BASIC TOOLS OF FINANCE
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This document discusses methods of funding acquisitions. It outlines various payment methods like issuing equity or preference shares, debt instruments, or cash. Key challenges with share swaps include determining accurate swap ratios and company valuations. Debt instruments are more likely to be accepted with differential pricing or listing. Cash offers are generally preferred by shareholders. Domestic funding sources include internal accruals, IPOs, rights issues, PE funds, bank/FI loans, and ECBs. Cross-border deals have size and structure peculiarities and are subject to RBI regulations and 400% net worth limits. Foreign exchange can be drawn from AD banks or through capitalization, share swaps, ECBs/FCCBs, A
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Issue, forfeiture and re issue of shares by N. Bala Murali Krishna
The document discusses various aspects of accounting for share capital. It defines types of share capital such as authorized, issued, subscribed, called up and paid up share capital. It explains journal entries for receipt and payment of application money, allotment money, call money. It discusses accounting treatment of shares issued at premium and discount. It also covers concepts of oversubscription of shares, calls in arrears, calls in advance, forfeiture and reissue of shares. The document provides detailed explanation of these concepts along with related journal entries.
Forfeiture of Shares
Forfeiture allows a company to take back shares from shareholders who fail to pay valid calls on their shares. Shares can only be forfeited if the company's articles of association give the directors the power to do so, and this power must be exercised strictly according to the notice, procedure, and manner stated in the articles. Forfeiture is not considered a reduction in share capital, as the company must dispose of the forfeited shares rather than retaining them. A shareholder facing forfeiture is entitled to notice specifying the amount owed and a deadline of at least 14 days to pay before the directors may pass a resolution declaring the forfeiture. The power to forfeit must be exercised in good faith and for the benefit of the
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Forfeiture of Shares : Company Accounts
This document discusses the accounting treatment for forfeiture of shares that were originally issued at a premium or discount.
For shares issued at a premium, if the premium was received before forfeiture, the share capital account and unpaid calls account will be debited and the share forfeiture account credited. If the premium was not received, the share capital, security premium, unpaid calls, and share forfeiture accounts will be adjusted.
For shares issued at a discount, the share capital account will be debited and the discount on issue of shares, unpaid calls, and share forfeiture accounts will be credited upon forfeiture.
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Issue of debentures
Debentures are a type of loan that companies use to borrow money from investors. They function similarly to bonds but are considered part of the company's capital rather than debt. The document discusses the key differences between debentures and shares, including how debentures are presented on the balance sheet, the rights of debenture holders versus shareholders, and priority of payment. It also categorizes debentures based on security, redemption, negotiability, convertibility, priority, and interest rate. The accounting treatment of debentures issued as collateral security is explained.
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This document summarizes key concepts related to shares and debentures issued by companies to raise capital. It defines shares and share capital, describing the main types of shares as equity and preference shares. It also outlines debentures, their types, and examples of IPOs and FPOs conducted by companies to issue new shares. The summary provides high-level information on the purpose and structure of the document.
Sweat equity
Sweat equity refers to equity shares that a company issues to individuals in consideration for services or value added to the company, rather than cash compensation. It can be issued for things like patents, technical know-how, or brand rights provided to the company. Sweat equity shares are subject to the same rules as regular equity shares and can be issued at a discount to their market value. Indian law stipulates certain conditions for issuing sweat equity, such as a minimum one year period since incorporation and shareholder approval. Sweat equity is different from stock options in that it provides real shares upfront rather than a future right to purchase shares.
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This document discusses the accounting treatment for forfeiture of shares that were originally issued at a premium or discount.
For shares issued at a premium, if the premium was received before forfeiture, the share capital account and unpaid calls account will be debited and the share forfeiture account credited. If the premium was not received, the share capital, security premium, unpaid calls, and share forfeiture accounts will be adjusted.
For shares issued at a discount, the share capital account will be debited and the discount on issue of shares, unpaid calls, and share forfeiture accounts will be credited upon forfeiture.
