REPORT ON INSTITUTIONAL TRAINING
Submitted to University Of Madras in partial
fulfilment of the requirement for the
DEGREE OF M.B,A
Training Undergone At
CAMEO CORPORATE SERVICE LIMITED
Trainee : Bharath Sudar
Register No : CS20345
Department of Corporate Secretaryship
K.C.S. KASI NADAR COLLEGE OF ARTS AND SCIENCE
(Belonging to S.V.H.N.A. Dharma Fund)
CHENNAI – 600 021
I hereby declare that the Report on INSTITUTIONAL TRAINING AT CAMEO CORPORATE SERVICE LTD for the MBA., Degree is my original work and that it has not formed the basis for the award of any Degree, Associateship, Fellowship or any other similar title.
PLACE : Chennai SIGNATURE OF THE
DATE : STUDENT
This is to certify that this Training Report is submitted by Ms.S.V. REVATHY, a bonafide student of III B.C.S., K.C.S. KASI NADAR COLLEGE OF ARTS AND SCIENCE (Belonging to S.V.H.N.A.DHARMA FUND), CHENNAI-600 021 who has undergone Training at CAMEO CORPORATE SERVICES LTD., from 1.12.03 to 31.12.03, in partial fulfilment of the requirements for the Degree of Bachelor of Corporate Secretaryship
HEAD OF THE DEPARTMENT PRINCIPAL
Institutional Training is very important for the study of Corporate Secretaryship. The name of the course itself is known as Company Secretaryship. It is a kind of source to improve the knowledge about the company, and also the way of behaving in the company i.e., to move with different kinds of people in a totally different atmosphere. The training proves to be much useful for the future. I have done good service during my training.
I have taken some deep study about
1. Secretarial Department
2. Legal Department
3. Finance Department and
4. Other Department
The aim of this training is not only to know the job but also to know how to proceed.
This training has lasted for a duration of 30 days and has proved to be of great help to me.
I want to express my deep sense of thanks and gratitude to K.C.S. KASI NADAR COLLEGE OF ARTS AND SCIENCE, and I convey my sincere obligation towards my Ex Principal Dr. A. Balasubramanian, M.Sc., Ph.D., F.B.S., I.A.W.S., and also the present Principal Dr. G. Sakkaravel, and also I obey and thank the Management members, respected Sir K.C.S.K. Asokan, (Secretary) and other members who helped me to do this Project.
I honour to obey all my department staff, Head of the department Madam Shobha Edward, M.C.S., M.Phil., P.G.D.P.M. & L.L. P.G.D.C.S.M., D.L.T., and other staff members Mr. P. Pandian, M.C.S., M.Phil., P.G.D.C.A., P.G.D.P.M., & L.L., Mr. Wilson Paul, M.C.S., Mphil., P.G.D.P.M. & L.L., P.G.D.M.M., and Mrs. B. Sujatha, M.A., M.Phil., and I thank all the members who helped me to do this project at this time I convey my kind regards to them and to my Corporate Department.
I thank my company Cameo Corporate Services Limited, first of all I thank my Sir Mr. Muralidharan and Madam Rohini, who guided me to do this project and trained me and gave the materials and other help for this project. And also I thank Ms. Gnanam and Mr. Gopi and other staff in Cameo who helped me in this project.
At this time I really thank my parents who have given a hearty and positive response to my project work, and now I convey my thanks to my friends and my brothers and all my relatives who helped me to do this project successfully.
Last but not least I must convey my hearty thanks to virtual image 'God' who has given this opportunity to express my views and ideas.
The Company was incorporated in 1985 under the Companies Act 1956 as Cameo Software Service Private Limited, subsequently the name of the company changed into Cameo Corporate Service Limited having its registered office at Subramaniam Building, No.5, Club House Road, Chennai – 600 002. The company is situated just opposite to Spencer's Tower in a spacious 15000 sq.ft. premises centrally air conditioned.
Cameo Corporate Service is one of the leading professionally managed registrars to the issue and securities transfer agents in India are associated with MAC group of companies, a leading industrial house in India. Cameo has been ranked in the sixth place by Prime (The Public Issue moniton) for the consecutive years (Viz) 1994-1995 and 1995-1996, with regard to number of issues handled in all India basis.
Cameo Corporate Service has successfully handled large issues of various Blue Chip Companies and constantly innovating to achieve high quality results over the years. It has experience in handling high volume data processing operations for big corporation leading industrial houses like SPIC, MAC, STERLING, MAX WORTH, PENTAFOUR, LMW groups and leading banks are extending active support to our company.
The share capital of the company is Rs.1,50,00,000/- (Rupees one crore fifty lakhs only) divided into 15,00,000 (fifteen lakhs) equity shares of Rs.10/- (Rupees ten only).
Cameo was established by the M.A. CHIDAMBARAM GROUP in the early 1990's essentially as a registry and securities transfer agent to participate in the emerging opportunities the capital markets presented at the time.
The M.A. Chidambaram group, of which Cameo is a member in South India's largest business house and has a turnover in excess of USD 1 million. The group has wide ranging interests across industries such as fertilizers, petrochemicals, agro business, logistics, financial services hotels, pharmaceuticals, electronics, detergents, engineering consultancy services and trading.
OPERATION & OBJECTIVES
Registry and Transfer Business
Cameo's registry and transfer business has performed consistently well right since inception and continues to be an important fact of its business. Cameo has consistently been ranked amongst the first six registry and transfer agents in the country and has successfully acted as registrar to well over 150 initial public offerings, many of which have been from some of India's largest companies and banks.
Data Conversion Business
Cameo believes that the data entry conversion business in India holds much promise given India's significant cost advantage in the area, and the abundant availability of data conversion skills with requisite knowledge of English. Cameo's traditional strengths in high volume data processing and in recruiting and managing a human resource intensive operation both of which are essential elements of the data conversion business, have indeed provided the strong impetus for this business.
Services to Banking Industry
Cameo derives much of its data processing / conversion capability from its volume intensive registry and transfer business. Cameo has been able to successfully transfer this capability to its banking services business which provides comprehensive back office support for banks.
Lending itself naturally to India's inherent strengths in data conversion, data processing and due to India's ideal location across time zones vis-a-vis the US the medical transcription business in India has all the trappings of being a sunrise business that is estimated to employ well over 2,00,000 people by the year 2008.
Cameo has established its credentials on the basis of high levels of service quality in keeping with best practices in the industry. Importantly, it is on the strength of referrals from satisfied customers that Cameo has built its business over all these years.
Cameo is supervised by an independent and professional board of directors, and is managed by a competent and experienced management team that is assisted by an equally fine complement of people across all levels in its organization.
MEMORANDUM OF ASSOCIATION
Any seven or more persons or where the company to be formed will be a private company any two or more persons associated for any lawful purpose may, by subscribing their names to a Memorandum of Association and otherwise complying with, to form an incorporated company, with or without limited liability.
a. A company having liability of its members limited by memorandum to the amount, if any unpaid on the shares held.
b. A company having liability of its members limited by Memorandum to such amount to contribute to the asset of the company in the event of being wound up.
c. Not having limited liability to members.
Lord Cairns in Ashbury Railway Carriage Company -Vs- Riche pointed out:
The memorandum is as it were, the area beyond which the action of the company cannot go, inside that area the shareholder may make such regulations for their own govt. as they think fit.
CONTENTS OF MEMORANDUM:-
I. The name of the company is
"CAMEO SHARE REGISTRY LTD.,"
II. The registered office of the company is situated in the state of Tamil Nadu.
It is divided into six clauses namely
1) Name Clause
2) Situation Clause
3) Objective Clause
4) Liability Clause
5) Association Clause and
6) Capital Clause.
Name Clause :
The name of the company is "CAMEO CORPORATE SERVICES LIMITED".
Situation Clause :
The Registered Office of the company will be situated in the State of Tamilnadu.
Objective Clause :
It can be of three types namely —
1. Main Object
2. Ancillary Object
3. Other Object
I. Main Object
1. To carry on the business as Registrars to public/rights/bonus/private placement issues and as Registrars and security transfer agents for securities in the physical or depository form and/or Transfer Agents for any negotiable and/or non-negotiable instruments, Depository Participants and stock lending operations.
2. The business of keeping in safe custody any monies, shares, securities, properties, articles and other valuable things including jewels on behalf of foreign or do mestic investors, mutual funds, venture capital funds, portfolio managers, companies or institutions and to render all kinds of custodial and allied services with respect to shares, securities, etc., for individuals, mutual funds and corporate bodies in India and overseas.
