New year resolutions

1. Reach office early by atleast 15 minutes

2. Leave office by 6.00 p.m

3. Read a business daily

4. Read more non fiction books

5. To listen more and talk less

6. To wake up by 6.00 a.m

7. Make the above resolutions again on December 31,2010 ;-)

Best forward !!!!!

A couple of days one of my school friends sent me this fantastic forward on the God of cricket:

10 reasons why I hate sachin tendulkar:

1. He always plays a brilliant innings before my exam and hence doesn’t let me study.

2. Every time that I think of becoming an atheist, he gets into the nineties and I have no choice but to pray.

3. Every time I take a resolution not to bite my nails, he gets into the nineties and I am left with no choice but to chew on my nails.

4. He keeps all the records to himself.

5. He makes a lot more money than me.

6. He costs way too much on ‘super selector’ but since I have to pick him, the rest of my team gets weakened.

7. During a match, invariably when I want to go to the bathroom, he hits a boundary and hence I have no choice but to sit and watch the replay.

8. As soon as I convince myself that God does not exist, he plays a straight drive and proves me wrong.

9. He brings the whole country to a standstill whenever he bats

10. And the last and the biggest reason why I hate Sachin Ramesh Tendulkar … He is going to retire sometime in the future??!!…

Mr.IFRS please come in!

This might be contrary to some of my previous posts. When I was looking at why we would should welcome IFRS into India, the following reasons came to my mind:

1. It will make Indian companies more global i.e. our financial statements will speak a language that the foreign investors will understand.

2. We will move towards more accurate financial statements (in the context of measurement)

3. We have created a frankenstein which we alone can tame. This will keep us (accounting fraternity) in the limelight for atleast next 3 years.

4. It is going to create tremendous professional opportunity - job market for chartered accountants is bound to boom!!!!!

Sportsmanship - Mr.Ponting do you know what it means?

Dear Mr.Ponting,

Wikipedia defines "Sportsmanship" as conformance to the rules, spirit and etiquette of sport. You complained that the England cricket team wasted the time by sending 12th man and physio on the field when there was absolutely no need for them. You also said that the English didn't play the game with sportsmanship. Now please let me know Mr.Ponting when was the last time Aussie team played the game with sportsmanship.

In the infamous Sydney test, Gilly claimed a catch that was nowhere near the bat, Clarke claimed a catch that was grassed and you followed suit.

Clarke didnt hear what Symmo said nor did gilly but Hayden heard the racist remark that Harbhajan uttered but didnt hear what Symmo said. When Sachin says that Harbhajan didnt make any racist comment but used the "m" hindi word, he is called a liar by your so called "honest and gentlemanly cricketer". Apologies poured in only after an angered nation reacted on baseless allegation on their cricketing god. I am sure you aussies wouldnt have apologized if not for the IPL.

Also keep in mind that you aussies popularized sledging and a perfect example was Michael Bevan throwing the ball towards Lara during a match in Sydney which angered the batsman and consequently lost his wicket.

There are many more examples and you have to admit that you aussies are neither proper winners nor gracious losers.

Remember Mr.Ponting, cricket is a gentleman's game.

My Prof was right "an aussie is an aussie and they stoop to any level to sell a book". (Your own ex coach is a perfect example)

Ardent cricket fan
Mukund

Why people write poetry?

I hated poetry right since I had it in my English syllabus. So I decided to get to the root of the problem and tried to understand why people write poetry. In my opinion some of the reasons are :

1) They are jobless

2) They have a lot of spare stationery at home

3) They cannot write proper sentences i.e. you cannot understand it unless someone explains it to you (you cannot question the understanding of the person explaining it)

I also googled this topic and hit on a fantastic article. Here is the excerpt:

What a boring subject, Poetry! I could never understand why anyone would like to write or read poetry. The idea of a person that has nothing to do but ponder on life's experiences of happiness, life, death or sorrow and put in to lyrics makes me feel that either that author has nothing better to do in life (flaky), maybe he/she is crazy or even a whiner. When I think of poetry, it reminds me of a satirical recording done in the early 70's by two comedians, Cheech and Chong, "The Big Bambu' ". In that recording a character, Sister Mary Elephant decided to recite a poem. As the good sister started off with the first verse, "The birds fly to the apple tree, the bumble bee kissed the flower tree", the class starts to fall asleep, with auditable snoring. Eventually, Sister Mary Elephant is annoyed by the snoring and yells, "Class, Class, Wake Up"!! That was classically humorous. What's really funny about poetry is that most people I spoke to have the same feeling about it. Their perception of poetry, as well as mine, is like listening to flowery words of love that its purpose is to bring warm fuzziness to the reader.

