institute’s Victorian founders lifted accountants’ poor reputation with a new premier chartered accountant brand. Historical research shows how they did it.

examination. Candidates had to obtain 50% overall with at least 50% in the accounting papers and 33% in the law papers. Pass rates were variable, but on average threequarters succeeded in the intermediate and two-thirds got through the final. Successful candidates had one last hurdle to overcome – they had to be declared a ‘fit and proper person’ by their principals.

ccountancy has come along a way since 1875 when a judge in Bristol famously referred to accountants as an ‘ignorant set of men’. Not long after, the Liverpool Courier compared accountancy to a ‘refuge for the destitute ’with accountants as maids-of-all-work to the commercial community. Worse, they had no special training and in many cases were ‘absolutely incompetent for the work they profess to discharge’.

From its foundation in 1880, the ICAEW faced an uphill task to construct a brand image of the chartered accountant that addressed these criticisms. By 1896, a commentator remarked that the profession of an accountant was not only a useful one but also ‘one of importance and absolute necessity to the commercial world generally’.

So how did the institute achieve this transformation in the space of 20-odd years?

These qualification hurdles – and the subsequent prohibition from mixing any other business with discharging their higher duties as public accountants – created the public image of the well-qualified chartered accountant.

Yet the ICAEW still had to differentiate its membership from other accountants. It was therefore important to promote and defend (via court injunctions) the chartered accountant, FCA and ACA credentials. So the annual list of members was distributed among elite and influential groups including banks, courts, government and the stock exchanges, and advertisements were placed in The Accountant and leading commercial and professional directories.

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Promoting the brand

Selecting the best Foremost in the new institute’s professionalisation strategy was the construction of a chartered accountant brand image that guaranteed the respect of the business community. This necessitated: lengthy, supervised vocational training and rigorous written examinations; prohibiting the practice of an array of nonaccounting services to create the ‘specialist practitioner’; and marketing the ICAEW and utility of the chartered accountant credential.

The institute’s council swiftly introduced a three-tier examination system with a preliminary exam designed to ‘keep the profession select’. By examining subjects that formed the basis of culture, including Latin and Greek, it automatically excluded ‘the great unwashed’ (80%-90% of the population) who had not received a secondary schooling.

Even for those with such an education, success was ‘more than a formality’, with pass rates as low as 38.5% recorded in 1882. On average, across the period 18821900, 65% of candidates were successful.

Articles and hurdles Aspiring members then faced a five-year articled clerkship, which posed a severe financial hurdle. The trainee usually paid a premium to the firm – up to 400 guineas or around £25,000 today – at best refunded as remuneration during articles. Salaries were the exception, rather than the norm.

Halfway through articles, the intermediate examination provided the first formal test of professional competence, followed in not less than two years by the final

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Influential establishment figures were courted, while the ICAEW literally built respectability through the design and construction of its prestigious Moorgate headquarters.

Success As early as 1890, ICAEW members were deemed to be the most competent professional grouping to act as ‘a sort of attorney or registrar-general of the births, marriages, and deaths of every kind of commercial enterprise, partnership contraction, and legal dissolution’. By the late nineteenth century, these combined efforts had ensured that the chartered accountant was both highly valued and highly recognisable in the market place for professional services.

This article first appeared in Accountancy magazine, July 2007. It is based on independent research conducted

by Malcolm Anderson, John Richard Edwards and Roy Chandler at Cardiff Business School. Contact Malcolm Anderson at andersonM3@cardiff.ac.uk or Gillian Knight at the ICAEW Centre for Business Performance on +44 (0)20 7920 8478 for details.

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Doing business with India: dispelling myths My first business dealings with India were in 1976. I traveled to Bombay to recruit two Indian chartered accountants to work in the Middle East in the leisure and manufacturing industries. Both became valuable additions to our workforce. ver since then I have always felt a close affinity with India. To the first time visitor, what you notice most is that it is a country of contrasts. The chaotic mix of vibrant colours, sounds and languages is accompanied by extremes of wealth and poverty. It’s an exciting place to visit. However, if you are going to be successful in business, it is essential to understand India and its contrasts.

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Raising profile This is why, as deputy president of the ICAEW’s London Society of Chartered Accountants and chairman of the society’s business board, I’ve been delighted to play a part in bringing that understanding to British businesses. Working together with senior CIMA and CIPFA colleagues on the board, we recently held a successful B2B event on doing business with India at Chartered Accountants’ Hall in London on 18 July.

We had two objectives in mind. First, to raise the profile of India in the City of London as a place to do business. Second, to highlight the importance of an accounting profession which is fit for purpose to support a globalised business world. Appropriately, we brought together the UK accountancy profession with the Indian Institute of Chartered Accountants with whom the ICAEW has historic ties.

Jewel in the crown It is India, rather than China, which has traditionally been Britain’s main trading partner in the Far East – truly the ‘jewel in the crown.’

Misconceptions about doing business in India are common: bureaucratic, difficult to raise finance, insufficient tax breaks, inefficient workforces. Yet, as our distinguished speakers – including Lord Bilimoria – demonstrated, the market is evolving to take advantage of globalisation.

Yet it also retains its unique qualities. One of our speakers, Samantha Gale, a partner with Mazars, for instance, recently helped an Indian company float on

AIM in London – it’s currently on the recommended stocks to buy. But she says she became part of ‘the family’ – invited back to the wedding of a director – an embracing and unique approach to building long-term business relationships.

The time is now Today, India is a largely unexploited, yet attractive market for international business. It has a Derek Felstead, Deputy President, vast pool of skilled London Society of Chartered workers who are Accountants mainly English speaking, and readily available tax incentives and finance despite regional variations.

Significantly, to some extent it is perhaps the one developing country in the world that the US has left largely alone. There is evidence that this is beginning to change. The opportunities for UK businesses are there to be taken – but the time to do so is now.

Dispelling myths The event on 18 July was an attempt to dispel of some of the myths about what to expect. We wanted our business members to gain a better understanding of some of the practical processes and pitfalls to avoid when setting up business in India.

We also wanted them to network with those who have real knowledge and understanding of the market.

Sharing collective business knowledge certainly facilitates trade between the two countries, but it is those with current Indian market experience who can best demonstrate that India is not merely a call-centre based economy.

We live and operate in a truly global economy.

Yet, in my own business experience – and in my heart – India still remains one of the best places in the world for the UK to do business.

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Partnerships that make a difference Surinder Kaul FCA, Chairman,UK Chapter of the Institute of Chartered Accountants of India hen I came to London in 1959 to train as an engineer, a family friend advised me that becoming a chartered accountant was a much better idea. But in those days, it proved hard to do for an Asian. It was only through family connections that I was able to take articles with the firm which is today known as Howarth Clark Whitehill. I was the only non-white among some 200 staff and 10 partners.

W

In demand Yet chartered accountants – of any colour or creed – have always been in demand. I subsequently worked for several national firms in the City and also did a spell in India. Since then, my career has also taken me to work for a number of multinational companies. I set up my own practice and consultancy in the 90’s.

The world has clearly changed since the early ‘60s when I trained. Today, accountancy is more than just being about management figures in a business. It is recognised as essential to a strong financial infrastructure and creating a climate of trust for investment.

Globalisation has altered the pattern of economies the world over. Service and professional sectors are now dominating the economic activities of countries at every stage of development.

A unique view For the last 10 years, I have been active in the ICAEW London Society of Chartered Accountants and was a council member of the ICAEW until last June. It has meant I have been part of the decision-making body for the profession.

I am also chairman of the Indian Institute of Chartered Accountants’ UK Chapter. And those dual roles have brought me a uniquely broad perspective on professional developments in both countries and an ability to promote the value of India to the UK. Given India’s vast pool of talented professionals in a wide range of services, India enjoys tremendous potential in the export of these professional services.

The role of the chartered accountancy profession in this millennium is becoming multi-pronged.

It means there is a need to change our professional outlook in line with changing times. As the president of the Institute of Chartered Accountants of India, Mr Sumil Talati, once said: ‘By changing the inner attitude of our minds, we can change the outer aspects of our lives. The only thing we must not change is our commitment to our professional ethos and ethics.’

The ICAEW and the corresponding institute for India have a long history of close cooperation, also

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Surinder Kaul

manifested in the form of the historical Memorandum of Understanding formed in April 2001. This has put both the institutes into a strategic position to work together in areas of common interest.

Influencing economic relations When Mr Richard Dyson, the ICAEW president, visited India and Sri Lanka in January 2007, he commented: ‘We come to the table with an advantage based on the historic ties between our two countries. The influence of the British-Asian business community will be an important factor in shaping our economic relationship, and our long standing relationship with the Indian Institute continues to play its part.’

You will not be surprised to learn that as founding chairman of the ICAI UK chapter in 2001, my objective has been to promote dialogue between the ICAEW and members of the chartered bodies in India, Pakistan, Bangladesh and Sri Lanka. We hold a high profile annual dinner for the president of the ICAEW every year to bring those communities together. This year it will be on 26th October at the ICAEW’s historic home, Chartered Accountants’ Hall in the City.

Promoting greater networking between our respective professions in the interests of partnership and learning is one important contribution among many that the accountancy profession can make to international economic growth.