3. To render advisory services in the formation, supervision or control of business operations of any company or undertaking and, Technical, Financial and Management Consultants and to act as advisors for foreign exchange risk management and as trustees for investors and subscribers and for this purpose to carry on the business of an Investment Trust company trading in investments, to act as underwriters, brokers, managers, dealers in units of Unit Trust of India, National Savings Certificates, Deposits of all kinds, Fixed Deposits, Inter Corporate Deposits, Mutual funds and for securities, issued by Central/State Governments, Public/Private Sector Companies, Banks, Institutions, etc., and other securities and to promote and start, finance industries and also to give any guarantee for payment of money or performance of any obligation or underwriting.
4. To manage investment pools, mutual funds, syndicate in shares, stocks, securities and finance, to receive money on deposit at interest or otherwise for fixed periods and to lend money on any terms that may be thought fit.
5. To provide factoring services and advisory services in the area of finance, trade, commerce and industry and to arrange, procure or obtain alone or jointly with others, finances, working capital facilities, credit syndication and purchase of instruments within India or abroad for and on behalf of any company, government undertaking, public/private sector corporations, bodies corporate or other concerns.
6. To establish, maintain, conduct, provide, procure or make available services of any kind namely statistical, financial, secretarial, merchant banking in all aspects, including for futures and options, dealers in foreigh exchange, money managers and advisory services connected with foreign currency exposure management and syndication of foreign currency loans of all kinds.
7. To engage in programming, electronic data processing, data entry services which may be required by Computer users in India and abroad (in order that they may make effective use of software products designed by the company).
8. To carry on the business of computer software design and development organisation for all computer systems and to engage in programming, electronic data processing, data entry services which may be required by Computer users in India and abroad (in order that they may make effective use of software products designed by the company).
II. Ancillary Object
1. To enter into negotiations with foreign companies and other persons for obtaining grant, license or other terms of formulate and other rights and benefits and to obtain financial and / or technical collaborations, technical informations, know-how and expert advice for production and in manufacture of all types of Electronic equipments and Electrical gadgets and other product or products ancillary thereto.
2. To establish and manage and provide education to students to provide for delivery and holding of lectures, exhibitions, meetings, classes and conferences, calculated, directly or indirectly, to advance the cause of education whether general, professional or technical and to provide libraries and institutions for the lending of books, periodicals, films, slides, phonographic records and other records,.
3. To buy, sell, import, manipulate, prepare for market and deal in merchandise of all kinds and generally to carry on business as merchants, importers and exporters.
4. To take part in management, supervision, or control of the business or operation of any Company or undertaking and for that purpose to appoint and remunerate any directors, accountants or other experts or officers. However the Company shall not act as Manager or Managing Agents of any Company.
5. To employ experts to investigate and examine into the conditions, prospects, value, character and circumstances of any business concerns and undertakings and generally of any assets, property or rights.
6. To invest and deal with the money of the Company nor immediately required upon such securities and in such manner as may from time to time be determined.
7. To improve, manage, work, develop, lease, mortgage, abandon or otherwise deal with all or any of the properties of the company, rights and concessions of the Company.
8. To undertake and execute any contract for works involving the supply, application or use of any machinery, chemicals, chemical products or processes and to carry out any ancillary or other works comprised in such contracts.
9. To distribute among the members in specie any property of the Company or any proceeds of sale or disposal of any property of the company, but so that no distribution amounting to a reduction of capital be made except with the sanction (if any for the time being) required by law.
10. To give donations or subscriptions to any religious, charitable or social institutions or to give any charity incidental to or conductive to any business that may be carried on by the Company.
11. To appoint trustees (whether individuals or corporations) to hold securities on behalf of and to protect the interest of the company.
12. To accept stock or shares in or the debentures, mortgage debentures or other securities of any other company in full or part payment for any services rendered or for any sale made to or debt owing from any such company.
13. To render all kinds of professional and consultancy services in procuring manpower including selection, recruitment and placement of personnel both skilled and unskilled, clerical, supervisory and managerial to domestic and foreigh clients.
14. To carry on business as proprietors and publishers of newspapers, journals, magazines, books, periodicals, newsletters, free-lancers and other literary works and undertaking.
III. The Other Objects
1. To take up agencies and act as Agents, Stockists or Distributors for the manufacturers and suppliers of any acid or other chemical product or substance, machinery, plant, implements, tools, property, chemical, industrial or other preparations and articles, substances, apparatus, materials and things.
2. To act as Industrial Consultants & Advisors to Companies, Institutions, Harbour Boards and Public Authorities and to give expert guidance to persons on the setting up and management of industry and technical problems relating thereto.
3. To carry on the business of contractors, engineers (mechanical), marine, electrical, electronic, canal, civil, irrigation, radio, aviation and in all its branches.
4. To carry on the business of exporters and importers, to function as Export House and deal in all varities of commodities and for this purpose to also engage in ancillary services such as shipping, forwarding, road transport and inland transport.
IV. Liability Clause
The liabilities of the member is limited.
V. Capital Clause
The Share Capital of the Company is Rs.1,50,00,000/- divided into 15,00,000 Equity Shares of Rs.10/- each, with rights, privileges and condition attached thereto as are provided by the regulations of the company for the time being, with power to increase and reduce the capital of the company and to divide the shares in the capital for the time being into different clauses in accordance with the provisions of the Company's Act 1956, and the regulations of the Company and to vary, modify or abrogate any such rights, privileges or conditions in such manner as may for the time being, be provided by the regulations of the company.
IV. Association Clause Table No:1.1
Sl.No. Signature, Name, Address, Description and Occupation of Subscriber Witness, Signature, Name, Address, Description and Occupation
S/o. AL. Vadivelu
22, I Main Road
Chennai – 600 085
COMPANY EXECUTIVE S. ANANTHANARAYAN
S/o. A.S. Mani
3rd Main Road
Gandhi Nagar, Adyar
Chennai – 600 020
S/o. P. Ramamoorthy
20 & 21, Sterling Avenue
Porur, Chennai-600 116
S/o. T. Ayyasamy
2B, Surya Apartments
No.9, Cenotaph II Lane
Alwarpet, Chennai-600 018
S/o. N. Arumugam
2, Venkataswamy Road
Teynampet, Chennai-600 018
Sl.No. Signature, Name, Address, Description and Occupation of Subscriber Witness, Signature, Name, Address, Description and Occupation
S/o. VE. Ramaswamy
183, Mount Road
Chennai – 600 015
COMPANY EXECUTIVE S. ANANTHANARAYAN
S/o. A.S. Mani
3rd Main Road
Gandhi Nagar, Adyar
Chennai – 600 020
S/o. A.R.D. Rajan
II Floor, No.89
II Aspiran Garden Street
Kilpauk, Chennai-600 010
S/o. S.S. Sivaprakasa
10, Clements Road
Vepery, Chennai – 600 007
ARTICLES OF ASSOCIATION
Articles of Association are framed with the object of carrying out the aims and objects of the memorandum of association. The articles of association is used for regulating the internal affairs of the company. The regulations contained in table 'A' in the first schedule to the Companies Act, 1956 shall apply to the company except is so far as they have been specifically excluded by or under these articles.
1. Highly trained man power is available in abundance to handle MEGA issues.
2. It has a good branch/agent network in all parts of the country to monitor the issue response and to ensure speedy information gathering and timely application collection.
3. All necessary allotment activities will be completed and all share certificate/refund orders will be mailed within the statutory period stipulated by SEBI and other authorities. They have handled SPIC Fine Chemicals Limited, issue which was subscribed nearly by 10 lakhs applicants in a record period of 52 days.
4. They have very good mailing facilities and working arrangements with post offices in Madras. All documents will be printed organised and despatched within a stipulated time.
5. They extend the services as transfer agents after the issue. Also, they can help set up inhouse secretarial department to handle the same under a separate contract.
ARTICLES OF ASSOCIATION
CONSTITUTION OF THE COMPANY:
The Regulation contained in Table "A" in the First Schedule to the Companies Act, 1956 shall apply to the Company except in so far as they have been specifically excluded by or under these Articles.
2. Calls on Shares:
3. Forfeiture of Shares:
4. Transfer and Transmission of Shares:
5. Alteration of Capital:
6. Surrender of Shares
7. Set-Off of Moneys due to Shareholders:
8. Conversion of Shares into Stock
9. Modification of Rights:
10. General Meetings
11. Proceedings of General Meeting
13. Managing and Whole Time Directors:
14. Debenture Director
15. Rotation of Directors:
16. Meetings of The Board
17. Powers and Duties of Directors
20. Common Seal
21. Dividends and Reserves
22. Capitalisation of Profits
24. Annual Returns
26. Service of Documents and Notice
27. Authentication of Documents
28. WINDING UP
29. Indemnity and Responsibility
The location of the office building is an important aspect, as a centralised location would enable better fulfilment of the various business activities without wasting any of the essential resources. Cameo share registry is situated at the heart of the city which is designed appropriately to complete the requirements of the enterprise. The location and premises are aptly located to suit the purposes of an office in order to help the employees and the customers. The proximity to Banks, Post Office, Hotels, Bus Stops and even the railway stations makes it an added advantage to the execution of office duties.
