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Holding company 30/10/2008 Accounts and Preparation of consolidated balance sheet

B.Com., M.com ICWA CA CS Students

By Prof. L.Augustin Amaladas M.Com.,AICWA., PGDFM., B.Ed.

St. Josephs College of Commerce, Bangalore Presents global students community
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Dedicated to
All my beloved sisters Prof.Dr.L.Josephine MCA.,M.Phil.,Phd., L.Xavier Arokia Selvi M.Sc.,M.Phil.,B.Ed., L.Arul Georginal B.E(CS)(WIPRO Ltd)

HOLDING COMPANIES IMPORTANT ISSUES TO SOLVE PROBLEMS

1.ANALYS OF CAPTAL PROFIT2.ANALYSYS OF REVENUE PROFIT 3.CALCULATION OF CAPITAL RESERVE/COST OF CONTROL(GOODWILL) 4.CALCULATION OF MINORITY INTEREST 5.Consolidated Balance sheet
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1.ANALYSYS OF CAPTAL PROFIT

MEANING:
PROFIT/RESERVE OF ANY TYPE IN THE SUBSIDIARY COMPANY BEFORE THE DATE OF ACQUISITION

CAPTAL PROFIT EXAMPLE -I

BALANCE SHEET OF SUBSIDIARY LIMITED AS ON 31-03-2007 LIABILITIES GENERAL RESERVE (1-4-2006) 5,00,000 PROFIT AND LOSS 2,00,000 THE BUSINESS WAS ACQUIRED ON O1-O1-2007
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ANSWER EX.1
RESERVE BEFORE ACQUISITION5,00,000 PROFIT UP TO O1-O1-2007 (2,OO,OOO*9/12) 1,50,000 TOTAL CAPITAL PROFIT 6,50,000 HOW MUCH IS THE REVENUE PROFIT?
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REVENUE PROFIT?
2,OO,OOO-1,5O,OOO= 50,000

Exercise-2:
SUPPOSING THE BUSINESS WAS ACQUIRED ON 30-09-2006 HOW MUCH IS CAPITAL PROFIT? /REVENUE PROFIT?

ANSWER-2
CAPITAL PROFIT: RESERVE(PRE-ACQISITION) 5,OO,OOO SHARE OF P/L A/C (2,OO,OOO*6/12) 1,OO,OOO TOTAL 6,OO,OOO REVENUE PROFIT: (2,OO,OOO *6/12) 1,OO,OOO ENTIRE RESERVE PROFIT EARNED BY THE SUBSIDIARY WAS PRE-ACQUISITION PROFIT
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CALCULATION OF CAPITAL RESERVE

AMOUNT INVESTED BY THE HOLDING COMPANY IN SUBSIDIARY COMPANY(REFLECTED AS INVESTMENT IN THE ASSET SIDE) LESS:1.AMOUNT RECEIVED OUT OF CAPITAL PROFIT IN THE FORM OF DIVIDEND 2.PAID UP VALUE OF THE SHARE(NOMINAL VALUE) 3. SHARE OF REMAINING CAPITAL PROFIT OF HOLDING COMPANY

Cost of control/goodwill

The holding company purchased shares of subsidiary more than the real worth of the subsidiary
What is the meaning of real worth? If all assets are sold and third party liabilities are paid what remain to share holders is known as real worth Real worth= Assets(realisable value) third party liabilities Or Equity shares + reserves and surplus(both capital profit and revenue reserve) 10

How do you calculate goodwill on the shares acquired by Holding company?

The excess amount paid over real worth to acquire subsidiary companys share is known as goodwill.

Example-3
4000 shares are purchased for Rs. 50,000. The nominal value is Rs.10. The excess amount of Rs.10,000 is goodwill. Goodwill is shown in the consolidated balance sheet. Assumed no profits in the balance sheet
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If goodwill appears already in the holding and subsidiary company?