Any profit made upon reissuing forfeited shares is transferred to a capital reserve account through adjusting
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This document discusses concepts related to buy-back of shares and redemption of preference shares including accounting treatment and income tax applications. It provides details on various methods of share buy-backs including open market purchases, tender offers, and selective buy-backs. It also discusses rules for redemption of preference shares including use of profits or fresh share issues. The rationale for allowing buy-backs under section 77A of Indian companies act is explained as making markets more vibrant.
Issue of debentures
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This document summarizes key concepts related to shares and debentures issued by companies to raise capital. It defines shares and share capital, describing the main types of shares as equity and preference shares. It also outlines debentures, their types, and examples of IPOs and FPOs conducted by companies to issue new shares. The summary provides high-level information on the purpose and structure of the document.
Sweat equity
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The document provides information on company accounts including:
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3. Maintaining of proper books of accounts and preparation of key financial statements for a company.
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This document discusses company share capital accounts. It defines different types of share capital including authorized, issued, subscribed, called-up, and paid-up capital. It also describes different types of shares such as equity, preference, cumulative, non-cumulative, participating, and redeemable shares. The document outlines how shares are issued for cash at par, premium or discount value. It discusses forfeiture and reissue of shares, including that premium received cannot be forfeited and discount accounts are credited on forfeiture.
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This document discusses the capital structure of limited liability companies. It defines key terms like authorized capital, issued capital, called-up capital, and paid-up capital. It also explains the two main types of shares - preference shares and ordinary shares. Preference shares offer a fixed dividend rate while ordinary shares dividends vary. The document also covers how companies can raise capital through the issuance of shares at par, a premium, or discount, as well as payment methods like payment in full or by installments.
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Issue of shares
The document discusses various topics related to the issuance of shares by companies, including:
1) Shares can be issued at a premium or discount to face value. When issued at a premium, a securities premium account is created to record the excess received. Premium can be used for bonus issues or writing off expenses. Discount is recorded as a capital loss.
2) Shares may be forfeited if the shareholder fails to pay calls. Amounts received are transferred to a share forfeiture account. Forfeited shares can be reissued.
3) Oversubscription occurs when applications exceed shares offered. Companies typically allocate shares on a pro-rata basis in this situation.
Redemption of preference share
Preference shares represent partial ownership in a company and carry preferential rights to dividends and assets. Preference shareholders receive dividends first before common shareholders and do not have voting rights. Preference shares can be redeemed either through company profits, issuing new shares, or a combination. When redeemed through profits, an equivalent amount must be transferred to a capital redemption reserve account.
Debt vs equity
Companies can raise capital through either debt or equity financing. Debt financing involves taking a loan that must be repaid with interest, while equity financing involves selling ownership stakes in the company. There are several pros and cons to each approach. Debt is generally easier to obtain but subjects the company to fixed repayment obligations, while equity does not require repayment but dilutes ownership and control of the company. The best financing structure depends on the specific needs and risks involved for each business.
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Equity
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The document outlines several ways that a company can issue shares, including:
1) Private placement of shares to friends and relatives without a public offering.
2) Preferential allotment, where a listed company issues bulk shares to a select group to raise capital.
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Redemption of preference share
Preference shares represent partial ownership in a company and carry preferential rights to dividends and assets over common stock. Preference shares can be redeemed by the company at par or at a premium using profits, reserves, or proceeds from new share issues. Upon redemption, the company must transfer an amount equal to the nominal value of shares redeemed to a capital redemption reserve account to maintain capital levels.
Accounting for issue of debentures
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The document provides information on company accounts including:
1. Types of companies such as statutory, government, foreign, registered, private and public companies.
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3. Maintaining of proper books of accounts and preparation of key financial statements for a company.
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This document discusses company share capital accounts. It defines different types of share capital including authorized, issued, subscribed, called-up, and paid-up capital. It also describes different types of shares such as equity, preference, cumulative, non-cumulative, participating, and redeemable shares. The document outlines how shares are issued for cash at par, premium or discount value. It discusses forfeiture and reissue of shares, including that premium received cannot be forfeited and discount accounts are credited on forfeiture.
