Tell Me About Yourself?

Tell me something about yourself?
Questions No: 1 "Tell me something About yourself"! 

1. 95% of the freshers talk about details like - place, father's name, father's job, college name, college location, university ( MBA, Degree & Inter) etc etc. If you analyse these responses then you will find that you are providing "FACTS OR "INFORMATION WHICH YOU HAVE ALREADY MENTIONED IN YOUR RESUME". Unfortunately, this is not a winning response. 

2. Instead, use this opportunity to talk about YOUR-SELF. This means about your - "Attitude - Skills - Knowledge" 
3. Ideal Answer:
a) Quickly tell him/her - I am XYZ and I am from XYZ location. I did my MBA from XYZ University with XYZ as specialization (You spend a maximum of 20 to 30 Seconds) 

b) Talk about your Summer Project/Training Programs/Workshop (Knowledge) (Take 60 to 90 Seconds)
- Company name
- Theme of your Summers
- Your work ( Maximum 2 Points)
- Your Learnings ( Maximum 2 Points) 

c) Talk about your Attitude: (60 to 90 Seconds)
Please note that you should mention about your "WORK ATTITUDE". Few Important Attitudes at Work Place are - Optimism, Confidence, Creativity, Conflict Resolution, Motivation, Focus, Drive for Achievement" etc.
Please note: Here you will have to assess yourself and pick-up ONE trait mentioned above. For ex: If you believe you have " Focus" then tell him/her that - I believe I have a strong Focus on Goals and focus on completing tasks. 90% of you stop here. But, Don't stop here. Go on and share your REAL experience which made you to believe that you have focus. Experiences for focus are like - Taking up a project or event or activity etc in your town or home or college and how you completed the task with focus. ( Please ensure that you keep well under 90 Seconds 

d) Talk about your Skills (60 to 90 Seconds)
Important Skills at work place are - Team Work, Communication Skills, Problem Solving Skills, Time Management, Planning Skills, Leadership Skills etc. As mentioned above - Please Select ONE important skill which you think you have to the core. DO NOT STOP HERE. Go ahead and explain why you think you have that skill. Ex: I am a good team player. Since school days, I did group studies or combined studies with my friends. We used to divide and share the syllabus among each other. Then we used explain to the group and listen from the group. This helped me to understand the concepts well. That I continued in graduation and in my MBA. And I play games like cricket, volleyball, basket ball where further improved on my team skills. 

e) Finally close your answer by telling him your Career Objective (45 Seconds)
Most of the freshers copy Career Objectives from their senior resumes. But, Please spend 1 or 2 hours and define your career objective. You will have to have your objective clear for next 2 to 3 years. Ex: I would like to work for a growth oriented company where I will have opportunities to work in the area of Finance/Marketing/HR etc. For next 2 to 3 years, i would like learn as much as I can and contribute for the growth of my organization. 

In total, you will have to present your self for about 3 to 4 minutes. Your details ( 25 Secs) + Summer Project (60 Secs) + Attitude (60 Secs) + Skills (60 Secs) + Career Aspiration (45 Secs) 

This model worked well for many freshers. We firmly believe that this will work for you. 

Please Note:
1. Write 1 Page notes on this
2. Prepare 10 times
3. Start recording the same with your Mobile Phone. You will have to do at least 10 to 15 recordings
4. Present it to your friends - 5 to 10 times
5. WITH OUT PRACTICE, its difficult to give a winning response for this question.

What is Venture Capital Fund?

What is Venture Capital?

Venture capital is a type of private equity capital typically provided by outside investors to new businesses. Generally made as cash in exchange for shares in the investee company, venture capital investments are usually high risk, but offer the potential for above-average returns.

What is Venture Capital Fund?

A venture capital fund is a pooled investment scheme that primarily invests the financial capital of third party investors in enterprises that are too risky for the standard capital markets or bank loans. Venture capital can also include managerial and technical expertise. Most venture capital comes from a group of wealthy investors, investment banks and other financial institutions that pool such investments or partnerships. This form of raising capital is popular among new companies, or ventures, with limited operating history, who cannot raise funds through a debt issue.

What is SEBI (Venture capital funds) Regulations 1996?

The SEBI (Venture capital funds) Regulations 1996 (”VCF Regulations”) issued by the Securities and Exchange Board of India (“SEBI”) are a comprehensive set of laws to be followed by the venture capital funds in India. From the registration of venture capital funds to the action to be taken in case of default, the regulation has been divided in VI chapters. Regulation 2(m) of the VCF Regulations defines as venture capital fund as follows: “venture capital fund” means a fund established in the form of a trust or a company including a body corporate and registered under these regulation which—

(i) has a dedicated pool of capital;

(ii) raised in a manner specified in the regulations; and

(iii) invests in accordance with the regulations;

How is Registration of Venture Capital Funds Done?

A venture capital fund can either be a fund established as a trust under the Indian Trust Act, 1882 or a company under Companies Act, 1956.

The regulations provided for the registration of a company or a trust which either was functioning as a venture capital fund before the commencement of this act or proposed to do so after the commencement of this act. The list of registered venture capital funds with SEBI can be found here

What are the Conditions and Restrictions on Investments into a Venture Capital Fund?

An investment in a venture capital fund, which is registered with SEBI and is established as a trust, can be made under the automatic route (i.e. without government approval) by any person who is a person resident in India or a SEBI registered Foreign Venture Capital Investor (“FVCI”). Persons resident outside India (other than FVCIs) such as non-resident entities / individuals, including non-resident

Indians (NRIs), can invest in such a VCF only with the prior approval of the Foreign Investment Promotion Board (FIPB). Investments by all investors of a VCF are subject to the requirements specified in the VCF Regulations, including that the minimum investment amount should be INR five lakhs (this does not apply to investment made by the employees, directors or the principal officers of the company or by the trustee where the venture capital fund is a trust).

An entity seeking to register as a VCF with SEBI is required to submit an application that discloses details of the venture capital fund, including, the investment strategy of the venture capital fund, the duration of its life cycle etc. Once registered, the venture capital fund is subject to the investment restrictions specifed in the VCF Regulations, such as

a. Not more than 25% of the fund shall be invested in a single venture capital undertaking.

b. Investments are to be made in the following manner:

i) At  least  66.67%  of  the  fund  to  be  invested  shall  be  invested  in  unlisted  equity  shares  or  other instruments linked to equity shares of the venture capital undertaking.

ii) Not more than 33.33% of the investible fund shall be invested by the way of IPO of a venture capital undertaking whose shares are proposed to be listed, the debt instrument of the venture capital

undertaking in which the venture capital fund has already invested, preferential allotment of equity shares of a listed company, equity shares or equity linked instrument of a financially weak company and SPV’s which have been created by the venture capital fund..  No venture capital fund shall get its units listed on any recognized stock exchange till the expiry of the years from the date when they were issued to the investors by the venture capital fund. The venture capital funds shall also not invite any member of the public by way of advertisement to subscribe to its units. The venture capital fund may receive investments only through private placements of its units.

