CS Final HRM Planning & Procurement - Understanding

III. HR PLANNING & PROCUREMENT

Yes, the very simple & interesting chapter, just make mind maps, this way, so that you understand better the topic for Company Secretaryship (CS) Final Group -III subject Human Resource Management & Industrial Relations (HRMIR). Just read it once, get the flow, you can win the exams very easily, I guarantee. See Yes with Vj.

Manpower Planning: "continuous process". The process of developing & determing Objectives, Policies & Programs and to develop, utilise & distribute manpower so as to achieve Goals of organisation.

The two phases include,

1. Management to project the future manpower requirements &

2. Develop manpower plans to accommodate the implication of projections.

NATURE of HR Planning:

Like, "FILL THE WATER IN THE GLASS THEOREM."

1. Ascertain Manpower NEEDS (Number & Kind).

2. Ascertain in INVENTORY (water tank) of Existing Manpower (water) – status & untapped talent.

3. Determine shortfall/surplus of manpower.

4. Initiation of Organisation programs depending on Demand & Supply of HR.

5. Encompass Acquisition, Utilisation, Improvement & Preservation of HR.

OBJECTIVES – HR Planning:

1. Ensure optimum use of HR.

2. Avoid balance in Distribution & Allocation of HR.

3. Assess/Forecast future skill requirement.

4. Control measure to ensure available resources, when required.

5. Control of cost aspect.

6. Formulate Transfer & Promotion policies.

SCOPE/Elements – HR Planning:

1. Listing of Current HR.

2. Assess the "Extent of Utilisation" of current HR.

3. Phasing out surplus HR.

4. Analysing HR requirements.

5. HR Forecast.

6. Training Programs for different categories.

BENEFITS – HR Planning:

1. Reduce Labour cost.

2. Make optimum Use of workers Skills.

3. Identify gaps of existing HR.

4. Improvement in overall business planning process.

5. Formulating managerial Succession plan.

6. Greater awareness of importance of sound HR.

7. Tool to evaluate effect of alternative HR actions & policies.

HR Planning Process:

1à2à3à4à5à6à7à8à1

1. Objectives – filling the future vacancies with right type of people. Relate Future HR –to Future Enterprise Needs –tomaximise future Return on Investment in HR.

2. Inventory of HR skills (finding gaps): ensure Reservoir of talent is available when vacancies occur. Make Index of Inventory.

3. Work Study & Demand Forecasting: Study,

A. Employment Trends

B. Replacement Needs

C. Productivity: growth potential & healthy wage increase

D. Growth & Expansion: perpetuation

E. Absenteeism: fails to come for work when is scheduled to work;

% = (Mandays lost) divided by (Mandays – both worked & lost)

F. Work study/load analysis

4. Determine Job Requirements: Quantum of work which an average person can do on a job in a day through Job Analysis

5. Recruitment Plan – Programs for R&S

6. Selection Procedure

7. Training & Development Program – T&D

8. Performance Appraisal (find deficiencies in T&D) – PA.

QUANTITATIVE ASPECT OF HR PLANNING: Demand & Supply Forecasting.

QUALITATIVE ASPECT OF HR PLANNING: Job analysis, evaluation, etc…

QUANTITATIVE ASPECT OF HR PLANNING

I. Demand Forecasting: process of estimating the requirement of different kinds of personnel in future.

METHODS –

i. Managerial Judgement

ii. Work study techniques

iii. Statistical techniques

iv. Combination of above

Managerial Judgement: Includes,

o Bottom-up basis: with Line Managers submitting Proposals

o Top-down approach: Company & Departmental forecast prepared by Top Management.

Work Study Techniques: When there is a possibility to apply Work Measurement to know HOW Long operations should take & amount of Labour required. Through,

1. Work Load analysis (short term projections)

Step1: Determine Manpower required per unit of product.

Step2: Determine how many employees of various types are required to achieve Total Production Target.

2. Work Force analysis (long term projections): Keep sufficient margin for absenteeism, labour turnover & idle time.

Statistical Techniques:

1. Ratios & Trend Analysis (Refer Costing)

2. Econometric Models:

Step 1: Describe relationship between numbers of variables in Math formula.

Step 2: Apply Formula to forecast of movements in these variables.

