CS Financial Management Starter Pack

Yes,

CS Final FTFM gets a life over here. These are the few pages, which created very exciting interests to study & pass Financial Management even to a person like me, who hates finance subjects.

Salutes to the author Mr. Pattabhiram, whose every style right from scripting every letter in the page is awesome. He narrates a story of Financial Management here.

Find http://www.primeacademy.com/mafachapter1.pdf here.

Friends, dont get carried away by this, as it contains lots of informations, as far as, CS Final is concerned, just get the idea from this, as this makes the concept very clear, then you may proceed with your study material and guideline answers.

Just read it....atleast for the sake of readin it....you feel the passion then.

Enjoy Passin....Vj

Voluntary Delisting

Thanks to Mr. CS Mukund Srinath of IGate for this wonderful presentation on Voluntary Delisting.

View Album

Get your own

Format - Invitation to tender Equity Shares http://thisisvj.googlepages.com/LettertoShareholder1-Final.pdf

Format - Application Form for Exit Option http://thisisvj.googlepages.com/LettertoShareholder2-21-01.pdf

Special Purpose Acquisition Companies (SPACs)

Special Purpose Acquisition Companies (SPACs): on the rise

Thank you Amit Yadav...

Special Purpose Acquisition Companies (SPACs) that are also known as "blank check companies" are gradually acquiring prominence in the Indian markets. It is worth briefly examining these entities and their advantages as well as the risks surrounding them.

SPACs are essentially shell entities with no business operations, and which raise funds from the public through an initial public offering (IPO). These funds are raised on the basis that they will be utilised by the SPAC to acquire one or more companies in the future so as to provide returns to their shareholders. The details of the future acquisitions or even the identity of the target entities are not known at the time of the IPO. The investors in the IPO largely rely on the management skills and reputation of the founders of the SPAC while making investments. SPACs are usually committed to a time-frame within which they are required to make acquisitions. In case the committed time elapses without any acquisitions, the investments will have to be returned to the shareholders with certain carrying costs..

SPACs have acquired prominence internationally, especially in the US and in Europe. last year, there were 66 initial public offerings for SPACs, raising a total of $12 billion. Many of these SPACs have also successfully implemented acquisitions. What is important to note, however, SPACs are yet not traded on the main stock exchanges around the world. For example, neither the NYSE nor NASDAQ permits listing of SPACs, resulting in most of the existing US listings taking place on the American Stock Exchange (AMEX). Even on the London Stock Exchanges, SPACs are usually listed on its AIM segment. The cautious approach adopted by the more prominent exchanges is owed to the innate risks and uncertainties involved in listing entities that do not have existing businesses (or even fairly concrete business plans) at the time of their public offering of securities.

The SPAC phenomenon is catching on in India as well. It has been reported by VC Circle that several SPACs have been formed in order to pursue acquisitions of Indian companies. These SPACs have been listed on both the AMEX as well as the LSE AIM. The reverse trend is also assuming importance, whereby Indian companies are contemplating SPACs that would be used to aid their acquisition of foreign companies. This trend can be gathered from HCL's plans to set up an SPAC for overseas acquisitions. HCL's example is important on two counts. First, it indicates the utility of SPACs for Indian companies as a means of financing overseas acquisitions. Second, it indicates that SPACs are not confined to financial investors, and that it can be used by strategic investors as well for acquisitions. With more avenues being made available for SPAC listings (in case the current NYSE and NASDAQ proposals to allow SPAC listings take effect), it is likely that SPACs would become more prominent in acquisitions both by Indian companies and of Indian companies.