What is Placement Memorandum or Subscription Agreement?

Every venture capital fund shall issue a placement memorandum to its proposed investors which contains all the terms and conditions relating to the scheme through which money is proposed to be raised from the investors. The venture capital fund may also enter into a subscription agreement with the investors which would specify the terms and conditions of the scheme through which money is proposed to be raised. The venture capital fund shall submit a copy of such placement memorandum or subscription agreement with SEBI along with the report of the money actually raised through such agreement or memorandum. The placement memorandum or the subscription agreement shall cover the following:

It shall contain the details of the trustee and the trust as well as the details of the directors and the principal officers of the venture capital fund. It shall also state the minimum amount of money to be raised to start the venture capital fund and the minimum share to be invested in every scheme of the venture capital funds. Tax implications which would be applied to the investors shall also be stated. The manner of subscription to the units of the fund, the period of maturity of the fund if any and the manner in which the fund would be wound up shall also be stated.

Every venture capital fund shall maintain a book of record for a period of eight years which would generate the true picture of the venture capital fund. SEBI at any time can call for information regarding the working of the venture capital fund, the information shall be submitted to SEBI in the specified time period.

IPO PROCESS IN INDIA.

Overview and History of Initial Public Offering:

An interesting Historical fact is that the first company that got listed was in the year 1602, “The Dutch East India Company” (Chambers, 2006).
Organizations in the 21 st Century are not only getting bigger, but also extremely complex. The M&A route adopted by many organizations to become even larger by acquiring smaller organizations is also on a roll, albeit in the short term.

Given the Global meltdown and its imperatives on the world economy, companies trying hard to stay afloat, approaching the small investor with a Public offerings is no more as exciting as it used to, yet Companies continue to choose the option of an Initial Public Offering (herein after referred as “IPO”). Being a professional in such demanding market situation, it becomes important to know certain aspects of the IPO.

Requirement for an IPO:

As organizations grow bigger, the requirement for funds increases. Such Orgniasations have limited options. They will either have to approach a Bank or a lender for money or go in for a “Private Equity Fund” (herein after referred to as “PE Fund”) investment. The funding from the PE Funds are expensive and stressful for a Company and proves counter productive in the long run as compared to public finance. The PE Funds also want to exercise the Exit Option at an appropriate price. In such a situation there are two options available for the Company namely:
1. IPO
2. Management Buy Out/ Leveraged Buy Out (herein after referred as “MBO/LBO”)
Generally, the option of MBO/LBO is preferred by the management where the acquiring entity is already listed. The benefit that arises out of such a transaction is that the acquired company becomes a listed entity directly, as the acquirer is a listed entity or it becomes a subsidiary of a listed company. This option to exercise is very cheap for the company as it does not have to incur any cost except the costs incurred at time of acquisition and such capital expenditure incurred by the company becomes allowable to the company for tax purpose under section 35D of the Income Tax Act, 1961. However, the only benefit that the company loses in exercising the option of MBO/LBO is loss of its identity. So far as other Commercial, Strategic or Financial benefits are concerned, they are for the management to decide. There is no debate here regarding which option is better to be exercise.

The IPO – Process

1. IPO process
2. Indian Regulatory and the Frame work
3. QIPs
4. Analysis and Restatement of Financial Statement of 5 years prior to listing
5. Management Discussion & Analysis
6. Auditors Role and Comfort letter issued & Compilation

7. Consent Letter
8. Risk Management
1. IPO Process:

The process can be divided into three stages:
a. Planning Stage – Phase 1
b. Executing and Controlling – Phase 2
c. Closing of the Deal – Phase 3

a. Planning Stage – Phase 1
1. Defining the Business Plan
2. Transaction Development
3. Formation of the Team
4. Assignment of the areas to the team and moderation.

b. Execution & Controlling – Phase 2
1. Capital Structure planning – Debt/ Equity
2. Preparing the Company profile – Due Diligences and Valuation
3. Co-ordination with Underwriters
4. Auditors Role – Analyses, Compilation, Auditors Letter of Comfort and Financial/ Accounting Ratios.
5. Legal – Due Diligences (Legal), Red Hearing Prospectus (Draft), registration with the regulator (Draft), other Civil/Criminal cases/FIRs against the Directors and the Company.

c. Closing the Deal – Phase 3
1. Filing of the Final registration with SEBI
2. Dealing with Merchant Bankers and Price Fixation
3. Agreements with Ad Agencies, Print Media and other PR Firms/Companies.
4. Other Sales Promotion
5. Successful Closure.

Critical factors to be considered for an IPO:

a. Strengthening the Corporate Governance:

As the Company goes for a public listing the compliances required becomes more stringent and transparent in comparison to the private company or an unlisted public company. The company has to expand the Board i.e. the company will have to include Independent Directors on the board, Committees such as Audit Committee, Remuneration Committee, Share Holder Grievance Committee, the related party transactions of the company will have to be disclosed a length and will have to be thoroughly scrutinized, a compliance officer shall be appointed.

b. Financial Statements and Disclosures:

Firstly, the financial statements for the previous 5 financial years will have to be restated as per the requirement of Security and Exchange Board of India (herein after referred as “SEBI”)

guidelines. Secondly, financial statements will have to be reconciled/ prepared/ restated showing the accounts as per U.S GAAP and Indian GAAP as per the requirement, being optional. The historical information of the company will have to be collected from the financial analysts for the analysis purpose. Management Discussion and Analysis will also have to be modified and thoroughly scrutinized. Even details of directors such as his identity proof, number of directorships held, criminal/civil cases against the directors and FIR if any launched against the director will have to be scrutinized.

c. Capital Structure Planning and Policies:

The capital structure of the company will have to be finalized with regards to bonus, convertible shares and shares outstanding as options. There should be no open financial instruments such as share warrants and certificates. The above planning shall not include the Employee Stock Option Plan (herein after referred as “ESOP”).

d. Internal Policies of the Company:

Internal Policies such as Sexual Harassment Policy, Insider Trading Policy, and Other Employee related policies would have to be finalized and implemented.

e. Company Law and Regulatory matters:

The will have to amend its MOA and AOA as per the requirements of a public company. The same shall have to be vetted by the stock exchanges before few days of filing final registration.

