NewsLetter - Baroda Branch of WIRC of ICAIBaroda Branch of WIRC of The Institute of Chartered...

Baroda Branch of Western Indian Regional Council ofThe Institute of Chartered Accountants of India

NewsLetterThe Institute of Chartered Accountants of India

VOL. VI JULY 2011 l(Setup by an Act of Parliament)

SUCCESS

ICAI

NATIONAL

CONVENTION

ON INTERNAL AUDIT

on 06.08.2011

INDEX

Photoflash .................................... 2

Chairman Communication ............. 3

Forthcoming Events ...................... 4

Income Tax Updates ...................... 6

The 48 Laws of Power .................. 7

Valuation Aspects of Merger &Acquisition ................................... 8

Photoflash .................................... 11

ICAI

NATIONAL

CONVENTION

ON NRIs

on 09.07.2011

WORKSHOP

ON CURRENT

FINANCIAL AFFAIRS

ON 23.07.2011 &

24.07.2011

Baroda Branch of WIRC of The Institute of Chartered Accountants of India

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National Convention - 2011 for CA Students on 23rd & 24th June, 2011 at Satsang Party Plot, Vadodara

Inauguration of the Convention by President, Globals Inc.,Guest of Honour, CA. Jaydeep Shah, Hon. Vice- President, ICAI, Guest of Honour, Shri Balkrishna Shukla, Member of Parliament.

Chief Guest, Mr. Suhas Gopinath, CEO &

Keynote address by Guest of Honour, Shri Balkrishna Shukla, Member of Parliament.

Keynote address by Guest of Honour, CA. Jaydeep Shah, Hon. Vice- President, ICAI.

2nd Technical Session, Dimension Guide – CA. Dhinal Shah, CCM, ICAI1st Technical Session, Dimension Guide – Padmashri CA. T. N. Manoharan, Past President, ICAI

4th Technical Session, Dimension Guide – CA. V. Murali, Chairman of Board of Studies, ICAI

3rd Technical Session, Dimension Guide – CA. Atul Bheda, CCM, ICAI

Keynote address by Chief Guest, Mr. Suhas Gopinath, CEO & President, Globals Inc.,


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VOL. VI JULY 2011 l

CA. Rahul ParikhImmediate Past Chairman 98253 29995

CA. Rajesh ShahEx-officio 98250 41142

CA. Nayan KothariTreasurer 98244 33445

CA. Yash BhattMember 99243 88339

CA. Viral ShahMember 98243 62211

MANAGING COMMITTEE

CA. M J ParsiyaChairman 98251 10620

CA. Pradeep AgrawalVice Chairman 98985 60967

CA. Ashish ParikhSecretary 98252 31545

DISCLAIMER

The ICAI and the Baroda Branch of WIRC of ICAI is not in any way responsible for the result of any action taken on the basis of the advertisement published in the Newsletter. The members, however, may bear in mind the provisions of the Code of Ethics while responding to the advertisements.

The views and opinion expressed or implied in the Newsletter are those of the authors / contributors and do not necessarily reflect those of ICAI. Unsolicited articles and transparencies are sent at the owner's risk and the publisher accepts no liability for loss or damage. Material in this publication may not be reproduced, whether in part or in whole, without the consent of ICAI.

Members are requested to kindly send article / paper of professional interest to [email protected]. The same may be published in the newsletter subject to availability of space & editorial editing.

EDITORIAL BOARDCA. Manilal ParsiyaCA. Arpan DodiaCA. Vihang BakshiCA. Vishal DoshiCA. Narendra HindochaCA. Bimal BhattCA. Ashok ThakkarCA. Neena PatelCA. Rachana ParikhCA. Chandrika Parsiya

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIAICAI Bhawan, Post Box No. 7100, Indraprastha Marg, New Delhi - 110002. Tel. : +91 (11) 39893989 E-mail : [email protected] Web : www.icai.org

WESTERN INDIA REGIONAL COUNCILICAI Bhawan, 27, Cuffe Parade, Post Box No. 6081, Colaba, Mumbai - 400 005. Tel. : +91 (22) 39893989 Email : [email protected] Web : www.wirc-icai.org