NO.1, CLUB HOUSE ROAD
CHENNAI 600 002
PHONE: 8460390 (5 LINES)
(Old No.) 36-40, (New No.)
73, ARMENIAN STREET
CHENNAI 600 001
? to ?
Departmentation is an element of the organising process. A Departmentation is a distinct area, unit or sub-system of organisation over which a Manager has authority for performance of specified activities.
MEANING OF DEPARTMENTATION:
Departmentation may be defined as the process of grouping individual jobs into departments. Once the total work of an enterprise is divided into individual functions and sub-functions these functions are grouped together into work units on a particular basis.
THE ACTIVITIES OF THE COMPANY
1. Inherent Advantages
a) A full packaged deal is available with respect to pre-issue, Issue time & Post-issue
b) Highly trained man power is available in abundance to handle MEGA issues. (200 permanent employees and 50 casual / contract employees.
c) Has a good branch / Agent network in all parts of the country to monitor the issue response and to ensure speedy information gathering and timely application collection.
d) All necessary allotment activities will be completed and all share certificates / refund orders will be mailed within the statutory period stipulated by SEBI and other authorities. They have handled SPIC Fine Chemicals Ltd., issue which was subscribed nearly by 10 lakhs applicants in a record period of 52 days. (It was oversubscribed by 17 times)
e) They have very good mailing facilities and working arrangements with Post Office in Madras. All documents will be printed, organized and despatched within a stipulated time.
f) They extend their services as Transfer Agents after the Issue. Also, they can help you set up in-house secretarial department to handle the same under a separate contract.
? Capacity ?
? Data Safety ?
? On time Delivery ?
? Quality Assurance ?
? High Volume Efficiency?
? Access Control System ?
SCOPE OF SERVICES
DEPOSITORY SERVICES – NSDL / CDSL
1 To comply with various provisions, rules and laws of NSDL / CDSL / SEBI
2 To establish continuous electronic means of communication with NSDL / CDSL.
3 To provide necessary manuals and procedural guidelines to the Company for effective and prompt conduct of business of the Depository
4 To maintain adequate systems / procedures, means of communication, infrastructure, hardware, software, security devices and back up facilities as per the requirements of NSDL / CDSL.
5 To undertake dematerialisation and rematerialisation requests and to process the same.
6 Updation and reconciliation of Inter Depository Transactions
7 To stop dematerialisation when there is any prohibitory order, stop transfer, attachment order and disputed title on the day of such requests within 15 days.
8 To provide share holding pattern (Resident Indians, NRIs, Financial Institutions, etc.,) of the Shares Dematerialized.
9 To provide weekly MIS Report on shares Dematerialized / Rematerialized.
10 To be responsible for corporate actions
11 Through V-SAT network, we would maintain the folios in the Depository.
12 Updation of Data down loaded from NSDL /CDSL on periodical basis.
13 Confirmation on updation to NSDL / CDSL
14 To maintain records / Data as prescribed by NSDL / CDSL
15 All other work connected with Electronic Transfer of shares
? In addition to the
above scope of services,
they would carry out
all other activities
by NSDL & CSDL ?
Profit Before Tax
Table No: 1.3
S.No. Year Net Profit
I 2000 83,05,025
II 2001 29,17,911
III 2002 17,59,826
IV 2003 50,64,075
PROFIT BEFORE TAX
Graph No : 1.1
PROFIT AFTER TAX
S.No. Year Net Profit
I 2000 58,05,025
II 2001 18,17,911
III 2002 5,59,826
IV 2003 37,74,281
ACHIEVEMENT OF THE COMPANY
P & L ACCOUNT
AS ON 31ST MARCH, 2001
Particulars As on 31.3.2001
Rs. As on 31.3.2000
Income 3,59,36,829 3,68,21,636
Profit before Tax 29,17,911 83,05,025
Profit after Tax 18,17,911 58,05,025
Pay to Govt. as Tax 11,00,000 25,00,000
P & L ACCOUNT
AS ON 31ST MARCH, 2002
Particulars As on 31.3.2002
Rs. As on 31.3.2001
Income 4,74,40,342 3,59,36,829
Profit before Tax 17,59,826 29,17,911
Profit after Tax 5,59,826 18,17,911
Pay to Govt. as Tax 12,00,000 11,00,000
P & L ACCOUNT
AS ON 31ST MARCH, 2003
Particulars As on 31.3.2003
Rs. As on 31.3.2002
Income 5,27,80,553 4,74,40,342
Profit before Tax 50,64,075 17,59,826
Profit after Tax 37,74,281 5,59,826
Pay to Govt. as Tax 12,89,794 12,00,000
I hereby conclude that from the Chapter I we come to learn about companies philosophy and their rules regulations and how to run the company. These are the one which I learned from the introduction chapter.
Chapter No. Title Page No.
2 Secretarial & Legal Department
3. Finance & Accounts Department
4. Other Department
Introduction of the Company
S.No. Particulars Page No.
1 History of the Company
2 Operation and Objectives of the Company
3 Memorandum and Articles of Association
4 Office Layout (Plan)
5 Organisational Chart of the Board of Directors
6 Management Flow Chart
7 Certificate of Incorporation
8 Certificate of Commencement of Business
9 Office Location
10 Working Hours
12 Technology Imported
15 Future Plans
16 Achievement of the Company
LIST OF TABLES
Table No:1.1 Association Clause
Table No.1.2 Scope of Service
Table No.1.3 Profitability
Table No.1.4 Profit after Tax
Table No.1.5 Achievement of the Company
LIST OF GRAPHS
Graph No:1.1 Profit before Tax
Graph No.1.2 Profit after Tax
LIST OF CHARTS
Chart No.1.1 Office Layout
Chart No.1.2 Organisational Chart
Chart No.1.3 Management Flow Chart
Chart No.1.4 Activities of the Company
? Certificate of Incorporation
? Certificate of Commencement of Business
? Form 1 - Declaration of compliance with the requirements of the Companies Act, 1956 on application for Registration of a company.
? Form 1.A - Application Form for availability of names
? Form 18 – Notice of situation change of situation of registered office.
History of the Company
Operations and Objectives
Articles of Association
2. Functions of the Secretarial Department
3. Stock Exchange
5. Issue of Shares
6. Capital Structure
7. Listing of Shares
8. Transfer and Transmission of Shares
9. Consolidation and Sub Division
12. Bonus Shares
17. Letter of Allotment
18. Charman's Speech
19. Legal Department
LIST OF TABLES
Table No:2.1 Registers maintained by the Company
Table No.2.2 Loan for both secured and unsecured
Table No.2.3 Dividend
LIST OF GRAPHS
Graph No:2.1 Loan for both secured and unsecured
Graph No.2.2 Dividend
LIST OF CHARTS
Chart No:2.1 Functions of Secretarial Department
Chart No.2.2 Flow Chart of Secretarial Department
Chart No.2.3 Types of Debentures
Chart No.2.4 Meeting of the Board
Chart No.2.5 Functions of Demat Process
Form. 7.B Share Transfer
Form. 8 Modification of Charges
Form. 13 Register of Charges
Form. 17 Memorandum of complete satisfaction of
Form. 23 Registration of Resolution and Agreement
Form. 29 Consent of Act as a Director of Company
and / or undertaking to take and pay for
Form. 32 Particulars of Appointment of Directors and
Manager and changes among them
Return of Deposit with non-banking companies other than Financial Companies.
The Secretarial Department acts as the eyes, ears and hands of the company. The main function of the Secretarial Department is to see whether all the activities performed are according to the provision of the companies act. It also has to ensure that whether it has compiled with all the formalities and legal provision laid down by different acts from time to time.
Functions of the Secretarial Department
About the Secretary : The term Secretary is derived from the latin work "Secretaries" which means confidential officer who is entrusted with the confidential matters.
Funcions or Duties : It can be classified into two types (1) Statutory Duty and (2) General Duty.
