FCEB made easy

FCEB made easy

What is FCEB?

Foreign Currency Exchangeable Bond is

• a Bond expressed in freely convertible Foreign Currency
• Interest and Principal of which is payable in foreign Currency
• Issued by an Indian company
• To overseas Investor who subscribes in foreign Currency
• Which on a later date can be converted into Equity shares of Offered Company

What are all the Eligibility conditions?

• Prior approval of RBI to be obtained

• Eligibility Conditions for the Offered Company
  • Offered company is a Listed company
  • Offered company is engaged in a sector eligible to receive FDI
  • Offered Company is eligible to issue FCCB or ECB
• Eligibility Conditions for the Issuer Company
  • The issuer shall form part of the Promoter Group of the offered Company
  • Issuer holding Equity Shares offered at the time of Issuance of FCEB
  • Issuer Company is not restrained by SEBI to access securities market
• Eligibility Conditions for the Subscriber
  • Entity not prohibited by SEBI from dealing in Securities
  • Subscriber comply with FDI Policy
  • Subscriber adhere to sector caps at the time of issuance of FCEB
  • Prior approval of FIPB obtained , wherever required

How the proceeds can be utilized?

• Can be invested in Promoter Group Companies
• Issuer company can invest in overseas by way of direct investment in Joint ventures or Wholly owned subsidiaries subject to FEMA Guidelines
• Promoter Group Company can utilize it according to the End Use Requirements applicable for ECBs
• Promoter Group Company shall not utilize the proceeds for investing in capital market or Real estate in India.
• Proceeds can be retained or deployed overseas in accordance with ECB policy

Conditions for Issuance?

v Rate of interest

• Rate of interest payable on FCEB and issue expenses incurred in foreign currency shall be within the ceiling prescribed by RBI for ECBs.

v Price

• The exchange price of the offered listed equity shares at the time of issuance of FCEB shall not be less than the higher of the -:

The average of the weekly high and low of the closing prices of the

related shares quoted on the stock exchange during the

(a) six months preceding the relevant date;

OR

(b) two weeks preceding the relevant date.

Relevant date-Date in which Board of Directors' passed the resolution authorizing the issuance of FCEB.

preceding the relevant date.

v Maturity

• Minimum maturity shall be 5 years for redemption

• Before that time holder can convert into shares of Offered company

• While exercising the option holder has to take delivery of shares and cash settlement is not allowed.

v Approvals Required

• Board Approval

• Shareholders approval, if applicable

• Offered company's Board approval

• Issuer company shall disclose the shareholding of the offered company to comply with respective provisions in SEBI Act, Rules, Regulations & Guidelines

v Other Conditions

• Issuer company shall not trade or mortgage or offer as collateral or trade offered securities till redemption or Exchange

• Issuer company keep the offered shares free from all encumbrances

Taxation Aspects?

• Interest till exercise subject to TDS

• Tax on dividend subject to Sec 115 AC of Income Tax Act

• Exchange of Bonds into Equity shares will not give raise to Capital Gains for computation of taxable income

• Transfer between Person Resident outside India to another Person Resident outside India will not give raise to Capital Gains tax in India.

Notified by Ministry of Finance, Dept. of Economic Affairs on Feb. 15, 2008 vide http://finmin.nic.in/the_ministry/dept_eco_affairs/capital_market_div/ExchangeableBonds.pdf

CS Latest Syllabus

Yes friends,
CS Foundation Program New Syllabus from December 2012 exams. Get your B.com along with CS Foundation course. All graduates & post graduates (excluding Fine arts) are exempted from CS Foundation programme & even scholarships are provided based on 10+2 marks. Students who have cleared Chartered Accountancy Final exams or Cost Accountancy Final exams (CA/CMA final exams) are exempted from CS Foundation Program. Though applications are open throughout the year, apply before end of September for following year's June exams & apply before end of March for following December examination.