3. Regression Analysis: When dependant & independent variables are functionally related.

II. Supply Forecasting:

- as to Current Resource & Future Resource;

- as to External Supply & Internal Supply;

METHODS:

1. Markov Analysis: By arranging probabilities of Personnel Transition in Transition Matrix.

2. Simulation: Create an Environment resembling real situation. Also called Vestibule when it comes to Tranining.

3. Renewal Analysis.

4. Goal Programming.

FACTORS affecting Internal Supply:

1. Existing HR

2. Labour Wastage measured using,

1. Labour Turnover Index

2. Labour Stability Index

3. Length of service analysis

4. Survival Rate: proportion of engaged employees REMAIN after 'x' years.

3. Internal Promotions & Transfers

4. Effect of changing conditions of work & absenteeism

5. Sources of supply from within the firm. It is influenced by,

1. Local Factors:

1. Population densities within reach;

2. Current & Future competition;

3. Local Unemployment;

4. Immigration & Emigration;

5. Local housing;

6. Attractiveness of the area to live in & the company to work with;

1. National Factors:

1. Growth of working population;

2. Output of Universities;

3. Demand for Specialised Professionals;

4. Impact of Government Training Schemes;

5. Government Employment Regulation.

QUALITATIVE ASPECT OF HR PLANNING

I. Job Analysis: Process of obtaining all pertinent job facts; studying the nature & operation of specific job. It can be further divided into Job Description & Job Specifications.

- Job Description: Factual statement of duties & responsibilities which will have,

1. Job Title 2. Location 3. Job Summary

4. Working conditions 5. Hazards.

- Job Specification: Statement of Minimum acceptable Human quality necessary to perform job properly. It will give details as to,

1. Education & Experience 2. Physical skills 3. Communication skills

4. Emotional Characteristics 5. Judgement.

Steps in Job Analysis:

1. R&S 2. Manpower Requirement 3. Compensation Package

4. Performance Appraisal 5. Training (Channelise energy)

6. Job Assignment 7. Job Re-engineering (working methods for higher productivity) 8. Job Analysis Process.

Techniques of Job Analysis:

1. Interview (Individual/Group)

2. Questionnaire – Types,

A. CODAP – Comprehensive Occupational Data Analysis Program;

B. FJA – Financial Job Analysis;

C. MPDQ – Management Position Description Questionnaire;

D. JAIF – Job Analysis Information Form.

3. Observation

4. Data from daily log books.

II. Job Evaluation: Systematic & orderly process of determining the worth of a job in relation to other job.

III. Job Design: Scientific art by which maximum output can be obtained with Minimum Input to the extent possible under given circumstances.

PROBLEMS – HR PLANNING:

1. Identity crisis 2. Support of Top Management 3. Size of Initial Effort

4. Co-ordination with Management Functions 5. Integration with Organisation Plans 6. Involvement of Operating Manager.

HRA – HUMAN RESOURCE ACCOUNTING:

Measurement & reporting of Cost & Value of people as Organisational resources.

- Benefits: assist Managers w.r.t.,

1. Recruit Vs. Promotion 2. Transfer Vs. Retention

3. Retrench Vs. Retention 4. Utility of Cost Reduction Program

5. Impact of Budgetary Control 6. New dimension to Capital Budgeting

7. Return of Investment in Human Assets.

8. Decision on relocating or streamlining, etc…

- Methods:

1. Historical or Actual Cost Method: First Investment is capitalised as Opening Value; Further Investment amortised.

2. Multiplier Method: It divides Cost & Value. Categorise into,

a. Senior Management (Highest) b. Middle Management

c. Supervisor d. Clerical & Operative (Lowest Multiplier)

Multiplier = Personal values of employees relating to Total assets value of organisation.

3. Replacement of Cost Method:

4. Economic Value Method: Discounts to a present value that, portion of companies' future earnings Directly Attributable to HR.

RECRUITEMENT: process of identification of different sources of personnel. Two sources include,

1. Internal Sources: a. Transfer (one job to another) b. Promotion (filling the higher jobs).

2. External Sources:

a. Recruit at Factory Gate b. Casual Callers or Unsolicited Applications

c. Media Advertisement d. Employment Agencies e. Management Consultants f. Campus Recruitments g. Recommendations

h. Labour Contractors i. Telecasting.