2. Indian Regulatory and the Frame work:

a. Compliance with SEBI (ICDR) Guidelines – Issue of Capital and Disclosure requirement.
b. Compliance with Part – II of Schedule – II of the Companies Act, 1956.
c. Compliance with Security Contract (Regulation) Act, 1956 (SCRA)
d. Compliance with allied laws such as Indian Penal Code, Code of Criminal Procedures and Code of Civil Procedures.
e. Following the Guidance notes issued by Institute of Chartered Accountants of India (ICAI).
- Audit Reports / Certificates on Financial Information in Offer Document

- Reports in Prospectus

1. Eligibility Criteria for listing for Company having Track Record – SEBI Compliance and Requirement.

All the five criteria given below shall be satisfied: (SEBI Guidelines)
a. The Company should have distributable profits for minimum period of 3 yrs out of 5 relevant previous years#
b. The tangible assets (Net) should be minimum of Rs. 300 lacs in each of the preceding 3 years out of which not more than 50% should be monetary assets.
c. The Company should have Net Worth of minimum Rs. 100 lacs for preceding 3 full years.
d. Where the company has changed the name in last year, then 50% of the revenue earned in last full 1 year shall be attributable to the new name.e. The aggregate of the proposed issue and all previous issues made in the same financial year in terms of size, does not exceed five (5) times its pre-issue net worth as per the last annual audited balance sheet.
# Distributable profits shall have same meaning as it is has as per section 205 of the Companies Act, 1956.

2. Eligibility Criteria when the Company does not have any Track Record – SEBI Compliances and Requirements.

Where any unlisted company does not meet any of the criteria given above in point 1, can make the IPO of Equity Shares only if it meets BOTH the conditions a and b, as below:
a. The issue shall be made through a Book Building process, with at least 50% of the Net public Offering is made to Qualified Institutional Buyers (QIBs) OR the “Project” has at least 15% participation from Financial Institutions/ Schedule Banks out which the 10% comes from the appraisers, and over above this 10% should be allotted to QIBs.
b. The minimum post – issue face value of share capital of the shall be Rs. 10 crores OR there should be a compulsory market making for the period of 2 years from the date of listing of the share, as per norms.

3. Prospectus :

The key Disclosures in the Prospectus are as follows:
a. Particulars of the Company, Management and Project.
b. Risk Factor and Managements perception about the same. (Risk factor shall be indicated with a font size of not less the 10)
c. Restated Financial Statements for last 5 years.
d. Audited Financial Statements of the Ventures, Firms Companies that are promoted by the Promoters of the Company which is being listed.
e. Management Discussion and Analysis by the directors over the financial results. And performance of the company.
f. Capital Structure of the Company.
g. Basis of Issue price and the objectives of the issue.
h. Any outstanding litigations against the company or its directors
i. Any complaint/FIR launched against the directors.
j. Statutorily required information in relation to utilization of the funds rose from public.
k. Significant/ Major Contracts that are entered or are to be entered by the Company.

4. Management Discussion and Analysis:

The Management with consultation with the Merchant Bankers would need to select the basis of the presentation and write up of MD & A.
The MD & A is made to reflect the financial performance of the last 3-year and can be based on following:
- Unconsolidated financial results, audited
- Unconsolidated financial results, unaudited
- Consolidated financial results, audited

- Consolidated financial results, unaudited
These financial statements are prepared as per the Indian GAAP.
Sometimes the MD&A is also prepared with Consolidated financial Statements for last 3 years in accordance with U.S. GAAP/IFRS. While the Unconsolidated financial statements are prepared in accordance with Indian GAAP.
The company would also have to give the analysis of the reasons for the changes in significant items of the Income and Expenditure, containing following:
- Unusual, non-recurring transactions.
- Economic changes that significantly affected the profit figures.
- The known trends of the uncertainty and how it works
- Relationship between the Costs and Revenue.
- The correlation between the volume on sales and materials.
- Turnover as compared to industry
- Dependence of the company on certain suppliers.
- Competitors.

5. Promoters and Other Conditions:

1. The promoters contribution for the IPO of an unlisted public company shall on be more then extent of 20% of the post issued capital
2. Shares that are issued 1 year prior to IPO to the promoter at a price equivalent which is lower than what is offered to public shall be considered in above 20% of the holdings.
3. The promoter contribution of 20% shall be locked in for the period of 3 years from the date of allotment of shares in IPO or the commencement of commercial production of the company, whichever is later.
4. Any holdings by the promoter in excess of 20% shall be locked for the period of 1 year.
3. Qualified Institutional Placements (herein after referred as “QIPs”):
In order to make Indian markets more competitive and efficient, it has been decided to introduce an additional mode for listed companies to raise funds from domestic market in the form of “Qualified

Institutions Placement” (QIP). Key features:

a. Any domestic company whose shares are listed is eligible.
b. Issues only QIBs as per the guidelines.
c. No restrictions as to lock in period
d. The restriction only to the extent of the amount which is raised through this channel.
e. No requirement of pre – issue filing of the Offer document with SEBI.
f. Pricing bases are similar to that of ADRs/GDRs.
g. No specification for the period/years of which the financial statements are to be filed.

4. Role of the Auditor:
The key deliverables to be issued by the auditor are:
a. Restated summary Financial Statements for previous 5 years immediately preceding the year in which prospectus is issued.
b. Last audited financial statements for which audit has been conducted not prior to 6 months from the date of prospectus.

The financial statements are subjected to below given adjustments:

1. Adjustments to wrong accounting practices or errors in estimations.
2. Adjustments to the quantified or unquantified qualification by the auditors.
3. Changes in accounting policy if any.
4. Non-recurring/ extra ordinary items to be separately disclosed.
Critical issues to be dealt with:
- Restated financial statements with period not less than 12 for 5 preceding years.
- Changes in the Statutory Auditor within 5 preceding previous year.
- Whether to present Consolidated Financial Statements or Standalone Financial Statement of the Company.
- Whether to present the financial statements of the oversees subsidiary, if any, in accordance to Indian GAAP or in accordance with the local GAAP.
- Whether to present financial statements as per U.S.GAAP/IFRS in addition to Indian GAAP.
- Timelines for presentation and audit – at discretion between the company, merchant bankers and the auditors
- However, it should be noted that no projected financial information should be included in the offer document in any case.
- Disclosure of the significant account policies.
- Accounting ratios based on the restated Financial Statements such as Earning per Share, Return on Equity, Return on Capital Employed etc.
- Basis of issue price should be justified.
- Statement of tax shelter.
- Rate of dividend to equity share holders.
- Tax benefit availed and available to the company.
- Turnover shall be segmented in accordance with each and every sale line item.
- Unsecured loans from group companies, JVs and associates shall be disclosed in the Offer Document.
- Details of the other Income exceeding 20% of the PAT, its sources and its nature.
- Details of discontinued business or business line and its impact over the Profit/Loss of the Company.
- Where the proceeds of the issue are to be used for acquisition of any other business where the interest is more than 50%, then Profit/Loss of such company for 5 preceding years and

statement of assets and liabilities of that company for the of 120 days preceding the date of issue.

