1) PATENTA government license that gives the holder exclusive rights to a process, design or new invention for a designated period of time. Application for patents are usually handled by a government agency. 2)COPYRIGHTCopyright is a form of protection provided to the authors of "original works of authorship" including literary, dramatic, musical, artistic and certain other intellectual works, both published and unpublished. The 1976 Copyright Act generally gives the owner of copyright the exclusive right to reproduce the copyrighted work, to prepare derivative works, to distribute copies, to perform the copyrighted work publicly or to display the copyrighted work publicly.

The copyright protects the form of expression rather than the subject matter of the writing. For example, a description of a machine could be copyrighted, but this would only prevent others from copying the description; it would not prevent others from writing a description of their own or from making and using the machine. Copyrights are registered by the Copyright Office of the Library of Congress.

3)TRADEMARKA trademark is a word, name, symbol or device which is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others. A service mark is the same as a trademark except that it identifies and distinguishes the source of a service rather than a product.

Trademark rights may be used to prevent others from using a confusingly similar mark, but not to prevent others from making the same goods or from selling the same goods or services under a clearly different mark.4) PRIVATE EQUITYInfinance,private equityis anasset classconsisting ofequitysecuritiesin operating companies that are notpublicly tradedon astock exchange. A private equity investment will generally be made by aprivate equity firm, aventure capitalfirm or anangel investor. Each of these category of investor has its own set of goals, preferences and investment strategies; each however providing working capital to a target company to nurture expansion, new product development or restructuring of the companys operations, management or ownership. Among the most common investment strategies in private equity are:leveraged buyouts,venture capital,growth capital,distressed investments. In a typical leveraged buyout transaction, a private equity firm buys majority control of an existing or mature firm. This is distinct from a venture capital or growth capital investment, in which the investors (typically venture capital firms or angel investors) invest in young or emerging companies and rarely obtain majority control.5) LEVERAGED BUYOUTLeveraged buyout, LBO refers to a strategy of making equity investments as part of a transaction in which a company, business unit or business assets is acquired from the current shareholders typically with the use offinancial leverage.The companies involved in these transactions are typically mature and generate operating cash flows.Leveraged buyouts involve afinancial sponsoragreeing to an acquisition without itself committing all the capital required for the acquisition. To do this, the financial sponsor will raise acquisition debt which ultimately looks to the cash flows of the acquisition target to make interest and principal payments. 6) GROWTH CAPITALGrowth Capitalrefers to equity investments, most often minority investments, in relatively mature companies that are looking for capital to expand or restructure operations, enter new markets or finance a major acquisition without a change of control of the business.7) VENTURE CAPITALVenture capitalis a broad subcategory of private equity that refers to equity investments made, typically in less mature companies, for the launch, early development or expansion of a business. Venture investment is most often found in the application of new technology, new marketing concepts and new products that have yet to be proven. DistressedorSpecial Situationis a broad category referring to investments in equity or debt securities of financially stressed companies.Versus hedge fundsTypically private equity investment groups are geared towards long-hold, multiple-year investment strategies in illiquid assets (whole companies, large-scale real estate projects or other tangibles not easily converted to cash) where they have more control and influence over operations or asset management to influence their long-term returns. Hedge funds usually focus on short or medium term liquid securities which are more quickly convertible to cash and they do not have direct control over the business or asset in which they are investing.Both private equity firms and hedge funds often specialize in specific types of investments and transactions. Private equity specialization is usually in specific industry sector asset management while hedge fund specialization is in industry sector risk capital management.

TPG CAPITAL

GOLDMAN SACHS CAPITAL PARTNERS

THE CARLYLE GROUP

THE BLACKSTONE GROUP

BAIN CAPITAL

8) INVESTMENT BANKINGJP MORGAN CHASE

BANK OF AMERICA

MORGAN STANLEY

GOLDMAN SACHS

DEUTSCHE BANK

CITIGROUP

BARCLAYS (ANTHONY JENKINS)