Balance sheet as on 31st March 2008
H Ltd S ltd H Ltd S Ltd

Equity shares(Rs.100 each) 12% preference shares(Rs.100 each) General reserve Profit and loss a/c (1-4-2007) Profits during the year

5,00,000

2,00,000

Nil 1,30,000

1,00,000 60,000(CP)

Goodwill Shares in S Ltd (2000 equity shares and 500 preference shares) Preliminary expenses

20,000 3,50,000

10,000

---------

10,000(CL)

60,000
80,000

20,000(CP)
70,000(CP)

Date of acquisition was 31-3-2008

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1.Total Capital profits

General reserve Profit on 1-4-2007 Profit during the year 2007-08 Total Less:-Preliminary expenses Less: Preference share holders (cumulative preference shares) Profit to equity share holders 60,000 20,000 70,000 150,000 (10,000) (12,000) 1,28,000
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Have You observed that all profits are capital profits. Why? It is not due to real capital profits. But because profits are earned by subsidiary before the date of acquisition. Note:1. General reserve before the date of acquisition, Revenue profit before the date of acquisition and all capital profits after the date of acquisition less all wasteful preliminary expenses(Capital loss) are capital profit. Note:2: Any benefits(money,dividend, bonus shares) derived by holding company out of capital profits reduce their cost of control(Investments)
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Capital reserve

If the subsidiary company shares are purchased less than the subsidiarys worth,(Purchased at cheaper rate) the benefits earned at the time of acquisition is known as capital reserve. The capital reserve is a capital profit

Example 4: If nominal value of shares of subsidiary is Rs.10 and 4000 shares are acquired for Rs. 35,000, then there is a gain of 5000 to holding company is known as capital reserve
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What is capital profit? What is the reason of differentiating between Capital profits and revenue profits? Capital profits: 1. Profits of subsidiary company earned by operation or non-operation prior to holding companys acquisition. 2. Capital profits earned after acquisition

Capital profits are not available for declaration of dividend. After the acquisition date, profits earned by subsidiary company by a normal business operations is a revenue profit. Such profits are available for declaration of dividend.
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Exercise-5

Balance sheet of subsidiary as on 31st March 2008

Equity shares 4,00,000 (Rs.100 per share) General reserve 50,000 Profit and loss a/c 30,000 (on 31-3-2007) Profit and loss a/c 80,000 (For the year 2007-2008)

3,000 shares were acquired by holding company in subsidiary company on 1st January 2008 for Rs.4,50,000.

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Date of acquisition is 1st January 2008 Reserves and Profits

Capital Profit

Before or After acquisition General reserve (Before ) P/L on 31-3-2007 (Before) P/L for 2007-08 (9 months before And 3 months after)

Revenue Profit
Nil Nil 3 months profit 3/12 x 80,000 =20,000

50,000 30,000

9 months profit 9/12 x 80,000 =60,000

Rs.1,40,000

Total

Rs.20,000
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Minority/Majority Minority Majority

1000x 100 1,00,000

x 1,40,000 =Rs.35,000

Shares Capital 4,00,000

Capital profits Rs.1,40,000

3,000x 100 3,00,000

x1,40,000 =Rs.1,05,000 Rs.4,05,000 x 20,000 =Rs.15000(P/L)
Rs.4,05,000-goodwill purpose Rs.15,000-profit and loss a/c In the consolidated 19 B/S

x 20,000 =Rs.5000 Rs.1,40,000

Revenue profits Rs.20,000

Total Rs.5,60,000

Good will/Capital reserve

It is calculated from the point of view of Holding company What is the value of total investment made by Holding company? It is Rs.4,50,000 What was it worth on the date of acquisition? It is Rs.4,05,000. Have they invested more than the real worth? Yes. It means they had paid extra for the goodwill of the subsidiary company.
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Suppose subsidiary company declares dividend after the acquisition out of revenue profits which were earned before the date acquisition? Holding company had invested in subsidiary.If dividend is declared out of pre-acquisition profits of subsidiary, the holding company gets parts of its investments back.Therefore such dividend received to be reduced from investment of the holding company in subsidiary. Does it affect goodwill/capital reserve of the company?

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Yes.It affects goodwill.It decrease the goodwill. Exercise-6

Suppose subsidiary declares dividend out of general reserve (Capital profit because it was earned before acquisition) Rs.40,000 to all share holders, the holding companys share of general reserve is of 40,000=30,000. Since 30,000 is received by holding out of their investments The investment value decreased to Rs.4,20,000(4,50,000-30,000). Therefore goodwill is Rs.15,000.

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If dividend declared by subsidiary out of post acquisition profit?

