warren buffet-Golden Rules

CONITNUED FROM YESTARDAY......

BASIC IDEAS
The basic ideas of investing are to look at stocks as businesses,
use market f luctuations to your advantage, and seek a margin
of safety. That’s what Ben Graham taught us. A hundred years
from now they will still be the cornerstones of investing.4
WARREN BUFFETT, 1994

GRAHAM’S APPROACHES
Graham’s approaches—buying a stock for less than twothirds
of net asset value and buying stocks with low P/E multiples—had
a common characteristic. The stocks that Graham selected based on
The basic ideas of investing are to look at stocks as businesses,
use market f luctuations to your advantage, and seek a margin
of safety. That’s what Ben Graham taught us. A hundred years
from now they will still be the cornerstones of investing.4
WARREN BUFFETT, 1994

PEOPLE COULD MAKE SUPERIOR PROFITS
Fisher came to believe that people could make superior profits by
(1) investing in companies with above-average potential and
(2) aligning themselves with the most capable management. these methods were deeply out of favor with the market.

GROWTH
companies with above-average potential have ability to grow
sales over the years at rates greater than the industry average. That
growth, in turn, usually was a combination of two factors: a significant
commitment to research and development, and an effective sales organization.

CONSISTENT PROFITS

“All the sales growth in the world won’t produce the right type of investment vehicle if, over the years, profits do not grow correspondingly,” .Accordingly,
Fisher examined a company’s profit margins, its dedication to maintaining
and improving those margins and, finally, its cost analysis and
accounting controls.”

TO BE CONTINUED TOMORROW.......

“ENJOY TODAY ,WAIT FOR BEAUTIFUL TOMORROW ”
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SATBIR SINGH
PRESIDENT
JAB WE MET CA
REDEFINING PROFESSIONALISM......
“LEADERS ARE READERS, READERS ARE THE LEADERS”

CA FINAL EXAM QUESTION

CA FINAL EXAM QUESTION
BY MANIT KAUR (40TH RANK,MAY2008)
CO-ORDINATOR
STUDENT HELP DESK
MEMBER JAB WE MET CA
SUBJECT :CORPORATE LAWS AND SECRETARIAL PRACTICE
CHAPTER- DIRECTOR

MR X was appointed as managing director for life by the articles of association of a private company
Incorportated on 1st june 1970. The articles also empowered ‘X’ to appoint a successor.
‘X’ appointed ,by will, ‘G’ to succeed him after his death. Can ‘G’ succeed ‘X’ as managing director after the death of ‘X’.? CA (FINAL),NOV 1995

ANSWER : Steps involved to solve the above question :-
1) Mention Problem :-Can ‘G’ succeed ‘X’ after the death of ‘x’ ?
2) Mention Applicable Section: 312 of Companies Act 1956
3) Mention Case Law and Decision :-Oriental Metal Precessing Pvt Ltd. V B.K. Thakoor
4) Give Analysis : difference between Assignment V/S Appointment
5) Give Conclusion:- There is appointment not assignment. Therefore the appointment of ‘G’ is valid and it does not amount to an assignment of office by ‘X’.

CA INTER PASS-CONGRATULATION!!!

CONGRATULATION TO FUTURE CA'S
(CA INTER PASS OUT)
JAB WE MET CA TEAM EXTEND BEST WISHES TO CA INTER PASS OUT.

" LET US DREAM BIG ,AND MORE IMPORTANTLY ,DREAM DIFFERENT. REMEMBER THAT DREAMS ARE LIKE STARS, YOU MAY NEVER TOUCH THEM BUT IF YOU FOLLOW THEM THEY WILL LEAD YOU TO YOUR DESTINY. YOU CAN NEVER CROSS THE OCEAN UNLESS YOU HAVE THE COURAGE TO LOSE SIGHT OF THE SHORE ."
CA VED JAIN

PRESIDENT ,ICAI
NEW DELHI,JUNE 25,2008

ANURAG SHARMA (CA INTER PASS, CONGRATULATION !!! )
MEMBER JAB WE MET CA
AJAY KUMAR ANURAG SHARMA (CA INTER PASS, CONGRATULATION !!! )



MEMBER JAB WE MET CA

IF ANY OTHER PERSON HAS ASLO PASSED CA INTER PLEASE MAIL ME YOUR PASSPORT SIZE PHOTO AND YOUR NAME,IF YOU HAVE SECURED RANKS,OR PASSES ONE OF THE GROUP EVEN THEN,MAIL ME at casatbirgill@gmail.com

SATBIR
PRESIDENT
JAB WE MET CA
REDEFINING PROFESSIONALISM........

