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Prowess TraX Prowess Application for TRAnsfer Pricing TaXation with Automated Documentation
Fastest, Easiest, most Reliable way to find Comparables
About Prowess TraX
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How does Prowess TraX Work?

Prowess TraX, or Prowess For Transfer Pricing TaXation, is a service that enables you to find the arms length profit margin for a target company from an appropriate set of peers. It provides access to a large database of the financial performance of companies and an interactive software that helps you find the most appropriate peers of a target company.

A target company is the company for which you wish to conduct a Transfer Pricing Taxation Case.

Prowess TraX draws upon the largest database available on the financial performance of Indian companies. This ensures greater success in finding the target company and its peers. Further, CMIE is happy to add companies in the database for its Prowess TraX subscribers. This makes Prowess TraX the most appropriate database to use for conducting studies to find comparables and the arms length profit margin.

A Case can be completed in 13 steps. The Prowess TraX software guides you through these step by step, one step at a time. The 13 steps are;

  1. Ascertain economic activity of target company

  2. Find comparables using main product/service

  3. Find comparables based on products produced/traded

  4. Find comparables based on grouping of products produced/traded

  5. Find comparables using product names as disclosed by companies

  6. Find comparables using business segment-wise information

  7. Filter comparables using annual financial statements

  8. Filter comparables using related party transactions

  9. Filter merged companies

  10. Filter companies based on ownership

  11. Add company by name

  12. Remove company by name

  13. Generate profit margins of target company and peers

Each step either finds companies or filters the available companies to find those that are similar to the target company.

Each step is a Query on the database.

A Query is executed by using the interactive Prowess TraX software. This software can be downloaded freely from http://trax.cmie.com. Queries are purchased from CMIE. Queries are consumables. They are consumed when they are executed. A Query can be used to execute any of the 13 steps.

Most Queries involve selecting variables and their parameters to filter the database to find companies that are comparable to the target company. For example, when you filter the companies by sales between Rs.200 crore and Rs.500 crore, you have specified the variable “sales” with parameters “200” and “500”. This involves skill on the part of the practitioner - in terms of selecting variables and parameters that maximises the comparability of the companies filtered.

Executing a Query leads to the creation of two files - an Output Sheet and a Data Sheet. The Output Sheet provides names of the short-listed companies after filtering the database based on the Query, and the Data Sheet provides the data for each of the companies involved in the Query.

You may end the Querying process when, in your opinion, the search for comparables has been completed. At this stage you should run the final step - “Generate profit margins of target company and peers”. Then you may decide to end the Case. When you do this, the Prowess TraX software freezes the Case. Once you do this, the Case cannot be edited. No more Queries can be executed for this Case, those done cannot be undone and all the intermediate files (Output sheet/s and Data sheet/s) are deleted.

Once you end the search process, a document is automatically prepared in pdf format. This contains the complete details of all the steps used, the variables and their parameters used at each step in filtering the database, the companies selected and the companies rejected at every stage. It also lists the final peer set, their profit margins and the average profit margin of the peer set.

The pdf file can be used in your filings with the tax authorities as a supporting document. If you know the target company and if you are familiar with the product/services classification system, conducting a Case should take about 30 minutes.

Prowess TraX provides several other useful features in the operations besides speed and ease:

  1. You can pause and re-start the Case if you cannot complete it in one session.

  2. You can run Prowess TraX from anywhere you can access the Internet. Prowess TraX is not tied to an installation.

  3. Every completed Case can be re-generated at any point in time by loading and re-running the specifications. This ensures a replicability of all Cases with full transparency of the processes and the output.

  4. A completed Case can be copied for a new Case to expedite the execution of a new Case.

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Prowess TraX is a service from Centre for Monitoring Indian Economy Pvt Ltd.

Request for Query Pack(s)

Prowess TraX v2.3
Build: 27 Sep'17 [ 12:04 ]

This is an executable software that can be installed on a PC running Windows. This software helps you conduct Transfer Pricing Taxation studies to find comparable companies and their profit margins.

Download & installation is free.
File size: 8.51 MB

Prowess TraX
Demonstration Videos

Learn Prowess TraX in 50 mins.