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Doing business in India S.Jagadeesan, Minister Economic, High Commission of India, London. ndia's economy is on the fulcrum of an ever increasing growth curve. With positive indicators such as a stable 8-9 % annual growth, rising foreign exchange reserves of over US$ 200 billion, a booming capital market with the popular "Sensex" index topping the 14,000 mark, estimated foreign direct investment (FDI) flow of US$ 12 billion in this fiscal, and a more than 35% surge in exports, it is easy to understand why India is a leading destination for foreign investment. India has become the world’s fourth largest economy in purchasing power parity terms. In absolute terms, as per World Bank data, India’s GDP in 2006 was USD 806 billion (rank: 10). GDP structure has undergone change with the service industry increasing its share in the GDP from 38.7% in 1984 to 55.1% in 2007. Of this IT services alone constituted USD 39.7 billion (IT services exports: USD 31.3 billion), witnessing a growth of 31% over previous year.

Manufacturing constituted 26.4% of GDP and Agriculture constituted 18.5% of GDP in 2006-07.

Exports in 2006-07 rose 23.9% to $124.63 billion, while imports jumped 29.3% to $181.4 billion. India’s total trade to GDP has been increasing over the years and is at about 35% in 2006-07, indicating an increased integration with the global economy.

The main advantage of India lies in the quality of its manpower, as witnessed by the country’s success in the services sector and relatively high-end manufacturing sector. The demographic profile of India, wherein two-thirds of its population (total population: 1.12 billion) is less than 35 years and a little over onethird of its population is below 15 years, will be of tremendous advantage compared to an ageing world.

Its working-age population is estimated to represent 70% of the total population by 2030, With more than 380 universities, 11,200 colleges, and 1500 research institutions, India has the second-largest pool of scientists and engineers in the world.

The large and rapidly growing consumer base is another compelling reason for multinational companies to be present in India. As per a recent McKinsey report, India's middle class will reach 583 million from the current 50 million by 2025. Incomes would triple over the next two decades and India would become the fifth-largest consumer market by 2025.

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What Sectors I. Agri business: The Indian Agriculture Industry is on the brink of a revolution that will modernize the entire food chain, as the total food produc-

tion in India is likely to double in the next ten years. The Government of India has approved proposals for joint ventures, foreign collaborations, and 100% export oriented units envisaging an investment of $4.80 billion, out of which foreign investment is over $18.2 billion.

India is the third largest producer of food items, largest milk producer, secS.Jagadeesan ond largest producer of fruits & vegetables, and has the largest livestock population. Huge opportunity in food processing sector exists as demand for processed food is expected to surge due to increasing income levels and urbanization.

II. Manufacturing: Over the past two years, this sector has achieved growth rates of 9-10%. It is expected to increase to 12 % in the near future.

Specific sectors in manufacturing that are witnessing high growth rates are automobiles, auto components, machine tools, garments and textiles, etc.

III. Knowledge based business: With its highly trained manpower and an enabling legal environment for protecting intellectual property rights, India offers high potential in pharmaceutical manufacturing, biotechnology and contract research & development.

The Indian pharmaceutical industry is worth US$ 12 billion, of which exports were US$ 3.8 billion (200506). The country ranks 4th worldwide, accounting for 8% of world’s production by volume and 1.5% by value. India is an efficient and cost effective source for procuring generic drugs, especially drugs going offpatent in the next few years. India has a high level of competence in molecular biology, immunology and biotechnology. Huge potential exists for clinical research and clinical trials, development of biotech based new drugs, and setting up of bio-technology parks.

IV. Services: Services sector has become the most important component of India’s GDP and is also the main driver of growth. Huge potential exists in the IT, IT enabled services (ITES), Hospitality, Health, Financial, Accounting and Legal services segments.

V. Infrastructure: i) Roads: India has an extensive road network of 3.3 million kms – the second largest in the world.

Roads carry about 61% of the freight and 85% of the passenger traffic. Highways/Expressways constitute about 66,000 kms (2% of all roads) and carry 40% of Asian Voice & Gujarat Samachar - 2007

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Careers in

Accountancy the road traffic. The Government of India spends about Rs.180 billion ($4 billion) annually on road development. The ambitious National Highway Development Project (NHDP) of the Government is at an advanced stage of implementation, which includes the Golden Quadrilateral (5846 kms of 4 lane highways) and North-South & East-West Corridors (7300 kms of 4 lane highways). Program for 4-laning of about 14,000 km of National Highways is underway.

Annual growth is projected at 12-15% for passenger traffic, and 15-18% for cargo traffic. Over $50–60 billion investment is required over the next 5 years to improve road infrastructure. A large component of highways is to be developed through public-private partnerships. FDI up to 100% is permitted for construction and maintenance of roads, highways, vehicular bridges, toll roads, vehicular tunnels. The Government also provides incentives by way of 100% income tax exemption for a period of 10 years. ii. Power: India has a generation capacity of 122 GW (590 billion units produced). Generation capacity has grown by an average of 4.6% p.a. over the last four years. India has the fifth largest electricity generation capacity in the world, despite a low per capita consumption at 606 units, which is less than half of China. Transmission & Distribution network of 5.7 million circuit km is the 3rd largest in the world. Coalfired plants constitute 57% of the installed generation capacity, followed by 25% from hydel power, 10% gas based, 3% from nuclear energy and 5% from renewable sources. Over 90,000 MW of new generation capacity is required in the next seven years and a corresponding investment is required in transmission and distribution networks. India is experiencing a large demand-supply gap. All India average energy shortfall is 7% and peak demand shortfall is 12%. Opportunities exist for investment in coal based plants at pithead or coastal locations (imported coal), Natural Gas/CNG based turbines at load centres or near gas terminals and hydel power potential of 150,000 MW is untapped. Opportunities also exist in renovation, modernisation, up-rating and life extension of old thermal and hydro power plants and in transmission network ventures. iii. Civil Aviation: Passenger traffic is projected to grow at over 15% p.a. in the next 5 years and will exceed 100 million passengers p.a. by 2010. Cargo traffic is projected to grow at over 20% p.a. over the next five years and will exceed 3.3 million tonnes p.a. by 2010.

Major opportunities lie in modernisation/upgradation of metro airports and greenfield airport projects planned in resort destinations and emerging metros. . iv. Telecommunications: India is among the fastest growing telecom markets in the world.

550,000 km of optical fibre cable has been laid.

Cellular phones are increasing by over 5 million every month. New Broad Band Policy envisages 20 million broadband subscribers by 2010. Investment Opportunities exist in setting up manufacturing facili-

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ties, supply of hand sets and equipments, telecom & value added service, etc. Investment opportunity is estimated at US$ 22 billion.

VI. Special Economic Zone: With a view to overcome the shortcomings experienced on account of the multiplicity of controls and clearances; absence of world-class infrastructure, and an unstable fiscal regime and with a view to attract larger foreign investments in India, the Special Economic Zones Policy was announced in April 2000. The incentives offered to the units in SEZs include - duty free import, 100% Income Tax exemption on export income for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years, exemption from minimum alternate tax, relaxation in external commercial borrowing, exemption from Central Sales Tax, exemption from Service Tax, single window clearance for Central and State level approvals, etc. The major incentives to SEZ developers include - exemption from customs/excise duties, Income Tax exemption on export income for a block of 10 years in 15 years, exemption from minimum alternate tax, exemption from dividend distribution tax, exemption from Central Sales Tax and Service Tax. Consequent upon the SEZ Rules coming into effect, formal approval has been granted to 237 SEZ proposals and in-principle approval has been granted to 164 SEZ proposals.

Investment of the order of Rs.1000 billion, including FDI of US $ 5 - 6 billion and 500,000 direct jobs are expected to be created by the end of December 2007.

How to do business in India Since the legal and regulatory framework is based on the British system, it should be relatively easy for British companies to do business in India. India is also a member of WTO and GATT, and abides by international conventions. Overseas companies can enter India in multiple ways. They can do business in India without incorporating a local company in India, i.e. by establishing a branch office/liaison office, working through distribution/out-sourcing Agreements, etc.

They can also incorporate a new company in India, either as a wholly owned subsidiary or a joint venture and also acquire existing Indian companies. The entry strategy has to be decided based on the business strategy of the overseas company.

Conclusion India is the largest democracy in the world with an independent judiciary and a strong press. The multiple layers of governance i.e. Federal Govt., State Govt. and Local Authorities, provide a stable policy environment, though decision making could be slow, for the same reason. Many companies especially foreign companies, are frustrated at the pace of decision making in India at the time of investing into India. But once the unit is established, the sailing is relatively smooth, as witnessed by the highest percentage of foreign firms operating profitably in India.

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India - a hub for global finance Michelle Potts, CIMA Head of International Development ndia has long been referred to as an emerging market, but the truth is that India has now well and truly emerged as a hub for global finance. Increasingly, the world’s leading companies now look to India to provide financial services and professionals to meet the needs of their global operations, as well as those of their clients.

Recent announcements by major UK-based organisations, such as the BBC, NHS and GlaxoSmithKline confirm that this trend will not only continue, but also will gather pace, as an increased number of high-end Finance & Accounting processes are transferred to India from the UK. The move towards more knowledge driven analytical processes and decision making skills is already resulting in increased demand for candidates with management accountancy skills. In other words, as the finance work being handled in India moves up the value chain, so do the skills of the finance professions required, with companies seeking highly skilled management accountants with an understanding of the international business context.

CIMA’s strong links with UK companies, many of

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whom are CIMA Quality Training Partners, means that CIMA is increasingly being asked to provide these skills by supporting the training and qualification of employees working for UK, International and Indian companies. To meet these growing demands, we have increased the exam centres, meaning that candidates can now sit CIMA exams in eight cities across India, as well as building partnerships with business schools and colleges to provide tuition to CIMA students.

Solutions, Solutions, Solutions FTC Kaplan is a leading global provider of professional qualification and training solutions

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Spice up your career **

Qualify as an ACCA accountant The ACCA professional qualification is a challenging but rewarding option. Choosing a quality tuition provider with a track record for success will maximise your chances of a first time pass.

