SEM III FINANCIAL INSTITUTIONS, MARKETS & SERVICES Objectives: The objective of the course is to provide a comprehensive understanding

of the nature and economic functions of the several types of financial institutions that are present in the market. It is expected that students will develop critical skills in assessing the relevance of the principles of finance and financial intermediation to real world situations, and to better understand the role that financial markets play in the business environment that they will face in the future. The focus will be on the description of Indian financial markets, institutions, instruments and services. Contents: 1.Financial System: Structure and Role, Significance of Banking and Financial Institutions, Structure of the Financial System Banks and Other Financial Institutions,Financial Innovation Function of Financial Markets, Overview of Structure of Financial Debt and Equity Markets Primary and Secondary Markets Exchanges and Over-the-Counter Markets, Money and Capital Markets Internationalization of Financial Markets 2.Banking Institutions: Institutional structure in India, Commercial banks, Cooperative banks, Private sector banks, Banking Regulations, Implication for the economy, Asset Management by Banks, The Bank Balance Sheet, Liquidity Management and the Role of Reserves, Asset Management, Liability Management, Capital Adequacy Management, Fund based and non-fund based/fee-based services. 3.Non-Bank Financial Intermediaries: Institutional structure in India, Types and comparison of asset liability structures of various NBFCs, Lease finance, Hire Purchase, Housing Finance, Venture Capital funds, Money Market Mutual Funds, Hedge Funds, Insurance companies, Infrastructure Finance Companies. 4.Money Market: Money and Call Money Market, Institutions constituents, Regulations, Role and Functions, Issues in India, The Money Markets, The Discount Market, The Parallel Markets, The Interbank Market, The Market for Certificates of Deposit, The Commercial Paper Market, The Local Authority Market, Repurchase Agreements, Monetary Policy and the Money Markets. 5. Capital Market: The Importance of Capital Markets, Characteristics of Bonds and Equities, Bonds, Equities, The Trading of Bonds and Equities, Bonds: Supply, Demand and Price, Equities: Supply, Demand and Price, The Behaviour of Security Prices, Hybrid SecuritiesPreference Shares, Convertible Debentures, Non-convertible Debentures (NCDs) Partially Convertible debentures (PCDs), Fully Convertible Debentures (FCDs), Warrants, Debt with Call and Put Options.

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6.Central Bank as a Financial Regulatory Authority: Reserve Bank , Reserve Bank of India as a Regulator and Financial Stability Authority, Banking sector regulations Basel I ,II and III Norms-Early Warning Signals of Credit Deterioration and Failure in banks, The co-ordination between the financial sector regulators like SEBI,IRDA,PFRDA and the Reserve Bank of India Recommmended Books: 1. Khan, M.Y. Financial Services. Tata Mcgraw-Hill Publishing Company Limited. New Delhi. 2004, PP.350 2. Machiraju ,H.R. Indian Financial System. Delhi. Vikas Publishing House Pvt. Ltd.2002.Pp.Xxii,501 3. Pandian, P. Financial Services And Markets. Noida. Vikas Publishing House Pvt. Ltd.2009,Pp.Xiii, 41 4. Tripathy, N.P. Financial Services. New Delhi. Prentice-Hall of India Private Limited.2008,Pp.Xv, 331 5. Bhasin, N. Indian Financial System :Reforms, Policies And Prospects .New Delhi. New Century Publications.2004,Pp.Xi, 228 6. Pathak, B.V .Indian Financial System. New Delhi. Pearson Education Asia.2003,Pp.Xiii, 592 7. Khan, M.Y. Indian Financial System. New Delhi. Tata Mcgraw-Hill Publishing Company Limited.2003,Xvi, 500 8. Desai, V. Indian Financial System. Mumbai. Himalaya Publishing House.2001,Pp.690 9. Paul, J. Suresh, P. Management of Banking And Financial Services. New Delhi. Pearson Education Pvt.Ltd.2007,Pp.Xxv, 658 10. Seethapathi, K. Rao, T.S.R.K Financial Services: Evolution of Financial Services, Leasing. Hyderabad. Icfai University Press.2004,Pp.Vii, 199 11. Bhalla, V.K. Management of Financial Services. New Delhi. Anmol Publications Pvt. Ltd.2007,Pp.Xx, 916 12. Batra, G.S .Financial Services And Publications.2002,Pp.X, 269Texts Books Markets. Rajouri. Deep & Deep

13. Fabozzi, Frank, Modigliani, Franco, Jones, Frank (Feb 2009), Foundations of Financial Markets and Institutions, International Edition, 4th Edition, Pearson Higher Education. 14. Eakins, Stanley G. (2005), Financial Markets and Institutions (5th Edition), Addison Wesley. 15. Howells, Peter, Bain, Keith (2007), Financial Markets and Institutions, 5th Edition. 16. Madura, Jeff (2008), Financial Markets and Institutions, 8th edition, Thomson Publications. 17. Kidwell, David, Blackwell, David W., Whidbee, David A. et.al. (2008) Financial Institutions, Markets, and Money, 10th Ed., John Wiley & sons.