(1) Statutory Duties : The Statutory duties of the Secretary arise out of his position mentioned under different acts such as Company act, Income tax act, Stamp act, etc.,
(2) General Duties : The Secretary of a company has several general duties. They are duties to the Director, duties to the Shareholder, duties to the Organisation Staffs, duties to the outsiders, etc.,
As to Administration
As a Public Relation Officer
As to Formulate Policies
As to Meeting
As a Trustee
As a Liaison Officer
As a Legal Advisor
Chart No: 2.2
FLOW CHART OF SECRETARIAL DEPARTMENT
Stock Exchange is the market where stocks, shares and other securities are brought and sold. The Joint Stock Company or the Corporate Form of Organisation is ideally suited to secure larger amounts of capital from all those who have surplus funds and who are willing to take risk in investing in companies.
An investor who puts his savings in a company by buying its securities cannot get the amount back from the bank directly.
The Stock Exchange where Cameo Corporate Service has listed its shares in Bombay and Chennai.
Nature of Shares
Share of any member in Cameo for a moveable property. They are transferable in the manner provided by the Cameo (Sec.82).
Issue of Shares
A private company, as already observed, raises its share capital from private sources, i.e. from friends and relations of promoters. A public company limited by shares raises its capital from the public by issuing a prospectus which is an invitation to the public to subscribe for its share capital.
Capital structure of the Cameo refers to the make up ot its capitalization and includes all long-term capital resources viz. loans, advances, reserves, shares and bonds. It is referred to as the proprietory of equity capital, preference capital, reserves, debentures and other long term debts to the total capitalization.
(I) Authorised Capital : This is the nominal value of the shares which a company is authorised to issue by its memorandum of association. This is the maximum capital which the Cameo will have during its lifetime unless it is increased.
(II) Issue and subscribed Capital : Issued capital is the nominal value of the shares which are offered to the public for subscription.
(III) Paid up Capital : This is that part of the issued capital which has been paid up by the shareholders.
(IV) Transfer & Transmission of Shares : The instruments of transfer of any shares in the company shall be executed both by the transferor and the transferee and the transferor shall be deemed to remain holder of the shares until the name of the transferee is entered in the Register of members in respect thereof.
1) The instrument of transfer shall be in writing
2) Boards right to refuse to register
3) Rights to shares on death of a member for transmission
4) Rights and Liabilities of a person entitled to Shares of Transmission
5) Endorsement on transfer and issue of certificate
6) Company's right to register, transfer by Apparent Legal Owner
Transmission of Shares in Cameo : Transmission of shares takes place on the death or insolvency of an individual member or if the member is a limited company, on its going into liquidation. In case of transmission of shares no instrument of transfer is necessary. If the company, without any valid reason, refuses to accept a transmission, the remedies available are the same as in the case of refusal of transfer of shares. In the absence of any such provisions in the articles, Articles 25 to 28 of Table A to Schedule 1 apply.
Transmission of shares takes place by operation of law.
Transfer of shares is effected by act of the parties.
These are the ways followed by the Cameo
Corporate Service Limited
Transposition of Shares in Cameo : Transposition of shares refers to changing the order of names in respect of joint holdings. It is not a transfer and hence no transfer deed is required if the request is made by all the joint holders in writing for the entire holdings.
TRANSFER OF SHARES IN FAVOUR OF HINDU UNDIVIDED FAMILY (HUF)
HUF not being a legal entity shares cannot be transferred in favour of HUF. However the same may be transferred in favour of the Karta of HUF.
TRANSFER OF SHARES IN FAVOUR OF FIRM:
Partnership firm not being a legal entity shares cannot be transferred in favour of firm. However the same may be transferred in the individual or joint names of partners.
TRANSFER OF SHARES IN FAVOUR OF COMPANY:
Shares can be transferred in favour of company after obtaining the following documents:
1. The Memorandum and Articles of the Association of the Company to be checked whether the company posses the right to invest in other company shares.
2. The resolution passed by the General Meeting / Board Meeting of the Company for such investment.
BENEFITS OF ACCRUING TO SHAREHOLDERS IN THE EVENT OF SHAREHOLDERS JOINING THE DEPOSITORY
1. Simultaneous settlement and transfer of shares in favour of the buyers.
2. Immediate transfer of securities in buyers' name on pay out day improves liquidity immensely. Electronic transfer also takes care of loss / theft in transit.
3. Transmission of Shares – simple procedures are followed for transmission of shares in Demat mode.
(V) Debentures in Cameo : "Debenture" signifies "Any instrument under seal evidencing a deed the essence of it being the admission of indebtedness". Debentures are commonly issued in a manner similar to the issue of shares through a prospectus. The amount might be payable by instalments on application, allotment, and calls. But usually the amount is payable in one lump sum.
Nature of debenture : (Sec. 82) The debentures of a company are movable property, transferable in the manner provided by the Articles.
Types of Debentures
Unsecured Debentures (or) Naked Debentures
Debenture Director : The Director appointed under this Article is herein referred to as "Debenture Director" and the term Debenture Director means the Director for the time being in office under this Article. Nominee Director is an officer or the Corporation or of the Reserve Bank of India, the sitting fees, in relation to such nominee Director/s shall also accrue to the Corporation and the same shall accordingly be paid by the Company directly to the Corporation. The Debenture Director shall not be bound to hold any qualification shares and shall not be liable to retire by rotation or be removed by the Company.
DIVIDENDS IN CAMEO
One of the main objects of commercial enterprises is to earn profit which is distributed among shareholders by way of 'dividend'. The term 'dividend' is used in the former sense. If there is a profit, the directors, by a Board resolution, decide the rate of dividend to be recommended to the shareholders.
Dividends : Considering the performance of the company during the year, the directors declare the final dividend of 40% aggregating Rs.8,15,409/- including corporate dividend tax. The final diidend entitlement is for all the shareholders whose names appear in the Register of Members on the date of the annual general meeting.
Dividends and Reserves : The profits of the company, subject to any special rights relating thereto, created or authorised to be created by these presents and subject to the provisions of these presents as to the Reserve Fund, shall be divisible among the equity shareholders.
1. Rights to Dividend
2. Declaration of Dividend
3. Interim Dividend
4. Dividends to be paid out of Profits only
5. Deduction of Arrears
6. Notice of Dividend
7. Unclaimed Dividend
8. Dividends not to bear interest
A dividend warrant is an instrument containing an order on the company's bank directing it to pay the stated amount to or to the order of the shareholder named therein who is entitled to claim dividend.
The notice and certificate part give particulars as to the meeting which declared the dividend, the rates of dividend declared and the period to which it relates, the gross amount of dividend due on shares, the amount of income-tax deducted and the net amount due.
LOAN AND UNSECURED LOAN
Loan : Shares being movable property and can be pledged to obtain loans against shares. The share holders may obtain loans from the following institutions:
1. State Bank of India
2. Scheduled Bank
3. Any Banking Company or Financial Institutions approved by the Central Government in this regard.
4. Central Government or State Government or any corporation owned or controlled by them.
The Shareholders will surrender the share certificate as a security for the repayment of the
loan and effect a blank transfer signed by them as transferor.
The bank or financial institutions shall endorse on the transfer deed.
a. The date on which the loan was repayed by the depositor.
b. In case of failure to repay the date on which the bank releases the same for sale.
c. In case of failure to repay and the bank intends to get the same transferred in its name, the date on which it signs and executes the transfer deed.
The transfer deed so endorsed shall be lodged to the company within two months of such endorsements.
Larger loan amount – the RBI has hiked loan limit against Demat shares to Rs.20 lakh compared to Rs.10 lakh for shares in physical form.
Secured Loan :
? Hire purchase loan of Rs.31,33,791/- from First Leasing Company of India Limited on Hypothecation of Computers and Generators.
? Housing loan of Rs.15,80,418/- from National Trust Housing Finance Limited.
? Car Loans of Rs.5,81,440/- from ICICI Ltd., and Rs.5,14,191/- from Canara Bank.
? Loans and Advance include amount due from Managing Director Rs.8,61,855/-.
? Secured loan from Bank Rs.1555827/- / Secured by assets Rs.5809840/-
? Unsecured Loan considering goods, debts outstanding for a period exceeding six months Rs.1199138/- and others Rs.11580759/-
? Advance recoverable in cash or kind or for value to be received Rs.4924984/-
This information is from the year 2002 & 2003.
In the year 2001 unsecured loan from bank is Rs.576877/- and from others Rs.8,00,000/-.
REGISTER MAINTAINED IN CAMEO
Importance of Register : The Register of Members is the creditors' gurantee showing them to whom and to what they have to trust. Besides, it is a prima facie evidence of the truth of the matters contained in it (Section 164).