WELLS FARGO

IN INDIA:BARCLAYS CAPITALBANK OF AMERICACITIDEUTSCHEJ.P.MORGANKOTAK MAHINDRA BANKYES BANK LIMITED9) MERGER AND ACQUISITIONAnacquisitionortakeoveris the purchase of one business or company by another company or other business entity. Such purchase may be of 100%, or nearly 100%, of the assets or ownership equity of the acquired entity.A merger happens when two firms agree to go forward as a single new company rather than remain separately owned and operated. This kind of action is more precisely referred to as a "merger of equals". The firms are often of about the same size. Both companies' stocks are surrendered and new company stock is issued in its place. 10) ACCRUAL(accumulation):For example, a company delivers a product to a customer who will pay for it 30 days later in the nextfiscal year, which starts a week after the delivery. The company recognizes the proceeds as revenuein its currentincome statementstill for the fiscal year of the delivery, even though it will get paid in cash during the followingaccounting period.The proceeds are also anaccrued income(asset) on thebalance sheetfor the delivery fiscal year, but not for the next fiscal year when cash is received.Similarly, a salesperson, who sold the product, earned a commission at the moment of sale (or delivery). The company will recognize the commission as anexpensein its current income statement, even though the salesperson will actually get paid at the end of the following week in the next accounting period. The commission is also anaccrued expense(liability) on thebalance sheetfor the delivery period, but not for the next period the commission (cash) is paid out to the salesperson.ACCRUED EXPENSES: An expense which has been incurred but not yet paid for. Salaries are a good example. Employees earn or accrue salaries each hour they work. The salaries continue to accrue until payday when the accrued expense of the salaries is eliminated.

ACCRUED INTEREST:A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, but not yetpaid or received.

For example, accrued interest receivable occurs when interest on an outstanding receivablehas been earned by the company, buthas not yet beenreceived.A loan to a customerfor goods sold would result in interest being charged on the loan.

11) CONVERTIBLE NOTEis a type ofbondthat the holder can convert into shares of common stockin the issuingcompanyor cash of equal value, at an agreed-upon price. It is ahybrid securitywith debt- and equity-like features. Although it typically has acouponrate lower than that of similar, non-convertible debt, the instrument carries additional value through the option to convert the bond to stock, and thereby participate in further growth in the company's equity value. From the issuer's perspective, the key benefit of raising money by selling convertible bonds is a reduced cashinterestpayment. The advantage for companies of issuing convertible bonds is that, if the bonds are converted to stocks, companies' debt vanishes.

12) SHORT SALEA market transaction in which an investor sells borrowed securities in anticipation of a price decline and is required to return an equal number of shares at some point in the future.

A short seller will make money if the stock goes down in price, while a long position makes money when the stock goes up. The profit that the investor receives is equal to the value of the sold borrowed shares less the cost of repurchasing the borrowed shares.Suppose 1,000 shares are short sold by an investor at $25 apiece and $25,000 is then put into that investor's account. Let's say the shares fall to $20 and the investor closes out the position. To close outthe position, the investor will need to purchase 1,000 shares at $20 each ($20,000). The investor captures the difference between the amount that he or she receives from the short sale and the amount that was paid to close the position, or $5,000.

13) ANGEL INVESTOR is an affluent individual who provides capital for a businessstart-up, usually in exchange forconvertible debtorownership equity. 14) VULTURE CAPITALISTis an investor who used the clauses of the terms of an investment deal in a company to seize ownership of the company or valuable parts of it outright. Whereas aventure capitalistinvests in a company likely to succeed in the marketplace and hence show a profit to the investor, a vulture capitalist looks to invest in a firm likely to fail to show a profit in the near term, triggering the takeover clauses, resulting in forfeiture of some or all the assets of the company, with an eye towards selling off the constituent parts, hence showing a profit while destroying or hobbling the company.

15) SWEAT EQUITYContribution to a project or enterprise in the form of effort and toil. Sweat equity is the ownership interest, or increase in value, that is created as a direct result of hard work by the owner(s). For example, consider an entrepreneur who has invested $100,000 in her start-up. After a year of developing the business and getting it off the ground, she sells a 25% stake to an angel investor for $500,000. This gives the business a valuation of $2 million (i.e. $500,000/0.25), of which the entrepreneur's share is $1.5 million. Subtracting her initial investment of $100,000, the sweat equity she has built up is $1.4 million.