Auditors Responsibility before an IPO:

1. Assistance in preparing the financial statements.
2. Evaluation of internal controls and accounting system.
3. Audited Financial Statements and Significant disclosures.
4. Tax consequences of the IPO.
5. Providing Services to the management as a trusted Business Advisor.
Auditors Responsibility after an IPO:
1. Drafting report for prospectus and filing registration statement.
2. Review the MD & A.
3. Issue Comfort Letters.
4. Co-ordinate with Merchant Bankers, Lead Book Runners, Lawyers and the Management.
5. Issue of the Comfort and Consent Letters:

1. Clause 5.3.3 of the SEBI Guidelines requires that the lead merchant bankers furnish a due diligence certificate as specified in Schedule III along with the draft prospectus.
2. The underwriters and certain other parties involved with the registration of securities may be held liable for false or misleading statements or omissions made in a registration statement. Generally, the underwriters would have little or no liability for statements made on the authority of an expert (e.g., independent auditors)
3. The due diligence certificate (Schedule III to the Guidelines) inter-alia include that the LMBs give comfort that the “the disclosures made in the draft prospectus / letter of offer are true, fair and adequate to enable the investors to make a well informed decision as to the ssinvestment in the proposed issue"
4. The due diligence review is generally is performed by the underwriters or their legal counsel and includes an examination of all material information contained in the registration statement or offering document.
5. However, because underwriters and certain other parties are not familiar with the company's accounting systems or personnel, they cannot personally conduct a "reasonable investigation" of financial and accounting data not covered by the auditors' report.
6. Instead, a usual condition of an underwriting agreement is that the independent auditors perform certain procedures and, based on those procedures, issue a letter to the underwriters (commonly referred to as the "comfort letter").


Sources of Comfort Letter:

No specific guidelines have been issued by the Indian GAAP.
Consent Letter:
According to Section 58 of the Companies Act, 1956, the expert should give his written consent, to the issue of the prospectus, with his statement or report included in the form and context in which it is included. The prospectus should further state that he has not withdrawn his consent as aforesaid.
Pursuant to section 60 of the Companies Act, 1956, ‘No prospectus shall be issued by or on behalf of a company or in relation to an intended company unless, on or before the date of its publication, there has been delivered to the Registrar for registration a copy thereof signed by every person who is named therein ….. . (a) Any consent to the issue of the prospectus required by section 58 from any person as an expert’.
The auditor would need to consent for the inclusion of the name of the auditor, the auditors’ report on the financial statements, the examination report to the restated financial statements, in the context in which it appears in the offer document proposed to be filed with the SEBI /ROC for the initial public offering and offer for sale of shares.

6. Managing the Firm Risk:

A Chartered Accountant or a firm of Chartered Accountants is always involved in the IPO process from beginning to the end. Hence, it becomes quite risky for a chartered accountant when there is any material misstatement, any undisclosed fatal fact or for that matter any crucial information which has not been disclosed by the management. In such cases in a chartered accountant falls in the loop of gross negligence and faces fatal consequences as per the ICAI Code of Conduct, Code of Criminal Procedures and Code of Civil Procedures. Hence, a chartered accountant to maintain his due diligences over such assignments should hedge the risk by following the policies as listed:
1. The public offering shall be reviewed by the independent partner of the same office and expert should be involved for all the legal matter and for drafting purposes.
2. Pre-clearance letters to the predecessor auditors should be circulated and confirmed.
3. Work program should be prepared in Compliance with the ICAI Guidance Notes on ‘Audit Reports/Certificates on Financial Information in Offer Documents’ and ‘Reports In Company Prospectuses’.
4. Where ever possible the opinion of Expert Advisory Committee of ICAI or any firm of Chartered Accountant with a good reputation and experienced in the said field should be asked for.

HIGHLIGHTS OF THE BUDGET-2013-14

HIGHLIGHTS OF THE BUDGET

The Union Budget for 2013-14 aims at higher growth rate leading to inclusive and sustainable development as 'mool mantra'.

  •   Finance Minister makes three promises: to women, youth and the poor.

  •   Nirbhaya Fund to empower women and to keep them safe and secure.

  •   Proposal to set up India's first Women's Bank as a public sector bank.

  •   Rs. 1,000 crore for skill development of ten lakh youth to enhance their employability and productivity.

  •   Direct Benefit Transfer (DBT) Scheme to be rolled out throughout the country during the term of UPA Government.

  •   Fiscal Deficit for 2013-14 is pegged at 4.8 percent of GDP. The Revenue Deficit will be 3.3 percent for the same period.

  •   Plan Expenditure placed at Rs. 5,55,322 crore. It is 33.3 percent of the total expenditure while Non Plan Expenditure is estimated at Rs. 11,09,975 crore. The plan expenditure in 2013-14 will be 29.4 percent more than the RE of the current year i.e. 2012-13.

  •   Substantial rise in allocation to the social sector. Allocation for Rural Development Ministry raised by 46 percent to Rs. 80,194 crore.

  •   The target for farm credit for 2013-14 has been set at Rs. 7,00,000 crore against Rs. 5,75,000 crore during the current year.

  •   Rs. 10,000 crore earmarked for National Food Security towards the incremental cost.

  •   Education gets Rs. 65,867 crore, an increase of 17 percent over RE for 2012-13.

  •   ICDS gets Rs. 17,700 crore. This is 11.7 percent more than the current year.

  •   Drinking water and sanitation will receive Rs. 15,260 crore. Rs. 1,400 crore is being provided for setting up water purification plants to cover arsenic and fluoride affected rural areas.

  •   Health and Family Welfare Ministry has been allotted Rs. 37,330 crore. National Health Mission will get Rs. 21,239 crore which represents 24.3 percent over the RE.

  •   The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) will receive Rs. 14,873 crore as against RE of Rs. 7,383 crore in the current year.

  •   Defence has been allocated Rs. 2,03,672 crore.

  •   Rs. 3,511 crore have been earmarked to Minority Affairs Ministry, 60 percent higher than RE for 2012-13.

  •   The Government will encourage Infrastructure Debt Fund (IDF) and allow some institutions to raise tax free bonds upto Rs. 50,000 crore which is 100 percent more than the current year.

  •   India Infrastructure Finance Corporation (IIFC), in partnership with ADB will help infrastructure companies to access bond market to tap long term funds.

  •   Income limit under Rajiv Gandhi Equity Savings Scheme (RGESS) will be raised from Rs. 10 lakh to Rs. 12 lakh.

  •   First home loan from a bank or housing finance corporation upto Rs. 25 lakh entitled to additional deduction of interest upto Rs. 1 lakh.

