What is Gilt Fund

These funds invest exclusively in government securities. Government securities have no default risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as is the case with income or debt oriented schemes

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What is Money Market or Liquid Fund

These funds are also income funds and their aim is to provide easy liquidity, preservation of capital and moderate income. These schemes invest exclusively in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bank call money, government securities, etc. Returns on these schemes fluctuate much less compared to other funds. These funds are appropriate for corporate and individual investors as a means to park their surplus funds for short periods.

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Bull and Bear Market

Bull market is where the prices go up and Bear market where the prices come down.

Exchange Rate: It is a rate at which the currencies are bought and sold.

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Dematerialisation:

It is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited to the investor’s account with his depository participant.

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IPO

: First time when a company announces its shares to the public is called as an IPO. (Intial Public Offer)
A Further public offering (FPO): It is when an already listed company makes either a fresh issue of securities to the public or an offer for sale to the public, through an offer document. An offer for sale in such scenario is allowed only if it is made to satisfy listing or continuous listing obligations.
Rights Issue (RI): It is when a listed company which proposes to issue fresh securities to its shareholders as on a record date. The rights are normally offered in a particular ratio to the number of securities held prior to the issue.
Preferential Issue: It is an issue of shares or of convertible securities by listed companies to a select group of persons under sec.81 of the Indian companies act, 1956 which is neither a rights issue nor a public issue.This is a faster way for a company to raise equity capital.


Index: An index shows how specified portfolios of share prices are moving in order to give an indication of market trends. It is a basket of securities and the average price movement of the basket of securities indicates the index movement, whether upward or downwards.

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Holding Company

A holding company is one which controls one or more companies either by holding shares in that company or companies are having power to appoint the directors of those company
The company controlled by holding company is known as the Subsidary Company.
Consolidated Balance Sheet: It is the b/s of the holding company and its subsidiary company taken together.

Partnership act 1932: Partnership means an association between two or more persons who agree to carry the business and to share profits and losses arising from it. 20 members in ordinary trade and 10 in banking business

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Large Cap / Big Cap

: Companies having a large market capitalization
For example, In US companies with market capitalization between $10 billion and $20 billion, and in the Indian context companies market capitalization of above Rs. 1000 crore are considered large caps.

Mid Cap: Companies having a mid sized market capitalization, for example, In US companies with market capitalization between $2 billion and $10 billion, and in the Indian context companies market capitalization between Rs. 500 crore to Rs. 1000 crore are considered mid caps.

Small Cap: Refers to stocks with a relatively small market capitalization, i.e. lessthan $2 billion in US or lessthan Rs.500 crore in India.

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When is the Right Time to Break Old FD

Every one of us who is earning today surely would want that their earnings multiply at a very pace. Some go it the equity way where there the risk burden is really high and some want to play it really safe by investing their funds in risk free instruments giving them positive returns. One such instrument is your fixed deposit. This is one such instrument where one can find surety of returns on their investment. Therefore many of us keep our savings in fixed deposit accounts which can opened at different branches of the bank proving their account holders with some interest on the amount deposited.
Maturity Period
Fixed deposit (FD) comes with a definite period of maturity though there is no lock in period, so can break his or her FD as and when required. So in times of need one does not have to hover here and there for money when they have FD account. But the main question an investor surely will ask to any financial planner that which is the right time when one should break his or her FD so that their investment are always safe. Today when on one hand the interest rates on almost every kind of loan is rising the simultaneous effect is that rates on different deposit accounts to a going up which tends to make the investors to deposit the money in the respective instruments. Within a time span of a year or so the interest rates have gone up from rate which was around 7% -7.5% to a rate as high as 9%- 9.25%.
Many people who invested their money in FD’s don’t know the when to do so and what will be the effect of such an act on their earning generation. Though there is no fixed time limit which any financial advisor can predict yet there are some minute aspects which an investor should know before breaking up his investment. A fixed deposit which is on the verge of getting matured should not be broken. The investor should try to not take out money until the maturity is reached. The direct effect is that he will have to forego an interest which he could have earned if his fund would have remained intact in the FD till the maturity period of the FD. The rate of interest is taken on an year basis so one should be careful while enough to see that what amount of interest he is foregoing if he breaks up his investment. The best way to explain the above situation is to take a numerical example.
Examples
Suppose an investor has invested Rs. 200000 in an FD having a maturity period of say 5 years providing the investor with a rate of interest of say 9%. So if the investor now wants to get his money back say after a period of 3 years so he or she has to break the FD. In such a case the rate of interest applicable on his investment will not be 9% but fixed by the bank which may be say 7%. So one will earn just Rs. 42000 as interest compared to an interest of Rs. 90000 which could have been earned if he would have sticked to his investment till the maturity period. This interest earned after 3 years would have been considerably reduced if the bank would have charged penalty for withdrawal of fund prematurely.
So one has to be aware of not only a loss of interest which in the above case is 2%, but also an added loss in the form of penalty, which is charged by the bank which reduces the earning considerably. So before breaking his or her FD one should go on a calculation mode to understand the effects of such premature withdrawal by the investor. The penalty charges of different bank vary but one thing is common in this that such charges not levied on holders of FD if such withdrawal was due to an emergency. But a situation is emergency or not has not been clearly mentioned anywhere. So it depends on the whims of the bank to give waiver and the FD holder has to make necessary arrangement in order to convince the bank about the emergency.
Ratings
Like banking institutions there are also non-banking financial institutions who accept such deposits. They are also known as company deposits. Company fixed deposits bear higher rate of interest but the creditability of such deposit depends on the ratings given different credit rating agency such AAA, AA etc. the higher the rating given by the rating agency the more is the reliability of return from such company deposi