16) DIVIDEND DISCOUNT MODELA procedure for valuing the price of a stock by using predicted dividends and discounting them back to present value. The idea is that if the value obtained from the DDM is higher than what the shares are currently trading at, then the stock is undervalued.

17) JOINT VENTUREThe cooperation of two or more individuals or businesses in which each agrees to share profit, loss and control in a specific enterprise.

Sony-Ericssonis a joint venture by the Japanese consumer electronics company Sony Corporation and the Swedish telecommunications companyEricssonto make mobile phones. The stated reason for this venture is to combine Sony's consumer electronics expertise with Ericsson's technological leadership in the communications sector. Now, Sony has acquired the stake and completely gained the company as of now.

Virgin Mobile India Limitedis a cellular telephone service provider company which is a joint venture between Tata Tele service and Richard Branson's Service Group.DOW CHEMICAL AND CORNING (LARGEST) (DOW CORNING CORPORATION) - SILICON BASED TECH18) REMITTANCEThe process of sending money to remove an obligation. This is most often done through an electronic network, wire transfer or mail. The term also refers to the amount of money being sent to remove the obligation.When a person sends a check to the government to pay for a tax bill, the check is remittance to remove the tax obligation.REDEMPTIONThe return of an investor's principal in a fixed income security, such as a preferred stock or bond; or the sale of units in a mutual fund. A redemption occurs, in a fixed income security at par or at a premium price, upon maturity or cancellation by the issuer.

19) REVENUEThe amount ofmoneythat a company actually receivesduring a specific period, including discounts and deductions forreturned merchandise. It is the "top line"or"gross income"figure from which costs are subtracted to determine net income.

Revenue is calculated by multiplying the price at which goods or services are sold by the number of units or amount sold.Revenue is the amount of money thatisbrought into a company by its businessactivities.20) PREFERENCE SHARESCompany stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a company bankruptcy, preferred stock shareholders have a right to be paid company assets first.Preference sharestypically pay a fixed dividend,whereas common stocks do not. And unlikecommon shareholders, preference share shareholders usually do not have voting rights.In case of preference shares rate of dividend is fixed whileequity shareholdersget dividend on the basis of performance of company, sometimes when company make loss then they are not paid any dividend.While preference shares can be converted into equity shares after some years, if the terms of issue provide so while equity share cannot be converted.Preference shares can be redeemed, while equity share cannot be redeemed, thoughcompanycanbuy backequity shares from the shareholders.

21) PUBLIC COMPANYA company that has issued securities through an initial public offering (IPO) andis traded on at least one stock exchange or in the over the counter market.

Public companies have inherent advantages over private companies, including the ability to sell future equity stakes and increased access to the debt markets. With these advantages, however, comes increased regulatory scrutiny and less control for majority owners and company founders.22) PRIVATE COMPANYA company whose ownership is private. As a result, it does not need to meet the strict Securities and Exchange Commission filing requirements of public companies.Private companies may issue stock and have shareholders. However, their shares do not trade on public exchanges and are not issued through an initial public offering.

23) ASSURANCECoverage ofan event that is certain to happen. Assurance is similar to insurance(and sometimes the terms are interchangeable) except that insurance protects policyholders from events that might happen.For example, a person can choose to purchase life assurance or termlife insurance. The event in question is thedeath of the person the policy covers. Since the death of this person is certain,a lifeassurance policy results in payment to the beneficiarywhen the policyholderdies.A term life insurance policy, however,will covera set period of time, such as 30 years, from the time the policy was bought. If thepolicyholder dies during that time, the beneficiary receives money, butif thepolicyholder dies after the 30 years, no money is received. The assurance policy covers an event that will happen no matter what, while the insurance policy covers a event that might happen.