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MANAGEMENT CONTROL SYSTEM Context: An understanding of decision and control subsystem of the organisation is necessary for any Finance professional. These systems receive information primarily from the operating subsystem. A substantial part of this information looks at the operations from the point of view of costs and benefits and is used for decisions aimed at maintaining and improving the effectiveness of operations.

Objectives: This course examines the various techniques used by managers to ensure that the decisions behavior of people in an organization is consistent with the organizations goals and strategies. course focuses on formal planning and budget processes, incentive systems, internal control systems, balanced scorecard and behavior problems associated with financial results control. On completion of this course the student will be able to: Learn to think big and be partners at the senior level as well as junior levels in organizations; Understand the various newer tools as traditional tools have by no means become redundant Intelligently understand the workings of any organization, adapt themselves to it, and quickly start contributing to its development to reach the highest levels of achievement Outlines:

1. The Newer Paradigms of Management Controls-Meaning, Nature and Significance of Control Systems, Four Paradigms of Control, Early Warning Systems and Balanced Score Cards, Twelve Commandments of Control Design 2. Balancing the Tensions in Control Systems, Six Sources of Tensions in Control Systems, Goal Congruence, Key Controllable Variables 3.The Traditional instruments of Controls in organizations, External Audit, internal Controls and Internal Audit, MSM , Accountability in organizations, Responsibility Centers, ABC Costing, Kaizan, Learning Curve 4. Profit Centers, Transfer Pricing, Investment Centers and Long Term Accountability EVA, compensation and Incentives, Empirical Psychological Findings in Hierarchical Controls, Three Generations ofKM 5. Controls in the Financial Sector, Service Industry, Project Management, NGOs and small businesses, government and cooperatives in business

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6. Comprehensive Cases, Designing Control System: A Tool Kit, Common Errors to beavoided. Recommended Books: 1. Management Control Systems - Text and Cases by R C Sekha, TATA McGraw-Hill Publishing Company Limited New Delhi 2. Management Control Systems; Robert N Anthony & Vijay Govindarajan from TAT A McGraw- Hill Publishing Company Limited New Delhi 3. Management Control System by B.M. Bhadada 4. Billy E. Goetz: Management planning and control - PHI 5. Accounting for Management Control from Willsmore A. W. 6. Accounting for Management Control from Charles T. Hongren - PHI 7. Merchant, K.A. Modern Management Control Systems: Text & Cases. New Delhi. Pearson Education Asia. 2002. 8. ICFAI Management Control Systems. Hyderabad. Icfai Center for Management Research.2008. 9. Pherwani, G. Management Control Systems .Mumbai. Himalaya Publishing House.2000.

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SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT Context: With the financial system getting globalized, it has become necessary for Finance professionals to understand different avenues of investments and the decision-making process of institutional investors.

Objectives: The student will be given an in-depth knowledge of how to analyze and select profitable securities and then construct a portfolio indicating in what proportion to hold such securities. Outlines: 1. Introduction to Securities: Investment versus speculation, Investment process, investment categories, Stock fundamental analysis - economic & industry analysis 2. Concept & tools of economic analysis, industry analysis: introduction, need for industry analysis, alternative classification of industry, industry life cycle analysis, economic factors & industry analysis, SWOT analysis for industries. 3. Stock Fundamental Analysis - Company Analysis: Risk & return, financial statement analysis, equity valuation: forecasting earnings including statistical tools, Balance sheet valuation, dividend discount model, earnings multiplier approach, other comparative valuation ratios. 4. Technical Analysis: Concept, Dow theory, price indicators, volume indicators, Elliott wave theory, line and volume chart, bar chart, candlestick chart, Moving averages, relative strength index, stochastic oscillator, Williams % R. Evaluation of technical analysis. 5. Efficient Market Theory: Random walk, efficient market hypothesis, empirical evidence on weak-form, semi-strong form and strong form efficient market hypothesis, Implications of Efficient Market Theory for investment analysis. 6. Portfolio Analysis: Portfolio risk and return, Markowitz risk-return optimization, single index model, Capital asset pricing theory (CAPM), Arbitrage pricing theory. 7. Portfolio Management: Specification of investment objectives and constraints, selection of asset mix, Formulation of portfolio strategy, portfolio selection, portfolio execution, portfolio revision 8. Portfolio performance evaluation. Sharpe, Treynor and Jensens Alpha.