INCOME TAX-IMPORTANT CASES

IMPORTANT INCOME TAX CASES

VIVEK SAWHNEY,VICE PRESIDENT

JAB WE MET CA
Employer-employee relationship:
The nature and extent of control which is the basis requisite to establish employer- employee relationship would vary from business to business. The test which is uniformly applied in order to determine the relationship is the existence of a "right to control" in respect of the manner in which the work is to be done. (Dharangadhra Commercial Works v State of Saurashtra 1957 SCR 152)
House Rent Allowance(S.10(13A):

When commission is paid to a person based upon fixed percentage of turnover achieved by the employee it would amount to "Salary" for the purpose of Rule 2 (h) of part A of IV Schedule(Gestetner Duplicators vCIT 117 ITR 1 (SC)).

Deduction under S.80G:
By the very nature of calculation required to be made u/s 80G(4) it is necessary that all deduction under chapter VIA be first ascertained and deducted before granting deduction u/s 80G (Scindia Steam Navigation Co v CIT (1994) 75 Taxman 495(Bom))

Revised return
A belated return filed u/s 139(4) can not be revised u/s 139(5). ( Kumar J.C. Sinha v CIT (1996) 86 Taxman 122(SC)).
Return showing income below taxable limit: Is a valid return. (CIT v Ranchhoddas Karosands(1959(361ITR 869 (SC)).

Perquisite (S17):
One can not be said to allow a perquisite to an employee if the employee has no vested right to the same. (CIT v L.W. Russel(1964) 531 ITR 91 (SC)).

Reimbursement of expenses incurred by the employee has been intended to be roped in the definition of " Salary" by bringing it as part of " Profit in lieu of salary." (I.E . I Ltd. v CIT (!993) 204 ITR 386(Cal)

JWM TEAM MEMBERS

JAB WE MET CA TEAM BEGINING TO PERFECTION........

IMPORTANT SERVICE TAX CASES

SERVICE TAX CASE LAWS
SOURABH SONI
SECRETARY
JAB WE MET CA

Service Tax - 2008 - - HIGH COURT OF GAUHATI -

Applicability of Service Tax on the business of development and sale of immovable properties, i.e., real estates - whether the appellant has been working, as a "service provider", for those persons with whom the petitioner-company enters into agreements and constructs flats for the purpose of sale to those with whom such agreements are entered into - HC held that department is binding by the circular issued by board. HC further held that, the activity in question is not subject to service tax.
Service Tax - 2008 - - HIGH COURT OF ANDHRA PRADESH

Applicability of Service tax on Works Contract - Appellant sought to declare the circular no. 98/1/2008 St dated 4-1-2008 ultra virus the Finance Act, 1994. In the circular it is said that contracts executed prior to 1.6.2006 shall be taxable under the old respective categories. Appellant wants to pay tax on the works contract under the new provision 65(105)(zzzza) - HC has granted interim relief to the petitioner to pay service tax under new category subject to further orders.
Service Tax - 2008 - CESTAT, Delhi

Applicability of Service Tax on services provided by private companies relating to generation, supply, distribution etc. on behalf of state power board (state governments, i.e. Madhya Pradesh Electricity Board) to the consumers - Demand was raised to the tune of Rs. 67,28,53,038/-. CESTAT has found that prima fascia the service is taxable under the category of "Business Support Service" and ordered to deposit Rs. 5 crore and stay granted for the balance demand from pre-deposit

Self Credit Scheme under Excise

Self Credit Scheme under Excise
(BY MOHAN,EDITOR,JAB WE MET CA)
Self Credit Scheme is one of the privilege given to an establishment in the state of Jammu and Kashmir by giving benefits of Central Excise
Original notification 57/2002…….. Exempts the goods specified in the schedule cleared from a unit located in the state of Jammu & Kashmir, from so much of amount of excise livable thereon under excise act as equivalent to amount of duty paid by the manufacturer of goods other than the amount of duty paid by utilization of CENVAT credit under CER 2002.

The point to be noted here is its only the amount of Excise which is exempted , the Assesee is required to pay the amount of CESS out of PLA, in other words we can say it can not be used for the payment of CESS.

Manufacturer has two Options
Either take refund of Duty paid on Cash or Take Credit of That Amount

Eg…..