24) BOARD OF DIRECTORSis a body of elected or appointed members who jointly oversee the activities of acompanyororganization. In a stock corporation, the board is elected by the stockholders and is the highest authority in the management of the corporation. In anon-stock corporationwith no general voting membership,e.g., a typical university, the board is the supreme governing body of the institution; its members are sometimes chosen by the board itself. Typical duties of boards of directors include: governing the organization by establishing broad policies and objectives selecting, appointing, supporting and reviewing the performance of thechief executive ensuring the availability of adequate financial resources approving annual budgets accounting to the stakeholders for the organization's performance setting the salaries and compensation of company management.Typically the board chooses one of its members to be thechairman.Thedirectorsof an organization are the persons who are members of its board. Aninside directoris a director who is also an employee, officer, majorshareholder or someone similarly connected to the organization. Inside directors represent the interests of the entity's stakeholders and often have special knowledge of its inner workings, its financial or market position.Typical inside directors are: AChief Executive Officer(CEO) who may also beChairman of the Board Other executives of the organization, such as itsChief Financial Officer(CFO) orExecutive Vice President Large shareholders (who may or may not also be employees or officers) Representatives of other stakeholders such as labor unions, major lenders, or members of the community in which the organization is locatedAn inside director who is employed as a manager or executive of the organization is sometimes referred to as anexecutive director. Anoutside directoris a member of the board who is not otherwise employed by or engaged with the organization, and does not represent any of its stakeholders. A typical example is a director who is president of a firm in a different industry. non-executive director- a director who is not an executive with the organization shadow director- an individual who is not a named director but who nevertheless directs or controls the company. Theoretically, the control of a company is divided between two bodies: the board of directors, and theshareholdersingeneral meeting. In practice, the amount of power exercised by the board varies with the type of company. In small private companies, the directors and the shareholders are normally the same people, and thus there is no real division of power. In largepublic companies, the board tends to exercise more of a supervisory role, and individual responsibility and management tends to be delegated downward to individual professional executives (such as a finance director or a marketing director) who deal with particular areas of the company's affairs. Another feature of boards of directors in large public companies is that the board tends to have morede factopower. Many shareholders grant proxies to the directors to vote their shares at general meetings and accept all recommendations of the board rather than try to get involved in management, since each shareholder's power, as well as interest and information is so small.AnIndependent Director(also sometimes known as aoutside directorornon-executive director) is a director (member) of aboard of directorswho does not have a material or pecuniary relationship with company or related persons, except sitting fees. Independent Directors do not own shares in the company. Some sources statenon-executive directorsare different from independent ones in thatnon-executive directorare allowed to hold shares in the firm while independent directors are not.26) SINKING FUNDA means of repaying fundsthat were borrowed through a bond issue. The issuer makes periodic payments to a trustee who retires part of the issue by purchasing the bonds in the open market.From the investor's point of view,a sinking fundaddssafety to a corporate bond issue: with it, the issuing company is less likely to default on the repayment of the remaining principal upon maturitysince the amount of the final repayment is substantially less.

27)PUBLIC SECTORis the part of the economy where goods and services are provided by the government or local authorities. The aim of public sector activity is to provide services that benefit the public as a whole. This is because it would be difficult to charge people for the goods and services concerned or people may not be able to afford to pay for them. The public sector accounts for about 40% of all business activity.28) PRIVATE SECTORconsists of business activity that is owned, financed and run by private individuals. These businesses can be small firms owned by just one person, or large multi-national businesses that operate around the world (globally). In the case of large businesses, there might be many thousands of owners involved. The goal of businesses in the private sector is to make a profit.29) PARTNERSHIP FIRMThis type of entity is suitable for team of people rendering professional services such as lawyers, charted accountants, management consultancies, doctors etc. It does not require compulsory registration of firms. It is optional for partners to register the firm and there are no penalties for non-registration. A partner of an unregistered firm cannot file a suit in any court against the firm or other partners for the enforcement of any right conferred by a contract or the Partnership Act. Likewise the unregistered firm cannot seek legal action in the court of law against any third party howsoever it does not limit a third party from suing the firm. In order to avail legal privileges a partnership firm must be registered with the Registrar of Firms. A firm may be registered at any time by filing an application with the local Registrar of Firms.Partnership Firms in India can have a minimum of two partners and a maximum of 20 partners, notably the banking businesses are allowed a maximum of 10 partners only. Like proprietorship the firm also does not have a separate identity, the partners and the firm is one and the same. In the event of the assets and property of the firm is insufficient to meet the debts of the firm, the creditors can recover their loans from the personal property of the individual partners.There are restrictions on transfer of rights; no partner can transfer his individual rights to another third party without the unanimous consent of all the partners. The firm must be dissolved on the retirement, lunacy, bankruptcy, or death of any partner.All partners have a right in management of the activities of the business and the extent of the rights of each partner may be clearly determined in an agreement. When the written agreement is duly stamped and registered, it is known as Partnership Deed. Generally a partnership deed contains the following particulars:- Name of the firm Nature of the business to be carried out Names of the partners The town and the place where business will be carried on The amount of capital to be contributed by each partner Loans and advances by partners and the interest payable on them The amount of drawings by each partner and the rate of interest allowed thereon Duties and powers of each partner Any other terms and conditions to run the business