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Recommended Books: 1. Investment analysis and Portfolio management by Ranganathan 2. Fisher & Jordan, Security Analysis & Portfolio Management, 6th Edition, Pearson Education. 3. Robert.A.Haugen, Modern Investment Theory, PHI-5th Edition. 4. Gordon, William and Jeffery; Fundamentals of Investment, 3rd ed., Pearson Education. 5. I Ranganatham and Madhumati, "Investment Analysis and Portfolio management", First Ed. (2005), Pearson Education. 6. Prasanna Chandra, "Investment Analysis and Portfolio Management" , second edition, Tara-Mcgraw Hill 7. Charles P Jones, "Investment Analysis and Management" , ninth edition, Wiley. 8. Bodie, Keynee, Marcus &Mohanty, "Investment Management", Tata-Mcgraw Hill. 9. A Damodran, "Investment Valuation", II edition, Wiley Finance. 10. Frank K. Reilly & Brown, "Investment Analysis & Portfolio Management", ThomsonSW. 11. Sharpe, Alexender, Bailey, "Investments", Eastern Economy Edition 12. Francis, J.C. Investments: Analysis And Management. New York. Mcgraw-Hill Company, Inc.2005, Pp.935

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TAX PLANNING AND MANAGEMENT Context: With liberalisation and deregulation, business organisation finds the tax and regulatory environment changing rapidly in the direction of flexibility coupled with greater accountability. A finance professional now has to give greater attention to the environmental interface while taking any major decision in the finance area. Hence an understanding of fundamental factors in the tax and regulatory environment becomes essential. Objectives: 1. To understand the provisions of tax laws 2. To gain knowledge on procedural aspects for filing tax returns for various assesses and other statutory compliances 3. To get knowledge of various tax incentives and benefits under direct taxes Outlines: 1.Basics: Terminology/Concepts required like assessee, year, person, income revenue and capital expenditure, Basis of Charge, Exemptions etc. Residential Status& Incidence of Tax: Individual, Firm, HUF, Corporate etc. Incomes exempt from tax Section 10 2. Heads of income Part I: Salaries, Income from House Property 3.Heads of Income Part - II: income from business and profession capital gains, income from other sources, income from business and profession; Income of other persons Set off and carry forward of losses, Deductions from GTI &Tax liability 4.Agricultural Income, Assessment of Individuals, HUF , Firms & AOPs, Trusts, Co-operative Societies and Companies and other persons 5. Return of Income and assessment, penalties, Advance Tax, Interest, IDS,. CTS, Refund, Appeals &Authorities 6. Tax evasion, Tax avoidance, tax planning, tax management, need for tax planning, precautions in tax planning, Limitations of tax planning, taxation of international transaction, acquisitions, setting up of a new business etc. 7.Wealth Tax, Service Tax, Excise and Custom duty relevance tax laws Recommended Books: 1. Singhania, V. Students Guide to Income Tax. New Delhi. Taxmann Allied Services (P) Ltd. 2010, PP.xx,1000

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2. Singhania, V.K. Singhania, M. Students Guide to Income Tax Including Service Tax New Delhi. Taxmann Allied Services (P) Ltd. 2009, PP.860 3. Ramaiya, A. Guide to the Companies Act. Appendices Part 1 & Part 2. Nagpur. Wadhwa& Co.2001, PP. ccxxii, 2336, 207 4. Taxmann's Income Tax Act .New Delhi. Taxmann Publication Pvt. Ltd.2010.Pp.1282 5. Singhania, V.K. Direct Taxes Ready Reckoner 2010-11 & 2011-12.New Delhi. Taxmann Publication Ltd.2010,Pp.248 6. Mehta, N.V. Income-Tax Ready Reckoner 2010-2011.Mumbai.Shree Kuber Publishing House.2010,Pp.344 7. Datey, V. S.Indirect Taxes: Law and Practice 2009.New Delhi. Taxmann Publication Pvt. Ltd.2009,Pp.890 8. Nag, C.K. Karmakar,, C. Direct And Indirect Tax Laws And Practice. New Delhi. New Central Book Agency.2008,Pp.Xxv, 724 9. Jain, R K. Central Excise Law Manual 2008-09: With Service Tax Ready Reckoner. New Delhi. Centax Publications Pvt. Ltd.2008,Pp.Xxiii, 1100.