BARODA BRANCH OF WIRC OF ICAI“ICAI Bhawan”, Kalali-Tandalja Road, Atladra, Vadodara - 390 012. Telefax : +91 (265) 2681115 / 2680593 E-mail: [email protected] Web : www.baroda-icai.org

DECENTRALISED OFFICE - VADODARA“ICAI Bhawan”, Kalali-Tandalja Road, Atladra, Vadodara - 390 012. Tel. : +91 (265) 2681115 / 2680593 E-mail: [email protected] Web : www.baroda-icai.org

CA. Arpan DodiaMember 98983 83530

Dear Members,

“Clouds come floating into my life, no longer to carry rain or usher storm, but to add color to my sunset sky.” – Rabindranath Tagore

As I pen down this communication, we all are eagerly awaiting for the rain, which brings us the most important element of our subsistence viz. water. We hope that our prayers to the raingods bring abundance of water resources for our agro-dependant economy which in turns produces a chain reaction translating into flourishing opportunities for our profession.

The month of June was packed with interesting programs. We conducted Direct Tax Refresher Course over three Saturdays which received fantastic response highlighting that Taxation is a major focus in our practice and all expert faculties were at their best in imparting knowledge in their respective subjects. “Go Green, and save the planet” is the motto embraced by people worldwide and taking that spirit forward, Baroda Branch celebrated World Environment Day on 5th June by participating in a Rally and planting trees at and nearby areas of ICAI Bhawan, Baroda.

A Delegation of Baroda Branch met with Dr. Guruprasad Mohapatra, Commissioner of Commercial Tax Gujarat to fortify the bond between Government agencies and ICAI. A meeting was also convened by the Commissioner to spread awareness about the novel concept of Commercial Tax Gujarat Department labelled “Know Your Dealer” and more than 100 representatives of ICAI, FGI, BTBA, VCCI attended the same.

The month of June also gave an opportunity to Baroda branch to showcase its expertise and team-work through organising National Convention for CA students where more than 600 student delegates participated from all over India. Participants had the rare opportunity to meet and listen to Shri Suhas Gopinath, World’s youngest CEO, who is a true role model for our young and impressionable students. The conference was also honored with the presence of CA. Jaydeep Shah, Vice President, ICAI, Padmashri CA. T. N. Manoharan, Past President, ICAI, Adv. Devang Nanavati amongst expert speakers of the Convention. My compliments to entire students’ fraternity and special accolades to CA. Pradeep Agrawal, Chairman WICASA Baroda, Managing Committee of Baroda Branch of WIRC and Baroda Branch of WICASA for excellent arrangement and execution of the Convention.

Month of July will bring the ICAI National Convention on NRIs. The program aims at updating and refreshing members about FEMA and Income Tax provisions in relation to NRIs. Workshop on Current Financial Affairs has also been scheduled in the month and divided in two well-structured sessions.

Classroom Training Centre (CTC) is a one of the prestigious ventures of the Baroda Branch. I take this opportunity to urge the members to encourage their students to use the CTC as we have painstakingly put together the structure and the faculties for the benefit of the students. New batches of CPT for December 2011 exam and IPCC for May 2012 exams are going to start in July month.

I end with words of wisdom from Confucius, “I hear and I forget, I see and I remember, I do and I understand.”

Sincerely Yours,

CA. Manilal Parsiya

Chairman's Communication


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VOL. VI JULY 2011 l

FORTHCOMING EVENTS

ICAI NATIONAL CONVENTION ON NRIs

Day & Date :

Timing : 09:00 a.m. to 05.30 p.m. (Breakfast at 08:30 a.m.)

Fees : `. 600 up to 06.07.2011 and ̀ 700 thereafter

Venue : Auditorium, ICAI Bhawan, Baroda

Topics Faculty

Inaugural Session

Chief Guest CA. Jaydeep Shah, Hon. Vice President, ICAI

Guest of Honor CA. Mahesh Sarda, CCM and Chairman of Committee on International Taxation, ICAI

st1 Technical Session

Dos and don’ts for NRIs CA. Abhishek Nagori, Vadodara

Inbound Investment by NRIs& Recent Amendments CA. Hiren Shah, Ahmadabad

nd2 Technical Session

Taxation of NRI including TDS CA. Vishal Gada, Mumbaion payments to NRIs

Rapid Fire Round CA. Hiren Shah and CA. Visha Gada

Saturday, 09.07.2011,

CPE HRS06 ICAI NATIONAL CONVENTION ON INTERNAL AUDIT

Day & Date :Timing : 09:00 a.m. to 05.30 p.m. (Breakfast at 08:30 a.m.)

