Paper 11: Capital Market Analysis & Corporate
Laws (One Paper: 3 hours:100 marks)
A. Capital Market Analysis ( 50 Marks)
1. Introduction of Capital Market & Capital Market Instruments
Capital Market / Security Market
Primary Market / New Issues / IPO Market
Secondary Market / Stock Market / Stock Exchange
Depositaries
Private placements of shares / Buy back of shares
CAPM vs Market Model
Issue mechanism
Forward Contract and future contracts
Clearing mechanism
2. Capital & Financial Market Regulation
Financial System and Capital Market Instruments,
SEBI – Regulation of Market and Control,
Collective Investment Schemes, Depositories, Dematerialization of Securities,
Regulation of banking & finance companies – role of Reserve Bank of
India and Banking Ombudsmen; Regulation
of Insurance sector by Insurance Regulation and Development Authority
(IRDA),
Cyber Law and regulation of e-commerce and electronic financial transactions,
Contemporary issues and Development
3. Capital Market Analysis
Stock market efficiency;
Risk and Return;
Investment Analysis;
Cost of Finance And Financing Structures;
Capital Asset Pricing Model;
Products on Stock Exchanges: Equity / Stock Markets, Basket Trading, Derivatives,
Debt Markets- Retail and
Wholesale, Interest Rate Futures, Exchange Traded Funds, Mutual Funds
(Close Ended).
Risk Management System: Capital Adequacy Requirements, Intra day Trading
limits, Gross Exposure Limit,
Margining Procedure.
Derivatives Markets: Introduction to Options and Futures, Explanation
of Market Terminologies, Pay-off Structure,
Basic Trading Strategies, Weekly Options.
Debt Markets: Debt Products traded in Stock Exchanges, Wholesale Debt
Markets, and Retail Debt Markets.
Commodity Market & Trading Corporate Actions: Bonus, Rights, Dividend,
Buy Back etc., Regulations to be
followed by the Corporates, Impact on the Shareholders.
Portfolio Management
Basic Principle, Functions and Activities
Factors effecting investment decision in portfolio management
Investment strategy
Portfolio theory
Use of matrix approach in investment decisions
Mutual Funds
Role of Mutual Fund in financial market
Advantage of investment in mutual fund
Regulations and operations
Investors right and obligation
B. Corporate Law & Corporate Governance ( 50
Marks)
4. Corporate functionalism in the context of Companies Act & Corporate
Laws
Introduction, Incorporation and its Consequences,
Financial Structure and Membership,
Management and Control of Companies,
Inter-corporate loans, Investments, Guarantees and Security,
Maintenance of Statutory Books/Registers and Filing of Returns,
Winding-up,
Joint Ventures,
Corporate Accountability,
Competition Act and Competition Commission,
Information Act and its corporate implication, Emerging Issues and Concepts
Merger and Acquisition
Reason for merger acquisition
Objective of acquisition
Gain from merger
Problem of merger and acquisition
Issues related to Companies Act 1956, Industrial(Development & Regulation)
Act, Sick Industrial
(Special Provision) Act, Income Tax Act, SEBI Regulations
Function of Court
Reconstruction
De-merger or division 5. Corporate Governance
Genesis, Narasimhan Committee and other Committee Recommendations on Corporate
Governance,
Effective Board of Directors and its role,
Independent Directors and Audit Committee, Remuneration Committee, Nomination
Committee;
Evaluation of effectiveness of Internal Control-Management Accounting
applications and Directors’ Responsibility
Statement;
Going Concern status-financial and other indicators, role of management
audit, evaluation of going concern
uncertainties;
Related party transactions and disclosures;
Project management audit and corporate governance;
Relevance of Risk Evaluation and Risk management;
Evaluation of key financial decisions and disclosures;
Management Audit for investors’ protection in the context of Corporate
Governance,
Corporate Governance Norms as prescribed by SEBI,
Paper 12: Financial Management & International
Finance (One Paper: 3 hours:100 marks)
1. Overview of Financial Management
Finance and Related Disciplines
Scope of Financial Management,
Planning environment
Key decisions of Financial Management
Emerging role of finance managers in India
Earnings distributions policy
Compliance of regulatory requirements in formulation of financial strategies
Sources of finance – long term, short term and international
Exchange rate – risk agencies involved and procedures followed in international
financial operations 2. Financial Management Decisions
Capital structure theories and planning
Cost of capital
Designing Capital Structure
Capital budgeting
Lease financing
Working capital management
Financial services
Dividend and retention policies
Criteria for selecting sources of finance, including finance for international
investments
Effect of financing decisions on Balance Sheet and Ratios
Financial management in public sector
Role of Treasury function in terms of setting corporate objectives, funds
management – national and international
Contemporary developments – WTO, GATT, Corporate Governance, TRIPS, TRIMS,
SEBI regulations as amended
from time to time 3. Financial analysis & planning
Funds flow and cash flow analysis
Financial ratio analysis -Ratios in the areas of performance, profitability,
financial adaptability, liquidity, activity,
shareholder investment and financing, and their interpretation.