Excise Payable on Output Rs100
Less:-
CENVAT Availed Rs 40

Excise Paid In Cash Rs 60


Now either he can take refund of this amount or…….

Next Month Excise Payable RS 200
Less;-
CENVAT Availed Rs 80
Less:-Self Credit Rs 60

(the amount paid in cash of last Month)
Payment to be made in Cash RS 60

Next Month Self Credit Available Will be 120 (I.e 60+60) as the amount paid as self credit will also be treated as paid in cash.
Now……… Notification 57/2002 is amended by Notification 22/2008

The amount of Self Credit taken is reduced by inserting following words

Credit Available……………….is of … Duty payable on VALUE ADDITION undertaken in the manufacture of the said goods by said unit

Duty Payable on Value Addition

Total Duty Payable (Gross) * %age specified in notification

Credit Available is of Duty Payable on Value Addition
Or
Amount paid in Cash
Which ever is less

Article by:-
Mohan Chand

OFFICE BEARERS OF JWM CA

SATBIR SINGH, PRESIDENT (JAB WE MET CA)

SOURABH SONI , SECRETARY (JAB WE MET CA)

VICE PRESIDENT ,VIVEK SAWHNEY,(JAB WE MET CA)
MOHAN , EDITOR, WEEKLY E- NEWSLETTER (JAB WE MET CA)

MANOJ GARG (48 TH RANKHOLDER NOV 07),

CORDINATOR, CA STUDENTS HELP DESK (JAB WE MET CA)

Golden Quotes

Everyone needs to be loved...
Especially when they do not deserve it...

Warren Buffet -Golden Tips

CONITNUED FROM YESTARDAY......

TWO QUALITIES OF INVESTMENT

1) some degree of safety of principal
2) and a satisfactory rate of return INCLUDING price appreciation

BUY CERTANTIES

“Buffett’s preference to “buy certainties at a discount.”
“Certainties” are defined by the predictability of a company’s
economics. The more predicable a company’s economics, the more certainty
we might have about its valuation”

INVESTMENT V/S SPECULATION

“An investment operation is one which, upon thorough
analysis, promises safety of principal and a satisfactory return. Operations
not meeting these requirements are speculative.

IDENTIFY MARGIN OF SAFETY

“Margin of Safety exists when securities are selling—for
whatever reason—at less than their real value”. If, for example, an analyst reviewed the operating history of a company and discovered that, on average, for the past five years the company was able to earn annually five times its fixed charges, then that
company’s bonds possessed a margin of safety. If the spread between the price of a stock and the intrinsic value of a company was large enough, the margin-of-safety
concept could be used to select stocks. Definition of intrinsic value is “that value which is determined by the facts.” These facts included a company’s assets, its earnings and dividends, and any future definite prospects.

MOST IMPORTANT FACTOR

“Single most important factor in determining a company’s value was its future earnings power, a calculation that is bound to be imprecise. Simply stated, a company’s intrinsic value could be found by estimating the earnings of the company and multiplying
the earnings by an appropriate capitalization factor. The company’s stability of earnings, assets, dividend policy, and financial health influenced this capitalization factor, or multiplier.Intrinsic value is distinct from the market’s quotation price. Originally, intrinsic
value was thought to be the same as a company’s book value, or the sum
of its real assets minus obligations. It is not essential to determine a company’s exact intrinsic value; instead, investors should accept an approximate measure or range of value. Even an approximate value, compared against the selling price, would be sufficient to gauge margin of safety.”

TWO RULES OF INVESTMENT,

“ Two rules of investing, said by Graham are
1) The first rule is don’t lose.
2) The second rule is don’t forget rule number one.
This “don’t lose” philosophy steered Graham toward two approaches for selecting common stocks that, when applied, adhered to the margin of safety. The first approach
was buying a company for less than two-thirds of its net asset value, and the second was focusing on stocks with low price-to-earnings (P/E) ratios.”

TO BE CONTINUED TOMORROW.......

“ENJOY TODAY ,WAIT FOR BEAUTIFUL TOMORROW ”
what are weakness and strength you find while reading this article/section ?
please give your comment below (in comment label) as how can this article/section be improved further ? it will GIVE THE OPPORTUNITY TO MEMBERS OF “ jab we met CA “ BLOG TO IMPROVE THEMSELVES. WAITING FOR YOUR REPLY....

SATBIR SINGH
PRESIDENT
JAB WE MET CA
REDEFINING PROFESSIONALISM......
“LEADERS ARE READERS, READERS ARE THE LEADERS”