  •   Proposal to launch Inflation Indexed Bonds or Inflation Indexed National Security Certificates to protect savings from inflation.

  •   On oil and gas exploration policy, the Budget proposes to move from the present profit sharing mechanism to revenue sharing. Natural gas pricing policy will be reviewed.

  •   On coal, the Budget proposes adoption of a policy of pooled pricing.

  •   Benefits or preferences enjoyed by MSME to continue upto three years after they grow out of this category.

  •   Refinancing capacity of SIDBI raised to Rs. 10,000 crore.

  •   Technology Upgradation Fund Scheme (TUFS) for textile to continue in 12th Plan with an investment target of Rs. 1,51,000 crore.

  •   Rs. 14,000 crore will be provided to public sector banks for capital infusion in 2013-14.

  •   A grant of Rs. 100 crore each has been made to 4 institutions of excellence including Aligarh Muslim University, Banaras Hindu University, Tata Institute of Social Sciences, Guwahati and Indian National Trust for Art and Cultural Heritage (INTACH).

  •   New taxes to yield Rs. 18,000 crore.

  •   A surcharge of 10 percent on persons (other than companies) whose taxable income exceeds Rs.1 crore have been levied.

  •   Tobacco products, SUVs and Mobile Phones to cost more.

  •   Relief of Rs. 2000 for the tax payers in the first bracket of 2 to 5 lakhs.

  •   'Voluntary Compliance Encouragement Scheme' launched for recovering service tax dues.

  •   Rs. 9,000 crore earmarked as the first installment of balance of CST compensations to different States/UTs.

Finance Questions-3

                FINANCE SHORT NOTES FOR INTERVIEW 

201.drawings : drawings denotes the money withdrawn by the proprietor from the business for his personal use.

202.outstanding Income : Outstanding Income means income which has become due during the accounting year but which has not so far been received by the firm.

203.Outstanding Expenses : Outstanding Expenses refer to those expenses which have become due during the accounting period for which the Final Accounts have been prepared but have not yet been paid.

204.closing stock : The term closing stock means goods lying unsold with the businessman at the end of the accounting year.

205. Methods of depreciation:

1. Uniform charge methods :
a. Fixed installment method
b .Depletion method
c. Machine hour rate method.

2. Declining charge methods :
a. Diminishing balance method
b.Sum of years digits method
c. Double declining method

3. Other methods :
a. Group depreciation method
b. Inventory system of depreciation
c. Annuity method
d. Depreciation fund method
e. Insurance policy method.

206.Accrued Income : Accrued Income means income which has been earned by the business during the accounting year but which has not yet become due and, therefore, has not been received.

207.Gross profit ratio : it indicates the efficiency of the production/trading operations.

Formula : Gross profit X 100/Net sales

208.Net profit ratio : it indicates net margin on sales

Formula : Net profit X 100/Net sales

209. return on share holders funds : it indicates measures earning power of equity capital.

Formula : profits available for Equity shareholders X 100/Average Equity Shareholders Funds

210. Earning per Equity share (EPS) : it shows the amount of earnings attributable to each equity share.

Formula : profits available for Equity shareholders/Number of Equity shares

211.dividend yield ratio : it shows the rate of return to shareholders in the form of dividends based in the market price of the share

Formula : Dividend per share X 100/Market price per share

212. price earning ratio : it a measure for determining the value of a share. May also be used to measure the rate of return expected by investors.

Formula : Market price of share (MPS) X 100/Earning per share (EPS)

213.Current ratio : it measures short-term debt paying ability.

Formula : Current Assets/Current Liabilities

214. Debt-Equity Ratio : it indicates the percentage of funds being financed through borrowings; a measure of the extent of trading on equity.

Formula : Total Long-term Debt/Shareholders funds

215.Fixed Assets ratio : This ratio explains whether the firm has raised adepuate long-term funds to meet its fixed assets requirements.

Formula Fixed Assets/Long-term Funds

216 . Quick Ratio : The ratio termed as ‘ liquidity ratio’. The ratio is ascertained y comparing the liquid assets to current liabilities.

Formula : Liquid Assets/Current Liabilities

217. Stock turnover Ratio : the ratio indicates whether investment in inventory in efficiently used or not. It, therefore explains whether investment in inventory within proper limits or not.

Formula : cost of goods sold/Average stock

218. Debtors Turnover Ratio : the ratio the better it is, since it would indicate that debts are being collected more promptly. The ration helps in cash budgeting since the flow of cash from customers can be worked out on the basis of sales.

Formula : Credit sales/Average Accounts Receivable

219.Creditors Turnover Ratio : it indicates the speed with which the payments for credit purchases are made to the creditors.

Formula : Credit Purchases/Average Accounts Payable

220. Working capital turnover ratio : it is also known as Working Capital Leverage Ratio. This ratio indicates whether or not working capital has been effectively utilized in making sales.

Formula : Net Sales/Working Capital

221.Fixed Assets Turnover ratio : This ratio indicates the extent to which the investments in fixed assets contributes towards sales.

Formula : Net Sales/Fixed Assets

222 .Pay-out Ratio : This ratio indicates what proportion of earning per share has been used for paying dividend.

Formula : Dividend per Equity Share X 100/Earning per Equity share

223.Overall Profitability Ratio : It is also called as “ Return on Investment” (ROI) or Return on Capital Employed (ROCE) . It indicates the percentage of return on the total capital employed in the business.

Formula : Operating profit X 100/Capital employed

The term capital employed has been given different meanings
a. sum total of all assets whether fixed or current
b. sum total of fixed assets,
c. sum total of long-term funds employed in the business, i.e.,
share capital +reserves &surplus +long term loans –(non business assets + fictitious assets).
Operating profit means ‘profit before interest and tax’

224 . Fixed Interest Cover ratio : the ratio is very important from the lender’s point of view. It indicates whether the business would earn sufficient profits to pay periodically the interest charges.

Formula : Income before interest and Tax/Interest Charges

225 . Fixed Dividend Cover ratio : This ratio is important for preference shareholders entitled to get dividend at a fixed rate in priority to other shareholders.

Formula : Net Profit after Interest and Tax/Preference Dividend

226. Debt Service Coverage ratio : This ratio is explained ability of a company to make payment of principal amounts also on time.

Formula : Net profit before interest and tax/Interest + Principal payment installment
1- Tax rate

227. Proprietary ratio : It is a variant of debt-equity ratio . It establishes relationship between the proprietor’s funds and the total tangible assets.

Formula : Shareholders funds/Total tangible assets

228. Difference between joint venture and partner ship :

In joint venture the business is carried on without using a firm name,
In the partnership, the business is carried on under a firm name.

In the joint venture, the business transactions are recorded under cash system
In the partnership, the business transactions are recorded under mercantile system.