Now you are going to become Executives & Professionals, as the CS Latest (New) Syllabus registrations have started and also CS New Prospectus are available in the ICSI chapters.

But what this Company Secretary New Syllabus is all about? Understanding the latest syllabus for CS Foundation Program, CS Inter (now, Executive Program) and CS Final (now, Professional Program); also the scheme of corresponding exemptions available? for whom its applicable ? and all the unresolved questions concerning the CS New Syllabus is attempted to be resolved in this.

Yes friends, you may acquaint the knowledge of CS New Syllabus and spread awareness of the same with this now.

Also, the ICSI-Sify computer exams (http://icsi.sifyitest.com/), before enrolling for CS Executive Program and Training requirements either after CS Executive/Professional Program remains the same.

Find ALL Subjects in CS New Syllabus from http://sdrv.ms/19wRgrH & http://sdrv.ms/13uFCGy

"For seeking paper wise exemption, students are advised to send the form….[click here for download the Form ] duly filled and signed, along with attested copies of requisite certificate[s] & exemption fee to : The Director, [students services], The institute of Company Secretaries of India,C-37, Sector 62, Noida -201309

Read this document on Scribd: NEWSYLLABUS

CS as your Valentine, I love you CS

Yes,
This year, your Valentine will surprise you with pleasant gifts 2 (TWO) Hours earlier as the following Resolution is passed by ICSI, with an Unanimous Approval,
"Resolved that.....CS Foundation/Inter/Final results will be announced at 2pm on 25th day of February 2008"

Just SEE to get the YES, for all questions...

There are many reasons to love your CS, the valentine,
1. Your subjects are making everyday's News. Yes, keep tracking, u will enjoy the amount, value & more of your subjects.
2. Now onwards, Inter friends will become Executives & Final Friends become Professionals as ICSI has announced Executive & Professional programs in lieu of Inter & Final respectively.
3. Every subject in CS is a fun-packed entertainment, collect your circle of frens, delegate the study subjects they love and then discuss your love, go & win the exams.
4. See CS, Yes, in every part of your life....pass resolutions in SMS, submit a deed/agreement in e-mail, use legal terminologies like sine die, mutatis mutandis,....with your CS frens as a colloquial language.
5. See CS CS everywhere. Just add some interests in every aspect of your doing, like quizzing things that you studied, so that the other person will get envied & try not only to answer your question but also to question you more.
6. Try creating interesting charts, audios, videos out of CS, circulate among frens to get critical reviews and make it as interesting as possible; v have already seen AGM's, declaration of dividend, in-camera court & more in movies including GURU by Guru Mani Ratnam.
7. Mergers are Marriages, Demergers are Divorces; Marriages involves various types of Takeovers also like Friendly Takeover, Bail-out Takeover,.... Birthday's are AGM's where you may invite all the shareholders and declare dividend to your shareholders, and never ending.
8. Company is a being; "Brains" are the Board (aka Board of Diretors), "Body" is the Shareholders, Your "Cap" is the Managing Director and what not....
9. Everything is easy in life, but you have to work smart (aka hard) to make it more easier & lovely. Your CS Study Materials are excellent treasures which many would not even have an opportunity to see; You will find all the acts, rules, regulations, including things in the international arena which packs you with a knowledge of everything, after which you will feel everything in the world is yours, then the actual interests begins...
10. CS professionals meet the variety of works that you can't imagine, it varies according to the Industries you work, Professionals you interact, Ministries you deal with, .....the ultimate joy of working independantly in tandem with the latest developments, update every one around you.....Yes, v make things happen everywhere whether its practice/employment.

Keep Loving....CS, as your Valentine, the only place where polygamy is permitted whereby you may add more valentines like CA, CWA, Law, MBA, Phd and more, as you interests, though not mandatory.

Do post your views as Comments/Messages/Chat Box/E-mails.

