Outsourcing: A Step to get Ahead in this Fast Moving World

A Step to get Ahead in this Fast Moving World

A Step to get Ahead in this Fast Moving World

21st century, and the world is moving way to fast to catch the pace of time. Technology and living standard are having continuous changes for making everyone’s life easy and comfortable; But doing business in today’s world isn’t easy at all. Things changes so rapidly that all have to keep up with it or the survival would be tough, but if things have become tough then there are solutions available all around as well. we would e talking about one such solution i.e. Outsourcing . Outsourcing make functioning and expansions of the firm so smooth which give aid to your complete management.

What is Outsourcing ? How it works?

Doesn’t it feel good when someone carry your extra baggage and reduces your burden; Well surely you feel bit of relief and lighter. And such friends who take your responsibilities as their own, are the true friends indeed; This is all what Outsourcing is about. There are many firms which provide the services and any firm can easily outsource their process to such firms, and then they will start working on their behalf. In other words, its basically means an agreement in which one firm contract out their existing internal activity and other company take that contract and run that process on the behalf of their clients.

Let us understand it by simple example suppose there’s family guy name ‘Ashok’ who have two children and loving wife. Now one day he stuck in a situation , his wife is sick and his grandma is coming to visit them and he have to pick her from the airport but the problem is that he have to pick his kids from school as well and at same time. So either he can pick grandma from airports or the kids. It’s the tough situation right? He called his friend ‘Vikas’ and told him about the situation and luckily Vikas offered his help; he told him that he would pick grandma from airport as he would be passing by airport. So Ashok was lucky that his friend Vikas Sorted out his problem.

Similarly Outsourcing firm are the friends like Vikas who share part of your responsibilities as their own. They can be any individual ( free lancing) or some group of Individual ( with organizational set up ). So Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO) is a lot in trend these days as it is cost efficient, time saving and great help in expanding. Just you need to choose a great friend of business world like SP Chopra & Co.

What are the benefits of Outsourcing ?

Outsourcing does have many great advantages which help the firm’s efficiency to chase new limits. it take away the excess task of your organization, so that your firm can work on their core functions better. Business process like Payroll, Accounting, Selling & Distribution and other essential part of business operations and most of them are not of productive nature but do add excess cost and does bring certain limitations in growth. There are many things to watch out for like count of employees, government rules & policies, hiring professionals is very costly, infrastructure and many more such important things. All these raise cost and responsibilities and does make things bit complex. Outsourcing don’t erase cost completely but does reduce to great extent as u don’t have to set up a specified department, hire professionals for that and also reduce the cost of infrastructure, and even you can get better services without any issues. And the Outsourcing firms take care of all the matter more carefully and professionally at lesser cost.

When you trying to expand your business internationally then issues are even higher and so does the costing as there is always huge difference in policies, taxes and law of different nations. So outsourcing becomes the better option as they take care of everything by their team of professionals. Legal matters and advisory , Structure and processing, the handle all these more professionally and smartly. Just have to choose right one like SP Chopra & Co. which is one of the top reputed firm in India and provide their great services and also have experience of many decades.

A Little about SP Chopra & Co.

SP Chopra & Co is about 65 years old establishment and this global Charted Accountant Firm is one of the top rated firm in India. They are the third largest Global Association of Independent Accounting Firm which also one of the 10 Prestigious firm as member of Prime Global and you can understand them even better by visiting spchopra.com.

Outsourcing beyond the nation Boundary is very big step and does require lot, SP Chopra & Co is the best choice for this purpose as their vast knowledge, experience and big team of professionals will guide you the best with all sort of advisory from legal aspects to basic functioning of the firm in India. So definitely being partner with SP Chopra & Co will take your firm growth to higher level and would make the functioning smooth and easy. They have complete solutions for your needs from financial advisory to accounts, audit and taxation and so many more.

Just visit spchpora.com for better details.

SP Chopra & Co End-to-end Services

Financial Marketing Process

Financial Marketing Process

Phase- I: Pre-IPO Capital Restructuring & Preparation

Under the phase, we shall assist you in preparing for IPO and listing on SME Exchange. The services under this phase shall include the following:

Assistance in devising appropriate capital restructuring plan;
Assistance in statutory compliance management and setting up minimum corporate governance practices expected by a listed company from the perspective of the following rules / regulations:
Companies Act, 2013
Listing Agreement applicable for SMEs
BSE listing norms
SEBI ICDR Regulations;
Assistance in appointment of market intermediaries and other parties including the following;
Underwriters
Market Makers
Registrars to Issue
Bankers to Issue
PR Agency, Printer etc.;
Assistance in devising a complete IPO plan and strategy including the likely post-issue shareholding distribution pattern.

Phase- II: Documentation Preparation

We shall assist you in drafting of IPO Offer Document and other important agreements, documents and resolutions necessary for an SME IPO process. An indicative list of important documents is as under for easy understanding:

IPO Offer Document
Tripartite Agreement with NSDL, CDSL and Registrar to Issue
Underwriting Agreement
Market Making Agreement
Agreement with Bankers to Issue
Agreement with Registrar to Issue
Board / Shareholders’ Resolutions
Certificates, Letters of Representations etc
Draft of public advertisements, notices etc
Forms / Applications to be filed with BSE, ROC and other regulatory office.