30) LIMITED LIABILITY PARTNERSHIP (LLP)Limited Liability partnership provides all the benefits of an incorporated company as well as the flexibility of a partnership. In an LLP, all partners have limited liability, similar to that of the shareholders of a limited company and are relieved from the liability for the acts of other partners. Unlike the shareholder of a company, the partners have the right to manage the business directly. Unlike a partnership firm there is no restriction on the number of partners. At least one of the partners should be an Indian resident.It has a unique legal identity and is separate from the partners. It also has perpetual succession. The liability of the partners is limited to their agreed contribution in the LLP. 31) PRIVATE LIMITED COMPANYThe minimum paid up capital at the time of incorporation of a Private Limited Company is INR 100,000. A Private Limited Company must have a minimum of two and a maximum of 50 members as its shareholders. It must have minimum of two directors and maximum of 12 directors. 32) PUBLIC LIMITED COMPANYThe regulatory provisions for this type of entity are contained in The Companies Act, 1956. A Public Limited Company must be registered with ROC.A Public Limited Company is a Company limited by shares in which there is no restriction on the maximum number of shareholders, transfer of shares and acceptance of public deposits. The minimum paid-up capital for a public limited company is INR 500,000. A Public Limited Company must have a minimum of seven shareholders and have a minimum of three directors and maximum of 12 directors. The liability of each shareholder is limited to the extent of the unpaid amount of the shares face value and the premium thereon in respect of the shares held by him. However, the liability of a Director / Manager of such a Company can at times be unlimited. The shares of a company are freely transferable and that too without the prior consent of other shareholders or without subsequent notice to the company.A company is a legally independent body therefore is perpetual irrespective of death, retirement or insolvency of any of its shareholders. The shareholders do not have a right in managing the activities of the company there is a clear separation of management and ownership and the companys Board of Directors are vested with the decision making power as per the rule of majority.33) DEEMED PUBLIC COMPANIESCertain private companies are deemed to be public companies when 25% or more of its paid up share capital is held by one or more body Corporate Its average Annual turnover exceeds INR. 250 million. It holds 25% or more of paid up capital of a public company or it accepts or renews deposits from public after making an invitation by an advertisement.

34) CORPORATIONAnincorporated entityis aseparate legal entitythat has been incorporated through a legislative or registration process established through legislation. Incorporated entities havelegal rightsand liabilitiesthat are distinct from itsshareholdersand may conduct business for eitherprofit-seekingbusinessornot for profitpurposes.37) APPROPRIATIONThe act of setting aside money for a specific purpose. A company or a government appropriates funds in order to delegate cash for the necessities of its business operations. This may occur for any of the functions of a business, including setting aside funds for employee salaries, research and development, dividends and all other uses of cash.In business use, may also be known as "capital allocation."38) ASSETThings of value owned by a business. An asset may be a physical property such as a building, or an object such as a stock certificate, or it may be a right, such as the right to use a patented process.Current Assets are those assets that can be expected to turn into cash within a year or less. Current assets include cash, marketable securities, accounts receivable, and inventory.Fixed Assets cannot be quickly turned into cash without interfering with business operations. Fixed assets include land, buildings, machinery, equipment, furniture, and longterm investments.Intangible Assets are items such as patents, copyrights, trademarks, licenses, franchises, and other kinds of rights or things of value to a company, which are not physical objects.