Post acquisition profit is a revenue profit.Such dividend received by holding from subsidiary does not reduce the value of investment of the holding company. It is included with the profits of holding company.The journal entry in the books of holding company is: Cash a/c debit Profit and loss a/c credit

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Elimination of common transactions

1.Bills drawn by holding company on subsidiary company or vice-versa:
Holding company Subsidiary company

Bills receivable a/c debit To subsidiary company a/c Balance sheet Asset side Bills receivable

Holding company a/c debit To Bills payable a/c

Balance sheet Liability side Bills payable

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When we prepare a consolidated Balance sheet?

Treat the holding and the subsidiary company as one unit.Therefore eliminate both bills receivables and payable to the extent of holding companys share of Bills receivable from consolidated balance sheet. The same treatment is applicable for debtors and creditors on goods sold by holding to subsidiary or vice versa. Suppose a girl friend given loan to her Boy friend before marriage and they get married; who has to pay to whom? No one has to pay to no one( after their marriage) provided???????????!!!!!!!!!!!
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Provided??????!!!!!
They get married each other.

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How do you deal in the consolidated Balance sheet? Exercise-8 1. Loan given by holding company to subsidiary? 2. Debentures issued by holding to subsidiary? 3. Loan given by subsidiary to holding?
Only one answer: In one company balance sheet they are shown as asset and an another company they are shown as liability. If combined(Consolidated) both asset and liability are eliminated.Only outsiders liabilities are shown in the consolidated balance sheet

See the exercise in the next page

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Exercise-9 Balance Sheet

H ltd Rs. 00,000 Share Capital Rs.10 each 9% debentures Creditors Bills payable 20.00 Nil 4.0 0.2 S Ltd Rs. 00,000 10.00 2.0 2.0 0.1 Shares in S ltd(80,000 shares) 9% debentures in S ltd Debtors Bills receivables H Ltd Rs 00,000 8.8 0.8 1.8 0.1 2.7 0.15 S Ltd Rs. 00,000 Nil Nil

Bills receivable of S ltd. include bills for Rs.8000 accepted by H Ltd and creditors of S Ltd include Rs.20,000 due to H Ltd. How do they appear in the combined(consolidated) balance Sheet?
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Balance Sheet(observe other than share capital)

H ltd Rs. 00,000 9% debentures Creditors Bills payable Nil 4.0 0.2 S Ltd Rs. 00,000 2.0 2.0 0.1 9% debentures in S ltd Debtors Bills receivables H Ltd Rs 00,000 0.8 1.8 0.1 S Ltd Rs. 00,000 Nil 2.7 0.15

Bills receivable of S ltd. include bills for Rs.8000 accepted by H Ltd and creditors of S Ltd include Rs.20,000 due to H Ltd. How do they appear in the combined(consolidated) balance Sheet?
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1. Bills accepted by H Ltd is B/P in H ltd Balance sheet. Remove Rs.8000 from B/P and B/R

2. Creditors of S Ltd. of Rs. 20,000 is equal to Rs.Debtors of H Ltd. Both to be eliminated to the extent of Rs. 20,000 3. Debentures of Rs.80,000 of S ltd is an investment for H Ltd. Both to be eliminated in the consolidated Balance sheet.The Remaining debentures belong to outsiders to be shown in the Consolidated Balance sheet.
See the consolidated Balance sheet in the next slide
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Consolidated Balance sheet

00,000 Debentures 1.2 Creditors 5.8 Bills Payable 0.22

9% Debentures Debtors Bills receivables

00,000 Nil 4.3 0.17

How do you show share capital of both the companies in The consolidated Balance sheet? See in the next slide
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Consolidated Balance sheet

Holding company Rs.20,00,000

Subsidiary company Rs.10,00,000

Consolidated Balance sheet

20,000 shares Minority

80,000 shares Majority (Holding company)

Paid up value-8,80,000 Real value- 8,00,000 Good will80,000 (consolidated 32 B/S)

Nominal value 2,00,000(Appear in the consolidated Balance sheet)

Explanations

1. Share capital of holding company appears in the consolidated Balance sheet 2. Minority interest appears as liability in the consolidated B/S 3. Investments of Holding company in subsidiary disappears in the consolidated Balance Sheet

4.Goodwill estimated appears along with other existing goodwill

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How do you deal interest outstanding and accrued interest from holding to subsidiary or vice-versa?

Both should be eliminated on either side of the consolidated Balance sheet as they Belong to the same home
Home is the place for loving and living. No creditor and debtor relationship
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How do you deal contingent liability?