Fees : `. 600 up to 03.08.2011 and ̀ . 700 thereafter Venue : Auditorium, ICAI Bhawan, Baroda

Topics Faculty

Inaugural Session

Keynote Address CA. Rajkumar Adukia, Increasing Role of Internal Audit CCM and Chairman (newer areas) on Internal Audit Standards

Board, ICAI

1st Technical Session

Effective Internal Audit for SMEs CA. Nandita Parekh, Mumbai

Risk assessment and risk mitigation CA. J. Krishnan, Chennai

2nd Technical Session

Internal Audit Report Writing Mr. Ravi Iyer, Delhi

Internal Audit Standards

Panel Discussion :

Internal Audit – CA. Maulik Mehta (Moderator)

In-house or Outsourced CA. Nandita Parekh Complimentary or Competitive CA. Ravi IyerSimilar Competencies or Different CA. KrishnanCompetencies Eminent Speaker

Saturday, 06.08.2011,

Eminent Speaker

CPE HRS06

Lecture Meeting (Jointly with Baroda Management Association)

Day & Date :Timings : 05:00 pm to 07:00 pmSubject : Attitude – The Master KeySpeaker : Shri Gnanvatsal SwamijiFees : NilVenue : Auditorium, ICAI Bhawan

Saturday, 16.07.2011

Public Program Jointly with Income Tax, Baroda

Day & Date :Timings : 04:00 pm to 05:00 pmSubject : Awareness Program on TDS (Data Mismatch

in Returns, Challans and Certificates)Speaker : Shri Abhijeet Kumar, Addn. CIT, TDS Range,

BarodaVenue : Auditorium, ICAI Bhawan

Wednesday, 20.07.2011

WORKSHOP ON CURRENT FINANCIAL AFFAIRS

Day, : Saturday, 23.07.2011, 03.00 pm to 6:30 pmTimings Sunday, 24.07.2011, 9:00 am to 12:30 pm

Venue : Conference Hall, ICAI Bhawan, Vadodara

Fees : Rs. 400 up to 21.07.2011 and Rs. 450 thereafter (No fees for Baroda CPE Study Circle Members)

Topic Speaker

Private Equity Process, CA. Sanjeev Shah, Due Diligence – Focus areas Vadodaraand Issues, Business Valuation and Issues, Dynamics of Foreign Acquisition and Leveraged Buy-Outs (LBO)

Date &

CPE HRS06

Date & Day : Tuesday, 05.07.2011Time : 06:30 pm to 08:30 pmSubject : GST – Roadmap to Stronger NationSpeaker : Mr. Mehul Thakkar, IPCC StudentVenue : ICAI Bhawan, Baroda

WICASA EVENTS

STUDY CIRCLE MEET

Members can avail drop-box facility by dropping their cheques for registration in Drop Box a t 2-B Ramkr ishna Chambers, BPC Road, Baroda. Kindly mention your name, membership number and the program for which registration is sought, on the backside of the Cheque.

DROP BOX FACILITY FOR REGISTRATION

Not receiving Branch Updates via SMS?

To start receiving updates

to SMS ICAIBRD

9220092200 today

CPE HRS02


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VOL. VI JULY 2011 l

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA BARODA (WIRC) [SET

“ICAI BHAWAN” KALALI-TANDALJA ROAD, ATLADARA, VADODARA - 390 012 E-mail : [email protected] / Web : www.baroda-icai.org

UP UNDER AN ACT OF PARLIAMENT]

ICAI - CLASSROOM TRAINING CENTRE-VADODARA

IMPORTANT NOTE: Admission first come first serve basis-limited seats-only one locationRegistration & Enrollment at : “ICAI BHAWAN” KALALI-TANDLJA ROAD, ATLADARA, VADODARA: 390012

