Investment Valuation in India

A SAS 70 report is the service auditor’s report on a service organization’s controls for use by user organizations and their auditors. Statement on Auditing Standards (SAS) No. 70, Service Organizations, is a widely recognized auditing standard developed by the American Institute of Certified Public Accountants (AICPA). The requirements of Section 404 of the Sarbanes-Oxley Act of 2002 make SAS 70 audit reports even more important to the process of reporting on the effectiveness of internal control over financial reporting It applies to any service organization that: • Executes transactions and maintains accountability or • Records transactions and processes related data The primary purpose of the SAS 70 report is to provide information about the service organization to auditors who audit the user organization’s financial statements. Benefits of a SAS 70 Report Reduces disruption to service organization operations (single auditor concept) - Otherwise, auditors of all user organizat...

New Pension Scheme FAQs What is the New Pension Scheme (NPS)? New Pension scheme is a retirement planning instrument and a system of fund management like the Employees Provided Fund (EPF), Public Provided Fund (PPF). It is based on defined contributions It is voluntary for private sector employees but mandatory for new recruits to the Central Government Service (Except armed forces). Who is it for? It is applicable for salaried employee (both public sector and private sector) within the age group of 18 to 55. you need to compulsorily withdraw from the system on or before the attainment the age of 70. Who is the regulator for this scheme? The Pension Fund Regulatory and Development Authority(PFRDA) has been assigned the work of protecting the interest of the people participating in the NPS. It’s a Government regulatory body of India What is PRAN? Permanent Retirement Account Number (PRAN) is like an account number which will help you check your funds online or at the point of presence (...

The Limited Liability Partnership (LLP) Bill 2008 was passed by the Parliament on December 12, 2008 and legislated vide notification of the Act in the Gazette of India on January 7, 2009. Subsequently ‘The Limited Liability Partnership Rules, 2009’ were notified by the Central Government on April 01, 2009. Key features of the LLP Act are as below: – An LLP Is a separate legal entity under the Limited Liability Partnership Act, 2008 and can sue and be sued. – An LLP has a perpetual succession and partners may come and go - The LLP Agreement is a charter of the LLP which denotes its scope of operation and rights and duties of the partners vis-à-vis LLP. – Foreign Nationals can be a Partner in an LLP. – The liability of partners is limited to the extent of their contribution, except in case of intentional fraud or wrongful act of omission or commission by the partner. In essence LLP combines the advantages of both the Company and Partnership into a single form of organization. While one p...

The Budget Glossary. On the way to the Budget which is expected to one of the biggest in Indian History, let us take a look at what some of the terms and jargons means. BALANCE SHEET - The lines and figures that reveal the receipts and expenditure of the year ANNUAL FINANCIAL STATEMENT This is the last word on the state’s receipts and expenditure for the financial year, presented to the Parliament by the government. Divided into three parts — Consolidated Fund, Contingency Fund and Public Account — it has a statement of receipts and expenditure of each. Expenditure from the Consolidated Fund and Contingency Fund requires the mandatory nod of the Parliament. CONSOLIDATED FUND - The government’s lifeline: it is a consortium of all revenues, money borrowed and receipts from loans it has given. All state expenditure is made from this fund. CONTINGENCY FUND - As the name suggests, any urgent or unforeseen expenditure is met from this Rs 500-crore fund, which is at the disposal of ...

CREDIT DERIVATIVES are over-the-counter contracts that allow credit risk to be exchanged across counterparties. A CREDIT DEFAULT SWAP (CDS) is a swap contract in which the buyer of the CDS pays premium (periodic or lump-sum) to the seller and, in exchange, receives a payoff if a credit instrument - typically a bond or loan - goes into default (fails to pay). This event of a default is called a “Credit event”. The payment made by the seller to the buyer is called a “Contingent payment” and is triggered by a credit event (CE) on the underlying credit. These contracts represent the purest form of credit derivatives (hence called Plain Vanilla), as they are not affected by fluctuations in market values as long as the credit event does not occur. Plain Vanilla CDS cater to the largest market share of the Credit Derivatives typically with 5 year maturities. Credit default swaps are often used to manage the credit risk (i.e. the risk of default) which arises from holding debt. Typically, t...

The chapter 11 of the Bankruptcy Code provides (generally) for reorganization, usually involving a corporation or partnership. A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11. Who files the petition A petition may be a voluntary petition, which is filed by the debtor, or it may be an involuntary petition, which is filed by creditors that meet certain requirements. The debtor also must file with the court: schedules of assets and liabilities; a schedule of current income and expenditures; a schedule of executory contracts and unexpired leases; and a statement of financial affairs Generally, a written disclosure statement and a plan of reorganization must be filed with the court. The disclosure statement is a document that must contain information concerning the assets, liabilities, and business affairs of the debtor sufficient to enable a cr...

THE SPECIAL ECONOMIC ZONES ACT, 2005 ESTABLISHMENT OF SPECIAL ECONOMIC ZONE (Extracts from SEZ Act, 2005) Procedure for making proposal to establish Special Economic Zone. 3. (1) A Special Economic Zone may be established under this Act, either jointly or severally by the Central Government, State Government, or any person for manufacture of goods or rendering services or for both or as a Free Trade and Warehousing Zone. (2) Any person, who intends to set up a Special Economic Zone, may, after identifying the area, make a proposal to the State Government concerned for the purpose of setting up the Special Economic Zone. (3) Notwithstanding anything contained in sub-section (2), any person, who intends to set up a Special Economic Zone, may, after identifying the area, at his option, make a proposal directly to the Board for the purpose of setting up the Special Economic Zone: Provided that where such a proposal has been received directly from a person under sub-section, the Board may g...