That leaves the crucial question of whether SPACs can be listed in India. It seems to me that the current disclosure requirements of SEBI as well as the listing requirements of the stock exchanges would not permit a company such as an SPAC to be listed on the Indian stock exchanges. This is because the SPAC has no business whatsoever or even a track record, but only certain broad business plans to acquire target companies that are yet to be identified. This creates uncertainties and risks to investors. Unless the existing regulations are amended to create a separate category of listings for SPACs, or unless specific waivers are granted from the applicability of the disclosure guidelines for IPOs to such companies, Indian listings would be unlikely. At the same time, it would be prudent for the regulatory authority (being SEBI) and the Indian stock exchanges to tread cautiously on this front, and to permit such listings only after assessing the experience (and success) of SPACs world-over and those specifically involving Indian promoters or Indian target companies. SPAC investors need proper protection as they are signing "blank checks" after all.

SEBI Amendments dated 19th March 2008

Dear All,

20^th March 2008

Operationalisation of Short Selling and Securities Lending and Borrowing

As you aware SEBI vide circular dated December 20, 2007 had specified the broad framework for short selling by institutional investors and a full-fledged securities lending and borrowing scheme for all market participants. It has been decided by the SEBI vide its Circular No. MRD/DoP/SE/Cir- 05 /2008 dated 19th March 2008 to operationalise the above with effect from Monday, April 21, 2008.

The Stock Exchanges and the Depositories are advised to:

Ø Make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision.

Ø Bring the provisions of this circular to the notice of the member brokers/clearing members, depository participants and also disseminate the same on their website.

Ø Communicate to SEBI, the status of the implementation of the provisions of this circular in the Monthly Development Report.

Margining of institutional trades in the cash market

As you aware SEBI vide circular dated February 23, 2005 had specified the risk management framework for the cash market. In order to provide a level playing field to all the investors in the cash market as in the case of derivatives market, the aforesaid circular is partially modified to provide that all institutional trades in the cash market would be subject to payment of margins as applicable to transactions of other investors. This would be implemented with effect from Monday, April 21, 2008.

To begin with, The SEBI vide its Circular No. MRD/DoP/SE/Cir- 06 /2008 dated 19^th March 2008 stated that from April 21, 2008, all institutional trades in the cash market would be margined on a T+1 basis with margin being collected from the custodian upon confirmation of the trade.

Subsequently, with effect from June 16, 2008, the collection of margins would move to an upfront basis.

The Stock Exchanges shall issue the necessary guidelines in this regard and shall put in place the necessary systems to ensure the operationalization of the above.

You can access entire text of the circular at http://groups.google.com/group/cschennai/files

Thanks & Regards

Alagar
Investment Banking
Karvy Investor Services Limited
Chennai
Tel: 044-28151034/3445/3658
Moble: 919884731993/ 919790906827
e-mail: alagar.muthu@karvy.com
website: karvy.com

SC rules that leave encashment should not be included in wages for PF calculation

Credits to Mr. CS Ravichandran of AIG.

In a significant ruling reducing the deductions on the salary sheet , the Supreme Court has held that the money got by an employee from encashing earned leave could not be taken as wages for calculation of provident fund (PF) contributions. Deciding a bunch of petitions in favour of the employees, a bench comprising Justices Arijit Pasayat and P Sathasivam rejected the stand of regional PF commissioner that the amount received on encashment of earned leave had to be taken into account for the purpose of calculating PF contributions.
The bench allowed the appeals -- the lead case being the one filed by Manipal Academy of Higher Education -- saying "the inevitable conclusion is that basic wage was never intended to include amounts received for leave encashment". It took note of a Mumbai case where an employer was including the amount of leave encashment as emoluments for the purpose of calculating PF dues from the employer as well as employees' contribution. When the Employees' Union took up the issue with the commissioner, it was informed that the provision did not provide for deduction of PF on leave encashment.
"Where the wage is universally, necessarily and ordinarily paid to all across the board, such emoluments are basic wages. Conversely, any payment by way of a special incentive or work, is not basic wages," the court said.