Highlights : Only 50-60 students per class | All Subjects Covered

LOCATION BARODA BRANCH OF WIRC OF ICAI

ADDRESS “ICAI Bhawan” Kalali-Tandalja Road, Atladara, Baroda - 390012

CONTACT PERSON Mr. Amit Shah

TELEPHONE NUMBER 91-265-2680593,2681115

COURSE OFFERED CPT IPCC

YEAR OF EXAMINATION DEC-2011 MAY-2012

PROPOSED DATE OF COMMENCEMENT 21.07.2011 01.08.2011

PROPOSED DATE OF COMPLETION 15.11.2011 15.03.2012

COURSE DURATION 3&1/2 Months 8 Months

APPROXIMATE HOURS 360 800

BATCH TIMINGS. 2:00 pm to 7:00 pm 7:00 am to 12:00 am

CLASSROOM CAPACITY 50-60 Students 50-60 Students

DAYS OF LEARNING 6 Days 6 Days

SUBJECTS OFFERED All Four All Seven

1. Accounts 1. Accounts - I 5. Acc.II

2. Maths 2. Costing & FM 6. Auditing

3. Economics 3. Law 7. IT& ST.MGT

4. Law 4. Taxation

FEES FOR THE ENTIRE COURSE ` 12,500.00 For Both Groups : 21,000.00

For Group-I : ̀ 14,000.00

For Group-II : ̀ 9,000.00

PAYMENT Fees Payable in favour of :”ICAI-BARODA BRANCH CLASSROOM TRAINING CENTRE”

FACULTIES Various renowned and highly experienced from colleges and CA Professionals.

BOOKS & STATIONERY The center will provide necessary printed study material and books

MOCK EXAM At the end of training, a mock exam. in all subjects in the style of the Institute exam. will be conducted

COURSE CO-ORDINATOR CA. ASHISH PARIKH

`

“Congratulation to CA. Sanjeev Shah, Past Chairman, Baroda Branch of WIRC of ICAI, on being a Special Invitee on Committee on Accounting Standards for Local Bodies of the Institute of Chartered Accountants of India.”

“Congratulation to CA. Chirag Bakshi on being appointed as the President of the Baroda Management Association for the year 2011-12.

CongratulationCongratulation


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INCOME TAX UPDATES : CA. Narendra HindochaCompiled by

1. Cost inflation index

By notification dated 23rd June 2011, cost inflation index for the year 2011-12 has been notified as 785.

2. Exemption from filing return of income

Vide notification dated 23rd June, 2011 exemption is given from filing return of income for Assessment Year 2011-12 to taxpayers in whose case:

- Income does not include income other than income under the Head `Salaries’ and interest from savings account from bank upto Rs.10000/-

- Total income is not more than Rs.5/- lacs

- There is only one employer, there is no tax payable or refundable(tax payable is deducted at source) and PA No is stated in certificate of tax deducted.

Exemption is not available in cases in which notice for filing return is received under section 142/148/153C.

3. Employees’ Stock Option Plans

When employees are allotted shares at a rate lower than market rate, I would understand that transaction as comprising of two elements, one, issue of shares at market rate and the other being benefit to employees by foregoing part of the market rate. That benefit can be considered income for the employee and expenditure or loss for the employer. While the element representing benefit to employees was earlier liable to fringe benefit tax and thereafter section 17 provided for taxation thereof in the hands of the employees, unfortunately no legislative provision is made for allowance of the expenditure in case of the employer. It appears that courts also find it difficult to appreciate this perspective and in case of ACIT V. Ranbaxy Laboratories Ltd. reported at 7 ITR (Trib) 161, Delhi Bench of ITAT did not allow deduction in respect of such expenditure or loss.