Accepted and discounted with in the Group (H to S or vice-versa)

Accepted by outsiders

Will become actual liability Therefore eliminated either Side of consolidated B/S

Appear as contingent liability In the consolidated B/S

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If goods are sold to subsidiary to holding or vice-versa?

Concept:- Profits can be realised only when goods are sold outside the boundary of subsidiary and holding company. 1. If goods supplied are completely sold out, profit would Have been realised therefore, no problem arises at the time of consolidation except if such goods sold are on credit. If the goods were sold on credit, (If, not yet paid on the B/S date) might have been included with creditors and debtors in subsidiary and holding company respectively.If so, eliminate both such debtors and creditors in the consolidated Balance sheet. 36

Exercise-10 On February 2008 H. Ltd sold goods to S Ltd. goods costing Rs.8000 for Rs.10,000.25% of such goods not yet sold by subsidiary (S.Ltd.).Creditors of S.ltd include Rs.4,000 Due to H Ltd on account of these goods. Solution: 75% of the goods are sold out side the boundary. So, profits are realised on those goods.But on 25% of the goods not yet sold are not yet realised. The unrealised profit is Rs.500(2000 x25%). 1.We remove from stock Rs. 500 2.We remove profit Rs.500 3. Eliminate from debtors and creditors Rs.4000.
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If goods supplied by subsidiary to holding or vice versa Are not fully sold on the date of balance sheet?

1.Unrealised profit on supplied goods with in the group to be eliminated from closing stock. 2.Eliminate the profit on such unsold stock from the supplier company(either H or S) to the extent of holding companys share.

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Treatment of dividend

Dividend already paid out of Subsidiary Ltd. to Holding

Dividend Proposed(not paid) By subsidiary Ltd.

Capital Profit

Dividend out of Revenue Profits

Holding company

Subsidiary company

REDUCE FROM INVESTMENT IN SUBSIDIARY

Credited to P/L A/c And appears In the consolidated

Added to Minority Interest

Balance sheet Do not disclose separately the proposed Dividend in the consolidated 39 B/S??

Do not disclose separately the proposed Dividend in the consolidated B/S Why?
It is because, the proposed dividend of subsidiary is shown with the minority interest(Minoritys share )and also in the P/L A/c of Holding (Holding companys share).

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Exercise-11

Balance Sheet as on 31st March 2008

A Ltd Rs. 00,000 B Ltd Rs. 00,000 A Ltd Rs 00,000 B Ltd Rs. 00,000

Share Capital Rs.10 each General reserves Profit and loss a/c Trade creditors

25.00
3.6 2.4 3.5 34.5

6.00
1.2 1.8 1.0 10.00

Land and building Machinery Furniture 40,000 shares in B Ltd. Stock on hand Debtors Bank Balance

6.4 12.6 1.4 5.0 4.1 3.8 1.2 34.5

2.0 3.4 0.6 ---2.5 1.0 0.5 10.00

A Ltd. acquired 40,000 shares of B Ltd . On the date of acquisition, the B Ltd. had profits and reserves undistributed Rs. 1,00,000. Out of preAcquisition profits Rs.60,000 was distributed as dividend. Prepare :-1.Minority Interest 2.Cost of control/goodwill 3.Consolidated Balance sheet as on 31st March 2008
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Note:- Do not bother about Holding Companys Balance sheet While preparing Minority Interest or cost of Control Step-1 A Ltd in B Ltd: Minority shares in B Ltd. 40:20=2:1 Step-2: Capital Profit of B Ltd= 1,00,000(Pre- acquisition profit) Holding company As share Rs.66,667 Minority share holders Rs.33,000

Less:Dividend received out of Capital profits : 60,000 x 2/3=40,000 Rs60,000 x 1/3= Rs.20,000 Remaining capital profits Rs.66,667-Rs.40,000=Rs.26,667 Rs.33,000-20,000=13,333
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Step-2:Revenue profit(Post acquisition profit) =[Rs.1,20,000-(1,00,000-60,000)](Remaining Reserve) +1,80,000(P/L A/c)=Rs.2,60,000 The reserve of Rs.1,20,000 remains in the Balance sheet is after paying dividend of Rs.60,000 (ie.,out of the capital Profits of Rs.1,00,000.) to the share holders.