Investing in Art is an art and needs registration .. SEBI Cautions

Investing in Art is an art and needs registration ..says SEBI

SEBI has advised investors with regard to their investments in "Art Funds" that "Art Funds" are "Collective Investment Schemes" as defined under the SEBI Act. At present, no entity has registered with SEBI, under the SEBI (Collective Investment Schemes) Regulations.

Launching / floating of "Art Funds" or Schemes without obtaining registration from SEBI amounts to violation of SEBI Act and Regulations. Appropriate actions, civil and criminal, under the SEBI Act may be taken by SEBI against such funds / companies.

This message is issued by SEBI in the interest of investors with regard to their

investments in Art Funds, funds/schemes launched by companies or any entity formed for the purpose. From the analysis of the characteristics of 'art funds' these are 'collective investment schemes' as defined under section 11AA (2) of the SEBI Act, 1992. The schemes/funds have been launched / floated by these entities without obtaining a certificate of registration in accordance with the SEBI (Collective Investment Schemes) Regulations, 1999 (the Regulations).

In terms of section 12 (1B) of the SEBI Act, 1992 no "person" shall sponsor or cause to be sponsored or cause to be carried on a collective investment scheme unless he obtains a certificate of registration from the Board in accordance with the regulations.

Regulation 3 of the Regulations permits only a 'Collective Investment Management

Company' having certificate of registration from Board to launch collective investment scheme.

Thus, only a company which has been granted certificate of registration by the

Board in accordance with the Regulations can launch or sponsor a collective investment scheme. In other words, for a collective investment scheme to raise money from the public it is prerequisite that the entity must (a) be a company and (b) registered with SEBI as a Collective Investment Management Company.

Therefore, the launching/ floating of the 'art funds' or schemes without obtaining a

certificate of registration from the Board in terms of the provisions of the Regulations

amounts to violation of the provisions of section 12 read with section 11 and 11AA of the SEBI Act and the Regulations. For such violations, appropriate actions, civil and

criminal, under the SEBI Act may be taken by SEBI against such funds/companies.

SEBI extends the number of centres where ECS refund is made

As of now,facility of refunds through ECS made available only in 15 centers where clearing houses are managed by the Reserve Bank of India (RBI).This was in addition to other permissible modes of making refunds electronically viz NEFT, RTGS and Direct credit.

SEBI in consultation with RBI, it has now been decided to extend the facility of refund through ECS in public/rights issues to 68 centers as provided by RBI .

Read more at..
http://www.sebi.gov.in/Index.jsp?contentDisp=WhatsNewScroll&FilePath=/circulars/2008/cfdcir0108.html

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SEBI reduces the burden of the Retail investors at the cost of Distributors and High networth investors

The Securities and Exchange Board of India (Sebi) reduced the costs for mutual fund investors by doing away with the initial issue fee for close-ended schemes. Currently, initial issue expenses on closed-ended funds are amortised over the period of the fund. It allows funds to spend the amount collected as fees (currently, about 6 per cent for a three-year fund) in stages and not at one go.

Following the Sebi move in 2006 to scrap the amortisation benefit for open-ended schemes, there was a spurt in closed-ended schemes.

Sebi said all mutual fund schemes will henceforth meet sales, marketing and other such expenses from the entry load. Bulk of the initial issue expenses normally pocketed by mutual fund distributors, who in turn refund certain amount to High networth invesrtors. Now, the Distributors have to rely more on their advisory services as the revenue through initial issue expenses collected by the fund has been swiped by SEBI. Read more at .....http://www.sebi.gov.in/Index.jsp?contentDisp=WhatsNewScroll&FilePath=/circulars/2008/mfdcir1108.html

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Grievances - IR

GRIEVANCES – claims concerning individual/collective RIGHTS under contract of employment/laws/usage;

Causes – ARISES from day-to-day working relations; LEADS to embitterment of working relationship;

PROCEDURE for settlement – fairness & justice through determination of respective Rights & Obligations of parties; a substitute for or a delaying factor in respect of direct action in the form of strikes; has successive steps @ different levels which is binding & final unless appealed.