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FIXED INCOME SECURITIES Objectives: To acquaint students with fixed income securities - bonds andsecurites, their pricing, trading strategies, risk management, and yield curves. Contents: 1. Debt Instruments:Basic concepts of debt instruments 2. Indian Debt Markets: Different types of products and participants; Secondary market for debt instruments. 3.Central Government Securities-Bonds:Primary issuance process; Participants in Government bond markets; Constituent SGL accounts; Concept of Primary dealers, Satellite dealers; Secondary markets for Government bonds; Settlement of trades in G-Secs; Clearing Corporation; Negotiated Dealing System; Liquidity Adjustment Facility (LAF). 4. Central Government Securities-Treasury Bills:Issuance process; Cut-off yields; Investors in Tbills, Secondary market activity in T-bills. 5. State Government Bonds: Gross fiscal deficit of state Governments and its financing, Volume, coupon rates and ownership pattern of state Government bonds. 6. Call Money Markets: Participants in the call markets, call rates. 7. Corporate Debt-Bonds: Market Segments, issue process, issue management and book building, terms of debenture issue, credit rating. 8. Commercial Paper and Certificate of DepositsGuidelines for CP issue, Rating notches for CPs, Growth in the CP market, stamp duty, certificates of deposit 9.Repos: Repo rate, calculating settlement amounts in repo transactions, advantages of repos, recent issues in repo market in India, secondary market transactions in repos. 10. Bond market indices and Benchmarks: I-Bex, Sovereign bond index, NSE-MIBID/MIBOR 11.Trading Mechanism in NSE-WDM: Description of the NSE WDM trading system, order types and conditions, order entry in negotiated trades market, order validation and matching, trade management, reports, settlement, rates of brokerage. 12. Regulatory and Procedural Aspects: G-Sec Act 2006, SEBI (Issue and Listing of Debt Securities) Regulations 2008 and Market Practices and Procedures.

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13.Valuation of Bonds: Bond valuation; Accrued interest; Yield; Weighted yield; YTM of a portfolio; Realized yield; Yield-price, relationships of bonds 14.Yield Curve and Term Structure of Interest Rates: Yield Curve; Bootstrapping; Alternate methodologies to estimate the yield curve; Theories of the term structure of interest rates 15. Duration:Introduction and definition; Calculating duration of a coupon paying bond; Computing duration on dates other than coupon dates; Modified duration; Rupee duration; Price value of a basis point;Portfolio duration; Limitations of duration 16.Fixed Income Derivatives:Concept of fixed income derivatives; Mechanism of forward rate agreements; Interest rate swaps Recommended Books: 1. Duration, Convexity, and other Bond Risk Measures, Frank J. Fabozzi, John Wiley and Sons 2. Hand Book of Fixed Income Securities, Frank J. Fabozzi, McGraw-Hill Professionals 3. Fixed Income Analysis - Second Edition, Frank J. Fabozzi, John Wiley and Sons 4. Bond & Money Market Strategy, Moorad Chowdhary, Butterworth Heinemann 5. The Money Markets Handbook: A Practioners Guide, Moorad Chowdhary, John Wiley and Sons 6. Analysing& Interpreting the Yield Curve, Moorad Chowdhary, John Wiley and Sons 7. Fixed Income Markets (Instruments, Applications, Mathematics), Moorad Chowdhary, John Wiley and Sons 8. Introduction to Bond Markets, Moorad Chowdhary, John Wiley and Sons 9. An Introduction to Repo Markets, Moorad Chowdhary, John Wiley and Sons 10. Fixed Income Markets and their Derivatives, Suresh Sundaresan, South Western College Publications 11. Value at Risk, Philippe Jorion, McGraw-Hill 12. Bond Pricing & Portfolio Analysis, Olivier De La Grandville, MIT Press 13. Handbook of Debt Securities and Interest Rate Derivatives, A V Rajwade, TATA McGraw Hill 14. Fixed Income Securities - Tools for Today's Markets, Bruce Tuckman, John Wiley and Sons

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