Registry Division : The performance of this division registered a declining trend throughout the year. Many clients opted the Dematerialisation of shares of their company which resulted in reduction in the number of Folios held. This had a direct impact on the Service Charges raised since the fee is proportionate to the number of folios. The Directors anticipate the same trend to follow in near future.
Register of Members : Section 150 of the Companies Act, 1956, makes it obligatory on every company, whether public or private, to keep in one or more books an up-to-date Register of its Members.
Index of Members : Every company having more than fifty members must keep an index of members, unless the Register is already in the form of an index. Any alteration in the Register of Members must be noted in the index within 14 days of the alteration.
Place of keeping the Register of Members and the Right of Inspection (Sec.163) : The Register of members shall be kept at the Registered Office of the company. It may, however, be kept at any other place within the same city or town in which the registered office of the company is situated.
Closure of the Register : As per Section 154, a company may, after giving not less than seven day's previous notice by advertisement in a local daily, close the Register of Members, for a period not exceeding 45 days in a year, but not exceeding 30 days at any one time.
REGISTER MAINTAINED BY THE CAMEO
Name of the Company : Cameo Corporate
Register No. of the Company : 18-41613
Authorised Capital : Rs.1,50,00,000/-
Paid-up-Capital : Rs.18,07,000/-
REGISTERS MAINTAINED BY CAMEO
Sl.No. Section Number Name of the Register
1 - Register of application and allotment
2 150 Register of Members
3 193 Minutes of the meetings of Board of directors
4 193 Minutes of the meetings of the Members
5 108 Share Transfer Register
6 143 Register of Charges
7 303 Register of Directors
8 307 Register of Directors' Shareholding
9 372A Register of Investments
10 301 Register of Contracts
11 Article 71 of Table A Board Meeting Attendance Register
12 General Meeting Attendance Register
13 Fixed Assets Register
Bonus Shares of Cameo : A company may be following a conservative policy of not distributing all the profits every year. It may accumulate large reserves over time. 'Bonus' is something given in addition to what they get in the form of dividend.
It may be paid in cash or partly paid by the shares paid free of cost.
Conditions for the issue of bonus shares :
1. The issue of bonus shares must be authorised by the Articles of the Company.
2. It must be recommended by a Board Resolution and then approved by the share holders in general meeting.
3. It must be in accordance with the guidelines issued by SEBI dated 13th April, 1994.
These are all activated by Cameo Corporate Service Limited.
MEETINGS CONDUCTED IN CAMEO
In all democratic associations – social, political or business – from the smallest sports club to the largest joint stock company, members get together periodically to discuss the problems relating to the association and take decisions by common consent or by the consent of majority. Such meetings have become an integral part of the modern democratic set-up.
Meetings of a Company : The meetings of a company may be classified as shown in the chart given below :
Chart No: 2.4
Members' meetings Directors' meetings Creditors' and
General meetings Class meetings During the lifetime At the time of
of members of the company the winding up
of the company
Statutory Annual Extraordinary
meeting general meeting
Objects of the meeting : The obvious objects of the statutoty meeting are —
1. To put the shareholders of the company in possession of all the important facts relating to the new company as regards incorporation of the company, allotment of the shares, and, to what extent the company has been successful in its appeal to the public for the subscription of its shares.
2. To enable the shareholders to discuss the above and any other matters arising therefrom.
3. To approve the modification of the terms of any contract named in the prospectus.
Statutory Meeting : The company shall, within a period of not less than one month nor more than six months from the date at which the Company is entitled to commence business, hold a General Meeting of the members of the Company which shall be called the statutoty Meeting.
Annual General Meeting : The Company shall in each year hold, in addition to the other meetings, a General Meeting, which shall be styled as its Annual General Meeting, at intervals and in accordance with the provisions of Section 166 of the Act.
Extra-Ordinary General Meeting :
i) Extra-ordinary General Meetings may be held either at the Registered Office of the Company or at such convenient place as the Board or the Chairman (subject to any directions of the Board) may deem fit.
ii) Right to Summon Extra-Ordinary General Meeting.
Extra-ordinary Meeting by Requisition : The Board shall, on the requisition of such number of members of the Company as is specified below, proceed duly to call an Extra-ordinary General Meeting of the Company and comply with the provisions of the Act in regard to meetings on requisition.
Proceedings of General Meeting :
2. Chairman of General Meeting
3. Adjournment of Meeting
4. Questions at General Meeting how decided
5. Casting Vote
6. Taking of poll
7. In what Cases Poll taken without Adjournment
9. Joint Holders
10. No member entitled to vote while call due to Company
Meetings of the Board :
1. Director may summon Meeting
2. Question how decided
3. Right of continuing Directors when there is no Quorum
4. Power to Appoint committees and to Delegate
5. Delegation of Power
6. Resolution by Circulation
7. Election of Charman of the Committee
8. Quorum of a Committee
NOTICE AT CAMEO
The second requirement of a valid meeting is that a proper notice of the meeting should be given to the members. Not less than 21 days' notice. For calling a general meeting of the members a notice in writing of atleast 21 days must be given (Sec.171(1)). The period of 21 days is computed from the date of receipt of the notice by the members.
Service of Documents and Notice : A document may be served on the Company or any officer thereof by sending it to the Company or Officer at the Registered Office of the Company by post under Certificate of Posting or by Registered Post or by leaving it at the Registered Office.
(For Eg.) : Fourth Annual General Meeting Notice : The meeting of the company will be held on Monday the 4th day of August, 2003 at 10.00 A.M. at the Principle Office of the Company at "Subramanian Building" V Floor, No.1, Club House Road, Chennai – 600 002 to transact the following business:
Ordinary Business :
1. To receive, consider and adopt the Audited Balance Sheet as on 31st March, 2003 and the P & L A/c. for the period ended as on that date together with the Director's Report and the Auditor's Report thereon.
2. To declare dividend
3. To appoint a Director in the place of Mr. T.A. Adikesavan, who retires by rotation and being eligible, offers himself for re-election.
4. To appoint auditor and fix their remuneration. The retiring auditors M/s. Sri & Sri Associates, Chartered Accountants are eligible for re-appointment.
AGENDA AT CAMEO
The term 'agenda' literally means "things to be done". In business world it is used to indicate the items of business to be discussed and transacted at a meeting which may be a Board meeting or a general meeting of the shareholders.
The agenda for a meeting may just enumerate the items and headings of the business to be done at the meeting. For example, the agenda of the first Board meeting will comprise the following itsms :
1. Election of chairman of the meeting.
2. Production of the certificate of incorporation of the company by the solicitor.
3. Appointment of — Chairman of the Company, Managing Director, Secretary, Bankers, Auditors, etc.
4. Fixing a quorum of directors' meetings.
5. Approval of common seal of the company.
6. Consideration of draft prospectus.
7. Application to the stock exchanges for listing of shares.
8. Fixing the day of next meeting.
MINUTES AT CAMEO
A minute is defined as 'a note to preserve the memory'. The minutes of a meeting are the permanent written record of the proceedings at the shareholders' and directors' meetings.
Minutes of General Meetings : The term 'minutes' means a concise and accurate official record of the business transacted at company meetings. It normally includes only the resolutions actually passed. It is not necessary to record therein the discussion which preceded the adoption of a resolution. "Minutes are more analogous to a telegram than to a letter, to a precis than to a narration."
The Company shall with the requirements of Section 193 of the Act in respect of the keeping of the minutes of all proceedings of every General Meeting and every meeting of the Board or any Committee of the Board.
1. Tenure of Managing Director / Wholetime Director
2. Managing Director not to Retire by Rotation
3. Remuneration of Managing Director / Whole-time Director
4. Power to be exercised by the Managing Director.
5. The Board may delegate substantial power of management to the Managing Director / whole-time Directors.
CHAIRMAN'S SPEECH AT CAMEO
The Chairman : Every General Meeting, to be valid must have a properly appointed chairman to preside over its proceedings. As the orderly conduct of a meeting is essential to the proper consideration and despatch of its business, the selection of a capable person to occupy the position of chairman, is a matter of special importance. The principal qualifications of a chairman are tact, firmness and impartiality.
Rights and Powers of Chairman : The chairman of a general meeting is responsible for conducting the business at the meeting successfully. Certain main powers are as follows :
1. To regulate the course of the proceedings at the meeting.
2. To decide who shall first address the meeting when simultaneously two or more persons, rise to speak, etc.,
DEMATERIALISATION AT CAMEO
Principle Function :
2. Transaction in Book entry
Demat : It is a process of assembling but not like that of assembling. It is to correct the xerox copy of the share dealers' list and that is the last accordance of the share holders.
