About VAT

Some useful links for understanding VAT and importing services, specifically for a services company.

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageImport_ShowContent&id=HMCE_PROD1_029955&propertyType=document

http://www.hmrc.gov.uk/vat/managing/international/exports/services.htm#2

http://www.hmrc.gov.uk/vat/managing/international/imports/importing.htm#3

http://www.hmrc.gov.uk/vat/forms-rates/rates/rates-thresholds.htm

Bank Mergers in Europe?

I agree that tighter regulations and worsening economic climate may lead to bank mergers in Europe: http://on.ft.com/rS5PEO

Other news clips of interest for this week:

WPP acquires Glover Park Group

BHP puts diamonds division up for sale

Free Accounting Software

Following free accounting software are available for small businesses:
http://www.icebergo.com/
http://www.tassoftware.co.uk/products/tas_accounts_software/basics.html
https://www.bionicbooks.com/
http://www.sage.co.uk/softwaresolutions
http://www.adminsoftware.biz/software.html
http://www.quickfile.co.uk/
http://www.vtsoftware.co.uk/cashbook/index.htm

If not Capitalism, then what?

Going through the recent articles in the FT by Ken Costa and Martin Wolf got me thinking: if not Capitalism, then what? In fact, it has been quite some time that I have been reading anti-capitalist articles all over the media and it makes me wonder: how many protestors actually understand what they are protesting against?

If they are protesting against the current system, we are in a continent that has a strong welfare system, difficult employment rules, strong unions, high taxes, generous pensions, and subsidised access to education & health. This is not capitalism, just ways to live beyond our limited means. We live in a system that has increasingly made it difficult for entrepreneurship to prosper, as pointed out by Luke Johnson. A system of greed and entitlement, be it banks, governments, unions or the people, has led us to where we are.

If anything, I would argue we need more of Capitalism if there has to be prosperity. I would argue that in today's world China is more capitalistic than Europe, and the results are for everybody to see. At the same time it is undeniable that comprehensive regulations, fostering a culture of ethics and a well-aware population are necessary for free enterprise to flourish.

Finally, I would like to say that while free-market played its part, it is absurd to blame it for everything. If the West was living beyond its means, are businesses the only ones to blame? Perhaps not, but they do make a convenient target. The truth remains that, given all things equal, Democratic Capitalism produces more prosperity and equality than systems like Communism, Socialism, Monarchy, Theocracy or any other system that the protesters may know about. The big question is still this: if not Capitalism, then what? Reform, not revolution, is the way ahead.

Olympus Saga

Olympus agrees to acquisitions probe

The more I learn about business, the more one thing becomes clear: ability is a small part of running a business. There are many ways to excellence and profits in business, and ability is definitely one of them. Business however, I have learned, is more complicated than that. As the Olympus saga illustrates, many times businesses are able to survive misspending millions. As long as the business model remains intact and there is somebody who thinks that the business can generate cash at an acceptable rate of return, the business will survive. I also see compliance and not ethics as the defining force for the code of conduct, which I attribute to the fact that self-interest is the defining force of capitalism. Unsurprisingly, unbridled self-interest can be fairly self-destructive as well. Regulations keep that in check to some extent, but there are always people looking for a loophole. So goes the game of cat and mouse.

In terms of M&A, it brings out some critical questions like value of an acquisition to the buyer and the fees paid to advisors. Already enough research papers have indicated that, at least in the short-run, the value of the acquisition goes to the seller. Deals like the infamous sale of ABN Amro raise a pertinent question on the effectiveness of advisors. The last thing the M&A world needs is the use of advisory as a cover for siphoning away millions from a company. All in all, an ignominious event in the corporate world that should be dealt with firmly.

Potential Upcoming Deal-business from European Aeronautic Defence and Space Company (EADS)

In a recent article in the Financial Times (August 2011), EADS’s chief financial officer stated that the company is looking to make acquisitions to put its €11bn of net cash to work and rebalance its portfolio.

Data from public sources indicates that in 2011 alone EADS subsidiaries have announced five acquisitions valued at about £1510m. These include acquisition of Vizada by Astrium, Satair and Metron Aviation by Airbus, Vector Aerospace Corporation by Eurocopter Holding and Grintek Ewation by Cassidian. Of these, Vector Aerospace Corporation deal was completed recently in June 2011. With so many acquisitions already in the pipeline and with presumably more to come, a full service firm can offer EADS a variety of services and advice.

For example, 'Consultancy’ practice can possibly help EADS with acquisition search and due diligence. Then ‘Corporate Finance’ can provide M&A Advisory and deal accounting service. Finally, ‘Transaction Services’ could offer M&A Integration and post-acquisition performance improvement advice.

About EADS: EADS engages in the manufacture and sale of commercial aircraft, civil and military helicopters, commercial space launch vehicles, missiles, military aircraft, satellites, defence systems, and defence electronics, as well as provision of services related to these activities worldwide.

About Aeronautics and Aviation industry: According to a report by ‘Ecorys Consulting’, the aviation industry has been under duress due to the financial crisis, which is critical for a capital intensive and global industry. Another recent report by ‘Roland Berger’ indicates that due to the crisis defence sector is also expected to suffer due to cuts in state spending. Business leaders expect the industry to return to pre-crisis growth levels at least by 2012. Overall, this state of aerospace and defence industry should present cash-rich EADS with good bargains in the market.

Writing on M&A

Working with Deloitte has certainly whetted up my appetite for M&A. Thought it may be good to do some pointed reading to further improve my understanding of the subject. So, from now I will periodically post articles highlighting companies that have shown interest in dealmaking, and it may be possibly worth somebody's time to pursue them for business. Sometimes I will also post my opinion about a deal, or simply aggregate some M&A specific news articles that I find interesting. All the views expressed are my own, and I will duly acknowledge and mention all the resources I use. Like a true consultant, in no way I take responsibility for anybody following any advice that I may ever give. Nevertheless, I hope you find the articles useful.

Status Report

Sometimes I am amazed by the unpredictability and complexity of life. In this cacophony of thoughts and events it is so easy to loose track of the self, of how subtle existence is. How does one prevent oneself from complaining or being complacent? The divine libran balance seems ever elusive. As I live to understand the subtleties of my own mind and of this world, I experience at least some moments of genuine bewilderment. Other times, I am simply too tired or lost to care. Yes, I can reaffirm that the world is chaotic and , at least, apparently not fair. Equality is a bad joke and don't even get me started on fairness. Yet I must admit that there is simply too much that I don't understand. So I wait, I watch, and I play. Sometimes I do fear being consumed, decimated, and destroyed by my inquisitiveness: after all curiosity did kill the cat (or so they say). At these times I feel like going back to a safe refuge of mediocrity and dependability just for the relative respite it would bring. Unfortunately, I know that respite may be temporary and may turn into a suffocating, inescapable prison. And, then, it may not. At the same time the desire to be my own master and insanely rich keeps calling, even though I now realise that being "my own master" is more about an attitude, a deep confidence that can possibly emanate only from deep self realisation. But I ain't no saint, and I have no idea how near or far the doors of realisation lay at this point of time. So where does that leave us? Apparently on planet earth in a now familiar human habitation by name of Oxford. With an MBA and without a job, for now. Everything changes, I have heard and I hope. Here I stand: wiser, monetarily a shade poorer, humbler, and more knowledgeable than I have ever been before. And I look to move to the future with hope, determination and absolute focus. Yes, I am wary and tired, but I know with certainty that nothing except my own self- effort done from the sphere of awareness can possibly take me anywhere. Cheers!