Rs.2,60,000

Majority(A Ltd) Rs.2,60,000 x2/3=Rs.1,73,333

Minority Rs.2,60,000 x1/3=Rs.86,667

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Note:- Amount of dividend received by minority shareholders has not been added as they have already received the dividend in cash. Step-3:- Minority Interest 1.Share capital 20,000 x 10 = Rs.2,00,000

Share of remaining Capital Profit

Rs.13,333

Share of revenue profit

Rs.86,667

Total

Rs.3,00,000 44

Step-4

Calculation of goodwill or cost of control (for Holding company point of view)

Amount paid to acquire shares Of B Ltd.

Less: Capital profits received In the form of dividend Less: Face value of share

Rs.5,00,000 Rs.40,000 40,000 x 10=Rs.4,00,000 Rs.26,667 Rs.33,333

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Less:-Holding companys share of Remaining capital profits

Good will

Consolidated Balance sheet(Exercise-11)

Liabilities Rs.00,000 Assets Rs.00,000

Share capital 2,50,000 shares of 10 each General reserve Profit and loss a/c(Note-3) (2,40,000 40,000 + 1,73,333) Trade creditors (3,50,000 + 1,00,000) Minority Interest

25.00 3.60 3.73 4.50

3.00

Total

39.83

Goodwill Land and Building (6,40,000 + 2,00,000) Machinery (12,60,000 + 3,40,0000) Furniture (1,40,000 + 60,000) Stock in trade (4,10,000 + 2,50,000) Debtors (3,80,000 + 1,00,000) Bank (1,20,000 + 50,000) Total

0.3333 8.40 16.00 2.00

6.6
4.8 1.7 39.83

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Important observations in consolidated Balance sheet

1.All assets of Holding and subsidiary are added and disclose in the consolidated Balance sheet. 2. All third party liabilities of both the companies are added and disclosed(displayed) 3.From the profits of holding company and holding companys share of subsidiarys revenue profits subtract capital profits received in the form form of dividend as such dividend taken to calculate capital reserve(reduced from investments).
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How do you deal Bonus Shares issued by subsidiary?

Issued out of Pre-acquisition profits

Issued out of Post-acquisition profits

No effect on Consolidated Balance sheet

Shares of investments held by Holding company in subsidiary Increases due to which cost of Control reduced(See exercise)

Note:- Anything is received from subsidiary either in the form of dividend or Bonus Shares out of Pre-acquisition profits or amounts of pre-acquisition profits reduces the investment made by holding in subsidiary.
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Exercise-12

Balance Sheet as on 31st March 2008

A Ltd Rs. 00,000 B Ltd Rs. 00,000 A Ltd Rs 00,000 B Ltd Rs. 00,000

Share Capital Rs.100 each General reserves Profit and loss a/c Trade creditors

90.00
20.00 15.00 20.00 145.00

25.00
5.00 10.00 5.00 45.00

Fixed assets Current Assets 20,000 shares in S Ltd.

65.00 50.00 30.00 145.00

20.00 25.00 -----45.00

A Ltd. acquired 20,000 shares of B Ltd on 31st March 2007. On the date of acquisition, the B Ltd. had reserves undistributed Rs. 5,00,000 and Rs.2,00,000 in the Profit and Loss Account when A Ltd. acquired B Ltd. B Ltd.issued bonus shares @1 for every 5 shares Held out of post-acquisition profits. Calculate: 1. Cost of control before and after issue of bonus shares 2. prepare consolidated Balance sheet
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Cost of control before issue of Bonus shares

Step-1
Cost of 20,000 shares Less: Face value 20,00,000 share of capital profits 1. Reserves 5,00,000 x 4/5=4,00,000 2. Profit 2,00,000 x 4/5=1,60,000 5,60,000 Cost of control 30,00,000

25,60,000 4,40,000

Cost of control after issue of Bonus shares Number of shares after bonus issue are (20,000 + 1/5 x 20,000) =24,000 Cost of acquiring 20,000 shares 30,00,000 Less:-Paid up value including bonus shares (24,000 x 10 ) 24,00,000 Less:Share of Capital profits ( 7,00,000 x 4/5) 5,60,000 Cost of control 40,000 50

Step-2

Why there is a difference in the cost of control before and after issue of Bonus shares?
The Bonus shares are issued out of revenue profits. How does company issue bonus shares? The bonus shares are considered as capitalisation of profits.What do you mean by capitalisation of profits? It means Revenue profits are converted into capital profits before the issue of bonus shares. Once profit is capitalised it amounts to return of investment made by holding company in subsidiary if bonus shares issued. Therefore, it reduces cost of control.
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Step-3
Revenue Profits