Couldnt have put it better!!!! If shakespeare, shelly, Wordsworth are alive today they should be subject to 302 of the Indian Penal code!

Workaholics

I was amazed to find a community of workaholics in a social networking site. What was even more intriguing was that some of my friends were members of it!!!. 5 out of 70 members were chartered accountants!!!!Why do people take pride in saying that they are workaholics??? Being a bandh today, I am at home and feeling bored as ever, I googled this topic and landed up with some interesting answers.

First Who is a workaholic?

A workaholic can be defined as someone who spends extraordinary time or effort at his or her work. The similarity with the word "alcoholic" provides a negative tone, meaning that the person is "addicted" to his or her work and would rather spend time at work rather than activities that most people find enjoyable.

Workaholics can be of 2 types. Voluntary and involuntary workaholics. Who are these involuntary workaholics?

In this context, the term "involuntary workaholic" can seem puzzling because it conflicts with the general belief that workaholics derive pleasure from what they are doing.

Involuntary workaholics are those people who are driven by external forces to work longer, even though they would rather be doing something else. Insufficient staffing, inflexible deadlines, lack of planning, improper prioritization, bad estimates, poor quality and unforeseen risks can create circumstances where employees and managers have to work harder and longer. Many workaholics are actually victims of situations created by themselves or other people or processes in their organization. They are working harder because they have no other choice.

How are involuntary workaholics created?

A second type of involuntary workaholic is created by managers who wrongly associate more effort with more output, and reward or encourage workaholic behavior. Such managers are themselves busy all the time and they want to see everyone put in as much effort as they do. Such a direction puts pressure on everyone to demonstrate their "dedication". However the proxy for more effort is simply "more time spent in the office" or "more face time with the manager", not necessarily actual work.

What are the problems for workaholics?

Quality is the first casualty in a workaholic environment as people hit biological limits on their body and brains and start making elementary mistakes. Then, the rate of work getting done starts decreasing, because people get too tired to contribute as effectively, and also need time to fix the mistakes that they made. In the end, there is only a very short-term improvement in productivity coupled with major quality problems and a long-term decline in productivity and increase in attrition due to employee resentment.

From organisation's standpoint?

From an organization's standpoint, there are significant advantages to having voluntary workaholics over involuntary ones. Voluntary workaholics are more knowledgeable and produce high quality of work consistently. They tend to be more flexible with changing needs because they have more time at their disposal. They are willing to take on more responsibilities, even if they sometimes overestimate their capabilities.

Crudely for workaholics the law of diminishing marginal utility does not apply.

Hard work hasn't killed anybody but why take a chance!!!!

The month of april and accountants

Its April 14 today and anytime a call is due from office. I have absolutely nothing to do and i am feeling extremely bored. So why not try to blog on some topic that has never been explored? (All bloggers from America to Amjikarai have this feeling that their blogs contain some posts that are mindblowing, pathbreaking etc [if you are blogger you can add your favourite adjective] and those posts are on topics that have never been explored). I am no excpetion and I zeroed on "THE MONTH OF APRIL AND ACCOUNTANTS". So, here is the content:

Officially its a holiday today but people in mostoffices are working. Almost all accountants work the entire April citing year end as a reason. They go home late , come to office early, sport some somber faces and assume that if they dont work on that day the human species will go the dinosaur way.

This leads us to one single logical question - what is that accountants do in april that they dont do the entire year?

1. They pass entries.
2. They close books of account.
3. They prepare financial statements.
4. They audit the books of account.
5. They prepare audit report.
6. They sign audit report and financial accounts.
7. In between all the above they discuss a lot.

If 1 to 6 takes 35% of the time, 7 takes 65% of the time (seriously!!!)

Non accountants think that this is some rocket science. Strictly, it is elementary. Luca Pacioli has kept it very simple. Every debit has a corresponding credit. Simple!!!. But people brag that they have tallied the balance sheet !!!! (CA students included).

All 11 months people from other departments say marketing, R&D , Business strategy run the show and finance finds it difficult to get into the limelight. Cometh april, reasons like finalisation, audit, Board meeting, resolutions are stated and other departments are made to look pedestrian.All accountants burn the midnight oil, forget families and dedicate themselves to the organisation (!!!!).

The next question that needs to be asked is - Is it really really required?

A big no is the answer. Reason being accountants dont plan (including myself). All important decisions are taken during the 11th hour. They inwardly like the last minute rush. So they should....... The inevitable has happened!!!Call from office.