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90% of FTSE 100 companies and individuals alike trust BPP for their training needs and here are a few reasons why:

Success - our pass rates consistently meet or exceed the ACCA global average.

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Why do we need Accountants?

Is it because the world cannot count…. ven though most accountants would like us to think that the world cannot count, this is really not the case. The role of an accountant has changed over the years, yes we are still the gate keepers and watch dogs over the treasure chests in the world of business, but more is now being asked of the humble accountant.

Gone are the days where accountants were left in the back office tapping away on their calculators and playing with their spreadsheets to their heart’s content.

Yes we still have to undertake the tasks of control and the policing of policies and procedures, yes we are still required to produce financial statements that conform to accounting standards but the world of business requires more. More often than not accountants are being asked to provide more commercial and strategic views of life due to the dynamic nature of the business world at present .

We are now being asked to add value and influence the direction of business. This value and influence comes in many guises, from locating funding, negotiating with suppliers, assisting with commercial negotiations to more high level skills like preparing and executing strategies.

Accountants are now becoming a major part the decision making process and their input is highly valued. The ability for an accountant to use their financial knowledge in a commercial environment is a very valuable one and a skill that is more and more in demand.

This is demonstrated by the fact that most accountancy job vacancies nowadays have the word “commercial” in the job specification.

It has now become a pre-requisite that accountants are commercial and that we have a multi-faceted approach to business rather than just report numbers on a monthly basis. Accountancy is not the boring “bean counting” profession it has been perceived to be, its now about advising, influencing, guiding businesses and individuals to future success. So the next time you are asked “Why do we need Accountants?” – think about how your role permeates throughout the business from HR to Sales and Marketing and how much influence you have. Failing that you could always say “it’s because the world cannot count…….”

E

Viren Patel, ACCA Director, BPP Professional Education

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A quality partner for your future btaining a recognised accounting qualification is essential when aspiring to a senior position in accountancy. Your journey into building a successful career starts with choosing a quality training organisation.

BPP Professional Education was established in 1976. For the past 30 years BPP has trained professionals for the qualifications they need to achieve their career goals. Thousands of accountants have gained their qualification studying with BPP. In fact, we train for more professional qualifications than any other company in the world. With a London headquarters, the organisation has over 30 teaching centres in the UK and overseas.

O

The Association of Chartered Certified Accountants (ACCA) The ACCA is the largest and fastest growing global professional accountancy body with 296,000 students and 115,000 members in 170 countries. ACCA members are internationally recognised and work in a variety of sectors including: Public Practice Industry and Commerce Public Sector Accounting Whichever sector you decide to work in, BPP has over a thousand course options to suit you.

Choosing the right ACCA training provider The ACCA awards different levels of recognition to tuition providers. The highest recognition is the Premier Plus accreditation. This is based on a tuition provider fulfilling certain criteria including:

Consistently meeting or exceeding ACCA’s pass rate targets.

An excellent structure to support students.

Quality of tuition.

Quality of materials.

Excellent facilities.

How does BPP measure up?

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21 BPP centres have been awarded the ACCA Premier Plus accreditation – more than any other tuition provider worldwide.

BPP has more than 200 professionally qualified tutors to support students throughout their studies.

For the December 06 sitting, 73% of UK ACCA prize winners, including the gold and bronze medal lists at the final level, trained with BPP. BPP consistently meet or exceed the ACCA global pass rates.

BPP has over a thousand flexible course options.

Asian Voice & Gujarat Samachar - 2007

Choose from full time, part time, day release, block release, weekend, distance learning and more.

BPP is an approved publisher of ACCA materials. All BPP centres are equipped with state-ofthe-art technology.

Centres use Power Point in the class room and other facilities comprise of computer labs, free internet access, study rooms and a student lounge.

ACCA has recently chosen BPP Professional Development as its preferred e-learning provider for its members’ Continuous Professional Development courses.

These are a few of the various reasons why individuals and major companies such as KPMG, PwC and Morgan Stanley choose to train with us.

Full time ACCA courses at BPP If you are a non EEA student requiring a visa, you will need to study full time. In addition to all the usual BPP services, on a full time course we also cater for: Career placements.

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Career talks and advice along with study skills sessions.

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Getting more advice For further advice come to a BPP open day held at BPP centres across the UK. To register your interest go to www.bpp.com/mycareer and click on open days.

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www.bpp.com/mycareer www.accaglobal.com

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Indian Tax Laws - Geared for Growth Rajesh Dhruva, Chartered Accountant and Tax Consultant “The Indian growth story is a real life story unfolding before our eyes. For Indians, it is a huge challenge. For Europe, it is a huge opportunity. For the world as a whole, it is an exciting prospect that India will finally succeed in eliminating poverty and join the ranks of the developed countries. When, I repeat when, not if, India succeeds, there will be no losers and all us will be winners. I hope Europe will respond to the ‘India’ opportunity and engage more with India in the months and years to come.”June 27, 2007”. The Indian Finance Minister in his KEYNOTE ADDRESS AT INDIA-EUROPE INVESTMENT FORUM. " INDIA " the tiger uncaged has opened its arms wide to inbound investments and is encouraging Indian entrepreneurs in their outbound explorations, resulting in India becoming a manufacturing hub and back office service center of global giants like Nokia, IBM, Google, GM Motors. On the other hand the acquisition of Corus (worth US$ 12.1bn) by Tata Steel is exemplary of Indian corporates going places across the globe.

On its part the Government has liberalised governing laws for inbound and outbound investments by replacing Foreign Exchange Regulations Act, 1973 (FERA) by Foreign Exchange Management Act, 1999 (FEMA). Thus FEMA regulates all capital account and current account transactions in foreign exchange including issue and transfer of securities, borrowing or lending in foreign exchange or Indian Rupees, placement of deposits, exports / import of foreign currency, acquisition or transfer of immovable property in India, providing guarantees, repatriation of incomes, investment of capital and of course export and import of goods and services.

Overseas investors - Both individuals and corporates can undertake almost any business activity in India barring a few, subject to investment caps laid down by the Government of India from time to time.

Most of the manufacturing sectors are open for overseas investments but sensitive sectors such as defence, atomic energy, minerals, petroleum, print media and broadcasting require prior approval. A few sectors such as retail trading, atomic energy, gambling and lottery, agriculture, plantation activities and real estate trading are prohibited. The government has laid down sectoral caps ranging from 26 % like in insurance, 49 % in telecommunication / private sector banking, 74 % in mining and upto 100 % in most of the manufacturing and export oriented activities for overseas participation.

An overseas entity can undertake business in India by various methods. They are:

1. Wholly Owned Subsidiary (WOS): A wholly owned UK company can set up an independent company in India and investment can be made under the Automatic Route on repatriation basis. The main advantages of WOSs are, an incorporated entity in India will be subject to Indian fiscal and other laws similar to a domestic company and can freely undertake business activities in India unlike a branch wherein limited activities can be undertaken. If the venture has Indian partners it can be established as a joint venture.

2. A foreign entity can also establish a branch or office in India subject to prior approval of the Reserve Bank of India (RBI). The branch may undertake activities of export and import, rendering professional or consultancy services, undertake research for the business of the company, promote technical or financial collaborations, provide information technology and software development services, render technical support for a company's products, airline or shipping business and act as the buying and selling agent of the parent company.

3. Similarly, a liaison office or a project office can also be established in India for executing a specified contract / project. This is advisable when a specific project is to be undertaken and executed in India in which activities are restricted only to such a project.

The branch or project can remit balance profits abroad after completion of the project subject to payment of appropriate taxes in India and compliance of prescribed procedures.

4. And finally, an overseas resident can also undertake business as a sole proprietor or a partnership in India, subject to prior approval of the Reserve Bank of India.

Repatriation: Most of the investment can be undertaken with the facility of repatriation - both of income as well as capital. In certain cases, general / specific approvals are granted for investment on non repatriation basis.

Taxation: The Income Tax Act of 1961 (IT Act) covering the whole of India applies to various incomes Asian Voice & Gujarat Samachar - 2007

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Accountancy from active business and professional activities such as business profits, professional income, salaries, remuneration and passive investment incomes such as rent, dividend, interest, royalty etc., as well as capital gains.

The IT Act covers the incomes from all the sources arising or accruing or deemed to arise or accrue in India and received or deemed to be received in India. In the case of persons covered by the definition of Resident, it applies to the income accruing or arising outside India during a Financial Year commencing on 1st of April and ending on 31st March. Whereas in case of Non Residents, only incomes accruing or arising in India and incomes received in India and deemed to be so, are taxed.

In case of individuals, Residential status under the Income Tax Act is determined based on the number of days of physical stay in India, whereas in case of companies, the same is determined on the basis of control and management. An Indian company, per say, is treated as Resident only if its affairs are wholly controlled and managed in India. Tax rates for Indian corporates are 30.90% and for foreign companies it is 41.20%.

Royalties and fees are taxed at 51.50%.