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This document discusses the capital structure of limited liability companies. It defines key terms like authorized capital, issued capital, called-up capital, and paid-up capital. It also explains the two main types of shares - preference shares and ordinary shares. Preference shares offer a fixed dividend rate while ordinary shares dividends vary. The document also covers how companies can raise capital through the issuance of shares at par, a premium, or discount, as well as payment methods like payment in full or by installments.
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The document discusses accounting for share capital and debentures. It defines key terms like share classes, issued capital, paid-up capital and uncalled capital. It also describes procedures for issuing shares such as setting the issue price, differentiating between fully-paid and partly-paid shares, accounting for public share issues, and costs associated with share issues. The document also differentiates between types of debentures and accounting for their issue and redemption.
Issue of shares
The document discusses various topics related to the issuance of shares by companies, including:
1) Shares can be issued at a premium or discount to face value. When issued at a premium, a securities premium account is created to record the excess received. Premium can be used for bonus issues or writing off expenses. Discount is recorded as a capital loss.
2) Shares may be forfeited if the shareholder fails to pay calls. Amounts received are transferred to a share forfeiture account. Forfeited shares can be reissued.
3) Oversubscription occurs when applications exceed shares offered. Companies typically allocate shares on a pro-rata basis in this situation.
Redemption of preference share
Preference shares represent partial ownership in a company and carry preferential rights to dividends and assets. Preference shareholders receive dividends first before common shareholders and do not have voting rights. Preference shares can be redeemed either through company profits, issuing new shares, or a combination. When redeemed through profits, an equivalent amount must be transferred to a capital redemption reserve account.
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Companies can raise capital through either debt or equity financing. Debt financing involves taking a loan that must be repaid with interest, while equity financing involves selling ownership stakes in the company. There are several pros and cons to each approach. Debt is generally easier to obtain but subjects the company to fixed repayment obligations, while equity does not require repayment but dilutes ownership and control of the company. The best financing structure depends on the specific needs and risks involved for each business.
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The document provides an introductory lesson on shares and debentures for social entrepreneurship students. It discusses key concepts such as how shares and debentures are issued, redeemed, and used to raise capital for business ideas and social transformation. The document also addresses accounting treatments for premiums/discounts on debentures and the importance of budgeting and financial control systems for entrepreneurial ventures.
Buyback and share spilt
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Introduction and Accounting for Buy-back of Shares in India as per the Companies Act 2013 and other rules.
It will be useful for the students of B. Com., B.Com.(H), CA, CS and other professional courses, studying Corporate Accounting.
Equity
Equity represents the value of assets owned after accounting for liabilities. Equity shareholders own fractional shares of a company and take on the highest risk. Equity shares are a permanent source of capital for companies and do not require repayment, but dividends are not guaranteed and shareholders' liability is limited to their investment amount. Risks to shareholders include economic, market, exchange rate and industry risks. Advantages are liquidity, potential dividend payments and share appreciation.
Issue of shares
The document outlines several ways that a company can issue shares, including:
1) Private placement of shares to friends and relatives without a public offering.
2) Preferential allotment, where a listed company issues bulk shares to a select group to raise capital.
3) Right issues, where existing shareholders can purchase additional shares at a discount.
4) Sweat equity shares given to employees for their work at a discounted market rate.
5) Employee stock option plans that incentivize employees and boost the stock price.
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Preference shares represent partial ownership in a company and carry preferential rights to dividends and assets over common stock. Preference shares can be redeemed by the company at par or at a premium using profits, reserves, or proceeds from new share issues. Upon redemption, the company must transfer an amount equal to the nominal value of shares redeemed to a capital redemption reserve account to maintain capital levels.