SC on forex differences

Finally a judgment has come from the SC on the taxability of exchange differences.

The sum and substance of SC's judgment (CIT vs Woodward governor's case )is as follows:

a) Exchange differences on items in revenue account:

For exchange differences on revenue account to be deductible the following conditions need to be satisfied:

(i) whether the system of accounting followed by the assessee is mercantile system, which brings into debit the expenditure amount for which a legal liability has been incurred before it is actually disbursed and brings into credit what is due, immediately it becomes due and before it is actually received;

(ii) whether the same system is followed by the assessee from the very beginning and if there was a change in the system, whether the change was bona fide;

(iii) whether the assessee has given the same treatment to losses claimed to have accrued and to the gains that may accrue to it;

(iv) whether the assessee has been consistent and definite in making entries in the account books in respect of losses and gains;

(v) whether the method adopted by the assessee for making entries in the books both in respect of losses and gains is as per nationally accepted accounting standards;

(vi) Whether the system adopted by the assessee is fair and reasonable or is adopted only with a view to reducing the incidence of taxation.

SC has also said that exchange differences would be deductible under section 37.

b) Exchange differences on items in capital account:

On the capital account front, this judgment is purely on 43A. The department had contended that amendment to 43A was only clarificatory in nature and not amendatory i.e. unrealized gains or losses on account of foreign currency borrowings cannot be adjusted to cost of fixed assets (prior to 43A amendment). However SC has held that the amendment is amendtory and not clarificatory in nature. This means that unrealized losses /gains can be adjusted to the cost of fixed assets prior to 43A amendment.

An interesting part in the 26 page judgment is the SC has analysed AS 11 also to give its verdict.

But the conundrum as to what constitutes revenue account and capital account still remains!!!!!

Letter to the President

Dear Mr.President,

I write this letter with a very very heavy heart. Satyam fraud has resulted in a crisis of confidence. The investor community has lost confidence in auditors. For the first time in the history of corporate India, two chartered accountants have been arrested and kept in judicial custody. There are rumours that the two have confessed that they have colluded with the management in committing the fraud.To add fuel to the fire, an article in Business Standard read that certificates issued by Chartered accountants for payments under Section 195 of the Income tax act have come under the scanner as some CAs are certifying left right and centre without looking into the applicability of TDS, for the want of money. (This allegations are made by IT department officials as if they are all Raja Harishchandras!!!)

The above happenings warrant the following:

1) Instilling the public confidence in the CA fraternity by taking swift disciplinary action against the guilty (Satyam and IT certification)

2) Make the general public understand that auditors dont enter their client's premises sniffing fraud and the expectation gap also needs to be bridged

With due respect to the institute and yourself, I believe you have, rather unfortunately, got your priorities wrong. Instead of weathering the storm, you have also started playing the blame game. If couple of partners in PwC colluded with the management in committing the fraud (not yet proved) how can you initiate action against the firm as a whole? Please remember that, the guilty are the profession's enemies and not PwC. This attitude is omnipresent among all non big 4 partners and employees. Aren't people working in PwC members of ICAI? If PwC goes the Arthur Anderson way for the deeds of 2 partners, what would happen to the thousands of people working there? And what was the reason in reacting angrily to appointment of KPMG and Deloitte as auditors of Satyam? Sir it is well understood that KPMG and Deloitte in India mean the Indian firms under their umbrellas. It must be understood that while every other profession/sector is opening up, we cannot remain shut. Whether you accept it or not the "hated in India" Big4 firms have certainly brought in quality into the audit work, in India. This view is also seconded by our ex finance and current home minister.

So please wage battles to weed out fraudulent auditors and not Big 4 firms.

Thanks and Regards

CA.M.Mukund

(Articleship - PwC)

P.S - Since I have been a PwC article I know about the quality of audit work carried out there. As I am also a member of the institute I am also competent enough to comment on the audit quality.

Sidhuisms (Borrowed from sites/blogs)-Part II

Here are some more sidhuisms:

1.That ball went so high it could have got an air hostess down with it.

2. There is light at the end of the tunnel for India, but it's that of an incoming train which will run them over.

3.Experience is like a comb that life gives you when you are bald.

4. He is like Indian three-wheeler, which will suck a lot of diesel but cannot go beyond 30! (On Romesh Kaluwitharana)

5. As uncomfortable as a bum on a porcupine.

6. The ball whizzes past like a bumblebee and the Indians are in the sea.

7. He is as confused as a child is in a topless bar!

8. The pitch is as dead as a dodo.

9. You cannot make Omelets without breaking the eggs.

10. One, who doesn't throw the dice, can never expect to score a Six

Sometimes the commentary is more interesting than the match itself. So never miss the fun when sixer sidhu is commentating!!!!

