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The "deliberate concealment of costs" at the business went undetected for two years, leading to a "material" mis-statement of the unit's financial performance in 2006, 2007 and the current year.

When the fraud was revealed in June, Greencore's share price plunged almost 15 per cent, with chief executive Patrick Coveney describing the incident as "a real blow". Operating profits for 2006 were cut by €4 million, the 2007 outcome was cut by €8 million and the estimated impact for the year to September will reduce operating profits by €9 million.

The loss of the Greencore contract will cost PwC around €800,000. PwC received remuneration for this amount and a further €16,000 in non-audit fees from Greencore in the year to September 2007. The company received remuneration of €829,000 and €150,000 in audit-related fees in the previous year.

Greencore said yesterday it was satisfied that the fraud, which led to the sacking of three senior managers, was an "isolated incident". A review by KPMG of the group's financial and internal controls has not identified any other problems.

KPMG has examined 20 of its manufacturing sites, comprising 80 per cent of Greencore's sales, with the remaining sites due to be reviewed by mid-September.

Capital Gain - exemption under section 54F
Nipun Mehrotra Vs. Asst C.I.T. 29/03/2007
[2008] 297 ITR (AT) 110 Bangalore

Description :Appointment of field level chartered Accountants for implementation of Double Entry Accounting Systems of Accrual basis.

Last Date :05/09/2008

Address :Commissioner, Urban Administration & Development, R.D.A. Building, Bajrang Complex, Opp. Mantralaya, Raipur, Chhattisgarh.

Location: Sector- M 1, Manesar.

Site Size: Approx. 14 Acres

High rise Apartments along with Townhouses and Independent Floors.

Area:

Apartments:

1760 sq ft ( 3 Bedroom with Servant Room)

2125 sq ft (4 Bedroom with Servant Room)

Townhouses : 2960 sq ft & 3070 sq ft

Independent Floors : 2860 sq ft

The regulator, at a board meeting of its core research body Accounting Research Foundation (ARF) on Tuesday, decided to study the policy that governs joint ventures, and the regulatory safeguards to counter the ills of cartelisation. The research study has been initiated as part of the regulator's MoU with information technology giant Infosys.

"We encourage capacity-building measures for joint ventures. The idea of the study is to understand the causes and effects of cartels vis-à-vis joint ventures," ICAI president Ved Jain told ET. Maintaining that the study is solely a research initiative of the regulator, Mr Jain said suggestions evolving from the study will be forwarded to the government.

Cartelisation -- which in simple terms means coming together of competing entities to distort competition -- affects the consumer. While the government considers cartelisation a negative force in its efforts to contain the spiralling inflation, the country still lacks regulatory teeth to counter it. With market regulator MRTPC lacking teeth to rein in suspected cartel formations and the upcoming Competition Commission of India (CCI) yet to get its enforcement rights, the economy stands susceptible to such unethical business practices.

NOTIFICATION NO. 86/2008, DATED 13-8-2008

In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government, having regard to seventy-five per cent of the average rise in the Consumer Price Index for the Financial Year commencing from the 1st day of April, 2007 and ending on the 31st day of March, 2008 for the urban non-manual employees, hereby specifies the Cost Inflation Index for the Financial Year commencing from the 1st day of April, 2008 and ending on the 31st day of March, 2009 and for that purpose further makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes number S.O.709(E), dated the 20th August, 1998, namely:-

In the said notification, in the Table, after serial number 27 and the entries relating, thereto, the following serial number and entries shall be inserted, namely :--

A bench headed by Justice B. N. Agrawal while seeking reply from the Retailers Association of India, the Confederation of Real Estate Developers' Associations of India and the Multiplex Association of India on the transfer petition filed by the Centre also stayed proceedings before various high courts. The Centre through the Department of Revenue has sought transfer of petitions pending before the High Courts of Bombay, Madras, Kolkata, Punjab and Haryana and Kerala on the ground that there was a likelihood of conflicting decisions.

According to the petition, retailers, real estate developers and multiplex owners had filed writ petitions before various High Courts challenging the levy of service tax on leasing, letting, renting or any other similar arrangement in respect of immovable property for use in furtherance of business or commerce.

Speaking on the sidelines of an interactive session organised by Confederation of Indian Industry (CII) on `Alternatives to SME financing', Jayanta K Sinha, chief general manager of State Bank of India (SBI), pointed out that SBI was planning to foray into private equity funds which might not be focussed on SME exclusively but may focus on infrastructure and other sectors also.

However, he mentioned that the whole idea is under incubation and still at an embryonic stage. The SME business of the bank was one of the fastest growing segments and it recorded all-India business of around Rs 76329 crore as on March 31, 2008.

The segment recorded a robust growth of 30 percent compared to last year's performance which was around Rs 58674 crore, he added.

If the present momentum of growth is maintained SBI also expects to touch Rs 100,000 crore in another two years time, said Sinha.

What emerged is that several banks, both public and private sector have shifted their attention to SME business because of the sector's high potential reflected in its bouyant performance despite the current economic upheaval

Some of the SEZs , which have already attracted PE funds include DLF, which received $400 million from US hedge fund DE Shaw in DLF Assets Private Ltd, and an IT park near Greater Noida that got $420 million from UK fund Trikona.

Besides, Trinity Capital Plc, a Trikona arm, is planning to invest around $75 million for a 49.4 per cent stake in Luxor Cyber City. The SEZ, to be developed at a cost of $400 million by Luxor and Trinity, spans over 63 acres and will cater to IT/ITeS companies.

Says Ravindra Sannareddy, CMD, Sri City, PE investors are drawn towards multi-product SEZs as they offer various investment opportunities.