Chart No: 2.5
Assembling the Shate Dealer's details
and arrange them in order
LOAN TABLES & GRAPH
(Loan both Secured & Unsecured)
S.No. Year Amount
1 2000 7081726
2 2001 5385067
3 2002 9885529
4 2003 7365667
LOAN (Both Secured and Unsecured)
S.No. Year Amount
1 2000 40350
2 2001 80700
3 2002 147276
4 2003 722800
The legal department function at the corporate level and it deals with all the formalities relating to the legal aspects of C.C.S. It relates to loans from Financial Institutions, Agreements, Contracts, Trade Marks, Patents, legislation, etc., It fulfills all the formalities required under monopolis and Restrictive Trade Practice Act, Foreign Exchange Regulation Act, Company Law, Industrial Licensing Foreign Collaboration, Capital issue and other related subjects.
The legal framework for a depository system has been laid down in the following enactments.
? The depositors Act, 1996
? The SEBI (Depositories & Participants) Regulations, 1996
? Bye-laws of Depository
? Business Rules of Depositopry
? The companies Act, 1956
? Securities & Exchange Board of India Act, 1992
1. FOR ISSUERS / RTAs:
For Issuers CDSL offers a number of advantages.
2. EASY ACCESSIBILITY TO SHAREHOLDER INFORMATION
Details of investors accounts are held by CDSL. RTAs will have access to the CDSL database and can obtain complete shareholder related information on every business day.
3. UPDATE INFORMATION OF SHARE ACCUMULATIONS:
Moreover, the CDSL system allows for analysis and grouping of shareholder related data from the Issuer's / RTAs office itself through the setting up of appropriate parameters, enabling Issuers to have up-to-date information of share movements and accumulations.
From this chapter, I came to know the functions of various activities in the Secretarial Department and it clearly explains about the loans, dividends, share certificates, share warrants, etc., This cahapter helps me to know the above said all.
FINANCE & ACCOUNTS DEPARTMENT
S.No. Description Page No.
3 Flow Chart
4 Fixed Deposit
5 Internal Audit
6 Cost Account
7 Accounting Policy
10 Ratio Analysis
11 Working Capital
12 Foreign Currency Conservation
13 Financial Audit
LIST OF TABLES
Table No.3.1 Fixed Deposit
Table No.3.2 Current Ratio
Table No.3.3 Debt Equity Ratio
Table No.3.4 Gross Profit Ratio
Table No.3.5 Retained Earnings
Table No.3.6 Fixed Asset Turnover Ratio
Table No.3.7 Financial Result as per the year 2003
Table No.3.8 Return on Investments
Table No.3.9 Return on Shareholder's Fund
Table No.3.10 Foreign Exchange Conservation
LIST OF GRAPHS
Graph No: 3.1 Current Ratio
Graph No.3.2 Debt Equity Ratio
Graph No.3.3 Gross Profit Ratio
Graph No.3.4 Retained Earnings
Graph No.3.5 Fixed Asset Turnover Ratio
Graph No.3.6 Return on Investments
Graph No.3.7 Return on Shareholder's Fund
LIST OF CHARTS
Chart No.3.1 Flow Chart of Finance Department
Chart No.3.2 Accounting Ratios
1. Schedule V – Form on Annual Return of a Company having a Share Capital
2. Part-IV – BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE
3. Form – 7-C – New Application Form for extension of time under Section 108 (1D)
Accounts and Finance Department
Every company is required to maintain proper books of accounts of its operation. This statutory requirement is fulfilled by the account department of "CAMEO" which records the day to day transactions of the company and also prepares the financial statements of the company to be placed before the members of the company. Accounts department is responsible for payment of salary.
Any company needs finance to carry out its operations. The financial requirements of the company is taken care by finance department. This department is the life blood of the organisation. This department prepares the budget for the year, ensures liquidity of funds and allocates necessary funds for investment in capital assets and other productive investments.
At Cameo Corporate Services Ltd., finance is recognised as a service function. This department plays an important role in taking decisions in regard to the procurement and utilisation of funds for business purpose and formulation of financial plans in concurrence with the objects of the company.
Finance and Accounts Department of a firm has necessarily to pursue a variety of objectives simultaneously. It is the necessary concern and is useful for acquiring the land material, machines, labour and to meet other expenses.
A financial system may be defined as a set of institutions, instruments and market which faster savings and channels them to their most efficient use. The system consists of individuals (savers), intermedia, markets and users of savings. Financial system is developed in terms of the efficiency of the market in mobilising savings and allocating them among competing users.
Functions of Financial System
Financial system performs the following functions.
1. Financial system generates information that helps in co-ordinating decentralised division making.
2. Financial system provides a mechanism for special and empirical transfer of resources.
3. Financial system provides a payment system for the exchange of goods and services, etc.,
1. Financial markets are the transmission mechanism between saver lenders and borrowers – spenders. They are the connection link between saving and investment.
2. Through a wide variety of techniques they mobilise the savings of millions and channel them into the lands of borrower spender.
3. Saver – lender stand to benefit because they earn interest or dividends on their funds.
The term capital market significance the institutional arrangements for facilitating the borrowing and lending on long-term funds. Financing the long-term capital requirements of productive investments of industrial and commercial enterprises, stock exchanges, investment institutions, unit trusts, insurance banks, specialised financial institutions are the constitutions of the capital market.
Finance the vital necessity in any concern is useful for acquiring the raw material, machines, labour and meet other expenses. The various sub sections of this unit are :
1. Payables : The function of this department is to make payments for the expense incurred through any purchase, administration expense, etc.,
2. Payroll : This department covers the settlement of salaries, loans, Provident Fund, ESI benefit, Pension, etc.,
Capitalisation of Profits
1. A share premium account and a capital redemption reserve account may, for the purpose of this regulation, be applied only in the paying up of unissued shares to be issued to members of the Company as fully paid bonus shares.
2. The Board shall give effect to resolutions passed by the Company in pursuance of this Article.
3. Powers of Directors for declaration of bonus and the Board shall have full power.
4. Any agreement made under such authority shall be effective and binding on all such members.
Deposit is a term used when the money is collected from the general public by the banking and non-banking institution. The money collected from the public will be retained by the company for a fixed period.
After the expiry of the period the money deposited will be repaid to the party with interest for that period. The company will have different rates of interest for different period. Under the fixed deposit scheme, interest can be paid monthly, quarterly or half-yearly. The deposit holder has to inform the company about the frequency of payment of interest. The fixed deposit period should not be less than 12 months.
Deposit which is earning for a particular period is called fixed deposit. Deposit are made in two kinds as short term and long term deposit. The short term deposit is from 30 days to 90 days. Long term deposit is from One year onwards.
Cameo collects deposit from public for the own companies. In fixed deposit money cannot be invested on taken back at any period. Interest earned on monthly, Quarterly, Half-yearly basis is known as fixed deposit.
Table No: 3.1
Period Minimum Deposit Amount
Rs. Rate of Interest
One year 5000 12%
Two years 5000 13%
Three years 5000 13%
The deposits are accepted in multiples of Rs.1000 with a minimum of Rs.5000 interest will be paid quarterly on 31st March, 30th June, 30th September and 31st December of every year.
1. The deposit receipt issued by the company are not transferable.
2. The company reserve right to reject any application for deposit without assigning any reason thereof., etc.,
Scope of Service – Depository Services – NSDL / CDSL.
1. To comply with various provisions, rules and laws of NSDL / CDSL / SEBI.
2. To establish continuous electronic means of communication with NSDL/CDSL.
3. To undertake dematerialisation and rematerialisation requests and to process the same.
Every auditor of the company shall have a right of access at all times to the books of account and vouchers of the company and shall be entitled to require from the Directors and officers of the company such information and explanations as may be necessary for the performance of his duties as auditor.
At the time of Auditor's examination of the books of account carried out in accordance with the generally accepted auditing practice, they have not come across any personal expenses which have been charged to profit and loss account.
1. Accounts to be audited
2. Audit of branch office
3. Remuneration of Auditors
4. Rights and duties of auditors
5. Accounts when audited and approved
Internal Audit : Internal audit may be defined as on exercise in managerial control by means of an independent appraisal by employees of the organisation.
Its Scope and Objectives
1. To ascertain the authenticity of accounting and other data complied within the organisation.
2. To study and evaluate the adequacy and effectiveness of accounting, financial and operating controls. Etc.,
According to auditors opinion CAMEO CORPORATE SERVICES LTD., has an internal audit system commensurate with the size and nature of business though the company does not have a formal internal audit department.