Civil Appeal No. 1832 of 2004 With Civil Appeal Nos. 2535, 2536, 2539, 2540 and 2541 of 2004
MANIPAL ACADEMY OF HIGHER EDUCATION
Vs
PROVIDENT FUND COMMISSIONER
Arijit Pasayat and P Sathasivam, JJ.
Dated : March 12, 2008
PF Contribution: Basic wages:
(a) Where the wage is universally, necessarily and ordinarily paid to all across the board such emoluments are basic wages.
(b) Where the payment is available to be specially paid to those who avail of the opportunity is not basic wages. By way of example it was held that overtime allowance, though it is generally in force in all concerns is not earned by all employees of a concern. It is also earned in accordance with the terms of the contract of employment but because it may not be earned by all employees of a concern, it is excluded from basic wages.
(c) Conversely, any payment by way of a special incentive or work is not basic wages.

"The inevitable conclusion is that basic wage was never intended to include amounts received for leave encashment."

For detailed judgment, click http://thisisvj.googlepages.com/basicwagewasneverintendedtoincludeam.doc

Changes in definition of QIB under SEBI DIP Guidelines

The SEBI vide its circular dated today, National Investment Fund (NIF), a fund set up by the Government of India vide Gazette Notification no. F. No. 2/3/2005-DD-II dated November, 23, 2005 , has been included in the definition of QIB, in the SEBI (DIP) Guidelines. NIF is a fund consisting of the proceeds from disinvestment of Central Public Sector Undertakings, which would invest in equity in accordance with broad investment guidelines provided by the Government of India.

SEBI has issued necessary instructions to all registered Merchant Bankers in this regard.
Accordingly the SEBI amended the definitionof QIB to insert NIF in definition part. you can access entire text of the ciruclar at http://groups.google.com/group/cschennai/files.

Erstwhile definition & Understanding:
2.2.2B(v) of SEBI (DIP) Guidelines, 2000 defines ''Qualified Institutional Buyer'' shall mean:
a. public financial institution as defined in section 4A of the Companies Act, 1956;
b. scheduled commercial banks;
c. mutual funds;
d. foreign institutional investor registered with SEBI;
e. multilateral and bilateral development financial institutions;
f. venture capital funds registered with SEBI.
g. foreign Venture capital investors registered with SEBI.
h. state Industrial Development Corporations.
i. insurance Companies registered with the Insurance Regulatory and Development Authority (IRDA).
j. provident Funds with minimum corpus of Rs. 25 crores
k. pension Funds with minimum corpus of Rs. 25 crores.

Yes....analysing the definition, it uses the word "SHALL" making the following meaning, a mandatory one and very strict. Then uses the word "MEANS", so its an Exhaustive Definition (NOT an Inclusive Definition); i.e., the scope of the term is limited to extent which is listed below. So, now because of this amendment, NIF = QIB. Keep Understandin....Vj

Thanks & Regards
Alagar
-- Karvy Investor Services Limited
G-1 Swathi Court22, Vijayaraghava Road
T.Nagar, Chennai - 600 017
Tel: 044-28151034/3445/3658
Moble: 919884731993
e-mail: alagar.muthu@karvy.com

Changes in FDI Policy - DIPP Press Notes Series 2008

Dear All,

Department of Industrial Policy & Promotion has issued 6 Press Notes under 2008 series on 12^th March 2008. Brief amendments in FDI policy in said press notes are as follows:

Press Note 1 (2008): Change in FID on Credit Information Company (CIC):

As per PN-1 of 2008, Foreign Investment is permitted to the extent of 49% through composite ceiling i.e both Foreign Direct Investment and as well Investment by FII through portfolio investment, subject to the approval from FIPB and necessary regulatory clearance from RBI and subject to the following conditions.

• Portfolio investment by FII should not exceed 24% at any case.
• Further no such FII should hold more than 10% either directly or indirectly.
• Any acquisition in excess of 1% is subject to the reporting to the RBI.
• FII's who are going to invest in CICs Companies, should not seek any representation in the Board based on their shareholding.