In the joint venture, profit and loss is ascertained on completion of the venture
In the partner ship , profit and loss is ascertained at the end of each year.

In the joint venture, it is confined to a particular operation and it is temporary.
In the partnership, it is confined to a particular operation and it is permanent

229. Meaning of Working capital

The funds available for conducting day to day operations of an enterprise. Also represented by the excess of current assets over current liabilities .

230.concepts of accounting :

1. Business entity concepts :- According to this concept, the business is treated as a separate entity distinct from its owners and others.

2. Going concern concept :- According to this concept, it is assumed that a business has a reasonable expectation of continuing business at a profit for an indefinite period of time.

3. Money measurement concept :- This concept says that the accounting records only those transactions which can be expressed in terms of money only.

4. Cost concept :-According to this concept, an asset is recorded in the books at the price paid to acquire it and that this cost is the basis for all subsequent accounting for the asset.

5. Dual aspect concept :- In every transaction, there will be two aspects – the receiving aspect and the giving aspect; both are recorded by debiting one accounts and crediting another account. This is called double entry.

6. Accounting period concept :- It means the final accounts must be prepared on a periodic basis. Normally accounting period adopted is one year, more than this period reduces the utility of accounting data.
7. Realization concept :- According to this concepts, revenue is considered as being earned on the data which it is realized, i.e., the date when the property in goods passes the buyer and he become legally liable to pay.

8. Materiality concepts :- It is a one of the accounting principle, as per only important information will be taken, and un important information will be ignored in the preparation of the financial statement.

9. Matching concepts :- The cost or expenses of a business of a particular period are compared with the revenue of the period in order to ascertain the net profit and loss.

10. Accrual concept :- The profit arises only when there is an increase in owners capital, which is a result of excess of revenue over expenses and loss.

231. Financial analysis :The process of interpreting the past, present, and future financial condition of a company.

232. Income statement : An accounting statement which shows the level of revenues, expenses and profit occurring for a given accounting period.

233. Annual report : The report issued annually by a company, to its share holders. it containing financial statement like, trading and profit & lose account and balance sheet.

234. Bankrupt: A statement in which a firm is unable to meets its obligations and hence, it is assets are surrendered to court for administration

235 . Lease: Lease is a contract between to parties under the contract, the owner of the asset gives the right to use the asset to the user over an agreed period of the time for a consideration

236. Opportunity cost : The cost associated with not doing something.

237. Budgeting : The term budgeting is used for preparing budgets and other producer for planning,co-ordination,and control of business enterprise
.
238.Capital : The term capital refers to the total investment of company in money, tangible and intangible assets. It is the total wealth of a company.

239.Capitalization : It is the sum of the par value of stocks and bonds out standings.

240. Over capitalization : When a business is unable to earn fair rate on its outstanding securities.

241. Under capitalization : When a business is able to earn fair rate or over rate on it is outstanding securities.

242. Capital gearing : The term capital gearing refers to the relationship between equity and long term debt.

243.Cost of capital : It means the minimum rate of return expected by its investment.

244.Cash dividend : The payment of dividend in cash

245.Define the term accrual : Recognition of revenues and costs as they are earned or incurred . it includes recognition of transaction relating to assets and liabilities as they occur irrespective of the actual receipts or payments.

245. accrued expenses : An expense which has been incurred in an accounting period but for which no enforceable claim has become due in what period against the enterprises.

246.Accrued revenue : Revenue which has been earned is an earned is an accounting period but in respect of which no enforceable claim has become due to in that period by the enterprise.

247.Accrued liability : A developing but not yet enforceable claim by an another person which accumulates with the passage of time or the receipt of service or otherwise. it may rise from the purchase of services which at the date of accounting have been only partly performed and are not yet billable.

248.Convention of Full disclosure : According to this convention, all accounting statements should be honestly prepared and to that end full disclosure of all significant information will be made.

249.Convention of consistency : According to this convention it is essential that accounting practices and methods remain unchanged from one year to another.

250.Define the term preliminary expenses : Expenditure relating to the formation of an enterprise. There include legal accounting and share issue expenses incurred for formation of the enterprise.

251.Meaning of Charge : charge means it is a obligation to secure an indebt ness. It may be fixed charge and floating charge.

252.Appropriation : It is application of profit towards Reserves and Dividends.

253.Absorption costing : A method where by the cost is determine so as to include the appropriate share of both variable and fixed costs.

254.Marginal Cost : Marginal cost is the additional cost to produce an additional unit of a product. It is also called variable cost.

255. What are the ex-ordinary items in the P&L a/c : The transaction which are not related to the business is termed as ex-ordinary transactions or ex-ordinary items. Egg:- profit or losses on the sale of fixed assets, interest received from other company investments, profit or loss on foreign exchange, unexpected dividend received.

256 . Share premium : The excess of issue of price of shares over their face value. It will be showed with the allotment entry in the journal, it will be adjusted in the balance sheet on the liabilities side under the head of “reserves & surplus”.

257. Accumulated Depreciation: The total to date of the periodic depreciation charges on depreciable assets.

258. Investment: Expenditure on assets held to earn interest, income, profit or other benefits.

259.Capital : Generally refers to the amount invested in an enterprise by its owner. Ex; paid up share capital in corporate enterprise.

260. Capital Work In Progress : Expenditure on capital assets which are in the process of construction as completion.

261. Convertible Debenture : A debenture which gives the holder a right to conversion wholly or partly in shares in accordance with term of issues.

262.Redeemable Preference Share : The preference share that is repayable either after a fixed (or) determinable period (or) at any time dividend by the management.

263. Cumulative preference shares : A class of preference shares entitled to payment of cumulates dividends. Preference shares are always deemed to be cumulative unless they are expressly made non-cumulative preference shares.

264.Debenture redemption reserve : A reserve created for the redemption of debentures at a future date.

265. Cumulative dividend : A dividend payable as cumulative preference shares which it unpaid cumulatives as a claim against the earnings of a corporate before any distribution is made to the other shareholders.

266. Dividend Equalization reserve : A reserve created to maintain the rate of dividend in future years.

267. Opening Stock: The term ‘opening stock’ means goods lying unsold with the businessman in the beginning of the accounting year. This is shown on the debit side of the trading account.

268.Closing Stock : The term ‘Closing Stock’ includes goods lying unsold with the businessman at the end of the accounting year. The amount of closing stock is shown on the credit side of the trading account and as an asset in the balance sheet.

269.Valuation of closing stock : The closing stock is valued on the basis of “Cost or Market price whichever is less” principle.

272. Contingency : A condition (or) situation the ultimate out come of which gain or loss will be known as determined only as the occurrence or non occurrence of one or more uncertain future events.