Withholding / Tax Deduction at Source [ TDS ] plays an important part of tax jurisdiction. Payment of most of the current expenses such as remuneration, rent, interest, commission, professional fees and payment to contractors attract TDS provisions. Many foreign companies deputing employees in India are unknowingly breaching the law by not deducting tax at source from the remuneration paid, often in cases where only few employees are deputed for short periods. Of course, Double Tax Treaty between India and U.K. would deem such employees to be Residents only if their stay for service in India exceeds 183 days and if it does, then not only is the foreign corporate, being the employer, required to deduct tax at source from the salary but is also required to avail Permanent Account Number (PAN) and Tax Account Number (TAN) and comply with statutory requirements of filing documents regarding tax deducted and deposited with the authorities. Domestic companies are also subject to dividend

Editor/Publisher: CB Patel Managing Editor: Jyotsna Shah Executive Editor: Kokila Patel News Editor: Kamal Rao

Editor/Publisher: CB Patel Associate Editor: Anne Hoose Assistant Editor: Shruti Ganapathy Advertising Managers: Alka Shah, Kishor Parmar Business Development Managers: Urja Patel, Cecil Soans Senior Advertising Sales Executive: L George & Nilam Patel Chief Financial Officer: Surendra Patel Accounts Executive: Akshay Desai Design/Layout: Harish Dahya & Ajay Kumar Customer Service: Dipti Parikh & Ankita Patel

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distribution tax and Indian company distributing dividend is subjected to distribution tax of 15%.

Other Important Taxes: India has also adopted the Value Added Tax (VAT) regime and foreign entities must comply with the provisions. India also levies Service Tax for as many as 104 services. Presently services are taxed at 12 % and foreign entities providing services in India to domestic sector should comply with the provisions. Exports are granted exemptions as regards to VAT and Service Tax. India has certain restrictions and reservations for small scale industrial units, restricting investments by foreign entities. Similarly, foreign entities from certain neighbouring companies such as Pakistan, Bangladesh, China, Afghanistan, Iran etc. are also subjected to certain approvals.

India UK Double Tax Treaty: Investments in India will also be covered by provisions of Double Tax Treaty between India, UK and Northern Ireland which came into effect in 1993, covering the law of Income Tax Act in India and the laws of Income Tax, Corporation Tax and Capital Gains Tax in UK. The provisions of this tax treaty are quite favourable and conducing for developing business and trade. The provisions of India-UK Tax Treaty have overriding effect and have a supremacy over Indian and UK Tax Laws and the tax payer can choose to be subjected to the provisions as may be found beneficial. The Tax Treaty mainly covers various incomes such as business profits of undertakings in India, royalties, dividend, fees for technical services and interest.

It may be noted that not only is India offering excellent opportunities of infrastructure development and is one of the largest domestic consumers but the tax regime is also investor-friendly and the Government offers substantial incentives for overseas investments which can play a pivotal role in furthering the development of Indian economy.

The author is Chief Executive of www.nribanks.com and femaonline.com.

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Accountancy

Life at PricewaterhouseCoopers Visesh Gosrani FIA – Senior Consultant – Actuarial Insurance and Management Solutions

fter graduating from the London School of Economics in 2000, I started my career with, and still work, for the largest professional services firm, PricewaterhouseCoopers. Although we are primarily known for our accountancy work, I have followed and enjoyed another career path. So what am I? An actuary. What’s that? We are a profession which has been in existence for over 150 years and we specialise in making long term financial decisions in a variety of areas that not only affect people in all aspects of their everyday life but also governments, businesses and financial organisations. Our work tends to be highly analytical and technical. But we are just not statisticians or mathematicians. What differentiates us is our ability to apply our understanding of mathematical, economic, statistical, law and businesses to solve real financial problems. All the different areas we work in involve solving complex business problems and the right area for you to specialise in depends on what interests you. The differences between the areas mean that while you’re using similar principles in each line of work the people you meet and environments you work in change vastly.

In PwC we employ actuaries in all of these specialist areas. When you first join PwC, you have to choose which area you wish to work in. We have actuaries in Human Resource Services (HRS), Executive Reward Consultancy (HRS - HR Analytics) and Actuarial Insurance and Management Solutions (AIMS). AIMS is further split into Life (working with Life Insurance companies) and Non-Life (working with General Insurance companies) – I joined AIMS Non-Life.

Our Pensions actuaries work in our HRS group and as their specialism suggests they advise companies on pensions and benefits issues. Why is this important? Well, last year British Airways had a deficit in their pension scheme of £2 billion. When you consider that the whole of British Airways is currently valued at about £4 billion, this means that BA owes about half of its market value to its pension scheme to be able to pay all its pensions. Hence if you wanted to take over BA last year (their pension deficit is smaller this year), you would have had to have spent a lot of your time thinking about what to do with the pension scheme! Often the projects my HRS colleagues are involved in relate to similar issues that arise during a merger or acquisition or advising clients on the best way to run their pension

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Visesh Gosrani FIA

and benefit schemes. For example, consider a company that operates around the world. If they want to offer their employees the same benefits around the world, they need to take into account cultural differences e.g. in the US you have to give share options whereas in Germany, they prefer a higher base salary. We help to reconcile these differences.

Our HR Analytics team design and implement programmes that pay executives of companies.

Sounds easy? Unfortunately it’s not that simple. They not only have to consider items such as salary and bonuses, but also under what conditions those bonuses will trigger, what the bonus payment will be (e.g. it could be more shares in the company, more cash, more pensions payments) and how these comAsian Voice & Gujarat Samachar - 2007

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Accountancy pare with the market. Executive reward is one of the key items that helps determine whether our clients can recruit, retain and motivate key talent. Our work is often as part of a multidisciplinary reward team that includes compensation, tax, legal and actuarial experts. It's this combination of thought leadership and robust analysis that adds value for the organisations we work with.

As I mentioned above I work in AIMS. Our work in the insurance industry is equally diverse. We advise all the key institutions and insurers on key topics like underwriting, pricing, reserving, solvency, economic capital, effects of legislation, the viability of new products and the efficiency of their underwriting, claims, finance and policy administration processes.

The two specialist areas of AIMS are Life and Non-Life insurance My colleagues in the Life department have to contend with any issue that could affect people’s lives.

For example, improvements in medical science mean we're living longer. That means that the cost of an insurance product that gives you a payment if you die between the ages of 30 and 50 will reduce (as people are less likely to die in this age range). However, the price of an insurance product that will give you a payment if you die after 65 will increase. They use mathematical models to analyse large pools of data to work out what the price should be and therefore by how much the price should change.

Non-Life insurance, where I work, looks at all insurance products that are not connected with life insurance. At the more everyday end of the scale there's car and home insurance. At the more extreme end there’s space and satellite insurance. We are also interested in issues like global warming as its potential effects, for example the increased frequency of hurricanes and floods, are substantially increasing the payments made by insurers for these events.

Non-life insurance is complicated because we don’t know (i) when an event may happen that leads to the insurance company making a payment (e.g. when you crash your car); and (ii) the amount of the payment. (You may scratch your car. Alternatively you may cause a motorway pile up involving 20 cars which means your insurance company is responsible for paying for the repair or replacement of those other 20 cars). By using our analytical and business sklls, we can help insurance companies determine what amount of money they need to set aside (reserves) to help them pay for these future events.

However, we don’t just do technical work. By calculating the risks and weighing up the odds of what might happen, we can help businesses and private individuals plan strategically. On all my projects I have used my analytical skills to deliver real commercial insights; insights that enable my clients to

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prepare for issues you see on the news everyday.

PwC employs more Non-Life insurance actuaries than any other company or consultancy - currently we account for 12% of all non-life actuaries in the UK and we are the largest non-life office in Europe.

What should you look for in a company?

What I looked for and what I get include: Being treated with respect from day one and given as much responsibility that we can handle; A true meritocracy. The harder I’ve worked and the higher quality work I’ve produced, the more quickly I have seen the rewards both financially and in the responsibility I’ve been empowered with; A supportive culture. People at all levels are keen to help whenever I, or they, find a development area. PwC provides a structured training programme to help us develop our expertise in both technical and soft skills areas; I was in a very diverse department – in a team of 60 we had a range of people from over 15 different countries and every ethnicity. This was a nice surprise and something I hadn’t expected to see in the city; The diversity was also reflected in the work-life balance initiatives with flexible working being promoted to everyone and everyone having a very accommodating nature; and The exams were incredibly tough – but the support and feeling on passing each was tremendous!

After seven years here I am still amazed at the way both the people who work at PwC and people outside our company respect our culture and ethics.

Just two of the many awards we have won this year reflect this: Graduate Employer of the Year by university finalists for the fourth consecutive year.

We were voted the ideal company to work for by business students responding to Universum’s graduate survey 2007.

As a professional services firm PwC offers a wide variety of career paths for graduates or even those who have already started their career. I’ve met people from all disciplines and backgrounds, including an ex Nuclear Physics professor, who used their skills and experience to improve and shape the business.

For me, working on the Actuarial side of PwC has been a fulfilling and rewarding decision. I have been supported in both laying the foundations of my career and building upon those foundations as I have increased my experience and responsibility.

I would whole-heartedly recommend that you explore our careers site at www.pwc.com/uk/careers and make the most of the opportunities we have for you.

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The New India- An interview with Dr Dak Patel, Principal, London School of Accountancy and Management he London School of Accountancy and Management has a particular interest in India.

Not only does it have offices in some of its major cities, a significant proportion of its student mix from the UK, Europe, Africa and Asia comprises of students of Indian origin. Like most institutions in the developed economies the college is keen to leverage India’s strengths and offer quality education and training to students looking to study in the UK.

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About the founder The Principal and founder Dr. Dak Patel started LondonSAM in January 2004 and it is now reckoned to be the fastest growing accountancy college in the City of London. Dr.Patel is a fully qualified ACCA and has over 20 years of teaching experience at different levels of Accountancy, Taxation & Management courses. Due to his skills, presentation techniques and approach to the training environment he became a well known name in the field of accountancy training and was head hunted by various institutions both in the UK and overseas, notably Trinidad where he frequently offered revision courses for various professional accountancy courses. He has also lectured at Cambridge on the MBA and DMS programmes, training the staff members of the Essex Police and Fire Brigade and the Lighthouse. Over the years he has carried out consultancy work for various banks such as Nat West, Royal Bank of Scotland and State Street in Docklands.