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This document provides an overview of shares, share capital, types of shares, debentures, and initial public offerings (IPOs) and further public offerings (FPOs). It defines what shares and share capital are, describes the main types of shares (equity and preference), and lists their advantages and disadvantages. It also defines debentures and describes different types. Real-life examples of an IPO by Jaypee Infratech Ltd. and an FPO by NTPC Limited are presented. The document concludes that while equity shares have risks, they remain very popular financial instruments for investment and speculation.
mainpptanurag-100526052222-phpapp02.pdf
This document provides an overview of shares, share capital, types of shares and their advantages and disadvantages. It discusses equity shares, preference shares, and debentures. It also provides examples of an initial public offering (IPO) and further public offering (FPO) to illustrate how companies issue shares. The key topics covered include the meaning of shares and share capital, types of shares such as equity and preference shares, how shares are issued, the process of IPOs and FPOs, and examples of companies that have undertaken IPOs and FPOs.
Sources Of Finance
Short term sources of finance include commercial papers and factoring. Commercial papers are money market instruments issued by companies with good credit ratings for 3 months to 1 year. Factoring involves selling a company's receivables to a factoring agent in exchange for immediate financing, with the factor taking on the risk of debt.
Long term sources include shares, debentures, term loans, venture capital and lease financing. Shares are equity while debentures are debt securities. Term loans are obtained from banks for capital expenditures. Venture capital provides early stage financing for new companies in exchange for equity. Lease financing involves leasing assets from a lessor.
Financial restructuring methods include debt-equity swaps,
1 long term_fund 2
The document discusses various long term financing options for companies including venture capital, initial public offerings, rights issues, private placements, preferential allotments, and term loans. It provides details on the process and requirements for each type of financing. Some key points covered include the roles of merchant bankers and underwriters in IPOs, the pricing and allotment process for rights issues, and the steps involved in applying for and disbursing a term loan.
Dividend Policy and Procedure
This ppt is prepared to make familiar with the dividend policy which includes Types of Dividend policy, Procedure for declaring dividend, Why do companies declare dividend
PROVISION OF BUSINESS FINANCE
Steven George Conville has contributed his time to several charities trusts, such as the Urban Financial Services Commissions (UFSC) of Toronto, and financially to the Academy for Gifted Children (PACE) Canada.
share and debentures
This document summarizes key concepts related to shares and debentures issued by companies to raise capital. It defines shares and share capital, describing the main types of shares as equity and preference shares. It also outlines debentures, their types, and examples of IPOs and FPOs conducted by companies. The summary provides high-level information on the purpose, structure, and key points covered in the document.
Private Placement
This document summarizes private placements, which are a type of private funding where securities are sold to a small number of chosen investors rather than through a public offering. It describes the types of private placements including traditional long-term loans, structured placements with stock price protections, stock options, bonds, and promissory notes. The advantages are choosing investors, less regulatory requirements than public offerings, and more flexibility. Drawbacks include difficulty raising large amounts, investors requiring lower share prices, and structured placements reducing future shares available. It also describes Qualified Institutional Placements in India which allow listed companies to issue securities privately to qualified institutional buyers through a faster process than other private placement methods.
Ch 2 Sources of finance are classed as being either internal or external.Fina...
This document discusses different sources of finance available to businesses, including equity shares, preference shares, debentures/bonds, term loans, and internal accruals. It explains the advantages and disadvantages of each source and the factors to consider when choosing a source of finance, such as cost, risk level, and term of funding needed. The chapter provides an overview of financing options for businesses needing capital for starting up, expanding, or other purposes.
Devidend legal & social aspects
Dividends are payments made to shareholders that are usually paid out of a company's current or retained earnings. Some companies pay dividends while others do not. Companies that pay dividends tend to be larger and more stable businesses with little growth potential. Paying dividends provides current income to investors but also takes away money that could be reinvested in the company. Dividend policies are influenced by legal requirements as well as financial, economic, and market factors.