273.Contingent Asset : An asset the existence ownership or value of which may be known or determined only on the occurrence or non occurrence of one more uncertain future events.

274. Contingent liability : An obligation to an existing condition or situation which may arise in future depending on the occurrence of one or more uncertain future events.

275. Deficiency : the excess of liabilities over assets of an enterprise at a given date is called deficiency.

276.Deficit : The debit balance in the profit and loss a/c is called deficit.

277.Surplus : Credit balance in the profit & loss statement after providing for proposed appropriation & dividend , reserves.

278.Appropriation Assets : An account sometimes included as a separate section of the profit and loss statement showing application of profits towards dividends, reserves.

279. Capital redemption reserve : A reserve created on redemption of the average cost:- the cost of an item at a point of time as determined by applying an average of the cost of all items of the same nature over a period. When weights are also applied in the computation it is termed as weight average cost.

280.Floating Change : Assume change on some or all assets of an enterprise which are not attached to specific assets and are given as security against debt.

281. Difference between Funds flow and Cash flow statement :

A Cash flow statement is concerned only with the change in cash position while a funds flow analysis is concerned with change in working capital position between two balance sheet dates.

A cash flow statement is merely a record of cash receipts and disbursements. While studying the short-term solvency of a business one is interested not only in cash balance but also in the assets which are easily convertible into cash.

282. Difference Between the Funds flow and Income statement :

A funds flow statement deals with the financial resource required for running the business activities. It explains how were the funds obtained and how were they used,
Whereas an income statement discloses the results of the business activities, i.e., how much has been earned and how it has been spent.

A funds flow statement matches the “funds raised” and “funds applied” during a particular period. The source and application of funds may be of capital as well as of revenue nature.
An income statement matches the incomes of a period with the expenditure of that period, which are both of a revenue nature.

Finance Questions2

101. Share capital: The sum total of the nominal value of the shares of a company is called share capital.

102. Funds flow statement: It is the statement deals with the financial resources for running business activities. It explains how the funds obtained and how they used.

103. Sources of funds: There are two sources of funds internal sources and external sources.

Internal source: 

Funds from operations is the only internal sources of funds and some important points add to it they do not result in the outflow of funds
(a)Depreciation on fixed assets 
(b) Preliminary expenses or goodwill written off, Loss on sale of fixed assets
Deduct the following items as they do not increase the funds:
Profit on sale of fixed assets, profit on revaluation of fixed assets

External sources:

(a) Funds from long term loans 
(b) Sale of fixed assets 
(c) Funds from increase in share capital

104. Application of funds: (a) Purchase of fixed assets (b) Payment of dividend (c)Payment of tax liability (d) Payment of fixed liability

105. ICD (Inter corporate deposits): Companies can borrow funds for a short period. For example 6 months or less from another company which have surplus liquidity. Such deposits made by one company in another company are called ICD.

106. Certificate of deposits: The CD is a document of title similar to a fixed deposit receipt issued by banks there is no prescribed interest rate on such CDs it is based on the prevailing market conditions.

107. Public deposits: It is very important source of short term and medium term finance. The company can accept PD from members of the public and shareholders. It has the maturity period of 6 months to 3 years.

108. Euro issues: The euro issues means that the issues is listed on a European stock Exchange. The subscription can come from any part of the world except India.

109. GDR (Global depository receipts): A depository receipt is basically a negotiable certificate, dominated in us dollars that represents a non-US company publicly traded in local currency equity shares.

110. ADR (American depository receipts): Depository receipt issued by a company in the USA is known as ADRs. Such receipts are to be issued in accordance with the provisions stipulated by the securities Exchange commission (SEC) of USA like SEBI in India.

111. Commercial banks: Commercial banks extend foreign currency loans for international operations, just like rupee loans. The banks also provided overdraft.

112. Development banks: It offers long-term and medium term loans including foreign currency loans

113. International agencies: International agencies like the IFC,IBRD,ADB,IMF etc. provide indirect assistance for obtaining foreign currency.

114. Seed capital assistance: The seed capital assistance scheme is desired by the IDBI for professionally or technically qualified entrepreneurs and persons possessing relevant experience and skills and entrepreneur traits.

115. Unsecured loans: It constitutes a significant part of long-term finance available to an enterprise.

116. Cash flow statement: It is a statement depicting change in cash position from one period to another.

117.Sources of cash: Internal sources-(a)Depreciation (b)Amortization (c)Loss on sale of fixed assets (d)Gains from sale of fixed assets (e) Creation of reserves External sources-(a)Issue of new shares (b)Raising long term loans (c)Short-term borrowings (d)Sale of fixed assets, investments

118. Application of cash: (a) Purchase of fixed assets (b) Payment of long-term loans (c) Decrease in deferred payment liabilities (d) Payment of tax, dividend (e) Decrease in unsecured loans and deposits

119. Budget: It is a detailed plan of operations for some specific future period. It is an estimate prepared in advance of the period to which it applies.

120. Budgetary control: It is the system of management control and accounting in which all operations are forecast ed and so for as possible planned ahead, and the actual results compared with the forecast ed and planned ones.

121. Cash budget: It is a summary statement of firm’s expected cash inflow and outflow over a specified time period.

122. Master budget: A summary of budget schedules in capsule form made for the purpose of presenting in one report the highlights of the budget forecast.

123. Fixed budget: It is a budget which is designed to remain unchanged irrespective of the level of activity actually attained.

124. Zero- base- budgeting: It is a management tool which provides a systematic method for evaluating all operations and programmers, current of new allows for budget reductions and expansions in a rational manner and allows reallocation of source from low to high priority programs.

125. Goodwill: The present value of firm’s anticipated excess earnings.

126. BRS: It is a statement reconciling the balance as shown by the bank pass book and balance shown by the cash book.

127. Objective of BRS: The objective of preparing such a statement is to know the causes of difference between the two balances and pass necessary correcting or adjusting entries in the books of the firm.

128. Responsibilities of accounting: It is a system of control by delegating and locating the responsibilities for costs.

129. Profit centre: A centre whose performance is measured in terms of both the expense incurs and revenue it earns.

130. Cost centre: A location, person or item of equipment for which cost may be ascertained and used for the purpose of cost control.

131. Cost: The amount of expenditure incurred on to a given thing.

132. Cost accounting: It is thus concerned with recording, classifying, and summarizing costs for determination of costs of products or services planning, controlling and reducing such costs and furnishing of information management for decision making.

133. Elements of cost: (A) Material (B) Labour (C) Expenses (D) Overheads

134. Components of total costs: (A) Prime cost (B) Factory cost (C)Total cost of production (D) Total cost

135. Prime cost: It consists of direct material direct labour and direct expenses. It is also known as basic or first or flat cost.

