Mandatory Requirement of Gratuity Provision As Per AS 15/ Ind AS 19

All the companies are required to maintain their accounts and prepare financial statements as per Accounting Standards under the companies act, 2013. Among others, AS 15/ Ind AS 19 is also a mandatory standard over which the Auditor is required to comment on the adequacy of provisions (as per Actuarial Valuation method – PUCM) made under this standard for Benefits like Gratuity, Leave Encashment.

The above picture summarises the Applicability and provisions of Gratuity and Leave Actuarial Valuation as required under Accounting Standard 15 & Ind AS 19.

In companies where PF Act is applicable, Gratuity Act is automatically applicable. So ensure that Actuarial Valuation is conducted in ALL such Companies whether public or private, listed or unlisted. This Note explains the rationale for the same and the rules about this requirement.

This provision for long-term employee benefits is also helping secure timely and appropriate due payment of social security benefits paid to eligible employees.

Forfeiture of Gratuity:

The gratuity payable to an employee shall be wholly forfeited for the following reason mentioned:

  1. If the service of such employee has been terminated for his riotous or disorderly conduct or any other act of violence on his part; or
  2. If the service of such employee is terminated for any act which constitutes an offense involving moral turpitude provided that such offense is committed by him in the course of his employment. In order to forfeit the gratuity of an employee, there must be a termination order containing charges as established to the effect that the employee was guilty of the aforesaid misconducts. In one case, it has been held that in the absence of a termination order containing any of the above allegations, the gratuity of an employee cannot be forfeited.

Duty of employer to pay gratuity and mode for payment:

Section 4 of the Act mentions the obligation of an employer of an establishment to consider the case of each employee in the matter of payment of gratuity to him. The employer shall arrange to pay the amount of gratuity within 30 days from the date it becomes payable to the person to whom the gratuity is payable. If the amount of gratuity payable under the section is not paid by the employer within the period specified, from the date on which the gratuity becomes payable he will have to pay simple interest on it at the rate not exceeding the rate notified by the Central Government from time to time.

The mode for the payment of gratuity is prescribed under section 9 of the Payment of Gratuity Act, 1972. The said section contemplates that gratuity payable under the Act should be paid in cash, or if so desired by the payee, by demand draft or bank cheque to the eligible employee, nominee, or legal heir, as the case may be.

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PVR and INOX announce a blockbuster merger

PVR and INOX a blockbuster merger

PVR and INOX announce a blockbuster merger, to become a combined entity that will be headed by Ajay Bijli (owner and chairman of PVR).

PVR and INOX announce a blockbuster merger to tackle the threat of growing OTT Content. With the OTT onslaught of the theatre business, the aims of theatre owners have risen to an extent that they want to dominate the multiplex market, as the combined entity is assured to have a market share of 50% with a box office share of 42% for Hindi and English content.

But with a higher ambition comes higher scrutiny! This deal will be subject to regulatory and shareholder approval.

From a shareholder’s point of view –

Imp – In this stock deal, for every 10 shares of INOX, the shareholders will receive 3 shares of PVR. Not a bad deal!

Governance Structure –

The structure looks clean, governance wise, as Pavan Kumar Jain (chairman of INOX) will take the seat of a non-executive director with INOX promoters having a 16.66% stake in the combined entity, and Sanjeev Kumar (Joint MD at PVR) being the executive director with PVR promoters having 10.62%.

From a regulatory standpoint –

The combined entity is poised to become the largest film exhibition company in India. CCI is the first one to eye over such a merger, where the entity is set to make multiplex a two-player market.

Cinepolis, the third-largest multiplex chain in India, will become less than one-third of the merged company.

But, here’s a catch! This merger won’t require CCI’s #approval as it is below the threshold of Rs 1,000 cr. This number could have been much higher if there was no pandemic. But the point is maybe we would have never seen a merger if the situation would have been normal.

The market sentiment –

The shareholders have no reason to be upset as this synergy will ramp up the EBIDTA by Rs 150 cr (Rs 90 cr from ads & Rs 60 cr from convenience fee).