According to the Chartered Institute of Management Accountants, London Standard Costing is "the preparation and use of standard costs, their comparison with actual costs, and the analysis of variances to their causes and points of incidence". The definition given by W.W. Bigg makes the concept of standard costing more clear. According to him, "Standard Costing discloses the cost of deviations from standard and classifies these as to their causes, so that management is immediately informed of the sphere of operations in which remedial action is necessary".
The Board shall cause proper books of accounts to be kept in respect of all sums of money received and expended by the Company and the matters in respect of which such receipts and expenditure take place of all sales and purchases of goods by the Company and of the assets and liabilities of the Company.
The Board shall, from time to time, determine whether and to what extent and at what time and under what conditions or regulations, the accounts, books and documents of the company or any of them shall be open to the inspection of the members and no member (not being a Director) shall have any right of inspecting any account or books or documents of the company except as conferred by statute or authorised by the Board or by a resolution of the company in General Meeting.
1. Inspection by members
2. Statement of Accounts to be furnished to General
3. Balance Sheet and Profit & Loss account
4. Authentication of Balance Sheet and Profit & Loss
5. Board's Report to be attached to Balance Sheet
6. Profit & Loss Account to be annexed and Auditors Report to be attached to the Balance Sheet.
Accounting is the language of business through which normally a business house communicates with the outside world. In order to make this language intelligible and commonly understood by all, it is necessary that it should be based on certain uniform scientifically laid down standards. These standards are termed as accounting principles.
Accounting principles may be defined as those rules of action or conduct which are adopted by the accountants universally while recording accounting transactions.
The accounts are prepared on a historical cost convention under the accrual basis of accounting and materially complies with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India.
The significant accounting policies followed by the company are stated below:
I Fixed Assets and Depreciation
a. Expenditure which are of a capital nature are capitalised at cost Depreciation has been provided from the date the assets have been installed and put to use on written down value method for all the assets at the rates specified in Schedule XIV of the Companies Act, 1956 as amended by notification dated 16.12.93.
b. The method of depreciation on the fixed assets has been changed from straight line method (SLM) to Written Down Value Method (WDV) with effect from 1.4.2000, in the manner and at the rates specified in Schedule – XIV to the Companies Act, 1956.
II Revenue Recognition
a. Revenue is recognised on raising invoices and all the expenses have been accounted on accrual basis.
b. Transactions in foreign currency are recorded at exchange rates prevailing on the date of transactions and realised exchange loss / gain are dealt within the Profit and Loss Account. Outstanding balances denominated in foreign currency are restated at the rates of exchange as on the Balance Sheet date and the exchange gain / loss is dealt within the Profit & Loss Account.
At the last day of the financial year, there were no amounts outstanding in respect of undisputed Income Tax, Wealth Tax, Sales Tax, Custom Duty and Excise Duty which were due for more than six months from the date they become payable.
Depreciation means depreciation in the value of an asset, due to its wear and tear and passage of time. It is the process of allocating the cost of long term assets to the time period in which it is used in a systematic and sequential manner.
In Cameo Corporate Services Ltd., Straight Line Method is used for depreciation at the rates specified in Schedule XIV of the Companies Act, 1956 as amended by notification dated 16.12.93.
Straight Line Method = Cost of Asset – Rate of Depreciation.
Meaning : Ratio Analysis is one of the techniques of Financial analysis where ratios are used as a yardstick for evaluating the financial condition and performance of a firm. Analysis and interpretation of various accounting ratios gives a skilled and experienced analyst, a better understanding of the financial condition and performance of the firm than what we could have obtained only through a perusal of financial statements. Ratio signifies the relationships between facts and figures which are inter-connected with each other in some manner. It is also used to classify the inter relationship between the balance sheet, budget and accounting statement.
Ratio analysis indicate the Financial position of the company and help the investors to know the effective return earned on the proposed investment. It also helps the management in planning and taking decisions, for increasing the efficiency of the concern. It also helps the investors, supplier and the shareholder in acquiring enough knowledge about the activities of the business.
Classification of Ratios
It has been classified on the basis of the financial statement
1. Profitability Ratios
2. Coverage Ratios
3. Turnover Ratios
4. Financial Ratios
a. Liability Ratios
b. Stability Ratios
Chart No: 3.2
P&L A/c. Balance Sheet Composite Profitability Coverage Turnover Financial
Ratios Ratios Ratios Ratios Ratios Ratios Ratios
Ratio analysis is one of the techniques of financial analysis where ratios are used as a yardstick for evaluating the financial condition and performance of a firm. Analysis and interpretation of various accounting ratios gives a skilled and experienced analyst, a better understanding of the financial condition and performance of the firm than what he could have obtained only through a perusal of financial statements.
Meaning of Ratios : Ratios are relationships expressed in mathematical terms between figures which are connected with each other in some manner. Obviously, no purpose will be served by comparing two sets of figures which are not at all connected with each other. Moreover, absolute figures are also unfit for comparison.
Profitability Ratios : Profitability is an indication of the efficiency with which the operations of the business are carried on. Poor operational performance may indicate poor sales and hence poor profits. A lower profitability may arise due to the lack of control over the expenses. Bankers, financial institutions and other creditors look at the profitability ratios as an indicator whether or not the firm earns substantially more than it pays interest for the use of borrowed funds and whether the ultimate repayment of their debt appears reasonably certain. Owners are interested to know the profitability as it indicates the return which they can get on their investments.
Profitability Ratio = x 100
Earning Per Share (E.P.S.) : In order to avoid confusion on account of the varied meanings of the term capital employed, the overall profitability can also be judged by calculating earning per share with the help of the following formula :
Net Profit after Tax and Preference Dividend
Earning per share =
Number of Equity Shares
Price Earning Ratio (P.E.R.) : This ratio indicates the number of times the earning per share is covered by its market price. This is calculated according to the following formula :
Market Price per Equity Share
Price Earning Ratio =
Earning per Share
Gross Profit Ratio : This ratio expresses relationship between gross profit and net sales.
Gross Profit Ratio = x 100
Operating or Expenses Ratio : This ratio is a complementary of net profit ratio. In case the net profit ratio is 20% it means that the operating ratio is 80%.
Operating or Expenses Ratio = x 100
Fixed Assets Turnover Ratio : This ratio indicates the extent to which the investments in fixed assets contribute towards sales. If compared with a previous period, it indicates whether the investment in fixed assets has been judicious or not.
Fixed Assets Turnover Ratio =
Fixed Assets (net)
Working Capital Turnover Ratio : This is also known as Working Capital Leverage Ratio. This ratio indicates whether or not working capital has been effectively utilised in making sales. In case a company can achieve higher volume of sales with relatively small amount of working capital, it is an indication of the operating efficiency of the company.
Working Capital Turnover Ratio =
Financial Ratios : Financial Ratios indicate about the financial position of the company. A company is deemed to be financially sound if it is in a position to carry on its business smoothly and meet its obligations, both short-term as well as long-term, without strain. It is a sound principle of finance that the short-term requirements of funds should be met out of short-term funds and long-term requirements should be met out of long-term funds.
Current Ratio : This ratio is an indicator of the firm's commitment to meet its short-term liabilities.
Current Ratio =
Debt-Equity Ratio : The debit-equity ratio is determined to ascertain the soundness of the long-term financial policies of the company. It is also known as"External-Internal" equity ratio.
Total long-term debt
Debit-Equity Ratio =
Retained Earnings (ie. Reserve and Surplus)
Retained Earnings =
Net Profit after tax and preference dividend
Return on Investment = x 100
Net Profit after interest & tax
Return on Shareholders Fund = x 100
(ie. It means measures earning power of equity capital.)
