Federal, State and Local Income Taxes:

12 Months Ended

Apr. 30, 2012

Income Tax Disclosure [Abstract]

Federal, State and Local Income Taxes:

Note 7-Federal, State and Local Income Taxes:

The Company computes its income tax provision in accordance with the requirements of the Income Tax Topic of the FASB’s ASC.

The provision for income taxes includes the following:

	Fiscal Years ended April 30,
($ in thousands)	2012			2011			2010
Current tax expense/(benefit):
Federal	$	139		$	356		$	-
State and local		(54	)		(413	)		-
		85			(57	)		-
Deferred tax expense/(benefit):
Federal		3,785			20,535			(7,086	)
State and local		503			3,203			(1,079	)
		4,288			23,738			(8,165	)
Income tax provision (benefit):	$	4,373		$	23,681		$	(8,165	)

Deferred income taxes are provided for temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. The tax effect of temporary differences giving rise to the Company’s deferred tax asset and deferred tax liability are as follows:

	Fiscal Years ended April 30,
($ in thousands)	2012			2011
Federal tax benefit (liability):
Net operating loss	$	126		$	2,226
Unrealized gains on securities available-for-sale		(46	)		(34	)
Operating lease exit obligation		153			211
Deferred professional fees		80			109
Deferred charges		76			192
Total federal tax benefit		389			2,704
State and local tax benefits:
Net operating loss		15			268
Other		38			50
Total state and local tax benefits		53			318
Deferred tax asset, short term	$	442		$	3,022

	Fiscal Years ended April 30,
($ in thousands)	2012			2011
Federal tax liability (benefit):
Deferred gain on deconsolidation of EAM	$	17,679		$	17,679
Deferred non-cash post-employment compensation		(619	)		(619	)
Lease exit obligation		1,032			(108	)
Depreciation and amortization		120			(364	)
Total federal tax liability		18,212			16,588
State and local tax liabilities (benefits):
Deferred gain on deconsolidation of EAM		2,182			2,132
Deferred non-cash post-employment compensation		(76	)		(62	)
Lease exit obligation		-			(25	)
Depreciation and amortization		127			(45	)
Deferred professional fees		(21	)		(14	)
Total state and local tax liabilities		2,212			1,986
Deferred tax liability, long term	$	20,424		$	18,574

The Company’s net operating loss carryforward of approximately $7.3 million was mostly utilized during the twelve months ended April 30, 2012. The tax effect of temporary differences giving rise to the Company’s long term deferred tax liability is primarily a result of the federal, state, and local taxes related to the $50,510,000 gain from deconsolidation of the Company’s asset management and mutual fund distribution subsidiaries, partially offset by the long term tax benefit related to the non-cash post-employment compensation of $1,770,000 granted to VLI’s former employee and the tax benefits related to the Company’s exit lease obligation of $914,000 all recognized in fiscal 2011.

As of April 30, 2012 and 2011, the remaining lease exit obligation related to EAM’s relocation was $475,000 and $914,000, respectively. The Company expensed $914,000 of the accrued lease exit obligation related to EAM’s relocation during fiscal 2011.

The Company uses the effective income tax rate determined to provide for income taxes on a year-to-date basis and reflect the tax effect of any tax law changes and certain other discrete events in the period in which they occur.

The annual effective tax rate changed during fiscal 2012 due to a number of factors including but not limited to an increase or decrease in the ratio of items that do not have tax consequences to pre-tax income, the Company’s geographic profit mix between tax jurisdictions, new tax laws, new interpretations of existing tax laws and rulings by and settlements with tax authorities.

The overall effective income tax rates, as a percentage of pre-tax income, for the fiscal years ended April 30, 2012, 2011, and 2010 were 38.71%, 38.53% and 26.04%, respectively.

The non-deductible portion of the provision for the Settlement with the SEC described in Note 15 included in fiscal 2010 and the change in the amount of the Company’s non-taxable investment income, events that do not have tax consequences, significantly contributed to the increase in the fiscal 2011 versus fiscal 2010 tax rate. The fluctuation in the effective income tax rate is also attributable to the alternative minimum tax on the limitation to the Company’s net operating loss carryforward in fiscal 2012 and 2011.

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory income tax rate to pretax income as a result of the following:

	Fiscal Years ended April 30,
	2012			2011			2010
U.S. statutory federal rate		35.00	%		35.00	%		35.00	%
Increase/(decrease) in tax rate from:
Tax effect of non-deductible portion of provision for settlement		-			-			-11.16	%
State and local income taxes, net of federal income tax benefit		2.58	%		2.95	%		2.24	%
Effect of dividends received deductions		-			-			0.33	%
Alternative minimum tax - net operating loss limitation		1.23	%		0.58	%		-
Other, net		-0.10	%		-			-0.37	%
Effective income tax rate		38.71	%		38.53	%		26.04	%

The Company believes that, as of April 30, 2012, there were no material uncertain tax positions that would require disclosure under GAAP.

The Company is included in the consolidated federal income tax return of the Parent. The Company has a tax sharing agreement which requires it to make tax payments to the Parent equal to the Company’s liability/(benefit) as if it filed a separate return.

The Company’s federal income tax returns (included in the Parent’s consolidated returns) and state and city tax returns for fiscal years 2009, 2010, and 2011 are subject to examination by the tax authorities, generally for three years after they were filed with the tax authorities. The Internal Revenue Service (“IRS”) and New York State tax authorities have recently concluded an examination for the years ended through April 30, 2008, which resulted in no changes that had any adverse effect on the Company’s financial statements. More recently, the IRS has concluded its examination of the Company’s federal income tax returns through the fiscal year 2010, which resulted in no changes that had any adverse effect on the Company’s financial statements.