Press Note 2 (2008): Foreign Investment on Commodities Exchange:

As per PN-2 of 2008, Foreign Investment is permitted to the extent of 49% through composite ceiling i.e both Foreign Direct Investment and as well Investment by FII through portfolio investment, subject to the specific approval of the Government and necessary regulatory clearance from RBI and subject to the following conditions.

• FII can invest only through secondary market i.e Portfolio investment route only to the extent of 23% at any case.
• Investment under FDI scheme will be allowed to the extent of 26%.
• No foreign investor, including person acting in concert with can hold more than 5% either directly or indirectly.

Press Note 3 (2008): Clarification on FID in Industrial Park:

You may be aware of that as per press note 2 of 2000, 100% FDI is allowed for industrial park under the automatic route. Further through press note 2 of 2005, the Govt of India stipulated certain conditions for FDI upto 100% under the automatic route for development industrial projects subject to the terms and conditions as stipulated PN 2 of 2005. But, Companies which are in established industrial park are falling under 100% automatic route without complying with PN 2 of 2005.

Further through this PN 3 of 2008, it is clarified FDI will be permitted under the automatic route without complying with PN 2 of 2005 both for setting up industrial park and as well established industrial park.

Besides, DIPP has also issued press notes on the following subject, Press Note 4 (2008): Change in FDI Policy in Civil Aviation Sector, Press Note 5 (2008): Change in FDI Policy in petroleum and Natural Gas Sector, Press Note 6(2008: FDI Policy for mining of titanium bearing mineral and ores.

You can access entire text of press notes 2008 series at http://groups.google.com/group/cschennai/files in PDF format.

Thanks & Regards

Alagar

Investment Banking

Karvy Investor Services Limited
G-1 Swathi Court
22, Vijayaraghava Road
T.Nagar, Chennai - 600 017
Tel: 044-28151034/3445/3658
Moble: 919884731993
e-mail: alagar.muthu@karvy.com
website: karvy.com

for more information about cschennai visit to
http://groups.google.com/group/cschennai

RBI proposal of amending form FCGPR for your comment

Dear All,

Yes, the following proposal is approved now. Click here for details.

The Reserve Bank of India, today placed on its website for public comments, draft format for reporting ( ie Form FCGPR) foreign direct investments (FDIs).

In the revised form the class of investors has been broadened to include several new entities viz., foreign nationals, foreign companies, foreign institutional investors (FIIs), foreign venture capital investors (FVCIs) registered with SEBI, foreign trusts, private equity and other funds, pension/ provident funds, partnership / proprietorship firms, financial institutions, NRIs / PIOs. Secondly, the details of investment received in units of venture capital funds from FVCIs are proposed to be separately captured. Thirdly, Part B of the form has been modified so as to capture breakup of the details of foreign investor class. The date of filing of Part B of the form has been extended from June 30 of every year to July 31.

The Reserve Bank has invited feedback from all interested stakeholders on the draft format of FC-GPR. The feedback may be sent to the Chief General Manager, Foreign Exchange Department, Reserve Bank of India, 11th Floor, Shahid Bhagat Singh Road, Mumbai – 400 001 on or before March 31, 2008. The feedback may also be sent by fax (022-22610623/30) or by email

It may be noted that Foreign Direct Investments (FDIs) in India are permitted under the automatic and government/approval route. An Indian company issuing shares and convertible debentures to non-residents under automatic and government / approval routes is required to submit the details of the investment in a two-stage reporting procedure. In the first stage, receipt of funds has to be reported to the Reserve Bank of India within 30 days of receipt. In the second stage, the company has to file form FC-GPR with the Reserve Bank within 30 days from the date of issue of shares / convertible debentures.

In order to capture the details of FDI in a more comprehensive manner, form FC-GPR was revised in April 2007, in terms of which the AD Category – I bank in India receiving foreign remittance for issue of shares was required to obtain a Know Your Customer (KYC) report in respect of the foreign investor from the overseas bank remitting the amount. In the wake of the recent policy changes in foreign investment and also taking into account the suggestions and feedback received from various entities, form FC-GPR has now been further modified.