SNO.	Internal Sources	External Sources
1.	From within the organisation.	From outside the organisation.
2.	Quick process	Lengthy process
3.	Cheaper as no cost of contracting	Costly as to be notified
4.	Limited choice of candidates	Infusion of new blood & new ideas
5.	Lethargic	Competitive Spirit.

R&S

RECRUITMENT: Attract applicants for vacant jobs;

SELECTION: Rejection of unsuitable candidates.

SNO.	Basis	Recruitment	Selection
1.	Meaning	Process of searching candidate for vacant jobs & making them apply for the same.	Process of selection of right type of candidates & offering them jobs.
2.	Nature	Positive Process	Negative Process
3.	Aim	Attract more & more candidates.	Reject unsuitable candidate
4.	Procedure	Firm notifies vacancies through various sources & distributes Application Forms to candidates.	Firm ask candidates to pass through a number of stages such as filling of form, Employment Test, etc…
5.	Contract of Service	Only communication of vacancies.	Leads to Contract of Service.

Employment Test includes, Intelligence Test, Aptitude Test, Proficiency Test, Interest Test, Personality Test.

Interview includes, Patterned, Unstructured, Press, Group Interview in which,

1. Find Suitability;

2. Seek more information;

3. Gives accurate picture of job;

CAREER: A sequence of positions held by person during course of his working life.

CAREER ANCHOR: Basic drives that create the urge to take up a certain type of career. It is concerned with,

1. Technical Competence; 2. Managerial Competence;

3. Security of career; 4. Autonomy;

5. Creativity.

CAREER PLANNING: To provide Continuity, Order & Meaning to person's life. The features include,

1. Process of developing HR

2. Means of managing people to obtain optimum results

3. Continuous process

4. Integration of Individual & Organisational needs.

HR PLANNING facilitates Career Planning.

SUCCESSION PLANNING: Career Planning for higher level executives.

The PROCESS of Career Planning:

Step1: Preparation of HR Inventory;

Step2: Identify Individual Career Needs (to help individual to do their own planning). Also, identify the employees, who are,

· Fit & Willing to Take Up;

· Potential & Willingness to Take Up;

· Capacity to Take Up higher responsibilities.

Step3: Analysing Career Opportunities;

Step4: Matching the Employees Needs with Career Opportunities;

Step5: Formulation & Implementation of Training & Development (T&D) program;

Step6: Review of Career Plan.

Your earnest comments are very valuable to make every subject even many more interesting. Yes frens, CS exams are nearin... Come on... Do it...You can...Enjoy passin...Keep Communicatin...Vj

Dividend/IEPF timeline, charts & concepts - Article in CS Mysore E-Newsletter

Yes,

CS Mysore 51st E-Newsletter has honoured me by publishing my article under the head "Spectrum Space" which talks about the Secretarial Practice to Winning Study by giving pictures, charts & ideas to make "Dividend very easy".

See Yes, click to see the 1st page http://thisisvj.googlepages.com/DividendArticle1.gif & click here to see the 2nd page http://thisisvj.googlepages.com/DividendArticle2.gif; Yes click the bottom right corner to the picture, to enlarge it.

But, read the wonderful E-Newsletter by clicking http://www.esnips.com/nsdoc/e401864a-d804-414b-83c2-c526ca172627 and join the group by clicking http://groups.google.co.in/group/csmysore?hl=en to stay inspired.

Waiting for your critical & valuable comments. You can only improve me, please....

Keep Communciatin...Vj

Pay tax electronically, if your 4th Digit of PAN is "C" & Taxpayers know your Rights

Yes,

As CBDT mandated electronic payment of tax by Company & a person (other than a company), to whom provisions of Section 44AB are applicable [hereinafter collectively referred as "Taxpayers"], w.e.f. 1.4.2008, RBI has notified RBI/2007-08/280 DGBA.GAD. No. H. 10875 / 42.01.038/ 2007-08, by which, the banks shall not accept physical challans from such assessees across the counter.

You are a Corporate Assessee, so your 4th digit in the PAN is "C" and yes, pay tax only through electronic payment facility. The responsibility of making e- payment rests primarily with the taxpayer. Hence, the word of taxpayers should be taken as final.