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【业务选择办理准则】
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一、工作未确定，回国需先给父母、亲戚朋友看下文凭的情况，办理一份就读学校的毕业证【微信bwp0011】文凭即可
二、回国进私企、外企、自己做生意的情况，这些单位是不查询毕业证真伪的，而且国内没有渠道去查询国外文凭的真假，也不需要提供真实教育部认证。鉴于此，办理一份毕业证【微信bwp0011】即可
三、进国企，银行，事业单位，考公务员等等，这些单位是必需要提供真实教育部认证的，办理教育部认证所需资料众多且烦琐，所有材料您都必须提供原件，我们凭借丰富的经验，快捷的绿色通道帮您快速整合材料，让您少走弯路。
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1:该专业认证可证明留学生真实身份
2:同时对留学生所学专业登记给予评定
3:国家专业人才认证中心颁发入库证书
4:这个认证书并且可以归档倒地方
5:凡事获得留信网入网的信息将会逐步更新到个人身份内，将在公安局网内查询个人身份证信息后，同步读取人才网入库信息
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8:在国家人才网主办的国家网络招聘大会中纳入资料，供国家高端企业选择人才
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我们所定的价格是非常合理的，而且我们现在做得单子大多数都是代理和回头客户介绍的所以一般现在有新的单子 我给客户的都是第一手的代理价格，因为我想坦诚对待大家 不想跟大家在价格方面浪费时间
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For more details, you can visit https://technoxander.com.
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BASIC TOOLS OF FINANCE
- 1. Presented by Faiz Ahmad Gaurav Gupta
- 2. Introduction Acquisition of a target company is one type of an investment in an expansion or a diversification project. However, when it comes to funding of acquisitions it is very different from the funding in an expansion or a diversification. Main reasons are:More risky Correct Valuation Undisclosed off-balance sheet liabilities.
- 3. Methods of Effecting Payment of Consideration By issue of equity shares of the acquirer company. By issue of preference shares of the acquirer company. By issue of secured debt instruments of the acquirer company. By payment in cash. By any combinations of the above.
- 4. Issue of Equity shares of the acquirer company An acquirer issues its shares to the shareholders of the target company in exchange of the target company in a specified ratio known as swap ratio. Issues in using share swap method : Determine the correct swap ratio Determine correct long-term intrinsic value of the acquirer company’s shares. It may lead to dilutions of the EPS and also reduced the stake of the acquirer company's promoters in the acquiring company.
- 5. Contd. Under the SEBI Act 20(2) of takeover regulations, the acquirer company would have to give options to the tendering shareholders to accept either cash or equity shares. Under the IT act, there is no exemption nor deferment available from payment of capital gain tax even if there is no cash consideration flowing from the acquirer to the tendering shareholder in the pure swap method.
- 6. Issue of preference shares of the acquirer company SEBI prohibits it, in the course of open offer. Not applicable in case of negotiated deal. If takeover is initiated by institutional investors due to there unhappiness with the present promoters.
- 7. Issue of secured debt instruments of the acquirer company Chances of acceptance of this instruments is better if company resorts to differential pricing. Also if the debt instruments is listed on a stock exchange with national trading. Lastly, the most favored is always the cash option, which is always liked by the tendering shareholders.
- 8. SOURECES OF FUNDS DOMESTIC ACQUISITIONS: 1) a) b) c) d) e) EQUITY Internal Accruals IPO/FPO Rights Issue PE funds ADRs / GDRs
- 9. Contd. 2. Borrowed Funds a) Banks and FIs b) External Commercial Borrowings(ECBs)
- 10. Cross-Border Acquisitions by Indian Companies Peculiarities of cross-border acquisitions a) Size of the acquisitions b) Corporate and Funding Structure c) RBI regulations (i) LIMIT:-Investments not exceeding 400 % of the net worth of the acquiring company.
- 11. Contd. Source of Funds:a) Drawl of foreign exchange from an AD bank in India. b) Capitalization of exports c) Swap of shares d) Proceeds from ECBs/FCCBs e) In exchange of ADRs/GDRs f) Balances held in EEFC account of the Indian company.