The recently-launched Sri City, has also attracted PE investors who will hold 60 per cent in the project. The SEZ is being developed by Chennai-based Sri City Private Limited in Tada, Andhra Pradesh, with an initial investment of Rs 1,000 crore. By 2012-13, the total investment in the project would be Rs 17,500 crore, he informs.

"As business confidence continues to remain strong...the private corporate investment in 2008-09 is likely to increase, although it may grow at a slower pace", said an RBI analysis on the corporate investment growth in 2007-08 and prospects for 2008-09.

The turnaround in corporate investment, RBI said, "Which began in 2002-03 and maintained healthy thereafter, is expected to be sustained in 2008-09".

Pointing out that downside risks arising from high international oil prices, hardening interest rates etc will be there, the analysis said, "the domestic demand is still resilient and supporting overall economic growth, driving corporates to continue the ir expansion plans at the back of rising capacity constraints."

The capital investment intentions for 2008-09 based on institutional assistance up to the end of March 2008, aggregates to Rs 1.48 lakh crore as against Rs 1.25 lakh crore in the previous year.

The proposed investment taking into account financial assistance from other sources such as ECBs and public issues, would work out to be Rs 1.73 lakh crore during the current fiscal, the analysis said.

In addition to this, the RBI added, the capital expenditure envisaged by the fresh projects in the private corporate sector has been above Rs 1 lakh crore in the past two years and "the incentive to invest are likely to remain strong in the current fisca l."

By this November, ICAI will inaugurate the country's first museum that traces the evolution of chartered accountancy in India.

Historic press clippings, photographs, rare documents and video clippings are some of things through which the institute hopes to illustrate the past.

"The initial idea was to start a museum dedicated just to ICAI, which is celebrating its diamond jubilee this year It was while working on this idea that we decided to look at the bigger picture. This museum will trace the journey of accountancy in the country right from the rudimentary stages. That is when Chanakya spoke of economy and made references to accounting," said ICAI president Ved Jain.

"A lot of the material from 1913 onwards will be easily available from the institute as well as people who have been associated with ICAI. We have, for example, managed to procure a photograph of the East India Company's first balance sheet that dates all the way back to the early 1700s," informed Vijay Kapur, director, ICAI.

The apex accounting body is also going to set up its 21st chapter in Singapore to provide forum for the members of the institute working there to interact and keep themselves abreast with the developments in the field of accounting.

That apart, ICAI has formulated a 75hour certificate course on International Financial Reporting Standards, which will provide in-depth education and training to professionals. The course will be launched in September

Constructing a portfolio of mutual funds is not an easy exercise. It is important to diversify the portfolio so that a retail investor has exposure to the broad market. Yet, the portfolio should be small for ease of monitoring.

This article is about such a tightly-constructed portfolio of mutual funds. The suggested portfolio may be optimal for retail investors whose investment is less than Rs 10 lakh or whose investment through Systematic Investment Plan (SIP) is less than Rs 50,000 per month. The core portfolio exposure will be in large-cap index funds. The satellite portfolio will be in mid-cap active funds, fixed maturity bond funds and emerging market funds.

Core Portfolio
It is always tempting to take exposure to active funds to constitute the core portfolio. After all, most active funds beat the large-cap index when the market trends up. The problem, however, is that active funds do not consistently outperform markets (generate alpha returns).

Portfolio managers generate alpha returns either through security selection and/or market timing. Generating alpha through security selection is difficult within the large-cap space due to the deluge of public information and the small universe of investible stocks.

But that is not the only reason for investors to consider taking exposure to index funds. Take active (diversified) funds that follow multi-style investing. Generating alpha in such cases requires good tactical asset allocation skills such as shifting between large-caps and mid-caps. It is moot if funds can beat the broad market index such as S&P CNX 500. Moreover, buying a multi-style active fund as part of the core portfolio and a sector fund or single-style fund for the satellite portfolio may result in over-exposure to a market sector. Why?

Here are eight financial and three non-financial parameters that you should look into when you invest in a company.

Return on Capital employed: This refers to the amount earned by the company on the total funds employed in business. The capital means both equity capital and loan capital. Equity capital would, of course, include reserves as well. Return would mean profit after tax plus interest on long-term funds, adjusted for tax. This measures the productivity of money and is the closest measure of finding out the underlying economics of the business. Higher the ROCE, better for the investor. At minimum, ROCE should be equal to the Weighted Average Cost of Capital (WACC) of the company. The WACC is the rate of return that equity shareholders and debt holders put together want to earn.

Return on equity: The return on equity measures the total return earned on the shareholders fund invested. It is the ratio of profit after tax to shareholders funds. Over the long term, the value of a company would move in lock step with the return on equity. Higher the ROE, better for the investors. Generally, ROE is higher than ROCE since the cost of debt is generally lower than ROCE, thus resulting in equity holders enjoying a higher share in the total returns pie.

Historical sales growth: This indicates how the company has been able to grow its business over the long term. Compared with the industry growth rate, this would give an indication of whether the company is increasing its market share or not. Also, it would help in finding out whether the business is in the growth or maturity phase and in understanding the seasonality of the business and, interpreting growth of the recent past, accordingly.

Free cash flows to shareholder: Business is not about booking accounting profit; hence cash surplus is more important than accounting surplus. Free cash flow is found out by deducting the upcoming maintenance capital expenditure from the cash from operations.

A business might be earning lots of profits, but if a large portion of it are to be spent in maintaining the fixed assets, then the "real returns" to shareholders will be less. Thus, higher the free cash flows, better for the investor.