Sidhuisms (Borrowed from blogs/websites) - Part I

Here are some enjoyable sidhuisms:

1. Sachin Tenduklar drives the ball faster than Michael Schumacher's Ferarri.

2. The wily fox is back? It is an ill omen when a fox licks the lambs! (Muthiah Muralitharan)

3. Sehwag's score is running like an Indian taxi meter.

4. He chased the ball,as if a young guy chased a beautiful girl, but who never knew she was daughter of army officer and paid the price, with his wicket.

5. Wickets are like wives - you never know which way they will turn!

6. He moved like a heavy duty truck (when a fielder dropped a catch due to his slow reaction)

7. A fifty is like kissing a virgin, you just have to go on!

8. Any good product without advertising is like winking at a girl in the dark, you know what your doing but she doesn't.

9. My parents always said, "laugh and everyone will laugh with you, sleep and you snore alone."

10. The trouble with Father Time is that it did not even wait for a woman

11. I lean on statistics like a drunken man leans on a lamppost, only for support, not illumination

12. Sachin Tendulakar is using his bat to make the fielders run all over the place just like my wife uses her broom to make me run all over Punjab!

13. Strutting around wicket as 'proud as peacock'

14. Rahul Dravid has hit this shot as straight as a candle.

15. Only one man in a thousand is the leader of men, rest 999 follow the women.

Some Corporate frauds (other than Satyam)

OUTSIDE INDIA

Enron:

Year – 2001

Gist – Enron was an energy company based in Houston, Texas and was awarded “America’s most innovative company” for six consecutive years. The concept behind Enron’s fraud can be described with the term “off balance sheet financing”. It means moving one’s asset or liability from the balance sheet. Enron did it with the help of Special Purpose Vehicles (SPV) and the structure was so complex that it managed to keep these SPVs outside the purview of consolidation. These SPVs made huge losses and had huge debts and consolidating them with Enron would have revealed the true position.

People Involved – Jeffrey Skilling (CEO), Andrew Fastow (CFO), Kenneth Lay (Former CEO)

Punishment to the convicted – Jeffery Skilling is serving a 24 year and 4 month term and fined 45 million USD. Andrew Fastow is serving a 6 year term. Kenneth lay died before sentence.

Auditors – Arthur Anderson

World Com:

Year – 2002

Gist – Worldcom awoke the leading giant by leading the telecom industry into profitability in 1990s. It handled 50% of US internet traffic and 50% of e-mails worldwide. The concept of worldcom’s fraud was “Capitalisation of revenue expenses” thus inflating profits.

People involved – Bernie Ebbers (CEO), Scott Sullivan (CFO)

Punishment to the convicted – Scott Sulivan is serving a 25 year term. Bernie Ebbers serving a 25 year term.

Auditors – Arthur Anderson

There have also been other frauds like Tyco, Parmalat, Cedant outside India which involved substantial amounts.

IN INDIA

GTB:

Year – 2002-03

Gist – A bank promoted by an engineer of Osmania university – Ramesh Gelli. GTB accumulated non performing assets in excess of permissible levels which led to negative net worth. These facts were not disclosed in its financial statements.

Punishment to the convicted – None

Auditors – Lovelock and Lewes

DSQ Software:

Year -2003

Gist - Dinesh Dalmia's Company DSQ Software was accused of dubious acquisitions and biased allotments made in the year 2000 & 2001.

Punishment to the convicted- Dalmia currently serving a jail sentence

Auditors – PwC

It is to be noted that India has been a place where the number of corporate frauds has been relatively less.

Ten old songs that one must hear

Here are ten evergreen songs that one must hear. These are songs from the period 1990 and before (In no particular order)

1. Song - Mannavan Vandanadi
Singer - Suseela
Movie - Thiruvarutselvar
Hero - Sivaji

2. Song - Thaen sinduthe vaanam
Singer - SPB and Janaky
Movie - Ponnuku thanga manasu
Hero - Sivakumar

3. Song - Namma ooru singari
Singer - SPB
Movie - Ninaithaale enikkum
Hero - Rajini/Kamal

4. Song - Siva sambo
Singer - MSV
Movie - Ninaithaale enikkum
Hero - Rajini/Kamal

5. Song - Ponn ondru kandaen
Singer - TMS and PBS
Movie - Padithaal mattum poduma
Hero - Sivaji

6.Song - Illakanam Marutho
Singer - SPB and others
Movie - Nizhal nijamagirathu
Hero - Kamal