The multiplex business derives revenues from two main sources:
~Ad Revenue (INOX’s is at a 33% discount than PVR, per screen wise).
~Convenience Fee (INOX’s is 50% lower than PVR).

This deal can be weighed as if it’s a merger of Amazon Prime with Netflix! Hence, it will be very interesting to see if the regulators take into consideration the present case of bad revenues or keep in mind the real dominance of these top two players.

This deal can be weighed as if it’s a merger of Amazon Prime with Netflix –

Hence, it will be very interesting to see if the regulators take into consideration the present case of bad revenues or keep in mind the real dominance of these top two players.

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The wait is over – TCS Buyback Details.

TCS Buyback Details, Day 1 Update, Day 2 Update –

TCS Buyback

TCS Buyback

  • ⦁ Buyback Window Opens: 09 March.
  • ⦁ Buyback Window Closes: 23 March Settlement.
  • ⦁ Amount Credit Date: 01 April.
  • ⦁ Retail Entitlement Ratio: 6 Shares against 45 Shares (13.33%).
  • ⦁ Expected Retail Acceptance Ratio: 22 – 27%.

Day 1 Summary, Window to close on 23 March

  • ⦁ Retail Reservation: 60,00,000 Shares.
  • ⦁ Small Shareholders on Record Date: 21,10,824.
  • ⦁ Shares Tendered in Individual Category on Day 1 – 9,10,255.
  • ⦁ Shares Number of Bids Received on Day 1 – 22,496.

Day 2 Summary, Window closes on 23 March (Expected AR – 25%)

  • ⦁ Retail Reservation: 60,00,000.
  • ⦁ Shares Small Shareholders on Record Date: 21,10,826.
  • ⦁ Shares Tendered in Individual Category till Day 2 – 42,72,848.
  • ⦁ Shares Number of Bids Received till Day 2 – 1,15,424.

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TCS Buyback – Key Details for buyback

TCS BUY BACK – Key Details for BUY BACK –

TCS Buyback – Key Details

TCS Buyback – TCS has once again come up with a buyback with a spread of 22% from CMP.

  • ⦁ Offer Price: INR 4,500/share (Spread of 22% from CMP).
  • ⦁ Offer Size: 1.08% (4,00,00,000 Shares).
  • ⦁ Offer Size (Value): INR 180 billion.
  • ⦁ Date of Board Meeting: 12-Jan-22.
  • ⦁ Record Date: 23- Feb-22
  • ⦁ TCS has fixed February 23, 2022 (Wednesday), as the Record Date
  • ⦁ For Retail investors’ acceptance could be lower around 40%-50% vs 100% in previous buybacks
  • ⦁ The last 3 buybacks stock has given returns of 10-12% post-ex-date of buyback.

Further Update – Read Latest Post.

We at Akhil Amit And Associates, Best Chartered Accountant in Chinchwad, take care of all your taxation and financial needs. We are a click away – Contact Us.

Geopolitical Tensions Drag Market: Biggest Fall in 10 Months

Geopolitical Tensions Drag Market – Indian Equity Market: Biggest Fall in 10 Months.

Move as on 14/02/2022-

  • ⦁ Sensex Down by 3%.
  • ⦁ Nifty Down by 3%.
  • ⦁ Bank Nifty down by 4%.
  • ⦁ Midcap Index down by 4%.
  • ⦁ Market turns negative for 2022 with the Biggest Fall in 10 Months (Since Apr 2021).
  • ⦁ Broader Markets Confirm a correction, mid-cap down 14% & Nifty Bank 11% from life highs.
  • ⦁ Sensex and Nifty are down over 9% from record highs hit in Oct 2021.
  • ⦁ BSE Cos Erase Market Cap of Nearly 9 Lakh Crore today & Erased Market Cap Gained in Last Three Months.
  • ⦁ Market Breadth Firmly in favour of Declines, Advance Decline Ratio at 1:10

The textile industry is seeing a major shift in terms of growth –

The textile industry is seeing a major shift in terms of growth. It’s outperforming. Re-rating of the entire Indian textile industry in focus. Hold tight for big-time returns as robust export opportunities give strong and sustainable earnings visibility Textile company shares bucked the weak market trend and rallied on Thursday as improving exports of cotton and made-up apparel, along with attractive valuation and earnings growth visibility, made analysts bullish on the sector.