Deposit
Generally the rate of interest provided in company deposits is higher compared to interest available from different banks since the risk factors associated with such a deposit is very high. Companies accepts such deposit when there is liquidity crunch in the company so companies dole out higher interest rates deposit which attracts public at large. But investing in such FD should be done before necessary checks. The investment in bank FD’s is a lot safer where the risk is more distributed.
Tax Factor
Apart from the above factor there is also one factor which is to be considered which every one has to consider i.e. the tax factor. Since income on FD in the form of interest is taxable therefore one receives considerably lower amount of interest than what will actually have received. Now the return varies from person to person on the basis of his income. For example if we consider a person whose income is more than Rs. 500000, then he belongs to the highest tax slab where the tax rate applicable is 30% (the effective rate being 30.9%). Now if an investor earns income of Rs. 3000 through interest then the tax on such interest would be at a rate of 30.9% which turns out to be Rs. 927 therefore ultimate amount which he will receive is 2073 (Rs.3000-Rs.927). now one has to understand that as we go down the tax slab i.e. lower income group will have to pay less tax, so their earnings is higher compared to higher income group which is mainly due to the tax rate prevailing in the slab rate. When we convert the above example into percentage form the result will show the same application.

Consider Inflation
Another factor which can be considered is the inflation which keeps on fluctuating now days. The effect is that it reduces the value of money for example an investment of Rs. 2000 at 8% fetches for a year fetches Rs. 2160. Now if the rate of inflation is 9% then the value of Rs. 1000 gets decremented by Rs. 90. So the value of investment will not be Rs. 2160 but Rs. 1980 in real sense though the investor would be receiving full amount of Rs. 2160 but the inflationary effect has brought down its value which though not visible works intrinsically.
Therefore one need to well versed with all the above factors in order make his decision regarding breaking of his or her FD which has several effects.

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INDIFFERENCE PRESENTATION OF BALANCE SHEET FINALLY REVEALED

• Generally every body have a confusion why the balance sheet of a company(vertical forum ) vary from that of a non company balance sheet

• The answer to this is that in the presentation of company balance sheet(vertical forum ) the following principle is followed



CAPITAL EMPLOYED IS EQUAL TO THE SUM OF
i. FIXED CAPITAL
ii. FINANCIAL CAPITAL
iii. WORKING CAPITAL
iv. FICTITIOUS ASSETS

Fixed capital refers to the amount of capital that is invested in fixed assets
And financial capital refers to amount of capital invested in acquiring investments
And working capital is the amount of capital is invested current assets
And fictitious assets Is not an capital asset and not acquired by employment of capital

For the kind attention of readers of this article capital employed is the sum of shareholders fund and loan fund

The specimen of company balance sheet is given below

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How to get IEC?

An application for grant of IEC has to be made along with supporting documents. The application should be made by registered office only (in case a company has multiple branches) to the DGFT office under whose jurisdiction the registered office of the applicant comes. IEC is applicable to across the company and there is no need of separate registration branch wise

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How to get IEC?

An application for grant of IEC has to be made along with supporting documents. The application should be made by registered office only (in case a company has multiple branches) to the DGFT office under whose jurisdiction the registered office of the applicant comes. IEC is applicable to across the company and there is no need of separate registration branch wise

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Who can get an IEC?

An INDIVIDUAL or a company who wants to do international business can get an IEC. Individuals can use either the name of their proprietorship firm or their name directly to apply for IEC

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Who can get an IEC?

An INDIVIDUAL or a company who wants to do international business can get an IEC. Individuals can use either the name of their proprietorship firm or their name directly to apply for IEC

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What is Forfeiture of share

It means the cancellation or allotment of unpaid shareholders.
Forfeiture and reissue of shares allotted on pro – rata basis in case of over subscription.

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What is Calls in advance

When a shareholder pays with an instalment in respect of call yet to make the amount so received is known as calls-in-advance. Calls-in-advance can be accepted by a company when it is authorized by the articles

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What is the Calls in Arrears

It means that amount which is not yet been paid by share holders till the last day for the payment

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What is Stock Split

The dividing of a company’s existing stock into multiple stocks. When the Par Value of share is reduced and the number of share is increased

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What is Stock Split

The dividing of a company’s existing stock into multiple stocks. When the Par Value of share is reduced and the number of share is increased

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Debenture

For large publicly traded firms. These are viable alternative to term loans. Skin to promissory note, debentures is instruments for raising long term debt. Debenture holders are creditors of company

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What is Preference Capital

It represents a hybrid form of financing it par takes some characteristics of equity and some attributes of debentures. It resembles equity in the following ways

1. Preference dividend is payable only out of distributable profits.
2. Preference dividend is not an obligatory payment.
3. Preference dividend is not a tax –deductible payment.

Preference capital is similar to debentures in several ways.

1. The dividend rate of Preference Capital is fixed.
2. Preference Capital is redeemable in nature.
3. Preference Shareholders do not normally enjoy the right to vote

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