7. Song - Senthazampuvil
Singer - Yesudas
Movie - Mullum malarum
Hero - Rajini/Sarathbabu

8. Song - Eeramana Rojave
Singer - Yesudas
Movie - Eelamai Kaalangal
Hero - Mohan

9. Song - Thendral vanthu yennai
Singer - SPB and Janaky
Movie - Thendrale ennai thodu
Hero - Mohan

10. Song - Enbamae unthan
Singer - TMS and Suseela
Movie - Idhayakani
Hero - MGR

Inconsistencies galore!!!!

A peep into the treatment of exchange fluctuations have been treated in books of account by the company.

1. Reliance Industries:

The Company has continued to adjust the foreign currency exchange differences on amounts borrowed for acquisition of fixed assets, to the carrying cost of fixed assets in compliance with Schedule VI to the Companies Act, 1956 as per legal advice received, which is at variance to the treatment prescribed in Accounting Standard (AS 11) on “Effects of Changes in Foreign Exchange Rates” notified in the Companies (Accounting Standards) Rules 2006. Had the treatment as per the AS 11 been followed, the net profit after tax for the nine months period ended 31st December 2008 would have been lower by Rs. 1,177 crore (US$ 242 million). This is a matter of reference in the limited review report of the statutory auditors. The net profit after tax for the seven quarters from 1st April 2007 to 31st December 2008 would have been lower by Rs. 1,147 crore (US$ 235 million) on account of cumulative effect of the above treatment.

2. Bharat Forge:

In order to recognize the impact of fluctuation in foreign currency rates arising out of instruments acquired to hedge highly probable transactions, in appropriate accounting periods, the company has from this year decided to apply the principles of recognition set out in the International Accounting standards as suggested by the Technical Directorate of the Institute of Chartered Accountants of India, as reflected in the Accounting Standard-30- Financial Instruments- Recognition and Measurement. As a result, the impact of unrealised losses (net) consequent to foreign currency fluctuation in respect of effective hedging instruments outstanding as at 31st December 2008, to hedge future exports, aggregating Rs. 2,981 lacs are carried as a Hedging Reserve to be ultimately settled when the underlying transaction arises, in the profit and loss account as against the practice of recognizing the same in the profit and loss account, on valuation at the end of each period. Hence previous period/ year figures are not strictly comparable.

The Company has not entered into any exotic derivative hedging instruments.
Other Foreign currency Financial Assets , liabilities, receivables etc. that do not qualify for hedge accounting have been revalued at the end of period rates and the resultant net loss of Rs.2,821 lacs for the quarter and Rs.18,506 lacs year to date has been debited to profit and loss account and treated as exceptional item in above results on account of the wide fluctuation in foreign exchange rates witnessed during the quarter/ Period. Out of this loss, Rs.2,568 lacs for the quarter and Rs.15,607 lacs year to date is in respect of FCCB's, which if not converted are repayable from April 2010 to April 2013.The balance loss of Rs. 253 lacs for the quarter and Rs.2,899 lacs for year to date is in respect of other loans etc..

3. Bajaj Auto:

In order to recognise the impact of fluctuation in foreign currency rates arising out of instruments acquired to hedge highly probable forecast transactions in appropriate accounting periods, the company has from this year decided to apply the principles set out in the IAS as suggested by ICAI reflected in AS 30.

As a result of impact of unrealised loss (net) consequent to foreign currency fluctuations, in respect of effective hedging instruments, to hedge future exports, aggregating Rs.9771 lakhs are carried in Hedging reserve as against the practice of recognising the same in profit and loss account.

4. TVS Motors:

Restatement of ECBs outstanding will be reckoned as of year end.

5. Bharti:

As reported in the last quarter, the Company has followed the accounting policy to adjust foreign exchange fluctuation on loans/liability for fixed assets till June 30, 2008, as per the requirement of Schedule VI of the Companies Act, 1956 based on legal advice. During the nine months period, effective April 1, 2008, the Company has adopted the treatment prescribed in Accounting Standard (AS-11) "Effect of Changes in Foreign exchange Rates" notified in the Companies (Accounting Standard) Rules 2006 dated December 7, 2006. Instead of capitalizing / decapitalizing such fluctuation, as per policy hitherto followed, the Company has charged/credited such fluctuations directly to the Profit & Loss Account. Had the Company continued with its earlier policy, net profit after tax would have been higher by Rs. 245.09 crore and Rs. 900.12 crore for the quarter and nine months ended December 31, 2008, respectively, for the Company and the net profit after tax would have been higher by Rs. 248.42 crore and Rs. 929.94 crore for the quarter and nine months ended December 31, 2008, respectively, for the Group.