Shares of Super Fine Knitters, Super Spinning, and Filatex India rallied up to 10 percent on Thursday. Those of JCT, Surat Textile, Swasti Vinayaka, KPR Mill, Sumeet Industries, Bhandari Hosiery, Minaxi Textiles, and Bombay Rayon, gained between 4 percent and 5 percent, and Gokaldas Exports, Suryaamba Spin, and Vardhman Textiles also ended in the green.

In comparison, the S&P BSE Sensex fell over 1 percent, or 621 points, and closed the session in the 60,000-mark. Further, the US-China trade war and imposition of additional duties on Chinese T&A imports have forced US-based importers to scout other destinations such as India.

In December, the US signed into law legislation that bans imports from China Xinjiang region over concerns about forced labor. As Xinjiang makes up nearly 20 percent of the global cotton market, the supply re-adjustment on account of this ban has led to more demand for Indian cotton and cotton yarn, analysts at Spark Capital said while initiating coverage of the sector.

They highlighted that cotton and cotton yarn exports from India have surged at a 34 percent CAGR (between April and October) from FY19-21. The US market accounts for 15 percent of global T&A imports. Countries such as China, Bangladesh, Vietnam, and Cambodia have become reliant on India for their cotton requirements after the ban, and Indian cotton exports have skyrocketed in the past eight months. Separately, India has witnessed increased exports in the made-up segment. The demand in the segment has significantly increased because of lockdown-led home confinements and the pandemic-induced new standard operating procedures (SoPs) which has led to the underlying volume demand improving. India being the second-largest supplier of made-ups naturally benefitted on account of Chinese suppliers losing market share, Spark Capital pointed out.

The government’s stance on free trade agreements (FTAs) is a welcome policy change for the T&A players. The stocks in the sector are also ripe for a re-rating as robust export opportunities give strong and sustainable earnings visibility, say analysts at ICICI Securities. Revival in the hospitality sector, along with duty reimbursement by the government of India, and market share gain on China 1 theme will drive earnings trajectory. Spread between yarn and cotton prices continues to remain high and should enable yarn producers to report strong earnings for Q3FY22, said a note by JM Financial.

From an investment viewpoint, analysts suggest playing the theme by going long on Suryaamba Spin, Vardhman Textiles, Trident, Sutlej Textiles, Alok Industries, KPR Mill, Nitin Spinners, Welspun India, Indo Count, Himatsingka Seide, Gokaldas Exports. This should be seen as a buying opportunity. Whenever market gives a dip, focus on these stocks.

Indian Stock Market Performance in 2021 – Investment Planning, Retirement Planning, Estate Planning & Tax Planning

Investment Planning, Retirement Planning, Estate Planning & Tax Planning – Indian Stock Market Performance in 2021 – Throwback

Contact us for Investment Planning, Retirement Planning, Estate Planning & Tax Planning. We have designed a 22 steps model to suggest to you the best possible funds to invest. Also, we review your funds periodically to determine if any alteration is required. Contact Us.

  • ⦁ Performance of Indices in 2020.
  • ⦁ Top Stocks in Nifty 50 – Top Gainers & Losers in 2020.
  • ⦁ Top Gainer and Loser in Nifty Mid Cap and Small Cap.

GMPs as heard on Social Media –

⦁ Supriya Life 210 (274)

⦁ Data Patterns 290 (585)

⦁ MapMyIndia 780 (1,033)

⦁ HP Adhesives 60 (274)

⦁ Medplus Health 210 (796)

⦁ Metro Brands -30 (500)

Only for information & education purposes. The actual listing depends on demand and supply at pre-opening.