Taxpayers, know your rights,

1. the acknowledgement for e-payment should be made available immediately on screen by the bank concerned. [check out your immediate acknowledgement]

2. the transaction id of e-payment should be reflected in the bank's statement. [check your bank statement for Transaction-Id]

3. each bank should prominently display on its e-payment gateway page, the official /s to be contacted in case the taxpayer faces any difficulty in making the payment, completing the e-transaction, generating the counterfoil etc. [feel free to contact the banking official for doubts]

4. also, banks are mandated to give the Income Tax Department and NSDL, a list of officials with contact particulars, to be contacted if required for any problems faced by ITD or taxpayers. [find out the name & contact details of your official from the list]

Keep payin electronically...Vj

SEBI amends Clause 49

SEBI amends Clause 49

Loophole left in the Clause 49 was plugged...

1) Companies are complying with Clause 49 of the listing Agreement only in letter and not in spirit. Now, if you have a person related to promoter as non-executive chairman, then half of the board should be independent.

2) The age limit of the Independent director fixed to a minimum of 21 years.

3) The time limit for appointment of another independent director after resignation of an independent director fixed as max. 180 days...but if the one-third/half composition is complied with, even after resignation, then this provision is not applicable.

SEBI had received requests/suggestions to bring about clarifications on certain provisions of the clause. After examining the same, it has been decided to modify the existing Clause 49. Hence SEBI vide circular SEBI/CFD/DIL/CG/1/2008/08/04 dated April 08, 2008 issued to stock exchanges has amended Clause 49 of the Listing Agreement to include the following provisions:

Mandatory provisions:

1. If the non-executive Chairman is a promoter or is related to promoters or persons occupying management positions at the board level or at one level below the board, at least one-half of the board of the company should consist of independent directors.

2. Disclosures of relationships between directors inter-se shall be made in specified documents/filings.

3. The gap between resignation/removal of an independent director and appointment of another independent director in his place shall not exceed 180 days. However, this provision would not apply in case a company fulfils the minimum requirement of independent directors in its Board, i.e., one-third or one-half as the case may be, even without filling the vacancy created by such resignation/removal.

4. The minimum age for independent directors shall be 21 years.

Non-mandatory provisions:

The company shall ensure that the person who is being appointed as an independent director has the requisite qualifications and experience which would be of use to the company and which, in the opinion of the company, would enable him to contribute effectively to the company in his capacity as an independent director.

Full text of SEBI circular at http://www.sebi.gov.in/Index.jsp?contentDisp=WhatsNewScroll&FilePath=/circulars/2008/cfdcir08.html

Understand the SEBI Updates here....

Company Secretary (CS) Study Videos on Directors appointed by Board u/s. 260, 262 & 313 of Companies Act, 1956

Yet another effort, a try to make CS (Company Secretary) study very interestin...Now its video venture....Yes...its "See Yes E-C(ast)"....

Here, three videos on Appointment of Directors by Board covering Sections 260, 262 & 313 of the Companies Act, 1956.

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Welcome, advice or suggestions from earnest friends & professionals to enhance my work.

Review it as critically as possible, now hav a look at it....

Part-I


Part-II


Part-III


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SEBI Revision in Fees&changes in Depositories&Participants Regulations&Cos(AS) amendment rules,2008

Securities And Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2008 dated 31/03/2008 which is applicable with effect from 1st April 2008.

Yes....SEBI has revised its fee structure under various regulations, its very clearly explained in the SEBI circular itself http://thisisvj.googlepages.com/SebiCircular.pdf

Now, through SEBI (Depositories and Participants) (Amendment) Regulations, 2008 dated 17/03/2008, the following amendments were made in Regulation 7 (i.e) Grant of Certificate of Registration:
1. In Regulation 7(d), the balance of the equity capital of the depository shall be held by its participants is DELETED, so only condition being "the sponsor shall, at all times, hold at least fifty-one per cent. of the equity share capital of the depository;”
2. The meaning of foreign entity and their Minimum Holding in equity of Depository as given in Regulation 7(e) is DELETED and in lieu of which, the following is inserted under R-7
"(ea) no person other than a sponsor, whether resident in India or not, shall at any time, either individually or together with persons acting in concert, hold more than five per cent of the equity share capital in the depository;
Explanation: For the purposes of this clause, -
(i) the expression “person resident in India” shall have the meaning assigned to it in clause (v) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999);
(ii) the expression “persons acting in concert” shall have the meaning derived from clause (e) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997;
(eb) the combined holding of all persons resident outside India in the equity share capital of the depository shall not exceed, at any time, forty-nine per cent of its total equity share capital, subject further to the following:-
(i) the combined holdings of such persons acquired through the foreign direct investment route is not more than twenty six per cent of the total equity share capital, at any time;
(ii) the combined holdings of foreign institutional investors is not more than twenty three per cent of the total equity share capital, at any time;
(iii) no foreign institutional investor acquires shares of the depository otherwise than through the secondary market;
(ec) no foreign institutional investor shall have any representation in the Board of Directors of the depository;”