39) DEFERRED INCOMEA liability that arises when a company is paid in advance for goods or services that will be provided later. For example, when a magazine subscription is paid in advance, the magazine publisher is liable to provide magazines for the life of the subscription. The amount in deferred income is reduced as the magazines are delivered.

40) DEFERRED REVENUE EXPENDITURESometimes, some expenditure is of revenue nature but its benefit likely to be derived over a number of years. Such expenditure is calleddeferred revenue expenditure.

Example 1:When a new firm enters in to market, it undertakes special advertising campaign on which it spends heavy amount. The benefit of this expenditure will certainly come in some future years. Hence it will not be justified to charge this expenditure only in the profit and loss account of the year in which it incurred. This expenditure must be spread over the period over which the benefit is likely to lose. Suppose this expenditure will cover 3 years. Hence 1/3 of the expenditure must be charged to each year Profit and Loss Account.It may be noted here that the amount which has not been charged off to the profit and loss account is shown in the balance sheet as a sort of asset.41) EXPENDITUREAn expenditure occurs when something is acquired for a business an asset is purchased, salaries are paid, and so on. An expenditure affects the balance sheet when it occurs. However, an expenditure will not necessarily show up on the income statement or affect profits at the time the expenditure is made.

42) EXPENSEAn expenditure which is chargeable against revenue during an accounting period. An expense results in the reduction of an asset. All expenditures are not expenses. For example, a company buys a truck. It trades one asset cash to acquire another asset. An expenditure has occurred but no expense is recorded. Only as the truck is depreciated will an expense be recorded.

43) RETAINED EARNINGThe profits not distributed to shareholders as dividends, the accumulation of a company's profits less any dividends paid out.

44) WRITEDOWNThe partial reduction in the value of an asset, recognizing obsolescence or other losses in value.

45) WRITEOFFThe total reduction in the value of an asset, recognizing that it no longer has any value. Writedowns and writeoffs are noncash expenses that affect profits.

46) STOCK SPLIT Increase in the number of shares of a company's COMMON STOCK outstanding that result from the issuance of additional shares proportionally to existing stockholders without additional capital investment. The PAR VALUE of each share is reduced proportionally.

A corporate actionin whicha company's existing shares are dividedinto multiple shares. Although thenumber of shares outstanding increases by a specific multiple, the total dollar value of the shares remains the same compared to pre-split amounts, because no real value has been addedas a result ofthe split.For example, in a 2-for-1 split, each stockholder receives an additional share for each share he or she holds.One reason as to whystock splits are performed is that a company's share price has grown so high thatto many investors,the sharesare too expensive to buy in round lots.For example, if a XYZ Corp.'s shares were worth $1,000 each, investors would need to purchase $100,000 in order to own 100 shares. If each share was worth $10, investors wouldonly need topay $1,000 to own 100 shares.

47) DISCRETIONARY ACCOUNTAn account in which the customer gives the broker or someone else discretion to buy and sell securities or commodities, including selection, timing, amount, and price to be paid or received.48) EX-DIVIDEND A synonym for "without dividend."

49) INDENTUREA written agreement under which bonds and debentures are issued, setting forth maturity date, interest rate and other terms.

50) LIQUIDATIONThe process of converting securities or other property into cash. The dissolution of a company, with cash remaining after sale of its assets and payment of all indebtedness being distributed to the shareholders.

52) TICKER A telegraphic system that continuously provides the last sale prices and volume of securities transactions on exchanges. Information is either printed or displayed on a moving tape after each trade.

53) UP TICK A term used to designate a transaction made at a price higher than the preceding transaction. Also called a "plus" tick.

54) INDEXAn Index shows how a specified portfolio of share prices are moving in order to give an indication of market trends. It is a basket of securities and the average price movement of the basket of securities indicates the index movement, whether upwards or downwards.

55) DEMATERIALIZATIONDematerialization is the process by which physical certificates of an investor are converted to an equivalent number of securities in electronic form and credited to the investors account with his Depository Participant (DP).

56) DRAFT OFFER DOCUMENTOffer document means Prospectus in case of a public issue or offer for sale and Letter of Offer in case of a rights issue which is filed with the Registrar of Companies (ROC) and Stock Exchanges (SEs). An offer document covers all the relevant information to help an investor to make his/her investment decision.