6. Infy, TCS, Wipro,ITC:

Blissfully silent.

7. Ranbaxy:

(A) Pursuant to ICAI Announcement “Accounting for Derivatives” on the early adoption of Accounting Standard AS 30 - Financial Instruments: Recognition and Measurement", the Company has early adopted the said Standard with effect from Oct 1, 2008, to the extent that the adoption does not conflict with existing mandatory accounting standards and other authoritative pronouncements, company law and other regulatory requirements. Pursuant to the adoption:-

(i) Transitional loss mainly representing the loss on fair valuation of foreign currency options, determined to be ineffective cash flow hedges on the date of adoption, amounting to Rs 11,788 Million (net of tax) has been adjusted against the opening balance of revenue reserves as of Jan 1, 2008.

( ii) Loss on fair valuation of forward covers, which qualify as effective cash flow hedges amounting to Rs. 723 Million ( net of tax), on the date of adoption, has been recognized in the hedging reserve account.

(B) For the quarter, foreign exchange loss arising on account of change in fair value of foreign currency options determined to be ineffective cash flow hedge, amounted to Rs.7,843 Million before tax and has been recognised under 'Exceptional items'. Net of tax the loss is Rs 5,177 Million.

Many companies are yet publish their results and are bound to come out with their own methods for treating exchange differences . Is the ICAI/MCA watching all this? Post Satyam the trust in the Chartertered accountants and the institute is at an all time low. Before its too late the MCA/ICAI need to standardise the treatment to some extent if not fully. The numbers involved are so huge that a change in treatment, say reckoning the differences in Profit and Loss account instead of capitalising/reckoning in Hedge reserve might wipe off the entire profits of the company!!!!!!.

Ten new songs one must hear

Here is a list of 10 songs one must hear, which are from the movies that released during the last one year (in no particular order):

1. Song -Hey vetri velaa
Singer - Ranjith
Movie - Padikathavan
Music Director - Mani sharma
Genre - Folk

2. Song - Ava enna enna
Singer - Karthik
Movie - Vaaranam Aayiram
Music Director - Harris Jeyaraj
Genre - Folk

3. Song - Nenjukkul Peithidum
Singer - Hariharan
Movie - Vaaranam Aaiyiram
Music Director - Harris Jeyaraj
Genre - Melody

4. Song - Yethi Yethi
Singer - Naresh Iyer
Movie - Vaaranam Aaiyiram
Music Director - Harris Jeyaraj
Genre - Peppy number

5. Song - Thoziya en kadhaliya
Singer - Harish Raghavendra
Movie - Kadalil vizhunden
Music Director - Vijay Antony
Genre - Melody

6. Song - Vaada maapiley
Singer - Tippu, Rita
Movie - Villu
Music Director - Devisri prasad
Genre - Folk

7. Song - Daddy Mummy
Singer - Divya
Movie - Villu
Music Director - Devisri prasad
Genre - Item number

8. Song - Azhiyile
Singer - Haricharan
Movie - Dhaam Dhoom
Music Director - Harris Jeyaraj
Genre - Melody

9. Song - Anbe en Anbe
Singer - Harish Raghavendra
Movie - Dhaam Dhoom
Music Director - Harris Jeyaraj
Genre - Melody

10. Song - En anbe
Singer - Saadhana Sargam
Movie - Satyam
Music Director - Harris Jeyaraj
Genre - Melody

The depreciation conundrum

The government came out with the second stimulus package in the first week of January 2009. One of fiscal incentives in the package was the increase of depreciation rates for Commercial Vehicles(CV) purchased between January to March 2009 to 50% from 30%. Would it be full 50% of the cost or 25%, due to put to use for "180 or more /less than 180" rule?

Objective of this fiscal incentive was to boost the sales of CV industry which is facing a severe downturn. Considering an average sale price of trucks of Rs.1 million and 50% depreciation , the saving for a buyer would be Rs.0.16 million (approx). Thats some savings for the buyers.