(Calculation of Ratio Analysis)
(FROM BALANCE SHEET)
1. Current Ratio =
For the Year 2000 = = 0.78
For the Year 2001 = = 0.97
For the Year 2002 = = 1.11
For the Year 2003 = = 1.27
Table No: 3.2
S.No. Year Value
1 2000 0.78
2 2001 0.97
3 2002 1.11
4 2003 1.27
Total Long Term Debt
2. Debt Equity Ratio =
For the Year 2000 = = 1.11
For the Year 2001 = = 0.66
For the Year 2002 = = 1.04
For the Year 2003 = = 0.62
DEBT EQUITY RATIO
S.No. Year Value
1 2000 1.11
2 2001 0.66
3 2002 1.04
4 2003 0.62
DEBT EQUITY RATIO
3. Gross Profit Ratio = x 100
For the Year 2000 = x 100 = 23%
For the Year 2001 = x 100 = 8%
For the Year 2002 = x 100 = 4%
For the Year 2003 = x 100 = 10%
GROSS PROFIT RATIO
S.No. Year Value
1 2000 23
2 2001 8
3 2002 4
4 2003 10
GROSS PROFIT RATIO
Retained Earnings (ie. Reserve & Surplus)
4. Retained Earnings =
Net Profit after tax and Preference Dividend
For the Year 2000 = = 0.96
For the Year 2001 = = 4.02
For the Year 2002 = = 4.38
For the Year 2003 = = 1.99
S.No. Year Value
1 2000 0.96
2 2001 4.02
3 2002 4.38
4 2003 1.99
5. Fixed Asseet Turnover Ratio =
For the Year 2000 = = 0.72
For the Year 2001 = = 0.60
For the Year 2002 = = 0.57
For the Year 2003 = = 0.52
FIXED ASSET TURNOVER RATIO
S.No. Year Value
1 2000 0.72
2 2001 0.60
3 2002 0.57
4 2003 0.52
FIXED ASSET TURNOVER RATIO
FROM BALANCE SHEET & PROFIT & LOSS ACCOUNT
1. Return on Investment = x 100
Where Operating profit = Operating Expense — Service Charge (income)
Capital Employed = Fixed Asset + Current Asset — Current Liability
Net Profit after interest & tax
2. Return on Shareholders Fund = x 100
Financial Results as per the year 2003
Particular Amount in Rupees
Year ended 31.3.2003
Total Income 5,41,43,617
Total Expenditure 4,40,87,338
Gross Profit before Interest and Depreciation 1,00,56,279
Profit before Tax 50,64,075
Add : Deferred Tax Asset 2,60,206
Provision for Tax 15,50,000
Reserves and Surplus 89,25,396
Paid up Capital 18,07,000
Return on Investment = x 100
For the Year 2000 = x 100 = 91%
For the Year 2001 = x 100 = 32%
For the Year 2002 = x 100 = 353%
For the Year 2003 = x 100 = 361%
RETURN ON INVESTMENT
S.No. Year Value (in %)
1 2000 91
2 2001 32
3 2002 353
4 2003 361
RETURN ON INVESTMENT
Net Profit after interest & tax
Return on Shareholders Fund = x 100
For the Year 2000 = x 100 = 90.93%
For the Year 2001 = x 100 = 22.4%
For the Year 2002 = x 100 = 5.87%
For the Year 2003 = x 100 = 31.63%
RETURN ON SHAREHOLDERS FUND
S.No. Year Value (in %)
1 2000 90.93
2 2001 22.4
3 2002 5.87
4 2003 31.63
RETURN ON SHAREHOLDER'S FUND
FOREIGN CURRENCY CONSERVATION
Transactions in foreign currency are recorded at exchange rates prevailing on the date of transactions and realised exchange loss / gain are dealt within the Profit and Loss Account. Outstanding balances denominated in foreign currency are restarted at the rates of exchange as on the Balance Sheet date and the exchange gain/loss is dealt within the Profit & Loss Account.
Foreign Exchange Conservation
S.No. Year Expense
1 2000 545080 148995
2 2001 58311 129752
3 2002 760465 6795865
4 2003 731264 9334408
Financial Statement : The financial statements have been prepared under historical cost convention in accordance with applicable Accounting Principles in India, the Accounting Standard issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956, as adopted consistently by the Company. Revenues are recognised and expenses accounted on their accrual including provisions / adjustments for committed obligations and amounts determined as payable or receivable during the year.
This chapter will be very useful to know about the functions of finance and accounts department which is said to be life or blood of the company management. It explains about the fixed deposit, accounting policies, taxation, ratio analysis, foreign currency conservation about financial audit. I conclude that the 3rd chapter clearly gives the views of the above said information.
A) MARKETING DEPARTMENTS
2. Channels of distribution
3. Pricing policy
5. Sales promotion
7. Market share
B) PERSONNEL DEPARTMENT
2. Selection Procedure
7. Personnel welfare
8. Health Safety and welfare measures
9. Benefit Schemes
11. Time keeping
C. EDP DEPARTMENT
D. PRODUCTION DEPARTMENT (i.e., Service Dept.)
E. PURCHASE DEPARTMENT
F. INSURANCE DEPARTMENT
G. RESEARCH AND DEVELOPMENT DEPARTMENT
H. IMPORT AND EXPORT
LIST OF TABLES
Table No:4.1 Managing Director's Remuneration
Table No:4.2 Employees Benefit for the year 2003
B. PERSONNEL DEPARTMENT
This department deals with welfare measures like re-imbursement of medical expenditure, travelling allowance, etc., In addition to this, accounts department is responsible for accounting various payments made by the company.
The personal department is concerned mostly with the labour employment in the Company at the factory levels as well as in the corporate level. In other words, in order to facilitate the effective performance of staffing function, the personnel department of "Cameo" has taken necessary steps for the recruitment, promotion, selection of employees.
This department also encourages welfare of the employees. Personnel requirements are indispensable in any organization. It is concerned with the procurement, development, compensation, integration and welfare of the personnel of organization for the purpose of contributing towards the accomplishment of the organization goals. Personnel management mainly involves matters such as identifying, placing, evaluating and developing individuals at work as also maintaining effective motivational and communication system.
It is the duty of the personnel department to calculate and disburse salary every month on specific date, after making deduction, if any. It is one of the duties to update employees record such as promotion. It also keeps complete record of every employees, loan taken by him, repayment, amount outstanding, etc., It holds the responsibility of maintaining the office, canteen, etc.,
Training has become an essential function of personnel management as jobs have an assembled technological character.
MANAGING DIRECTORS REMUNERATION:
Sl.No. Particulars 2000 2001 2002 2003
1 Salary and allowances 7,15,000 7,40,000 9,97,500 9,40,500
2 Contribution to provident fund 46,200 44,400 68,400 68,400
3 Value of perquisites 54,337 2,42,383 2,45,760 2,54,585
EMPLOYEES BEENFITS FOR THE YEAR 2003:
Sl.No. Particulars 2003
1 Salaries and wages 14971258
2 Contribution to Provident Fund and other funds 1055983
3 Workmen and Staff welfare 1444277
DIRECTORS REPORT REGARDING EMPLOYEES:
Cameo is constantly persevering to provide to its clients and customers, service of the highest standard. In order to achieve this, the company has invested substantially in training its employees and has endeavoured to make its working environment more conductive, thereby helping to sustain a high level of performance from its employees.
Date is written on the letter by this machine. It is mostly used in office where a large number of letters are written every day.
Mail which is being received as well as that sent out are both recorded with required diligence. For oral communication mechanical devices like the call bell, buzzer are utilized. Telephone a machine without which office work would literally come to a stand still is available as well for its extensive use.
Typewriter is the most commonly used and best known office machine. Typewriter enables the businessman to produce letters which are neat. Duplication through cabon papers is made easier with the help of typewriter than with pens.
Telephone is an instrument for faster communication of information. It is less expensive also when compared with dictating typing and dispatching of letters. It helps personal contacts and direct exchanges of ideas and information. It is convenient and speedier form of communication device.
Xerox machine helps to get exact copies of a document. It is electrically operated, manual labour required is minimum, several copies of a document can be made very quickly. The size of the copies can be enlarged or reduced with the help of this machine.
Fax machine is the fastest means of communication. Business messages, diagrams chart, etc., are quickly transmitted. Fax system helps to send business communication world over within the shortest possible time.
Cameo deals with the shares of the other company so they have to safeguard all the details regarding that company.
Standard Chartered Bank join hands with the custodial service of Cameo. Standard Chartered Bank lends loans for those securities. Every customer will be given an account number. These numbers will be checked with the particular certificate. Such report is known as interim variation report (IVR).
ELECTRONIC DATA PROCESSING UNIT:
The computer department of Cameo Corporte service is headed by the Deputy General Manager. The functioning of this department avoid manual work of maintaining accounts.
In this department, they get information form various departments. Representatives are appointed to collect application from all banks and feed them into the system. Pre-printed shares certificates are provided and the dispatch section will send all the certificates.
The operating system used here are HPOX, DOS, WINDOWS, WINDOWS'95, COBOL TECHNICAL ENVIRONMENT, WINDOWS NET SERVICE, HPUX, SERVICE, NOVELL SERVICES.
Transfer details received from the brokers will be fed into the computers.
a. Contribution to the Provident Fund is made monthly at predetermininated rate to the Provident Fund Authorities and debit to the Profit and Loss account on accrual basis.
b. The company has covered the Gratuity and Super Annuation liability with the Life Insurance Corporation of India.
From Chapter IV the reader will have a clear idea about the Personnel Department and EDP Department. From this Chapter, I came to know about the other departments in my company which engaged as a Secondary activities which included marketing, personnel and other departments such as Service, Insurance, EDP department, etc.,