Also have a look @ Companies (Accounting Standards) Amendment Rules, 2008 in http://www.mca.gov.in/MinistryWebsite/dca/notification/pdf/Companies_Acct_Std_Amendment_Rules_2008.pdf

Keep Updatin...Vj

NSE Listing Fees & Clause 35 amendments

Credits to Mr. Ashwin...for this detailed presentation...

Listing fees as the name implies is the fees to be paid by the companies to the stock exchange where their shares are listed based on the paid up capital of the Company. This is to be paid annually. The Annual listing fee of National Stock Exchange of India Ltd.,(NSEIL) each year has to be paid on or before 30^th of April.

The listing fees of NSEIL has been revised/changed w.e.f. 1^st April, 2008 and the revised list is as follows:-

S.No.	Particulars		Amount (Rs.)
1	Initial listing Fees(one time payment)		25,000
2	Annual listing Fees (based on paid up share, bond and/or debenture and/or debt capital, etc.)
	Above(Rs.)	Upto(Rs.)
	N.A.	1 Crores	10,000
	1 Crores	5 Crores	15,000
	5 Crores	10 Crores	25,000
	10 Crores	20 Crores	45,000
	20 Crores	30 Crores	70,000
	30 Crores	40 Crores	75,000
	40 Crores	50 Crores	80,000
	50 Crores	100 Crores	130,000
	100 Crores	150 Crores	150,000
	150 Crores	200 Crores	180,000
	200 Crores	250 Crores	205,000
	250 Crores	300 Crores	230,000
	300 Crores	350 Crores	255,000
	350 Crores	400 Crores	280,000
	400 Crores	450 Crores	325,000
	450 Crores	500 Crores	375,000
	500 Crores		375,000+2500 for every increase of 5 crores or part thereof
	1000 Crores		630,000+2750 for every increase of 5 crores or part thereof

ALTERATION IN FORMAT (l)(d) UNDER CLAUSE 35 OF

LISTING AGREEMENT

Through Circular NSE/CML/2006/002 dated April 26, 2006 amendment was made in Clause 35 of listing agreement requiring the company to file shareholding pattern within 21 days from the end of the each quarter.

Under clause 35, company is also required to file statement of locked in shares in Format (l) (d)

Format (l) (d) under Clause 35 of the listing agreement is altered by introducing a new column – "Category of share holders" After the amendment it stands as follows:-

(l)(d) – Statement showing details of locked in shares

Sr.No.	Name of the shareholder	*Category of shareholders (Promoters/Public)	Number of locked-in shares	Locked-in shares as a percentage of total number of shares{i.e., Grand Total (A)=(B)+(C) indicated in Statement at para (l)(a) above}
1.
2.
TOTAL

*New addtion in the format (l)(d) of the clause

Keep updatin...

Development Banking for CS Final

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DEVELOPMENT BANKING – the gap filler

It is a multi-purpose financial institution. Financial institution
concerned with providing all types of financial assistance to business
units, in the form of loans, underwriting, investment, guarantee
operations & promotional activities – economic development in general
& industrial development.