Link is available in this mail to access new form, respected members can give their comment to RBI in this regard.

Thanks & Regards

Alagar

Consolidated Updates flash

FEMA Master Circulars http://thisisvj.googlepages.com/MasterCircularRFO.pdf & http://thisisvj.googlepages.com/MasterCiruclar-remittancefacilitiest.pdf

UPDATES FROM Dr.KSR's DESK

Date: 11/03/2008	MCA	RBI	SEBI	Dept. of Commerce (DoC)	Dept. of Industrial Policy & Promotion (DIPP)
Circulars	Nil	---	SEBI/CFD/DIL/MB/IS/1/2008/11/03 Instructions to Registered Merchant Bankers on PAN card along with Public Issue applications	---	Nil
Notifications	Nil	Nil	---	Nil	Nil
Guidelines	Nil	Nil	Nil	---	---
Reports	---	---	Nil	Nil	---
Rules	Nil	---	Nil	Nil	Nil
Regulations	Nil	Nil	Nil	Nil	Nil
Master Circulars	---	Nil	---	Nil	Nil
Concept Papers / Papers for Discussion / Public Comments	Nil	---	Nil	Nil	Nil
Press Release	Nil	Nil	PR No.88/2008 SEBI instructs Merchant Bankers not to demand for photocopy of PAN card along with Public Issue applications	Nil	Nil

Date: 12/03/2008	MCA	RBI	SEBI	Dept. of Commerce (DoC)	Dept. of Industrial Policy & Promotion (DIPP)
Circulars	Nil	---		---	Nil
Notifications	Nil	Nil	---	Nil	Nil
Guidelines	Nil	Nil	Nil	---	---
Reports	---	---	Nil	Nil	---
Rules	Nil	---	Nil	Nil	Nil
Regulations	Nil	Nil	Nil	Nil	Nil
Master Circulars	---	Nil	---	Nil	Nil
Concept Papers / Papers for Discussion / Public Comments	Nil	---	Nil	Nil	Nil
Press Release / Press Note	Nil	Press Release: 2007-2008/1186 Respect Your Banknotes: RBI appeals to Public	Nil	Nil	Press Note No.1 (2008) Guidelines for foreign investment in Credit Information Companies Press Note No.2 (2008) Guidelines for foreign investment in Commodity Exchanges Press Note No.3 (2008) Guidelines for Foreign Direct Investment in Industrial Parks Press Note No.4 (2008) FDI Policy for the Civil Aviation Sector Press Note No.5 (2008) Rationalisation of FDI Policy for the Petroleum & Natural Gas sector Press Note No.6 (2008) FDI Policy for mining of Titanium bearing minerals and ores

Date: 10/03/2008	MCA	RBI	SEBI	Dept. of Commerce (DoC)	Dept. of Industrial Policy & Promotion (DIPP)
Circulars	Nil	---	Nil	---	Nil
Notifications	Nil	RBI/2007-2008/260 DPSS No.1405 / 02.10.02 / 2007-2008 Customer charges for use of ATMs for cash withdrawal and balance enquiry RBI/2007-2008/261 DPSS No. 1407 / 02.10.02 / 2007-2008 Use of electronic mode of payment for large value transactions	---	Nil	Nil
Guidelines	Nil	Nil	Nil	---	---
Reports	---	---	Nil	Nil	---
Rules	Nil	---	Nil	Nil	Nil
Regulations	Nil	Nil	Nil	Nil	Nil
Master Circulars	---	Nil	---	Nil	Nil
Concept Papers / Papers for Discussion / Public Comments	Nil	---	Nil	Nil	Nil
Press Release	Nil	Nil	Nil	Prohibition on Export of Basmati & Non-Basmati Rice – PR Dated 07/03/2008	Nil