Draft Offer document means the offer document in draft stage. The draft offer documents are filed with SEBI, atleast 30 days prior to the registration of red herring prospectus or prospectus with ROC. SEBI may specify changes, if any, in the draft Offer Document and the issuer or the lead merchant banker shall carry out such changes in the draft offer document before filing the Offer Document with ROC. The Draft Offer Document is available on the SEBI website for public comments for a period of 21 days from the filing of the Draft Offer Document with SEBI.

57) ABRIDGED PROSPECTUSAbridged Prospectus is a shorter version of the Prospectus and contains all he salient features of a Prospectus.

58) LOCK-INLock-in indicates a freeze on the sale of shares for a certain period of time. SEBI guidelines have stipulated lock-in requirements on shares of promoters mainly to ensure that the promoters or main persons, who are controlling the company, shall continue to hold some minimum percentage in the company after the public issue.

59) PAY-IN AND PAY-OUTPay-in day is the day when the securities sold are delivered to the exchange by the sellers and funds for the securities purchased are made available to the exchange by the buyers.Pay-out day is the day the securities purchased are delivered to the buyers and the funds for the securities sold are given to the sellers by the exchange.At present the pay-in and pay-out happens on the 2nd working day after the trade is executed on the stock exchange.

60) CAPITAL RESERVEA type of account on a municipality's orcompany's balance sheet that is reserved for long-term capital investment projects or any otherlarge and anticipatedexpense(s)that willbeincurred in thefuture. This type of reserve fund is set aside to ensure that the company or municipality has adequate fundingto at least partially finance theproject.61) MARGIN OF SAFETYA principle of investingin whichan investor only purchases securities whenthe market price is significantly belowits intrinsic value.In other words, whenmarket price is significantly belowyourestimation ofthe intrinsic value, the difference is the margin of safety. This difference allows aninvestment to be made with minimal downside risk.

MARGIN OF SAFETY=ACTUAL SALES - BREAK EVEN SALES

62) PLACEMENT DOCUMENTDocument prepared by Merchant Banker for the purpose of Qualified Institutions placement and contains all the relevant and material disclosures to enable QIBs to make an informed decision.