I. EVOLUTION:
1. Institutionalism (1948-55)
2. Expansion (1955-64)
I. CONSOLIDATION & INNOVATION (1964-76):
1. Introduction of Consortium financing;
2. Industry potential survey & concessional finance for Backward areas;
3. Introduction of Loan convertibility clause, merchant banking, etc…
4. Creation of Technical consultancy organisation & Management
Development Institute (MDI, Gurgaon).
I. STABILITY & GROWTH (1976-84): Increased sanctioning & disbursement
of loans; creation of Entrepreneurship Development Institute of India,
1983.
I. DIVERSIFICATION & CHANGE (1984-92):
1. Increase in project financing and fund & fee based services;
2. Introduction of Credit Rating Agencies (CRA);
3. Guidelines for appointment of nominee directors.
I. RE-ORIENTATION (1992 onwards):
1. Establishment of commercial banks, investment banks & mutual funds;
2. IFCI which was formed as a statutory corporation is converted into company.

SNO. DEVELOPMENT BANKING; COMMERCIAL BANKING
1. Project oriented; Security oriented;
2. Influencing & collecting savings & re-channelising them to people
in need; It has an additional function of generating money;
3. Liabilities are not converted into cash-on-demand; Substantially
there are demand deposits & only banks are authorised to accept
deposits withdrawable by cheque;
4. For medium & long term needs; For short term credit requirements;
5. Funds drawn from budgetary resources of Central Government, RBI
borrowings, foreign lines of credit & bond borrowings; Funds from
deposits of public & corporate sector (demand deposits).
6. CREDIT FUNCTION; Also MONETARY FUNCTION.

GROWTH OF DEVELOPMENT BANKING – for long term investment credit;
FOR i) Industry: IDBI, SIDBI, IFCI, ICICI [(P) sector], IIBI, SFC, SIDC;
ii)Agriculture: NABARD;
iii)Exports: EXIM;
iv) Housing: NHB;
v) Infrastructure: IDFC;
In economic development of a country, development banking act as
"partners in progress" & proceed on "anticipated income theory" i.e.,
dues are expected to be realised out of the anticipated income of the
borrowers. The common functions include, Direct Investment /
Underwriting / Guaranteeing / Securing…

INDUSTRIAL FINANCIAL CORPORATION OF INDIA LTD (IFCI) – 1948
Making medium & long term credit more readily available to eligible
industrial concerns in India when, normal banking accommodation is
"inappropriate" OR recourse to capital market is "impracticable".

NODAL AGENCY for "sugar development fund" & "jute modernisation fund".

FUNCTIONS:
1. Financial assistance to industrial concerns for new, expansion,
diversification & modernisation projects in corporate & co-operative
sector;
2. Merchant banking (fund & fee), foreign & rupee currency loans;
3. Underwriting/direct subscription/guarantees;
4. Subsidiaries include IFCI financial/custodial/investor service;
5. Established MDI, Gurgaon for management training.

STATE FINANCE CORPORATION (SFC) ACT 1951: for meeting term credit
needs of small & medium industries. It complements IFCI. It raises
resources as 'trustee securities', borrows up to 2x(paid-up) from RBI,
borrow from SG/FI/Scheduled Commercial Banks within the prescribed
limits. The business includes factoring, money market, endorsing
letter of credit, trustee for debenture holders, etc…

PRIME LENDING RATE: interest rate at which bank or financial
institution is willing to lend to its prime customers (near zero
risk), so that the earnings from lending will cover, all costs &
expenses and leave adequate enough margin to service its capital. It
can be short term (<=3years) or long term (>3years). The components
include,
1. Fund cost (Deposits + Own funds); 2. Staff cost (Fund mobilisation
+ loans/advances); 3. Overheads; 4. Write-off bad & doubtful debts; 5.
Premium for Asset-Liability mismatch.
INDUSTRIAL CREDIT & INVESTMENT CORPORATION OF INDIA (ICICI) 1955: as a result of international co-operative effort (by World Bank with GOI
support) to foster private investment in India & to promote industries
in (P) sector.

FUNCTIONS: (as a Universal Bank)
1. Underwriting/direct subscription/guaranteeing/merchant banking, etc…
2. Merchant banking & Project Counselling for NRIs.
3. Foreign currency assistance for 3crores project.
4. Provides risk & loan capital for creation/expansion/modernisation
of Productive Facilities & encourages others to invest.
5. Credit facilities to indigenous manufacturers & equipment leasing services.

INDUSTRIAL DEVELOPMENT BANK OF INDIA (IDBI) – 1964 as a Wholly Owned
Subsidiary (WoS) of RBI, later converted into autonomous body to serve
as an APEX institution for term finance in an industry.