The finance ministry took around 15 days to come out with the notification and it read
"In the Income-tax Rules, 1962, in the Table to New Appendix 1, in Part-A relating to TANGIBLE ASSETS, under the heading III. MACHINERY AND PLANT, in item (3), after sub-item (vi) and entries relating thereto, the following shall be inserted, namely:—
"(via) New commercial vehicle which is acquired on or after the 1st day of January, 2009 but before the 1st day of April, 2009 and is put to use before the 1st day of April, 2009 for the purposes of business or profession [See paragraph 6 of the Notes below this Table] = 50%"

The way in which depreciation needs to be calculated is given in clause (ii) in sub section (1) to section 32 which reads "in the case of any block of assets, such percentage on the written down value thereof as may be prescribed". This needs to be read with the proviso 2 to this sub section "that where an asset referred to in clause (i) or clause (ii) [ or clause (iia)], as the case may be, is acquired by the assessee during the previous year and is put to use for the purposes of business or profession for a period of less than one hundred and eighty days in that previous year, the deduction under this sub-section in respect of such asset shall be restricted to fifty per cent of the amount calculated at the percentage prescribed for an asset under clause (i) or clause (ii), as the case may be " . So when the notification is read with the relevant section, sub section and its proviso, the effective depreciation is only 25% and not 50%, as the commercial vehicle is put to use for only less than 180 days.

Hence the effective increase is only 10% (25% - 15% [30%/2]). This should have been guessed at the time of announcement itself as the plan was to provide incentives without amending the act. A 50% rate could have been effected only through an amendment, as in the year 1998-1999 a proviso to this sub section was inserted to specifically mention that the depreciation will be allowed fully.

Can oratory get better than this?????

A speech that moved the entire world. All the best Barrack Hussain Obama!!!!!

The entire speech is given below:

My fellow citizens:
I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors. I thank President Bush for his service to our nation, as well as the generosity and cooperation he has shown throughout this transition.

Forty-four Americans have now taken the presidential oath. The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the
People have remained faithful to the ideals of our forbearers, and true to our founding documents. So it has been. So it must be with this generation of Americans.

That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age. Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many; and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.

These are the indicators of crisis, subject to data and statistics. Less measurable but no less profound is a sapping of confidence across our land - a nagging fear that America's decline is inevitable, and that the next generation must lower its sights.

Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time. But know this, America - they will be met.

On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord. On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn out dogmas, that for far too long have strangled our politics.
We remain a young nation, but in the words of Scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness.

In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of short-cuts or settling for less. It has not been the path for the faint-hearted - for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things - some celebrated but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom.

For us, they packed up their few worldly possessions and traveled across oceans in search of a new life.

For us, they toiled in sweatshops and settled the West; endured the lash of the whip and plowed the hard earth. For us, they fought and died, in places like Concord and Gettysburg; Normandy and Khe Sahn.

Time and again these men and women struggled and sacrificed and worked till their hands were raw so that we might live a better life. They saw America as bigger than the sum of our individual ambitions; greater than all the differences of birth or wealth or faction.

This is the journey we continue today. We remain the most prosperous, powerful nation on Earth. Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished. But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions - that time has surely passed. Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.

For everywhere we look, there is work to be done. The state of the economy calls for action, bold and swift, and we will act - not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age. All this we can do. And all this we will do.

Now, there are some who question the scale of our ambitions - who suggest that our system cannot tolerate too many big plans. Their memories are short. For they have forgotten what this country has already done; what free men and women can achieve when imagination is joined to common purpose, and necessity to courage.

What the cynics fail to understand is that the ground has shifted beneath them - that the stale political arguments that have consumed us for so long no longer apply. The question we ask today is not whether our government is too big or too small, but whether it works - whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified.

Where the answer is yes, we intend to move forward. Where the answer is no, programs will end. And those of us who manage the public's dollars will be held to account - to spend wisely, reform bad habits, and do our business in the light of day - because only then can we restore the vital trust between a people and their government.

Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control - and that a nation cannot prosper long when it favors only the prosperous. The success of our economy has always depended not just on the size of our Gross Domestic Product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart - not out of charity, but because it is the surest route to our common good.

As for our common defense, we reject as false the choice between our safety and our ideals. Our Founding Fathers, faced with perils we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generations. Those ideals still light the world, and we will not give them up for expedience's sake. And so to all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and that we are ready to lead once more.

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

We are the keepers of this legacy. Guided by these principles once more, we can meet those new threats that demand even greater effort - even greater cooperation and understanding between nations. We will begin to responsibly leave Iraq to its people, and forge a hard-earned peace in Afghanistan. With old friends and former foes, we will work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet. We will not apologize for our way of life, nor will we waver in its defense, and for those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that our spirit is stronger and cannot be broken; you cannot outlast us, and we will defeat you.