Changing face That India is now the second fastest growing economy in the world is well established. Driven by a burgeoning middle class and a rising demand for goods and services, the upwardly mobile 18-28 age group can be heard discussing their futures, hopes, dreams and ambitions in coffee bars across the country placing an unprecedented demand on the jobs market.

The education sector and the employment landscape is going through a sea change. In many sectors salaries are rising and some of the older traditional employers are beginning to struggle to find quality management personnel. The reason for this is lack of relevant training but more importantly, salaries. Many

young people are beginning to ask why they should train for low wages and continue on low wages after training .

Several of them are opting for call centre jobs with much higher salaries and therefore the age demography within traditionally managed companies is rising. On his recent visit to India, with his Course Director (Mr. Raj Kumar), Dr. Dak Patel Dr Patel observed many changes. He saw for himself how India is witnessing a rising demand in quality educational courses for professions such as music, fashion, design, film and animation. This is already causing colleges and industry to look at the way they operate and create new ways to attract students. It is also forcing parents to look closely at traditional routes in education. Until recently a bachelors degree was seen as the launching pad to a successful career but nowadays employers are looking for the ‘extras’ that students can bring that will put them at the front of the queue.

Dr Patel believes that in an increasingly globalised world it is imperative for jobseekers to have internationally recognised qualifications with transferable skills and more and more students are now looking for such qualifications. That is why students come to London to study because London besides being a major financial capital of the world, offers the perfect launching pad to a successful career. Situated in the heart of the city the London School of Accountancy and Management with its enviable track record is well equipped to fulfil the ambitions of students from all over the world .

London School of Accountancy and Management The college is based in the square mile of the City of London and is surrounded by around 168 banks, stockbrokers and insurance firms, many of its clients are large corporate companies.

The college has branched into Europe with an office in Poland, and has links with China and the Gulf states; in fact some of LondonSAM’s students are with Ernst and Young in Bahrain on internship. In Poland it Asian Voice & Gujarat Samachar - 2007

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Accountancy has attracted some of the very best corporate companies who send their staff to LondonSAM for training and education. Currently Dr Patel has three branch offices in India - Mumbai, Ahmedabad, and New Delhi.

The demand for accountants world wide continues to grow as the financial world and its regulations become more complex. Acutely aware of this, The London School of Accountancy and Management addresses the changing scenario through a number of internationally recognised courses. Its learning environment and curriculum helps students confront two of the key issues facing higher education - globalisation and leadership. It strongly believes that each student is a potential leader, and so work to provide an atmosphere in which students learn to assume significant roles in their collegiate community before doing so in their local, national, and global ones.

Employers today are looking for people who can add value to the organisation, which means that they need extra skills as well as the pure qualifications. A question often asked at interviews nowadays is, ‘what can you offer our company that we don’t already have’.

LondonSAM with its successful track record and highly skilled and qualified staff is well equipped to help students to prepare for such searching questions.

Dr Patel says the college has approximately 3,700 students of which about 60-62% is overseas and the rest from the home market or EEC member countries.

The full time students (mainly overseas) are keen to make a career in the UK over a five year basis and round off their education with a Masters Degree. This is for two reasons. Firstly because a Masters Degree will entitle them to stay and seek employment for 12 months under new Home Office Guide lines. Secondly, after five years in the UK they can apply for PR/and or Work permits. There is a strong preference to study in the heart of London because of the several attractions the city holds. A truly multicultural city, there are

always different communities in and around the city offering students housing accommodation. Part-time jobs are also much easier to obtain.

The evening students tend to be those who are already working in accountancy or those looking for a career change. Many of them work for the large corporates, so there is a great opportunity for students to network. Dr Patel believes that all students, and professionals from other fields should have knowledge of accountancy and finance whether they are employed or self employed. London School of Accountancy and Management is well equipped to cater to the needs of such professionals.

Dr Patel says, the college provides a range of facilities and takes a holistic approach designed to help students make educated and informed decisions about their futures after graduation. He said’ We help students make choices about work and further study, provide a termly programme of events , one-to-one careers interviews and a wide variety of careers information resources due to which 97% of our graduates go straight into work or further study’. Dr Patel is determined to give every Indian student that comes to his college, the best opportunity to develop their talents and take their rightful place in the global economy. Dr Patel is passionate about his college, passionate in his belief to help all students get their foot on the ladder to success. The back drop of the college is the famous ‘gherkin’ building which is designed to meet the needs of a modern city. Dr Patel has designed his college to meet the needs of the modern student in the modern city.

If you have any questions, please visit our web site www.dak@londonsam.org.uk or call 0044 207 623 8777 or visit the college at 12-20 Camomile Street, London EC3A 7PT (nearest station- Liverpool street).

Students sitting AAT EXAMS at LondonSAM which is the main exam centre in City Of London Asian Voice & Gujarat Samachar - 2007

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The growth of retail sector in India Ashok Rajgopal, Director – Retail & Consumer Products Practice, Ernst & Young India & Soumya Palchoudhuri, Manager - Retail & Consumer Products Practice, Ernst & Young India.

Retail: An Indian perspective ver the last few years, retail has become one of the fastest growing sectors in the Indian economy. Organized retail is expected to grow to 89% of the Indian retail industry in the next 5 years and there is hectic activity in the sector in terms of expansion, entry of international brands and retailers as well as focus on technology, operations and processes. All these present a tremendous opportunity in this new high growth industry.

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Of India’s 209 million households, approximately six million are considered “rich” and spend more than U.S. $28 billion every year. There is a growing demand for luxury goods, cosmopolitan fashion and international brands from these groups. At the other end of the spectrum lie consumers at the lower end of the income scale - what some call the real drivers of India’s retail sector.

Sector FMGG Consumer Durbles Textiles & Apparel Jewelry Furniture Food Processing

Approx Industry Size USD 10 - 15 billion USD 5 - 10 billion USD 20 - 25 billion USD 7.5 - 10 billion USD 7 - 10 billion USD 100 - 125 billion

Source: Economic survey of India, 2006

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Key drivers of growth India ranks 1st, ahead of Russia, in terms of emerging markets potential in retail and is deemed a ‘Priority 1’ market for international retail. While consumer demand is driving retail growth, it is in turn being driven by the following factors: Economic growth: This has meant greater disposable incomes for the booming Indian middle class, which currently comprises 22% of the total population.

Demographics: At 24.9 years, India has the lowest median age of population in the world. More than 50% of the population is less than 25 & 70% is less than 35 years of age.

Urbanization: The Indian urban population is projected to increase from 28% to 40% of the total population by 2020 and incomes are simultaneously expected to grow in these segment.

Estimated retail space in India (In million sq feet)

Source: Images Retail, August 2005

Retail concentration in India The top 6 Indian cities -Mumbai, Delhi, Chennai, Kolkata, Bangalore and Hyderabad -are the darlings of India’s exploding economy. They represent 6% of the population, but contribute 14% of India’s GDP. These cities are also the barometer of India’s economic development and most foreign investors have flocked here.

Another key driver for organized retail is the surge in mall growth. The number of malls is expected to rise from 158 in 2005 to 600 by 2010. The Indian Government is also likely to spend USD 150 billion over the next few years to develop world class infrastructure, thereby aiding growth in the retail sector.

Total retail sales pie (2005)

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Accountancy grow their presence regionally, there will be a pressing need for a single, enterprise-wide IT plat form to manage operations, which will become increasingly complex.

HR in retail The retail industry is expected to create 2 million jobs between now and 2010. The industry is facing a shortage of talented professionals, especially at middle -management level.

Infrastructure & logistics The lack of a distribution sector and specialized distribution companies is a major obstacle for retailers to fully utilize India’s retail potential.

Fraud in retail Fraud and theft, including employee pilferage, shoplifting, vendor frauds and inaccuracy in super vision and administration costs the Indian retail industry about 2% of the organized retail sector’s revenues every year.

Impact on small retailers FMCG companies realize that 80% of their sales come from small sized stores and hence these companies are guiding the small shops to compete with the big stores by offering price discounts and easy payment schemes including credit. Most of these shops operate on high volumes and low margins. The smaller shops also have the advantage of being in the vicinity of the consumer’s neighborhood thereby offering facilities like free home delivery.

FDI in retail While there are restrictions on FDI in Indian retail, the most common channels for entry of foreign retailers are through: Strategic Licence Agreements i.e. partnering with Indian promoter owned companies in the Middle East or South East Asian countries (Singapore, Malaysia, Thailand & Indonesia), Franchising, Cash-and-Carry wholesale trading and Single brand entry.

Key challenges ahead

Supply chain & logistics Logistical challenges, constant changes in con sumer preferences and patterns, crowded market places and rapidly evolving retail formats are trade marks of the retail environment in India today.

Advancement in technology As Indian and International retailers continue to

OPPORTUNITY FOR UK RETAILERS TO ENTER INDIA There are a significant number of UK retailers who have already ventured into Indian territory and are poised for rapid growth. The market is expanding and this is probably the best time for international players to enter the Indian retail space. The opportunities are plenty for food & grocery, department stores, fashion & apparel and luxury lifestyle goods. When it comes to doing business in India, most companies will find that Indians are very positive about doing business with the British.

The two countries have a long history of working together and many Indians will have family members living in the UK. Some of the major UK retailers looking at entering India over the next few years include Lush, Argos, Hamleys, Virgin Mobile, DSG Retail, Kingfisher and Clarks shoes. Tesco has already set up a back office in India and is expected to start operations soon. Marks & Spencer established its Indian roots in 2001 and currently operates 12 stores.