Essence of MODEL GRIEVANCE PROCEDURE – not only be settled but also seem to be settled in the eyes of aggrieved;
Ä Settlement @ LOWEST level;
Ä Settlement as EXPEDITIOUSLY as possible;
Ä Settlement to the SATISFACTION of aggrieved.

Time-bound THREE TIER SYSTEM

BIPARTITE GRIEVANCE COMMITTEE (highest)à<= 7days
\ lack of satisfaction
DEPARTMENT/FACTORY HEAD à <= 3 days
/ lack of satisfaction
IMMEDIATE SUPERVISOR (lowest) à <= 48 hours

Bipartite Grievance Committee will have representatives from both Management & Workers.
APPEAL lie to Organisation Head <= 3 days of decision.

Understand this for Industrial Relations (IR) - CS final Group III.

What is a recession?

What is a recession? Recession means...

It is a protracted slowdown of the economy. T
The slowdown is usually classified as a recession if it lasts at least six months [means, >= 6m].

The technical definition is ‘two consecutive quarters in which the gross domestic product (GDP) decreases’.

The GDP is all the goods, services and products a country produces.

The typical symptoms of a recession are:
1. People buying less (retail decline).n Decrease in factory output.
2. Growing unemployment (In the US, unemployment recently rose to 5 per cent, another sign of an imminent recession).
3. Slump in personal incomes.
4. A dipping stock market.

Continue http://www.hindustantimes.com/StoryPage/StoryPage.aspx?id=711bb451-c39e-44bb-87ca-273b479fe172

Courtesy - Hindustan Times

Policy,Procedure,Principle,Ethics

Yes,

You got to very clear with these terms for Human Resource Management (HRM) paper of CS Final Group-III or Ethics Paper in Module-IV of CS Professional Program

POLICIES = Guide: Plan of action – statement of intention & commits management to a definite course of action. MORE Specific. Say, to provide healthy plant by giving adequate attention to cleanliness, temperature, ventilation, light, etc…

PROCEDURE: Detailed method for carrying out a Policy.

PRINCIPLE/OBJECTIVE = Fundamental Truth: TOO General. Say, to provide a safe plant & a healthy working environment.

ETHICS = Philosophy: Set of belief, standards accepted & practised. As to,

1. What is Right?
2. What is Wrong?
3. What ought to be?

Enjoy Writin..... CS Final

Understand REIT

REIT Regulations made simple....can v say?!

Yes,

What is this Reit? - Real Estate Investment Trusts (REIT) Regulations.

Credits to the Maker, Thanks to Mr. CS TRIDIB BARAT.

Interesting Charts on REIT by http://thisisvj.googlepages.com/ReitCHART.pdf

Understand REIT regulations, the most interestin & this way http://thisisvj.googlepages.com/UnderstandREIT.pdf

DRAFT SECURITIES AND EXCHANGE BOARD OF INDIA (REAL ESTATE INVESTMENT TRUSTS) REGULATIONS, 2008 FOR PUBLIC COMMENTS... Click http://www.sebi.gov.in/commreport/RealEstate.html

Keep Interestin...

Y Market Freezes ?

Sometimes questions arises why BSE or NSE closed for the entire day when sensex or nifty falls or rises beyond certain level.

Here lies the answer,because of the index based market wide circuit breaker system implemented by both exchanges pursuant to SEBI circular, which is placed for our bloggers perusal-:


SEBI circular SMDRPD/Policy/ Cir-37/2001 dated June 28, 2001

The index based market wide circuit breaker system

The system is applicable at three stages of the index movement either way at 10 per cent, 15 per cent and 20 per cent. This circuit breaker brings about a coordinated trading halt in all equity and equity derivative markets nationwide.

This is in addition to the price band imposed for individual stocks by the Exchanges.