FUNCTIONS:
1. Established National Securities Depository Ltd., & Entrepreneurial
Development Institute at Ahmedabad.
2. Planning, promoting, co-ordinating,… the working of & assisting the
development of & to fill gaps.
3. Conducting surveys, R&D, techno-economic studies & Investment research.
4. Re-discounting to push up sales by Indigenous manufacturers.
5. Advise Government in disinvestment.
6. Entered International market with floating rate note issue.
7. Direct loans under Project Finance Scheme for 5crores with
convertibility up to 20% of loans into equity.

SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA (SIDBI): an APEX bank for
tiny, small & cottage sector, established as a WoS of IDBI & it
administers SID fund & National Equity fund.

FUNCTIONS:
1. Direct assistance through project, equipment & infrastructure financing;
2. Indirect financing through 100% refinancing if repayment on
quarterly basis to loans for a period of 25years;
3. Equity type assistance including Seed Capital scheme, self
employment for ex-servicemen, et al.
4. Commercial exploitation of lab-tested technology in association
with CSIR (Council for Scientific & Industrial Research).

INDUSTRIAL INVESTMENT BANK OF INDIA (IIBI), 1997 as a Government
Company; an AIFI (All India Financial Institution) providing financial
assistance to SICK & Non-Sick industries (medium & large scale)
needing modernisation, diversification & technological updation by way
of term loans, bridging urgent liquidity gaps, etc… The ancillary
services include Consultancy (Viability Report), Merchant banking
(Scheme of M&A) & equipment leasing. The repayment period of 10years
is based on surplus generation capacity. The schemes include Short
term loans, Short term Working capital loans & Asset credit scheme.

VENTURE CAPITAL: provides initial support to new companies (with sound
project ideas) using high technology & have potential for high profits
but suffer from capital inadequacy.

SEBI (VENTURE CAPITAL FUNDS (VCF) REGULATIONS), 1996:
1. Venture fund incorporated in India can exit the company within
1year of going public or stay invested, foregoing the Tax Pass Through
Benefit (TPTB).
2. Foreign funds not incorporated in India have no TPTB though
registered with SEBI.
3. Acquisition of shares will be exempt form Takeover Code.
4. Investor in Venture Fund for 5lakhs & Minimum corpus of the fund to
be 5crores & investment in a company up to 25%.
5. Mutual fund can invest till 5% (Corpus) in open-ended schemes & 10%
(Corpus) in close-ended schemes.
6. VCF can invest in IPO as QIB (Qualified Institutional Buyer).

EXPORT IMPORT (EXIM) BANK 1982 established as a statutory corporation
from IDBI providing financial assistance to exporters/importers & to
promote country's international trade. The operations include deferred
payment @ post-shipment stage, multi-currency financing for project
exporters & term loans to SEZ.

FUNCTIONS:
I. Loans to Indian companies:
1. Direct financial assistance through Risk syndication facility;
2. Facilities for deemed exports & overseas investment financing;
3. Pre-shipment credit if cycle time of export contract is >3months;
II. Loans to foreign Government & Financial Institution:
1. Overseas Buyers Credit: Foreign importers for Indian goods/services;
2. Line of Credit (LoC) to foreign government & re-lending facility to
bank overseas;
Foreign BuyerBANK OverseasEXIM (Intermediary)Suppliers.
III. Loans to commercial bank in India:
1. Export bills re-discounting; 100% re-finance of export credit;
2. Guaranteeing of obligation for execution of export contracts & also
in-principle approval for such contracts at bid stage if its worth
beyond 2crores.

Joint venture with Global Trace Finance for forfeiting & factoring;
Got award for "Export Development" from ADFIAP Awards, 2002;
Book for "Business practises of Successful Indian Exporters";
"EXIMius centre" at Bangalore;

UNIT TRUST OF INDIA (UTI) 1963 as statutory public sector investment
institution.
STEP1: Mobilise savings through sale of units under schemes;
STEP2: Invest in good companies;
STEP3: Distribute tax-free dividend to unit-holders.

TRIPLE ADVANTAGE to small investors as to SAFETY, STEADY RETURN &
LIQUIDITY, also benefit of leaving task of portfolio management to
experts.