Debenhams is also set for major expansion and plans to open up to 10 stores by 2010. Body Shop, the global cosmetics giant has targeted to reach 50 stores by end of 2008. Next has launched 3 stores in India and is set to expand by the end of next year.

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Partnership

“Thanks Bob, your help in this project has been invaluable. Not only has it avoided me spending considerable valuable time on this matter, but your advice throughout was most reassuring, and avoided what would have been a very stressful operation.”

opportunities across the North

Managing Partner, Independent Practice

Bob Hicklin has been working on behalf of qualified accountants for over 30 years and represents a number of well known practices, from small regional firms to large nationals.

If you are considering your next career move and would like more details about the opportunities available, contact me for a confidential discussion, either on the phone or face to face. I look forward to helping you develop your career. - Bob Hicklin, Director, Hays.

Partner

Partner

North West • £100-150,000

Liverpool • c£100,000

Planning for long-term succession, this substantial multi-office firm seeks tomorrow’s partners. You must be a competent and highly ambitious ACA with good general practice experience and the appetite to develop your commercial and business generation skills.

This established and fast growing small/medium sized firm is looking for an additional partner to assume responsibility for a substantial portfolio of high value fees. You should have the skills to manage a team whist providing a high level of client support and contributing to the future strategic growth of the business.

Partner

Partner

South Cheshire • £80-£100,000

Manchester • £100,000

This established, reputable and profitable firm with a high quality client base is planning for partner succession. You will have the experience and skills to provide a full range of services including tax advice across a full portfolio, including OMB’s and professional services clients.

This practice, with an enviable client base, wishes to develop its corporate client work and is offering a partnership proposition to contribute to its accelerating plans. If you have the experience and appetite, and are able to make a contribution to the management of a business, we want to hear from you.

Partner

Partner

Leeds • c.£80,000

Rural Cheshire • Equity Purchase

Join this leading national practice as a director or partner and work with a team who is focused on providing a high level of service to a diverse client portfolio. Fast track prospects through to partner level are linked to your own determination and ambition.

This sole practitioner has built a profitable general practice with a diverse client portfolio and a loyal and hard working delivery team.

The Partner exit strategy could provide for the whole or partial sale of fees together with a scaled step down allowing for a smooth transfer of ownership.

For further details about these roles and a confidential discussion, contact Bob Hicklin, Director at Hays Senior Finance.

E bob.hicklin@hays.com T 0161 237 3388 M 07836 678936 127-129 Portland St. Manchester M1 4PZ.

To search for more vacancies across the UK, to set up a Job Alert or to find your nearest Hays office, visit our newly relaunched website, hays.com.

Plot your next career move on hays.com

Specialist Recruitment hays.com/accountancy Australia Austria Belgium Brazil Canada China Czech Republic France Germany Hong Kong Ireland Italy Japan Luxembourg Netherlands New Zealand Poland Portugal Singapore Slovakia Spain Sweden Switzerland UAE UK

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Polishing the Brass Plaque Bob Hicklin, Director, HAYS Accountancy & Finance lanning for succession in small to medium sized firms of accountants is becoming more difficult as competition for qualified accountants becomes fiercer. Many Partners wait until they are near retirement and hope that ‘something will turn up’. In the current employment climate, this approach is over optimistic and as a result a Partner may be forced to sell to whoever happens to be a prospective purchaser when they retire rather than attracting and grooming a successor who is appropriate to continue the business and capitalise on the goodwill built up over many years within the local business community.

It hasn’t always been this way. Over the last thirty years, there has always been a steady supply of qualified accountants eager to enjoy the financial and lifestyle benefits of being a Partner and as a result, senior Partners found it relatively easy to attract high quality individuals to follow in their footsteps. Client relationships were successfully transferred and the outgoing Partner was able to agree a financial exit that could have included purchase of goodwill and in some cases lifelong annuities.

How times have changed. Most firms have stopped providing annuities and many no longer value goodwill whilst the value attached to fee income has in some cases eroded significantly.

Furthermore, increased opportunities and demand for qualified accountants in industry makes it more difficult to attract partners into local and regional firms. The variety and increasing salaries offered by commercial businesses makes it vital that a firm not only knows where to look for its future partners but how to promote the benefits.

A plan of action. For many Partners faced with the challenge of finding the right successor for their business, the answer can lie in a merger or sale of fees prior to retirement, thus sharing the burden of succession and providing a more structured approach to their exit. It is vital that when planning for the future that decisions are well thought out with care and consideration given to cultural, lifestyle and personality fit as well as the usual geographical and financial issues. A first step can be employing the services of a specialist third party who can take an overall view of the options and leverage their contacts and market knowledge to help select the most appropriate potential business partners.

It’s not what you know…it’s who. Understanding how to “sell” the benefits of business ownership and

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Bob Hicklin

having access to a selection of high calibre qualified accountants are important when competing for the few individuals who have the right combination of technical skills, entrepreneurial spirit and that all important ‘bedside manner’ that is crucial to successfully running an accountancy business. In many ways, opportunities have never been more varied and the financial rewards for Partners are significant. Plus job satisfaction can be far more rewarding than working for others. A prospective employer must be in a position to source and attract interested applicants and be prepared to effectively communicate the benefits. For example, promoting the diversity of technical challenge, the independence of direction and the control of lifestyle. A specialist recruiter will of course manage that process for a business whilst representing the interest of the Partners.

Bob Hicklin has spent 30 years in recruitment with Hays. Initially he built a network of offices in the North West whilst personally specialising in Public Practice recruitment. More recently he has developed Hays niche businesses in Public Practice, Taxation, Banking and Legal markets across the UK. Now based back in the North he specialises in Partner recruitment and arranging mergers, acquisitions and associations for Accountancy Practices.

He can be contacted at, Hays Accountancy & Finance, 127-129 Portland St. Manchester M1 4PZ Mobile: 07836 678936 Office: 0161 237 3388 Fax: 020 7068 5499 Email: bob.hicklin@hays.com.

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Entrepreneurship and Accounting: A by-the-numbers story of Cobra Beer Lord Bilimoria, Founder and Chief Executive, Cobra Beer and UK Chairman of the Indo British Partnership. took an interest in accountancy from quite an early age, and indeed I remember as a 16-year-old telling my grandfather in Bombay that I had decided that I wanted to be an accountant one day. He agreed, and advised me that a Chartered Accountancy qualification was the best preparation for a career in business.

I moved to London to study accountancy, and I realised very quickly how right my grandfather was!

Fundamentally, a career in accountancy opens the doors to so many other options – more than anything, it is training in business. As accountants we experience business from within business, and that kind of experience is invaluable whatever profession or career you choose.

When I came to Britain, in the early 1980s, I was 19 years old. I remember the thrill of living in London so well, but I remember also that it was at a time when the Asian community in Britain was still a few steps away from scaling the heights it has reached today. My friends and family warned me that no matter how hard I worked, I would never reach the top – they said there would be a glass ceiling if I decided to stay on and start a career here.

And to a point, I had to agree with them. I remember that among what was in those days called the Big 8 firms there was less than a handful of Asian partners.

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When I joined my firm there was only one, and everyone joked that he was only a partner because he had an English wife!

Of course we need to keep in mind where that attitude came from: Britain at that time was the sick man of Europe, and had no respect in the world economy. But in even in those days you could sense that change was in the air, and indeed in the years since I moved here I have seen Britain transformed into a more meritocratic society, into an environment that is multicultural and cosmopolitan. At the same time, the Asian community in Britain has reached the top in virtually every area, be it politics, business, sport – and, of course, accountancy!

I personally am very grateful for my background in accountancy. From the time I started my training I realised how far from the Monty Python image of an accountant it is as a profession. And what many people overlook is that accountancy is basically a people business – so many people outside the profession think accountancy is number-crunching and sums. What is more, accountancy teaches you the strong principles, values and ethics that are the cornerstone of the profession – we were always taught not just to do things right, but more importantly to always do the right thing.

All that said, within two years of qualifying as an accountant I decided to change course. I felt I needed a new direction, and went up to Cambridge to study law. I was also feeling the pull of entrepreneurship, even in the early days, and I knew that my future lay in business. This feeling is something that I believe is common to many people, and it is an instinct that I would encourage people to follow. Because accountancy gives you a solid base in business, as well as

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Accountancy strong ethics and principles, I feel it is perhaps especially possible for accountants to try their hands in other fields if they wish.

It was at Cambridge that I came up with the idea for my company, Cobra Beer. I realised that there was a gap in the market for a less gassy, extra smooth beer that would complement food and appeal to both lager and ale drinkers alike. And admittedly it wasn’t the sort of move you would expect from an accountant: when I started Cobra I still had £20,000 of student debt. I knew nothing about brewing beer and I was launching a new brand into the world’s most competitive beer market, the UK. It really was against all odds.

And it was then that I learned one of the most important lessons of my life: that whatever you do, you have to do it with complete passion, faith and belief. I call it crossing the credibility gap – how can I make people finance me, supply me, buy from me? And the answer is that if you have that total faith in your product or service, people will want to work with you.

Passion is infectious.

In fact, there are many lessons to be learned from a career in business. Foremost among them, I believe, is the importance of people. The environment you create – whether it’s for an office of 100 or a team of two – is so important, and what’s more it can be a truly entrepreneurial environment. If you keep things open and free-flowing, encouraging communication, you can get the rapid flow of ideas and the constant innovation that will help you and your people to flourish.