The market wide circuit breakers would be triggered by movement of either Sensex or the NSE S&P CNX Nifty whichever is breached earlier.

In case of a 10 per cent movement of either of these indices, there would be a 1-hour market halt if the movement takes place before 1 p.m. In case the movement takes place at or after 1 p.m. but before 2.30 p.m. there will be a trading halt for ½ hour. In case the movement takes place at or after 2.30 p.m. there will be no trading halt at the 10 per cent level and the market will continue trading.

In case of a 15 per cent movement of either index, there will be a 2-hour market halt if the movement takes place before 1 p.m. If the 15 per cent trigger is reached on or after 1 p.m. but before 2 p.m., there will be a 1-hour halt. If the 15 per cent trigger is reached on or after 2 p.m. the trading will halt for the remainder of the day.

In case of a 20 per cent movement of the index, the trading will be halted for the remainder of the day.

These percentages are translated into absolute points of index variations on a quarterly basis. At the end of each quarter, these absolute points of index variations are revised for the applicability for the next quarter. The absolute points are calculated based on closing level of index on the last day of the trading in a quarter and rounded off to the nearest 10 points in case of S&P CNX Nifty.

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Imposing of Price Band on the day of Listing

SEBI proposes to impose price band on the day of Listing

PROPOSED POLICY FOR IMPOSITION OF PRICE BANDS ON THE DAY OF LISTING OF INITIAL PUBLIC OFFERS (IPO's)

q Introduction

This is a proposal by SEBI for imposing a price band of 25% on the issue price on the day of listing of IPOs of issue size upto Rs 250 Cr. This proposal does not apply in case of re-commencement of trading of the equity shares of a company on the stock exchanges.

q Background

Currently, the stock exchanges do not apply price bands on the day of listing of Initial Public Offerings (IPOs). The price fixed by the company in consultation with its lead managers is left open to price discovery in the matter and after the day of listing, this process of price discovery may continue within a price band of 20%. For IPO issue sizes that are greater than Rs.500 Cr, price bands are not imposed even after the day of listing if such scrips are available for trading on the derivative segment.

q Issue for Consideration

Recently, it has been noticed by SEBI that there are significant price & volume spikes/ volatility on the day of listing of IPOs. This was particularly noticed in IPOs of issue size upto Rs 250 cr. In particular, for several such IPOs, where the stock available for trading in the hands of public, after excluding shares of promoters and others that face a lock in period is about 25-30% of the equity capital of the company, the price may not sustain on subsequent days leading long-term investors to become dissatisfied with the dramatic activity on the day of listing.

While it is appreciated that demand /supply mechanics should freely determine the market price, large scale price/volume fluctuations on the first day of trading seem to warrant a systemic response to contain such sharp movements. Accordingly, there seems to be a need to consider a price band even on the day of listing of IPOs. This would not only assist in a more orderly price discovery process over a period of time, instead of on the day of listing, but more importantly also have a salutary impact on potential abnormal price movements on the day of listing.

The matter has been also deliberated at length in the meetings held by SEBI with the stock exchanges. A back testing was also carried out by the stock exchanges on the IPOs during the past year, using parameters such as issue size, price variation on day of listing, maximum variation on day of listing as well as price variation on subsequent days. It was noticed by SEBI that IPOs of issue size upto Rs 250 Cr exhibited more volatility than IPOs of greater issue size. After taking into account the views of the stock exchanges and the results of back testing, it was felt that there is a need to impose price bands on the day of listing of IPOs in a cautious and gradual manner to facilitate steady and sustained price discovery over a period of time.

Comments/suggestions are invited from the public on the above proposal by SEBI, so as to reach SEBI by January 31, 2008.

Comments /suggestions may be sent by email to the following addresses

sanjayp@sebi.gov.in (Mr Sanjay Purao)

sapnas@sebi.gov.in (Ms Sapna Sinha)

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