4. Year in which loss/expenditure should be allowed.

In many cases, allowance for loss/expenditure is denied on the ground that it does not pertain to the Assessment Year in which it is claimed. And the Revenue conveniently avoids determining the year in which it will be allowed. As a result, assessee suffers from delayed allowance, uncertainty regarding year of allowance and sometimes even loss of deduction, bundle of litigation etc. Courts have held that dispute regarding the year in which deduction is allowable should not be raised by the Department, apparently considering that such issue is often tricky and debatable and have little tax effect over a period of years (Refer CIT V. Nagri Mills Ltd. -33 ITR 681). Unfortunately, the revenue continues with its practice of denying deduction on the ground that it does not pertain to a particular year and sometimes appellant authorities support such disallowances. In case of DCIT V. Bayer(India) Limited reported at 7 ITR (Trib)381, assessee

changed method of accounting for leave encashment from cash basis to mercantile basis. Logically in the first year, the cumulative amount of provision ought to be allowed and support may be found from earlier decisions. However, Mumbai Bench of ITAT did not allow deduction to the extent relating to earlier years. In case of Birla Sunlife Asset Management Co. V. DCIT reported at 7 ITR (Trib)586, Bombay Bench of ITAT did not allow loss on account of fraud on the ground that the same was premature.

5. Unabsorbed depreciation/loss under section 115JB

In my view, the provisions relating to MAT suffer from absence of foundation of sound logic. Within these provisions, the provision allowing reduction of `the amount of loss brought forward or unabsorbed depreciation whichever is less as per the books of accounts’, suffers from lack of any logic whatsoever. Explanation following this, to the effect that ̀ the loss shall not include depreciation’ appears outright absurd. Unfortunately, the provisions have survived decades.

Now we are at implementation stage. The debit balance in profit and loss account is made up of both loss and depreciation. There is no method of segregating them either in Income-tax Act or the Companies Act. No method that I can even otherwise consider to be logical. In the year of profit, profit is reduced from the debit balance in profit and loss account and at that stage, it becomes impossible to separate the amount of loss and depreciation surviving in the debit balance.

In the light of the above, if, in the Income-tax return, you deduct the lower of loss or depreciation in computing book profit in one year, there is a possibility of claiming that the amount so deducted in Income-tax return, survives in the debit balance in profit and loss account in the books of accounts. That claim, when successful, paves the way for claiming deduction of that amount again in the following years and possibly something can be claimed until the debit balance becomes zero.

Support for such deduction again in the following years can be taken from the the decision of Chennai Bench of ITAT in case of Aircel Cellular Limited reported at 8 ITR (Trib) 446. I must add that such a course will be contrary to decision of AAR in case of Rashtriya Ispat Nigam Ltd.(285 ITR 1).


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LAW-1 Never Outshine The Master

Always make those above you feel comfortably superior. In your desire to please or impress them, do not go too far in displaying your talents or you might accomplish the opposite—inspire fear and insecurity. Make your masters appear more brilliant than they are and you will attain the heights of power.

LAW-2 Never Put Too Much Trust In Friends, Learn How To Use Enemies

Be wary of friends –they will betray you more quickly, for they are easily aroused to envy. They also become spoiled and tyrannical. But hire a former enemy and he will be more loyal than a friend, because he has more to prove, In fact, you have more to fear from friends than from enemies. If you have no enemies, find a way to make them.

LAW-3 Conceal your Intentions

Keep people off- balance and in the dark by never revealing the purpose behind your actions. If they have no clue what you are up to, they cannot prepare a defense. Guide them far enough down the wrong path, envelop them in enough smoke, and by the time they realized your intentions, it will be too late.

LAW-4 Always Say Less Than Necessary

When you are trying to impress with words, the more you say, the more common you appear, and the less in control. Even if you are saying something banal, it will seem original if you make it vague, open-ended, and sphinx like. Powerful people impress and intimidate by saying less. The more you say, the more likely you are to say something foolish.

LAW-5 So Much Depends On Reputation—Guard It With Your life

Reputation is the cornerstone of power. Through reputation alone you can intimidate and win; once it slips, however, you are vulnerable and will be attacked on all sides. Make your reputation unassailable. Always be alert to potential attacks and thwart them before they happen. Meanwhile, learn to destroy your enemies by opening holes in their own reputations. Then stand aside and let public opinion hang them.

LAW-6 Court Attention At All cost

Everything is judged by its appearance; what is unseen counts for nothing. Never let yourself get lost in the crowd, then, or buried in oblivion. Stand out. Be conspicuous, at all cost. Make yourself a magnet of alienation by appearing large, more colorful, more mysterious than the bland and timid masses.