You also need to build your team or your business on solid principles. At Cobra we have very few rules, but one rule we hold to is never asking for exclusivity. Treat everyone – buyers, suppliers and customers – equally. The competition will spur you on to be different, better, and to change the marketplace forever.

Since I started Cobra back in 1989, one of the most exciting developments by far has been our move into India – a country that offers the most remarkable opportunities for business. In fact we started Cobra Beer by importing the beer from India, but we moved our manufacturing to the UK in 1997. It was a time when the manufacturer was truly king, and business was stifled by red tape and regulations.

A few years ago we decided that the time was right to take Cobra back into India, and later to brew in India for the Indian market. We noticed an alignment in India – that consumers, business and government were aligned in their thirst for reform. We realised there was no turning back in India. The customer was now king – consumers finally had the choice, and increasingly the means, to buy the premium and foreign brands they wanted.

It was becoming the perfect market for us.

So far, I’m happy to say we’ve been proven right!

Since we started brewing in India in 2005, Indian Cobra has won numerous gold medals at the prestigious Monde Selection – proof, if any were needed, of the world-class standard of Indian manufacturing today.

Even better, from an accountant’s perspective, is that our sales are growing strongly – and indeed this year they increased by 400% in just five months.

As the saying goes, “life is a journey, not a destination”, and the same is true of business. You should never rest on your laurels or accept that “good enough” is good enough. You have to be restless, constantly innovating and pushing ahead, and as Winston Churchill so famously said, you must “never, ever, ever give up”.

My father gave me some excellent advice before I came to the UK, first for my accountancy qualification and ultimately to start Cobra. He told me that throughout life you will be given jobs to do, and when you are given a task the first thing is to do it. The second thing is to do that little bit extra that isn’t expected from you.

What he was saying was be innovative, be creative, and always, always go the extra mile.

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Careers in

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Accountancy Systems, Solutions and Troubleshooting Harshad Kothari FCCA, MAAT,MiMgt any years of dealing with new start-ups and SMEs has given me some good and many bad experiences, mostly related to the maintenance of accounting systems and records.

When a business starts, the main focus is on sales, which is understandable. Some businesses also give priority to their accounting systems right from the outset. Their records are kept in good order and regular reports extracted to give key indicators, which assist in decision-making.

For others accounting is not an essential feature and they adopt a haphazard system of recording their transactions either manually or using one of many offthe-shelf software and engaging staff who are unfamiliar with basic accounting. Quite often businesses that relegate their accounting function to the second or third division start experiencing problems which are mainly cash flow related.

A properly constituted and profitable business that has set up an accounting system in a proper manner from the start should not experience cash flow problems. Neglect, lack of foresight or preconceived ideas about accountants may make some businesses sceptical about engaging them from the outset. They do not seek advice from trained and experienced accountants, until they start experiencing problems. By the time an expert is appointed, the system is in chaos and it becomes difficult to introduce a new one around the existing one. It then becomes a fire-fighting exercise with red notices, bank pressure, staff defection, etc.

Lack of timely information (including debtors, creditors, overheads, profits, etc.,) could have many consequences including business failure. Appointing an experienced accountant at the right time can save the business avoidable trauma.

The key-deciding factor for businessmen is the cost of engaging experienced accounting personnel.

There are many ways to strike the right balance between costs and getting the right value for money and some of the options are discussed below: a. Outsource accounting function – this takes away the burden of keeping accurate records. When enough business and transactions are generated, then consider engaging a full time accountant. Many think of outsourcing as contracting it out to places like India!

There are many accountancy firms in U.K. who undertake basic accounting and payroll work at a cost that is normally 30-40% less than employing full time staff . b. Employ a full time book-keeper backed up by a

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part-time accountant with business knowledge. The part-time accountant would assist in setting up the basic system and thereafter oversee and review the work done by the book-keeper and also assist in financial management and control. c. Employ a full time accountant who is capable of preparing management accounts and interHarshad Kothari prets the key indicators as accurately as possible.

Some qualified accountants offer themselves as finance and/or non-executive directors to create a proper company and structure in keeping with the business demands. Regardless of whether they are full or parttime, their legal and professional responsibility remains the same.

Quite often good businesses fail or cannot expand due to lack of timely and accurate information but with modern technology including accounting and other business planning software, it should not be difficult to create a simple system that gives basic information. Applying or using these tools is not an end in itself; one has to ensure that the staff using it is familiar with it and also has a grasp of basic accounting principles. If the standard software does not provide certain key information then use of spreadsheets and/or simple database program could be an additional source for further analysis.

General advice is to introduce a system with the help of an accountant, even if it is a one-off assignment to save costs. If your system is in a mess consult an accountant immediately and get appropriate advice to bring it back on track.

If you do decide to engage an accountant, ensure that the person has some commercial knowledge. It may also be a good idea to get your business administration and processes reviewed. You will be surprised to find that you may be able to save costs in streamlining the procedures and also achieve some efficiency.

The importance of a basic accounting system cannot be under estimated. Investing in a system backed up by an accountant is an investment into the longevity of your business.

The Author runs an accountancy practice specialising in providing hands on Management and Accountancy Services to SME's"

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Not all firms of chartered accountants is the same Located in the heart of London's West End Servicing clients throughout the country A professional firm dedicated to helping business grow

We provide practical experience and supervision at all stages in a supportive and dynamic environment, enabling you to To find out more about us and how we can work with you, contact Kiran D Patel ACA at:

fully develop your professional abilities.

Come and grow with us by finding out more about our training programmes.

73/75 Mortimer Street LONDON W1W 7SQ Tel: 020 7636 7493 Fax: 020 7636 8424 Email: k.patel@westonkay.com Website: www.westonkay.com

Partners: Geoffrey M Davis, Joseph H L Weston, Melvin C Kay, Kiran D Patel, Jill L Springbett

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Careers in

Accountancy

What’s the alternative Kiran Patel, Partner, Weston Kay or those interested in pursuing a career in accountancy, the first option that comes to mind is firms like PriceWaterhouseCooper, Deloitte, KPMG and Ernst & Young which is probably due to their extensive marketing and publicity campaigns.

The second tier medium firms such as the likes of Grant Thornton, BDO Stay Hayward, PKF and Moore Stevens also tend to proactively recruit graduates. For those who are seriously interested in becoming chartered accountants in a smaller environment, what is the alternative?

There are a number of practices (comprising of the majority, in numbers, of Chartered Accountancy firms in the United Kingdom) defined as small and medium tier firms who, nowadays, provide a very diverse range of services to their clients from which students can gain substantial training as well as develop an all round commercial approach.

More and more firms are adapting to the changing business environment and to the demands of their clients. Smaller practices are also providing a whole host of services never previously considered to be feasible, given their size and limited infrastructure structure. Services such as corporate finance and recovery, consultancy, audit and accountancy and taxation are now commonplace in most practices.

The big difference between the larger firms and smaller practices tends to revolve around the type and size of clients, although most of the larger firms tend to have a small-business section. Nearly all the smaller practices deal substantially with owner managed businesses and the experience gained will be in the preparation of financial statements, audit of accounts prepared by the client, preparation of Corporation Tax and Income Tax Returns, completion of VAT Returns, dealing with clients, ad hoc enquiries and much more. In depth practical working of businesses and the commercial development of clients is an experience that certainly becomes rewarding and satisfying to most professionals employed in the smaller practice.

Students wishing to pursue a career in chartered accountancy through smaller practices will discover that their training will take a fast track approach to a position of seniority and responsibility in a very short period of time.

Graduates pursuing a career in accountancy with small practices tend to obtain the best of hands on training due to direct client contact and will have the ability to attend structured internal and external training courses through a network of training practices established for smaller training firms.

From the very beginning, you will interact with senior members of staff, partners, managers and

F

Kiran Patel

clients, and there is no doubt that the foundations of the training will be a very strong starting position from which to develop a commercial career in the world of chartered accountancy, whether in practice or business.

In addition, as seniority gains pace, you will deal directly with owner managed businesses, where the result of your work will have a direct impact on the people within the client business and you will be able to see the effects of your advice and its impact on smaller businesses both at home and abroad.

Training is not just limited to owner managed businesses and smaller practices tend to have a variety of clients. With the global world of business getting smaller, acquiring international business and clients is now common among smaller practices.

Smaller practices do tend to lag behind the top accountancy practices as far as salaries are concerned but they offer flexibility within training programmes and you will find that salaries from semi senior positions onwards are comparable to the national averages as revealed by various surveys.

So how do you gather information about smaller practices and decide on whether a career in chartered accountancy through a smaller practice is suitable for you ? Bear in mind that most small practices do not attend university recruitment programmes therefore it is difficult for undergraduates and graduates to find information about them. The Institute of Chartered Accountants in England & Wales provides a recruitment service for smaller practices and this is a good starting point to find out about the size of practices and the career structures available in such firms.

Weston Kay is a five partner practice based in the West End. We are continuously recruiting graduates to our training programme.

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Star Champion for Women's Enterprise Gita Patel ita Patel is a Director and Co-founder of the London based investment firm Stargate Capital and has created Trapezia, Europe’s first venture fund to back women focussed businesses. As a graduate of The London School of Economics and a Chartered Accountant, her career was largely citybased where she spent many years as a senior banker.

Her views of the emerging opportunities in Women’s Markets are highly respected -from being the instigator of The Treasury hosting a seminar on Women in Business, to being asked to address various forums like the World Summit of Women in Business held in Istanbul last spring, to the Global Banking Alliance’s Annual Conference held in Scotland and the World Bank in the USA. In a candid conversation with Careers in Accountancy magazine, Gita bares the highs and lows of her successful career, her passion for issues concerning women and challenges women to aim high.