For we know that our patchwork heritage is a strength, not a weakness. We are a nation of Christians and Muslims, Jews and Hindus - and non-believers. We are shaped by every language and culture, drawn from every end of this Earth; and because we have tasted the bitter swill of civil war and segregation, and emerged from that dark chapter stronger and more united, we cannot help but believe that the old hatreds shall someday pass; that the lines of tribe shall soon dissolve; that as the world grows smaller, our common humanity shall reveal itself; and that America must play its role in ushering in a new era of peace.

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West - know that your people will judge you on what you can build, not what you destroy. To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history; but that we will extend a hand if you are willing to unclench your fist. To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds. And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; nor can we consume the world's resources without regard to effect. For the world has changed, and we must change with it.

As we consider the road that unfolds before us, we remember with humble gratitude those brave Americans who, at this very hour, patrol far-off deserts and distant mountains. They have something to tell us today, just as the fallen heroes who lie in Arlington whisper through the ages. We honor them not only because they are guardians of our liberty, but because they embody the spirit of service; a willingness to find meaning in something greater than themselves. And yet, at this moment - a moment that will define a generation - it is precisely this spirit that must inhabit us all.

For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies. It is the kindness to take in a stranger when the levees break, the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours. It is the firefighter's courage to storm a stairway filled with smoke, but also a parent's willingness to nurture a child, that finally decides our fate.

Our challenges may be new. The instruments with which we meet them may be new. But those values upon which our success depends - hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism - these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility - a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task. This is the price and the promise of citizenship.

This is the source of our confidence - the knowledge that God calls on us to shape an uncertain destiny.

This is the meaning of our liberty and our creed - why men and women and children of every race and every faith can join in celebration across this magnificent mall, and why a man whose father less than sixty years ago might not have been served at a local restaurant can now stand before you to take a most sacred oath.

So let us mark this day with remembrance, of who we are and how far we have traveled. In the year of America's birth, in the coldest of months, a small band of patriots huddled by dying campfires on the shores of an icy river. The capital was abandoned. The enemy was advancing. The snow was stained with blood. At a moment when the outcome of our revolution was most in doubt, the father of our nation ordered these words be read to the people:

"Let it be told to the future world...that in the depth of winter, when nothing but hope and virtue could survive...that the city and the country, alarmed at one common danger, came forth to meet [it]."

America. In the face of our common dangers, in this winter of our hardship, let us remember these timeless words. With hope and virtue, let us brave once more the icy currents, and endure what storms may come. Let it be said by our children's children that when we were tested we refused to let this journey end, that we did not turn back nor did we falter; and with eyes fixed on the horizon and God's grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations.

When will results be comparable?????

A leading bluest of blue chip company announced its III quarter results a couple of days back and there were few obvious points there :
1) Treatment of foreign currency transactions was not disclosed (in newspapers)
2) The company had stated that it had a MAT liability this year and in accordance with the guidance note had taken the same to "MAT credit entitlement" and also a reversal of some crores of excess provision pertaing to earlier years against the tax expense.

Point 1:
Non disclosure of foreign currency transactions is either on account of
a) Strict adherence with AS 11 and AS 30
b) Deliberately omitted

Companies having huge exposures in foreign currency are not bound to comply with AS 11 and AS 30 at face value (Reliance, Bharti are examples), with the rupee weakening, as it would dent their profits. Now whats the logic of restating a loan which is repayable after 5 years( at an exchange rate which god only knows) at the rate prevailing on balance sheet date. Companies are finding ways and means to reduce the losses on account of those restatements. (These monies were raised when 1 USD was say Rs.38-40). So being the situation in the coporate world, why was it not disclosed?

Point 2:
Assuming the company had a tax loss, the entire MAT paid/payable is credit. The entire tax expense represents Deferred tax liability and FBT. How can a company net of excess provisions of normal tax pertaining to previous years against deferred tax liability? The reversal itself needs to be questioned. With the taxman disallowing every exchange loss and taxing every exchange gain, it would be prudent to retain the excess provision in books rather than reverse it.

Another listed company had said in its quarterly/YTD results that it would ascertain deferred tax liability/ asset on as of March and no charge/ income had been recognised on account of deferred tax. Then why have AS 25 and illustrations to them? Would a disclosure to the extent that law has not been complied with, tantamount to compliance ? (AS notified by NACAS is law now)

If results are reported on such grounds, what will the analysts and investors do? Will results of 2 companies in the same in industry be comparable? With IFRS getting introduced in another couple of years, the situation is only bound to worsen.