136. Factory cost: It comprises prime cost, in addition factory overheads which include cost of indirect material indirect labour and indirect expenses incurred in factory. This cost is also known as works cost or production cost or manufacturing cost.

137. Cost of production: In office and administration overheads are added to factory cost, office cost is arrived at.

138. Total cost: Selling and distribution overheads are added to total cost of production to get the total cost or cost of sales.

139. Cost unit: A unit of quantity of a product, service or time in relation to which costs may be ascertained or expressed.

140.Methods of costing: (A)Job costing (B)Contract costing (C)Process costing (D)Operation costing (E)Operating costing (F)Unit costing (G)Batch costing.

141. Techniques of costing: (a) marginal costing (b) direct costing (c)absorption costing (d) uniform costing.

142. Standard costing: standard costing is a system under which the cost of the product is determined in advance on certain predetermined standards.

143. Marginal costing: it is a technique of costing in which allocation of expenditure to production is restricted to those expenses which arise as a result of production, i.e., materials, labour, direct expenses and variable overheads.

144. Derivative: derivative is product whose value is derived from the value of one or more basic variables of underlying asset.

145. Forwards: a forward contract is customized contracts between two entities were settlement takes place on a specific date in the future at today’s pre agreed price.

146. Futures: a future contract is an agreement between two parties to buy or sell an asset at a certain time in the future at a certain price. Future contracts are standardized exchange traded contracts.

147. Options: an option gives the holder of the option the right to do some thing. The option holder option may exercise or not.

148. Call option: a call option gives the holder the right but not the obligation to buy an asset by a certain date for a certain price.

149. Put option: a put option gives the holder the right but not obligation to sell an asset by a certain date for a certain price.

150. Option price: option price is the price which the option buyer pays to the option seller. It is also referred to as the option premium.

151. Expiration date: the date which is specified in the option contract is called expiration date.

152. European option: it is the option at exercised only on expiration date it self.

153. Basis: basis means future price minus spot price.

154. Cost of carry: the relation between future prices and spot prices can be summarized in terms of what is known as cost of carry.

155. Initial margin: the amount that must be deposited in the margin a/c at the time of first entered into future contract is known as initial margin.

156 Maintenance margin: this is some what lower than initial margin.

157. Mark to market: in future market, at the end of the each trading day, the margin a/c is adjusted to reflect the investors’ gains or loss depending upon the futures selling price. This is called mark to market.

158. Baskets: basket options are options on portfolio of underlying asset.

159. Swaps: swaps are private agreements between two parties to exchange cash flows in the future according to a pre agreed formula.

160. Impact cost: impact cost is cost it is measure of liquidity of the market. It reflects the costs faced when actually trading in index.

161. Hedging: hedging means minimize the risk.

162. Capital market: capital market is the market it deals with the long term investment funds. It consists of two markets 1.primary market 2.secondary market.

163. Primary market: those companies which are issuing new shares in this market. It is also called new issue market.

164. Secondary market: secondary market is the market where shares buying and selling. In India secondary market is called stock exchange.

165. Arbitrage: it means purchase and sale of securities in different markets in order to profit from price discrepancies. In other words arbitrage is a way of reducing risk of loss caused by price fluctuations of securities held in a portfolio.

166. Meaning of ratio: Ratios are relationships expressed in mathematical terms between figures which are connected with each other in same manner.

167. Activity ratio: it is a measure of the level of activity attained over a period.

168. Mutual fund: a mutual fund is a pool of money, collected from investors, and is invested according to certain investment objectives.

169. Characteristics of mutual fund:
• Ownership of the MF is in the hands of the of the investors
• MF managed by investment professionals
• The value of portfolio is updated every day

170. Advantage of MF to investors:
• Portfolio diversification
• Professional management
• Reduction in risk
• Reduction of transaction casts
• Liquidity
• Convenience and flexibility

171.Net asset value : the value of one unit of investment is called as the Net Asset Value

172.open-ended fund : open ended funds means investors can buy and sell units of fund, at NAV related prices at any time, directly from the fund this is called open ended fund.
For ex; unit 64

173.close ended funds : close ended funds means it is open for sale to investors for a specific period, after which further sales are closed. Any further transaction for buying the units or repurchasing them, happen, in the secondary markets.

174. dividend option : investors who choose a dividend on their investments, will receive dividends from the MF, as when such dividends are declared.

175.growth option : investors who do not require periodic income distributions can be choose the growth option.

176.equity funds : equity funds are those that invest pre-dominantly in equity shares of company.

177.types of equity funds :
• Simple equity funds
• Primary market funds
• Sectoral funds
• Index funds

178. sectoral funds : sectoral funds choose to invest in one or more chosen sectors of the equity markets.

179.index funds :the fund manager takes a view on companies that are expected to perform well, and invests in these companies
.
180.debt funds : the debt funds are those that are pre-dominantly invest in debt securities.

181. liquid funds : the debt funds invest only in instruments with maturities less than one year.

182. gilt funds : gilt funds invests only in securities that are issued by the GOVT. and therefore does not carry any credit risk.

183.balanced funds :funds that invest both in debt and equity markets are called balanced funds.

184. sponsor : sponsor is the promoter of the MF and appoints trustees, custodians and the AMC with prior approval of SEBI .

185. trustee : trustee is responsible to the investors in the MF and appoint the AMC for managing the investment portfolio.

186. AMC : the AMC describes Asset Management Company, it is the business face of the MF, as it manages all the affairs of the MF.

187. R & T Agents : the R&T agents are responsible for the investor servicing functions, as they maintain the records of investors in MF.

188. custodians : custodians are responsible for the securities held in the mutual fund’s portfolio.

189. scheme take over : if an existing MF scheme is taken over by the another AMC, it is called as scheme take over.

190.meaning of load: load is the factor that is applied to the NAV of a scheme to arrive at the price.

192. market capitalization : market capitalization means number of shares issued multiplied with market price per share.

193.price earning ratio : the ratio between the share price and the post tax earnings of company is called as price earning ratio.

194. dividend yield : the dividend paid out by the company, is usually a percentage of the face value of a share.

195. market risk : it refers to the risk which the investor is exposed to as a result of adverse movements in the interest rates. It also referred to as the interest rate risk.

196. Re-investment risk : it the risk which an investor has to face as a result of a fall in the interest rates at the time of reinvesting the interest income flows from the fixed income security.

197. call risk : call risk is associated with bonds have an embedded call option in them. This option hives the issuer the right to call back the bonds prior to maturity.

198. credit risk : credit risk refers to the probability that a borrower could default on a commitment to repay debt or band loans

199.inflation risk : inflation risk reflects the changes in the purchasing power of the cash flows resulting from the fixed income security.

200.liquid risk : it is also called market risk, it refers to the ease with which bonds could be traded in the market.