LAW-7 Get Others To Do The work For Your, But Always Take The Credit

Use the Wisdom, knowledge and legwork of other people to further your own cause. Not only will such assistance save you valuable time and energy, it will give you a godlike aura of efficiency and speed. In the end your helpers will be forgotten and you will be remembered. Never do yourself what others can do for you.

THE 48 LAWS OF POWER Compiled by (Author: Robert Greene) : CA Bimal R. Bhatt

LAW-8 Make Other People Come to You- Use Bait If Necessary

When you force the other person to act, you are the one in control. It is always better to make your opponent come to you, abandoning his own plans in the process. Lure him with fabulous gains—the attack. You hold the cards.

LAW-9 Win Through Your Actions, Never Through Argument

Any momentary triumph you think you have gained through argument is really a Pyrrhic victory. The resentment and ill will you stir up is stronger and lasts longer than any momentary change of opinion. It is much more powerful to get others to agree with you through your actions, without saying a word. Demonstrate, do not explicate.

LAW-10 Infection—Avoid The Unhappy And Unlucky

You can die from someone else’s misery—emotional states are as infectious as diseases. You may feel you are helping the drowning man but you are only precipitating your own disaster. The unfortunate sometimes draw misfortune on themselves; they will also draw it on you. Associate with the happy and fortunate instead.

LAW-11 Learn To Keep People Dependent On You

To maintain your independence you must always be needed and wanted. The more you are relied on, the more freedom you have. Make people depend on you for their happiness and prosperity and you have nothing to fear. Never teach them enough so that they can do without you.

LAW-12 Use Selectively Honesty And Generosity To Disarm Your Victim

One sincere and honest move will cover over dozens of dishonest ones. Open-hearted gestures of honesty and generosity bring down the guard of even the most suspicious people. Once your selective honesty opens a hole in their armor, you can deceive and manipulate them at will. A timely gift—a Trojan horse—will serve the same purpose.

LAW-13 When Asking For Help, Appeal To People’s Self-Interest, Never To Their Mercy Or Gratitude

If you need to turn an ally for help, do not bother to remind him of your past assistance and good deeds. He will find a way to ignore you. Instead, uncover something in your request or in your alliance with him that will benefit him and emphasis it out of all proportion. He will respond enthusiastically when he sees something to be gained for himself.

LAW-14 Pose As A Friend, Work As A Spy

Knowing about your rival is critical. Use spies to gather valuable information that will keep you a step ahead. Better still: Play the spy yourself. In polite social encounters, learn to probe. Ask indirect questions to get people to reveal their weaknesses and intentions. There is no occasion that is not an opportunity for artful spying.

(To be continued….)


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VALUATION ASPECTS OF MERGER & ACQUISITION Compiled by : CA Bharat Gajjar

Valuation is the central focus in fundamental analysis, wherein the underlying theme is that the true value of the firm can be related to its financial characteristics, viz. its growth prospects, risk profile and cash flows. In a business valuation exercise, the worth of an enterprise, which is subject to Merger or Acquisition or demerger (the target), is assessed for quantification of the Purchase Consideration or the Transaction Price.

Generally, the value of the target from the bidder’s point of view is the sum of the pre-bid standalone value of the target. On the other hand, the target companies may be unduly optimistic in estimating value, especially in case of hostile takeovers, as their objective is to convince the shareholders that the offer price is too low. Since valuation of the target depends on expectations of the timing of realization as well as the magnitude of anticipated benefits the bidder is exposed to valuation risk. The degree of risk depends upon whether the target is a private or public company, whether the bid is hostile or friendly and the due-diligence performed on the target.

The main value concepts, viz.

FOwner value

FMarket value and

FFair value

The owner value determines the price in negotiated deals and is often led by a promoter’s view of the value if he was deprived from the property. The basis of market value is the assumption.

That if comparable property has fetched a certain price, then the subject property will realize a price something near to it. The fair value concept in essence, ensures that the value is equitable to both parties to the transaction.

METHOD OF VALUATION OF TARGET

Valuation based on assets

The valuation method is based on the simple assumption that adding the value of all the assets of the company and sub-contracting the liabilities leaving a net asset valuation, can best determine the value of a business. Although the Balance Sheet of a company usually gives an accurate indication of the short-term assets and liabilities, this is not the case of long term ones as they may be hidden by techniques such as “off balance sheet financing”. Moreover, valuation being a forward looking exercise, may not bear much relationship with the historical records of assets and liabilities in the published balance sheet.

