ICWAI Final - Group III
Capital Market Analysis and Corporate Laws
Objective:
· To know application of the various regulations for financial and capital markets
· To understand Companies Act and compliances under the same
· To gain basic knowledge on Corporate Governance Principles and purpose of good corporate governance

A. Capital Market Analysis ( 50 Marks)

1. Introduction of Capital Market & Capital Market Instruments 10%
· 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 10%
· 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 30%
· 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
Ø Basic Principle, Functions and Activities
Ø Factors effecting investment decision in portfolio management
Ø Investment strategy
Ø Portfolio theory
Ø Use of matrix approach in investment decisions
· Mutual Funds
Ø Role of Mutual Fund in financial market
Ø Advantage of investment in mutual fund
Ø Regulations and operations
Ø Investors right and obligation




B. Corporate Law & Corporate Governance ( 50 Marks)

4. Corporate functionalism in the context of Companies Act & Corporate Laws 30%
· 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
Ø Reason for merger acquisition
Ø Objective of acquisition
Ø Gain from merger
Ø Problem of merger and acquisition
Ø Issues related to Companies Act 1956, Industrial(Development & Regulation) Act, Sick Industrial
(Special Provision) Act, Income Tax Act, SEBI Regulations
Ø Function of Court
Ø Reconstruction
Ø De-merger or division

5. Corporate Governance 20%
· 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,

Financial Management and International Finance
Objectives:
· Understand the scope, goals and objectives of Financial Management
· To provide expert knowledge on concepts, methods and procedures involved in using Financial Management for managerial decision-making
· To gain knowledge of international monetary and financial system

1. Overview of Financial Management 10 %
· 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 15 %
· 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 10%
· 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 5%
· 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 15 %
· 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 15 %
· 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 10%
· 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 10%
· 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 5%
· 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 5%
· 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

Management Accounting - Strategic Management
Objective:
· To understand the importance of strategic and risk management and apply tools for strategic analysis appropriately
· To develop the ability to understand the risks both internal and external and build capabilities to mange risks

A. Strategic Management 60%
1. Introduction to Business Strategy 10%
· 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 10%
· 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 10%
· 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 10%
· 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 decision-making market shares.
5. Application of management accounting in strategic management 20%
· 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 40%
6. Risk Measurement and Management 15%
· Introduction, Risk and Risk Management,
· Objectives of Risk Management,
· Risk Measurement and Pooling, Total Loss Distribution,
· Pooling and Diversification,
· Ruin Probability
7. Risk insurance: 10%
· 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: 15%
· Risk Management and Shareholders,
· Risk Retention/Reduction,
· Financial Risk Management,
· Futures and Options,
· Asset / Liability Management,
Project risk management, Enterprise Risk Management

Indirect and Direct Tax Management
Central Excise
Customs
Service Tax
Export Promotion Schemes, Foreign Trade Policy, EOU, SEZ.
Central Sales Tax/ VAT Act
Income Tax including Fringe Benefit Tax.
Wealth Tax
Case Studies under Direct and Indirect Taxes.