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Why did you take up accountancy, what influenced you?

As a profession it was highly respected and offered a sound foundation for business understanding. It was also one of the few professions that paid you while you trained and did your professional exams.

It offered international recognition and a base from which you would have many choices in terms of careers, industries, sectors, specialisms, public/private sector or to set up in business What challenges did you face in your initial years?

The challenges of the late 70’s and early 80’s were very different in some respects. There weren’t many women in accountancy profession so we were like gold dust – you did not think race or gender and it was an honour to be included. Getting articles to train with the top firms were very difficult and I was lucky to get selected by Arthur Andersen, a top notch firm in those days. A lot of the intake tended to be from Oxbridge and very definitely from middle/upper class and ethnic people were an unknown dimension that hadn’t made its mark. As an Asian woman there were additional culturally challenges such as travelling and staying away on client audits, entertaining, long hours, etc all of which are accepted norms but the landscape was different culturally then.

Today we have a much bigger pool of talent, that is smart, educated, experienced, confident and knows what it wants and is in a position to exercise choice –and a large part of this talent are women from a diverse background seeking a level playing fields.

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Gita Patel

What are the challenges that women face in particular ?

Traditionally, men have prioritized networking at the professional level and that has become part of everyday business. Women have been unable to place the same level of importance on business networking, not helped by the fact that they do not have a presence in male dominated networks.

It is also worth noting that men tend to network

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Careers in

Accountancy in places or at times which are not convenient for women given their circumstances and responsibilities and therefore are automatically excluded but not out of choice.

Is there enough being done to remove barriers?

If yes, what is being done?

There are attempts to remove the barriers – some try but it tends to almost become an attempt to be politically correct and say the right things and have policies that in theory entertain diversity and you are seen to be doing the right thing. We suffer from too many initiatives in this space but not enough to be judged by the results of what has been achieved. There are many invisible barriers – at the end of the day. Some will always be difficult to remove because it’s about hearts and minds, entrenched views and personal experiences, relationships and about the ability to control and influence change.

You are a successful entrepreneur. How did you begin, what motivated you? How do you overcome challenges?

3 years ago, I saw huge opportunities in the early stage sector both as a business angel and from my city experience. I co-founded Stargate Capital (a fund management and venture capital house) with a number of like-minded individuals who were passionate about entrepreneurship and with investors who also saw the opportunity to bankroll us.

The market opportunity, the possibility of making a lot of money and the chance to drive change and make a difference in the sector were my key motivators. The challenges we faced are the same as any entrepreneurs; no track record, innovation in the sector, did not tick all the boxes and lack of cash & capital. A further challenge was working within the confines of traditional mindsets, entrenched views, poor UK data and the fact that influence and power was in guarded circles.

We overcame these challenges through persistence, purpose and aligning ourselves with people that shared our vision and were happy to risk their reputation and money in their determination to ensure the success of the venture that was underpinned by the market opportunity.

In what way did studying accountancy help you to set up your business?

An understanding of the financials and the city environment plus the experience and contacts gained all contribute in their own way. I have to say I am amazed at how few women understand the finance world and for me it has been a currency of its own and a huge advantage.

What advice would you give women entrepreneurs ?

Setting up a business is hard for any entrepreneur but tends to be more challenging for women. This is

because: a. The financial environment is not women-friendly despite quality projects. Women don’t tick all the boxes and often lack the collateral to put up as security and therefore are largely dependent on friends and family. b. Women’s enterprise continues to be viewed by many as being higher risk such that there is a psychological risk loading of their businesses. c. Lack of access to relationship based referral, financial and business networks. d. Personal self limiting issues like lack of self confidence, not asking for large amounts of capital and being overly conservative with their business projections. e. Women suffer from a perceived lack of credibility by the financing institutions and legitimacy by others. f. Perception that woman are not committed to the long term (family commitments etc). g. Men tend to down play woman’s capabilities and hence inadvertently create invisible obstacles.

The profile of the woman entrepreneur is fast changing. They have: • Passion, drive, tenacity, and success is not negotiable.

• Solid experience in relevant sectors.

• Focussed on protecting and growing their business.

• Good analysis of strengths and weaknesses.

• Want to make loads of money.

• Understand responsibility of external investment.

The profile of women’s business is also changing in that the: • The Business ideas are compelling and scaleable.

• Businesses also include science / technology based ventures.

• Ventures origin from own profession, across all sectors.

• Businesses are looking for £250k to £2m for expansion.

• Business plans are well researched.

• Management teams are highly qualified and competent and are well placed to identify gaps and niches.

My advise is ‘Go for it’, you can not win the lottery if you don’t even buy a ticket! It takes brave women and enlightened men to really make it work.

A supportive partner, a well chosen mentor, a brilliant proposition and a good team go a long way.

Do not surround yourself with negativity –just positive influences The entrepreneurial dream should not get lost in the system or be held back because the person that dares to dream just happens to be a woman.’

How do you wind down after a hard day’s work?

The occasional glass of red wine and listening to music or watching documentaries.

For more information on Trapezia visit: www.trapeziacapital.co.uk

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Careers in

Accountancy

Devesh Dutt - Walking the talk wenty seven year old Devesh Dutt is a Financial Analyst at Diageo, the world's leading premium drinks business, a FTSE 50 company better known for its leading beverage alcohol brands such as Johnnie Walker, Smirnoff, Baileys and Guinness to name a few.

He began his career at the age of 22, practising with a local firm in Agra where he also did his articleship. Simultaneously, he taught tax at the local faculty of ICAI (Institute of Chartered Accountants of India).

His role in Diageo is in Global Business Support – a team which provides a range of consulting capabilities to Diageo Companies across the globe. These include Business Development, Change Management, Decision Support, Strategy, market facing Tax (including Transfer Pricing) and Treasury. The Global Business Support team is organised into a single global community, with 50% of its resources located in regional hubs, to facilitate effective partnership with local business teams. Devesh is involved in various projects and works with different specialist groups.

An often heard story, Devesh's decision to migrate to the UK was influenced by his cousins and schoolmates who left India for pastures abroad. Equipped with an accountancy degree, the temptation to ascertain first hand, what the outside world had to offer and the strong desire to gain international experience was hard to resist. The transition, however, was more difficult than he anticipated, which he attributes to not taking the 'ideal' path which he would recommend to those looking to find employment in the UK. Ideally Devesh would recommend working for an Indian part of an MNC and then relocating to one of their foreign offices. Devesh on the other hand came to the UK without a job and on a student visa to gain a local degree - CIMA What prompted Devesh to gain an additional CIMA degree when he already had a CA from India? He says, "I did CIMA to diversify my knowledge and skills. When compared to a CA, CIMA is more related to business. Moreover, it is always good to be equipped with a recognised local qualification in whichever country you plan to work, better if that qualification is also internationally recognized which is the case with CIMA " According to Devesh, in keeping with increasing globalisation, the accountancy profession is becoming more and more global in nature.

Although the various accountancy qualifications have different attributes, by and large all of them offer access to a myriad career opportunities relating to business and finance.. Additionally, the requirements to comply with IFRS and Sox (Sarbanes Oxley) are creating further opportuni-

T

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ties for finance professionals to broaden their career.

Accountancy is not all work and no play and Devesh fits the changing mould of the profession well.

Far from the dull image of a man in a grey suit, he leads a busy personal life pursuing a wide range of interests and hobbies including sport, music and travelling.

Devesh attributes part of his success so far to his parents in providing support and encouragement in carving out a successful career. Proud to be working with Diageo, the Johnnie Walker 'keep walking' campaign reminds him of his father's advice to keep going and never to stand still. "Without their constant support, it would have been difficult for me to have walked this far", he muses.

Having created a firm foundation Devesh is now determined to carve out a successful career in finance.

His dream role is to become the Financial Director of Diageo in India. His parting shot - “after all, home is where the heart is!"

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Whilst some companies offer

more variety of the same, at PwC the

of our client list is second-to-none.

Career opportunities – all levels Competitive salaries & flexible benefits – Nationwide From multinational businesses and governments to charities and small start-ups, at PricewaterhouseCoopers, our clients come in all shapes and sizes. The challenges they face are equally diverse. As such, whether you’re looking to work in assurance, advisory, tax or operations, rest assured, you’ll enjoy the breadth of work your talents deserve.

To find out what we could offer you, visit www.pwc.com/uk/jobs/asianvoice/

© 2007 PricewaterhouseCoopers LLP. All rights reserved. “PricewaterhouseCoopers” refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom) or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity.

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Spirit Imagine where you’ll go At Ernst & Young, we believe success should be the natural result of outstanding performance.

The better you do, the faster you’ll rise. But, we don’t expect you to do it all alone. Whether you’re learning from clients, mentors or one of our management modules, we’ll support your ambition as you climb the ladder. The faster, the better.

After all, we’re a business that’s driven by people, so when you achieve so do we.

We need qualified professionals ready for their next challenge. We have opportunities nationally within our audit and assurance, business and risk-advisory, tax, transaction advisory and financial services practices.

Our approach is to work with each client on an individual basis to ensure that we offer solutions that are right, now and in the future. It’s a huge professional canvas, but by putting together teams with the right skills and personal chemistry, we’re confident in our continued growth.

If you want to be part of that growth in a business that will applaud your success and support your ambition, we’d like to hear from you.

Please apply online at www.ey.com/uk/spirit Ernst &Young. We always put our people first.

Ernst & Young is an equal opportunities employer and welcomes applications from all sections of the community.

The UK firm Ernst & Young LLP is a limited liability partnership and a member practice of Ernst & Young Global.