Valuations of Listed Companies have to be done on a different footing as compared to an Unlisted Company. In case of listed companies, the real value of the assets may or may not be reflected by the market price of the shares. However, in case of unlisted companies, only the information relating to the profitability of the company as reflected in the accounts, is available and there is no indication of market price.

Valuation based on earnings

The normal purpose of the contemplated purchase is to provide for the buyer the annuity for his investment outlay. The buyer would

certainly expect yearly income, returns stable or fluctuating but nevertheless some return which commensurate with the price paid therefore. Valuation based on earnings, based on the rate of return on capital employed, is a more modern method being adopted.

An alternate to this method is the use of the Price Earning (P/E) Ratio instead of the Rate of Return. The P/E Ratio of a listed company can be calculated by dividing the current price of the share by the earning per share (EPS). Therefore, the reciprocal of the P/E Ratio is called earnings-price ratio or earning yield.

Thus P/E = P/ EPS, where P is the Current Price of Shares. The Share Price can therefore be determined as P = EPS x P/E ratio.

Commitments Received under the Financial Assistance Scheme for CA Students (CPT)

Name of No of Students AmountMember Sponsored `

C. D. Amin & R. J. Parikh Fund* 2 7,000

Shantaben R. Parikh Fund* 1 4,000

CA. Neena Patel 1 3,000

Commitments Received under the Financial Assistance Scheme for CA Students (IPCC/Final)

Name of No. of students Amount Member Sponsored `

CA. Manish Baxi 1 10,000

CA. Mayur Swadia 1 10,000

CA. Neena Patel 4 40,000

CA. Rachana Parikh 1 10,000

CA. Jay Chaira, RCM 5 50,000

CA. S. R. Parikh 3 30,000

CA. K. K. Shah 1 10,000

CA. Divyesh Mehta 1 10,000

CA. Darshan Bhootwala 1 10,000

CA. Dhruv Agrawal 1 10,000

CA. Jayesh Verma 1 10,000

*Commitments from the said funds are based on utilization of interest accruals from Corpus already available with the Branch in the said funds plus additional donation received from fund benefactors for direct utilization.

Members desirous of contributing to the above scheme are requested to kindly contact the Chairman, Baroda Branch on +91-9327243479.

Financial Assistance


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CA. Rajiv D KhatlawalaManaging Director

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For Problem/Queries related to Returns uploading Please contact:

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92275 19995


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Press Conference on 24.06.2011

Direct Tax Refresher Course

PART - I on 04.06.11 PART - II on 11.06.11 PART - II on 18.06.11

1st Special Session, Speaker – CA. Yagnesh Desai, Mumbai

2nd Special Session, Speaker – Adv. Devang Nanavati, Ahmedabad

3rd Special Session, Speaker – CA. Atul Bheda, CCM, ICAI

Valedictory Session, Chief Guest - CA. V. Murali, Chairman of Board of Studies, ICAI Entertainment Programme

Entertainment Programme Press Conference by CA. Jaydeep Shah, Hon. Vice- President, ICAI

CA. Tarun Ghia, Mumbai

Adv. Tushar Hemani, A’bad

CA. Anil Sathe, Mumbai

CA. Mahesh Sarda, Rajkot

CA. Nihar Jambusaria, Mumbai

CA. Amar Shah, Vadodara


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VOL. VI JULY 2011 l

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Tree Plantation on World Environment Day, 05.06.2011

Study Circle

Other Activities

CA. Samir Parikh, VAdodara, speaking on “Critical Issues in Audit of Co-operative Bank” on 07.06.2011.

CA. Prakash Thakkar, Vadodara, speaking on “Assessment under GVAT Act & CST Act & Provisional Assessment” on 28.06.2011.

Rally on World Environment Day, 05.06. 2011 CPT Mock Test on 05.06.2011

NewsLetter - Baroda Branch of WIRC of ICAIBaroda Branch of WIRC of The Institute of Chartered...

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Transcript of NewsLetter - Baroda Branch of WIRC of ICAIBaroda Branch of WIRC of The Institute of Chartered...