SCHEMES include OPEN ENDED – tailored to suit the needs of different
categories of peoples & different purposes; CLOSE ENDED – Income &
Growth schemes. Thus, SUPER MARKET for instruments.

SUGGESTIONS of Deepak Parekh Committee: for sustaining investor
confidence & strengthening about US64 scheme by taking a) Measures to
provide financial support by enhancing promoter's stake, GOI
participation, etc…; b) Measures for qualitative changes in funding of
UTI through independent trustees in Board, reconstitute AMC,
NAV-driven schemes, etc...

LIFE INSURANCE CORPORATION (LIC) 1956: accumulate in the form of "life
fund" & is the single largest investor to subscribe/underwrite/provide
term loans;

Accretion to "Controlled Fund" invested as per Insurance Act, 1938:
<=20% in CG Marketable securities; <=25% (including above) as loan to
National Housing bank; <=50% (including above) in CG/SG securities;
<=75% (including above) in Social Oriented sectors; Balance (25%) as
per commercial judgement subject to Prudential Norms.

Investment for General Insurance Corporation (GIC) being <=20% in
CG/SG securities; <=15% to housing loans; <=55% to market sector &
Balance to Social Oriented Sectors.

NATIONAL BANK FOR AGRICULTURAL & RURAL DEVELOPMENT (NABARD) 1981 by merging agricultural credit & rural planning cell of RBI &
Agricultural Refinance Development Corporation (ARDC) as APEX
Development bank for promotion of agriculture, SSI, cottage & village
industries & economic activities in rural areas.

FUNCTIONS
*. CREDIT FUNCTION:
1. Refinance <=18months for seasonal agriculture, marketing of inputs,
& other production & marketing activities; conversion & rescheduling
of loans <=7years from out of "National Rural Credit
(Stabilisation/Long term operations) Fund".
2. Medium/Long term credit assistance to Banks/FI.
3. Incorporated the "Co-operative Development Fund" & Rural
Infrastructure Development Fund (RIDF) for quicker completion of
on-going projects.
*. DEVELOPMENT FUNCTION:
1. Assist & act as agents to Government & RBI for rural development efforts;
2. Assist SG to contribute to share capital of eligible institutions.
*. REGULATORY FUNCTION:
1. For Regional Rural Banks & Co-operative banks, NOT being Primary banks;
2. Undertake inspection & required to file returns & documents.

NATIONAL HOUSING BANK (NHB) 1987: Principal Agency of APEX institution
in housing finance & support services.

FUNCTIONS:
1. Promotion & Development: Equity support & conducts training;
2. Regulation & Supervision: S24 – power to inspect & call
information; S30 – regulate/prohibit issue of
Prospectus/Advertisement; S31 – collect information & issue
directions.
3. Financing: Equity & Re-financing for Land development & shelter
projects, Infrastructure projects & Slum re-development schemes;
front-end charge up to 2% of sanctiond amount.
4. Housing Finance Company (HFC) accepts deposits from public
(12-84months) & can give interest <=15% p.a. but such limit will not
apply if Net Owned Funds (NoF) >= 50lakhs.
5. HFC should have a minimum credit rating of "A" grade.
The major amendment being on default of loan, apply to Recovery
Officer, NOT under Transfer of Property Act.

LOAN SYNDICATION:
STEP1: When prospective borrower, approaches the Financial Institution
(Lead Manager/Mandated Institution) & request it to arrange for
credit;
STEP2: Such financial institution prepares Information Memorandum with
details of projects, credit requirements, terms, etc…
STEP3: Such information memorandum is for Prospective Lenders to
participate in credit offer;
STEP4: Such prospective lenders do Independent Evaluation of Borrower,
Project & Credit offer;
STEP5: Meeting of Financial Institution (FI) & prospective lenders for
finalisation & appoint Agent FI by entering into agreement with limits
for agency services;
STEP6: Such Agent FI communicates to borrower who then offers his
written consent & then executes documents based on "Single Window
Clearance".
STEP7:
Credit deposition by FIDisbursement of amountRepaymentProrata entitlement.

METHODS – Loan Syndication:
1. Direct Lending: Executing Independent loan agreement & Several liability;
2. Participation Method: Agent FI is the only lending bank.

Thats it...this chapter...come on...u r nearin Victory.....Enjoy passin...Vj