THE IPO PROCESS IN INDIA Appointment of merchant banker and other intermediaries Registration of offer document Marketing of the issue Post- issue activitiesAppointment of Merchant Banker and Other IntermediariesOne of the crucial steps for successful implementation of the IPO is the appointment of a merchant banker. A merchant banker should have a valid SEBI registration to be eligible for appointment.A merchant banker can be any of the following lead manager, co-manager, underwriter or advisor to the issue.The number of co- managers should not exceed the number of lead managers.There can only be one advisor/consultant to the issue.There is no limit on the number of underwriters.Other IntermediariesRegistrar to the Issue:Registration with SEBI is mandatory to take on responsibilities as a registrar and share transfer agent. The registrar provides administrative support to the issue process. The registrar of the issue assists in everything from helping the lead manager in the selection of Bankers to the Issue and the Collection Centres to preparing the allotment and application forms, collection of application and allotment money, reconciliation of bank accounts with application money, listing of issues and grievance handling.Bankers to the Issue:Any scheduled bank registered with SEBI can be appointed as the banker to the issue. There are no restrictions on the number of bankers to the issue. The main functions of bankers involve collection of application forms with money, maintaining a daily report, transferring the proceeds to the share application money account maintained by the controlling branch, and forwarding the money collected with the application forms to the registrar.Underwriters to the Issue:Underwriting involves a commitment from the underwriter to subscribe to the shares of a particular company to the extent it is under subscribed by the public or existing shareholders of the corporate. Broker To the Issue:Any member of a recognized stock exchange can become a broker to the issue .A broker offers marketing support, underwriting support, disseminates information to investors about the issue and distributes issue stationery at retail investor level.Registration Of The Offer DocumentFor registration,10 copies of the draft prospectus should be filed with SEBI. The draft prospectus filed is treated as a public document. The lead manger also files the document with all listed stock exchanges. Similarly, SEBI uploads the document on its website www.sebi.com. Any amendments to be made in the prospectus should be done within 21days of filing the offer document. Thereafter the offer document is deemed to have been cleared by SEBI.Promoters Contribution:In the public issue of an unlisted company, the promoters shall contribute not less than 20% of the post issue capital. Lock-in RequirementThe minimum promoters contribution will be locked in for a period of 3 years. The lock-in period commences from the date of allotment or from the date of commencement of commercial production, whichever is earlier.Marketing of the Issue Timing of the Issue Retail distribution Reservation of the Issue Advertising CampaignTiming of the IssueAn appropriate decision regarding the timing of the IPO should be made, keeping in mind the general sentiments prevailing in the investor market. Retail distributionRetail distribution is the process through which an attempt is made to increase the subscription. Normally, a network of brokers undertakes retail distribution. The issuer company organises road shows in which conferences are held, which are attended by high networth investors, brokers and sub-brokers. The company makes presentations and solves queries raised by participants. This is one of the best ways to raise subscription.Reservation in the IssueSometimes reservations are tailored to a specific class of investors. This reduces the amount to be issued to the general public. The following are the classes of investors for whom reservations are made: Mutual Funds Banks and Financial Institutions; Non-resident Indians (NRI) and Overseas Corporate Bodies (OCB) The total reservation for NRI/OCB should not exceed 10% of the post-issue capital, and individually it should not exceed 5% of the post issue capital. Foreign Institutional Investors (FII): The total reservation for FII cannot exceed 10% of the post-issue capital, and individually it should not exceed 5% of the post issue capital. Employees: Reservation under this category should not exceed 10% of the post issue capital. Group Shareholders: Reservation in this category should not exceed 10% of the post issue capital.The net offer made to the public should not be less then the 25% of the total issue at any point of time.Post-Issue Activities Principles of Allotment:After the closure of the subscription list, the merchant banker should inform, within 3 days of the closure, whether 90% of the amount has been subscribed or not. If it is not subscribed up to 90%, then the underwriters should bring the shortfall amount within 60 days. In case of over subscription, the shares should be allotted on a pro-rata basis, and the excess amount should be refunded with interest to the shares holders within 30 days from the date of closure. Formalities Associated With Listing:The SEBI lists certain rules and regulations to be followed by the issuing company. These rules and regulations are laid down to protect the interests of investors. The issuing company should disclose to the public its profit and loss account, balance sheet, information relating to bonus and rights issue and any other relevant information.Definition of 'Bridge Financing'In investment banking terms, it is a method of financing used by companies before their IPO, to obtain necessary cash for the maintenance of operations. Bridge financing is designed to cover expenses associated with the IPOand is typically short-term in nature. Once the IPO is complete, the cash raised from the offering will immediately payoff the loan liability.These funds are usually supplied by the investment bank underwriting the new issue. As payment, the company acquiring the bridge financing will give a number of shares to the underwriters, at a discount of the issue price that equally offsets the loan. This financing is, in essence, a forwarded payment for the future sales of the new issue.

Definition of 'Eurobond'A bondissued in a currencyother thanthe currency of the country or market inwhich itis issued.Usually, aeurobond is issued by an international syndicate and categorized according to the currency in which it is denominated. A eurodollar bond thatisdenominated in U.S. dollars and issued in Japan by an Australian company would be an example of a eurobond. The Australian company in this example could issue the eurodollar bond in any country other than the U.S.

Eurobonds are attractive financing tools as they give issuers the flexibility to choose the country in which tooffer their bond according to the country's regulatory constraints. They may also denominate their eurobond in their preferred currency. Eurobonds are attractive to investors as they have small par values and high liquidity.

Definition of 'Leverage'1. The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment.

2. The amount of debt used to finance a firm's assets. A firm with significantly more debt than equity is considered to be highly leveraged.

Leverage is most commonly used in real estate transactions through the use of mortgages to purchase a home.

Definition of 'Finance'The science that describes the management, creation and studyof money, banking, credit, investments, assets and liabilities. Finance consists of financial systems, which include the public, private and government spaces,andthe study of finance and financial instruments, which can relate to countless assets and liabilities. Some prefer to divide finance into three distinct categories: public finance, corporate finance and personal finance. All three of which would contain many sub-categories.