Out of Rs.10,00,000 profits Rs2,00,000 were earned pre-acquisition period.The revenue profit is (10,00,000-2,00,000) Rs.8,00,000. Bonus shares are issued out of revenue profit. It reduces revenue profit. Remaining profit is[Rs.8,00,000-(25,00,000 x1/5)] Rs.3,00,000.
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Step-4

Share of remaining revenue profit

Holding company Rs.3,00,000 x 4/5 =Rs.2,40,000

Minority Interest Rs.3,00,000 x 1/5 =Rs.60,000

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Step-5

Minority Interest
What ever belong to them whether capital profit or revenue profit or bonus shares. No of shares after bonus shares [5000 + (5000 x 1/5)] 6000 shares Face value (6000 x 10 ) Rs.6,00,000 Share in capital profits Rs.1,40,000 (Rs.7,00,000 x 1/5) Share of remaining revenue profit Rs.60,000 Minority interest Rs.8,00,000
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Step-6 Consolidated Balance sheet as on 31st March 2008

Rs. Share capital (90,000 shares Rs.100 each) Reserves Profit and loss a/c (H Ltd. 20,00,000 share in subsidiary Rs.2,40,000) Creditors (H Ltd. Rs.15,00,000 S Ltd. Rs. 5,00,000) Minority Interest Total 90,00,000(H) Fixed assets Current assets Cost of control(goodwill) Rs. 85,00,000(H+S) 75,00,000(H+S) 40,000(Balance)

20,00,000(H) 22,40,000(H+S)

20,00,000(H+S)

8,00,000(S) 1,60,40,000 1,60,40,000

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Exercise-13

How do you deal the following?

1.Unclaimed dividend given in the Liability side of subsidiary company. 2.Preliminary expenses given in the asset side of subsidiary company Answer: 1.Unclaimed dividend is assumed to belong to minority Share holders.Add to minority Interest.
2.Preliminary expenses is a wasteful expenses. It can not be Realised in cash. The net worth should be brought down.Capital profit Of pre-acquisition period should be brought down to the extent of preliminary expenses.
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Exercise-14

How do you deal the following?

Preference shares given in the subsidiary company balance sheet Answer: a)Share of Minority share holders to be added to minority interest. b)Share of Holding company to be added with equity shares held by majority before calculating goodwill/capital reserve.

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Exercise-15

How do you deal if debentures of Subsidiary

company acquired by Holding company?

We know that debentures are third party liabilities.If same debentures are acquired by holding company from subsidiary company it is known as intra company debts. Remove from either side of the Balance sheet. 1.Balance sheet before S Ltd H Ltd. Debentures Rs.40,000 Investments in debenture 10,000

2.Consolidated Balance sheet

Debentures Rs.30,000

Investment in subsidiary Nil 58

Exercise-16

Debenture interest accrued from subsidiary to holding-How do you deal?

It is also inter company debts. Remove from both sides of Balance sheet to the extent belong to holding company. How ever outsiders interest due will appear in the liability side of consolidated Balance sheet

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Exercise-17

What is the Journal entry in the books of Holding company if dividend is received from subsidiary?
Answer:-A. If dividend declared by subsidiary out of pre-acquisition profits, the Journal entries are 1.Bank a/c debit To Dividend received 2. Dividend received A/c debit To Investment in shares of subsidiary A/c Note: Any dividend received from pre-acquisition profits are to be reduced from investments in subsidiary account in order to calculate goodwill/capital reserve.
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B.If Dividend received on investments made by holding in subsidiary out of post acquisition profits, Journal entry is Dividend received A/c debit To Profit and Loss A/c Note:- Such dividend is considered as income from investment. It is added to holding companys profit and loss a/c.

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Acquisition of shares on different date

If acquired on different dates, AS-21 consolidated Balance sheet only from the date on which holding and subsidiary relationship comes into existence.

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How do you deal dividend tax?

Dividend paid by Indian company has to pay 15% dividend tax +3% educational cess.It is equal to 15.45%. The dividend paid and tax reduce profit and loss account. Even preference dividend reduces profit.

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Thank U all professors and teachers

Knowledge is meant to share, and not to store Life is to give, and not to receive

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