Limitations of ratio analysis
Identification of information required to assess financial performance
Effect of short-term debt on the measurement of gearing. 4. Operating and financial leverages
Analysis of operating and financial leverages
Concept and nature of leverages operating risk and financial risk and
combined leverage
Operating leverage and Cost volume Profit analysis – Earning Before Interest
and Tax (EBIT) and Earning Per
Share (EPS), indifference point. 5. Financial Strategy
Financial and Non-Financial objective of different organizations
Impact on Investment, finance and dividend decisions
Sources and benefits of international financing
Alternative Financing strategy in the context of regulatory requirements
Modeling and forecasting cash flows and financial statements based on
expected values for variables – economic
and business
Sensitivity analysis for changes in expected values in the models and
forecasts
Emerging trends in financial reporting 6. Investment Decisions
Costs, Benefits and Risks analysis for projects
Linking investment with customer’s requirements
Designing Capital Structure
The impact of taxation, potential changes in economic factors and potential
restrictions on remittance on these
calculations
Capital investment real options
Venture Capital financing
Hybrid financing / Instruments 7. Project Management
Project Identification and Formulation
Identification of Project opportunities
Project Selection Consideration and Feasibility Studies
Project appraisal & Cost Benefit analysis
Source of Project Finance & Foreign Collaboration 8. International Finance
Minimization of risk,
Diversification of risk
Forward and futures,
Forward rate agreements
Interest rate swaps
Caps, floors and collars
Parity theorems
FDI
Money market hedge
Options. 9. Sources of International Finance
Rising funds in foreign markets and investments in foreign projects
Forward rate agreements and interest rate guarantees
Transaction, translation and economic risk, Interest rate parity, purchasing
power parity and the Fisher effects
Foreign Direct Investment 10. International Monetary and Financial System
Understanding the International Monetary System
Export and Import Practices
International Financial Management: Important issues and features, International
Capital Market
International Financial Services and Insurance: Important issues and features
A. Strategic Management 1. Introduction to Business Strategy
Meaning and implications of corporate planning, long range planning, business
policy planning and strategic
planning; strategic management processes; meaning and use of mission,
goals, objectives and targets, profit gap,
sales gap, risk gap and other strategies;
SWOT analysis; target selling strategy formulation and implementation,
monitoring mechanism, strategies for
stagnation versus growth, strategies for growth through expansion versus
diversification & diversification vs core
competency.
Acquisition and merger strategy, strategy of joint venture both in India
and abroad.
Marketing strategy as a part of corporate strategy, growth under inflation
and protection of shareholder, real capital.
Financial objectives, non- financial objectives, resources analysis and
evaluation. 2. Forecasting and planning for strategy
Forecast trend and changes – social, political, legal and technological
impacts.
Distribution channels and competitive forces. Government policies, economic
growth and government expenditure.
Public and private sector investments,
International trade practices and government policies for capacity expansion,
new industries, subsidiaries and
substitutes 3. Model Building and models
Strategies in the development of models, Delphi Model, econometric, mathematical
programming, budgetary and
heuristic model.
Sensitivity analysis and the characteristics of models.
Limitations in model building vis- a-vis simulation techniques.
Life cycles, Porters generic strategic, Ausoj’s model, BCG matrix and
other models 4. Marketing strategy
Production orientation versus market orientation, marketing objectives,
framework and management of marketing
mix.
Linkage between strategic planning and marketing strategy-both forward
and backward.
Research and intelligence- source for the techniques for acquiring information
necessary for marketing decisionmaking
market shares. 5. Application of management accounting in strategic management
Marketing strategy: analysis of marketing costs and profitability, product
development policy & strategy, pricing
policies and strategies, budgetary control in marketing, evaluation and
control of sales activities;
Operations Management Strategy: process, technology and logistic strategies,
inventory policies and strategies,
Human Resource Management policies and strategies,
Financial Strategies and Strategic Total Cost Management B. Risk Management 6. Risk Measurement and Management
Introduction, Risk and Risk Management,
Objectives of Risk Management,
Risk Measurement and Pooling, Total Loss Distribution,
Pooling and Diversification,
Ruin Probability 7. Risk insurance
Insurability of Risk and Insurance Contracts,
Insurance Pricing, Analysis Tools, Demand for Risk Management (Utility
Theory),
Legal Liability, Corporate Liability, Liability Issues,
Insurance case study: Auto Insurance (or such other insurance industry
segment as may be notified )
Commercial Insurance. 8. Corporate risk management
Risk Management and Shareholders,
Risk Retention/Reduction,
Financial Risk Management,
Futures and Options,
Asset / Liability Management,
Project risk management, Enterprise Risk Management
Paper 14: Indirect & Direct - Tax Management
(One Paper: 3 hours:100 marks)
1. Central Excise
2. Customs
3. Service Tax
4. Export Promotion Schemes, Foreign Trade Policy, EOU, SEZ
5. Central Sales Tax/ VAT Act
6 Income Tax including Fringe Benefit Tax
7. Wealth Tax
8. Case Studies under Direct and Indirect Taxes
