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is that the companies will have a better balance sheet. The ICAI move will only enhance the transparency that investors require and should be seen as a positive one, reckon experts.
It also reinforces the age-old investment practice of conducting self due-diligence and questioning the decision to invest in companies that have a high amount of other income. Some companies, like Hindalco, Tata Steel or even a Bajaj Auto might have a substantial component of other income. And this is because they also have huge investment portfolios. Also, certain business income streams, for example, earnings from income selling scrap a byproduct for a steel maker, are qualified as other income. They are not from equity or derivatives trading.
However, companies that keep shoring up earnings based on non-core activity related trading gains should be shunned. It is at times such as these that old lessons are revisited. India Inc remains on the growth track and after taking a breather and a clean-up, it would resume its journey....
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