Phase- III: Offer Management

Once all pre-IPO preparations would be over including meeting the eligibility criteria, appointment of other market intermediaries, and drafting of offer document, we shall initiate the actual process of IPO. Our services under the phase shall include end-to-end IPO activities :

Filing of IPO Offer Document with BSE and other regulatory offices like SEBI and ROC;
Follow-up with BSE and ROC for their approvals;
Coordinating and assistance in interview with SE Listing Advisory Committee,
Assistance in execution of agreements with other market intermediaries;
Assistance in launch of IPO and coordinate with other parties including PR Agency, Printers for adequate public advertisement, distribution of application forms as required statutorily;
Monitoring the flow of applications and keeping a real-time discussion with the management of the Company;
Coordinating with bankers and registrars for deposit of application moneys and finalization of allotment list in consultation with the stock exchange.

Phase- IV: Listing Assistance

Finally, post IPO closure and finalization of allotment, we shall initiate the activities for listing of equity shares of the Company on SME Exchange. Our scope of services under this phase shall include the following:

Assistance in completing allotment of shares to the successful allotees
Preparing listing application
Filing of listing application with Stock Exchange(SE)
Follow-up with SE and obtain listing approval
Assist in trading formalities and obtain SE’s trading approval
Assist in making required public disclosures as required statutorily
Coordinating for continuous market making for 3 years

 

SPC – Companion in Process

SPC – Companion in Process

SPC – Companion in Process

Phase- I: Pre-IPO Capital Restructuring & Preparation

Under the phase, we shall assist you in preparing for IPO and listing on SME Exchange. The services under this phase shall include the following:

Assistance in devising appropriate capital restructuring plan
Assistance in statutory compliance management and setting up minimum corporate governance practices expected by a listed company from the perspective of the following rules / regulations:
Companies Act, 2013
Listing Agreement applicable for SMEs
BSE listing norms
SEBI ICDR Regulations
Assistance in appointment of market intermediaries and other parties including the following
Underwriters
Market Makers
Registrars to Issue
Bankers to Issue
PR Agency, Printer etc.
Assistance in devising a complete IPO plan and strategy including the likely post-issue shareholding distribution pattern.

Phase- II: Documentation Preparation

We shall assist you in drafting of IPO Offer Document and other important agreements, documents and resolutions necessary for an SME IPO process. An indicative list of important documents is as under for easy understanding:

IPO Offer Document
Tripartite Agreement with NSDL, CDSL and Registrar to Issue
Underwriting Agreement
Market Making Agreement
Agreement with Bankers to Issue
Agreement with Registrar to Issue
Board / Shareholders’ Resolutions
Certificates, Letters of Representations etc
Draft of public advertisements, notices etc
Forms / Applications to be filed with BSE, ROC and other regulatory office

Phase- III: Offer Management

Once all pre-IPO preparations would be over including meeting the eligibility criteria, appointment of other market intermediaries, and drafting of offer document, we shall initiate the actual process of IPO. Our services under the phase shall include end-to-end IPO activities :

Filing of IPO Offer Document with BSE and other regulatory offices like SEBI and ROC;
Follow-up with BSE and ROC for their approvals;
Coordinating and assistance in interview with SE Listing Advisory Committee;
Assistance in execution of agreements with other market intermediaries;
Assistance in launch of IPO and coordinate with other parties including PR Agency, Printers for adequate public advertisement, distribution of application forms as required statutorily;
Monitoring the flow of applications and keeping a real-time discussion with the management of the Company;
Coordinating with bankers and registrars for deposit of application moneys and finalization of allotment list in consultation with the stock exchange.

Phase- IV: Listing Assistance

Finally, post IPO closure and finalization of allotment, we shall initiate the activities for listing of equity shares of the Company on SME Exchange. Our scope of services under this phase shall include the following:

Assistance in completing allotment of shares to the successful allotees
Preparing listing application
Filing of listing application with Stock Exchange(SE)
Follow-up with SE and obtain listing approval
Assist in trading formalities and obtain SE’s trading approval
Assist in making required public disclosures as required statutorily
Coordinating for continuous market making for 3 years

SME Listing – Way Forward…

1) Appointment of Merchant Banker
2) Restructuring of capital
3) Due Diligence & Pre-IPO preparation
4) Valuation and Preparation of Offer Document
5) Marketing Strategy
6) Appointment of other intermediaries
7) Filing of Offer Document with BSE & Others
8) Issue Management & Share Allocation
9) Listing & Market Making

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SP Chopra & Co End-to-end Services

SME LISTING – Shaping up in a BIG Way…

SME LISTING – Shaping up in a BIG Way

SME LISTING – Shaping up in a BIG Way

Government initiatives, a major boost: The MSME sector, acknowledged as the backbone of the India economy, is further expected to contribute significantly to India’s growing GDP. The sector will inevitably support India to improve nation’s financial inclusion and mitigate the urban rural divide. Also, it is expected that by 2020, India will have the largest job ready, youth population in the world and with favourable business ecosystem in the manufacturing sector it will not on ..

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So far, 89 Companies have been listed on BSE SME Exchange (of which 3 have migrated to main board) and 6 on NSE Emerge Exchange.

AIFL Ultra Cab Si. Vi. Momai Apparels Women’s Next
A. Market Cap INR Crores
Pre Issue Net Worth 10.98 6.25 3.10 17.12 2.02
Issue Size 21.00 7.97 6.86 43.33 6.50
Market Capitalization* 310.31 39.47 14.38 121.93 14.98

Closing Price as on March 31, 2015

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SPC – Companion in Process

SMEs – The backbone of Indian economy

An Overview of Key Requirements & Eligibility Norms

An Overview of Key Requirements & Eligibility Norms

Small and Medium Enterprises (SME) sector has been emerged in a highly striking and dynamic sector of the Indian economy over the last five decades.

SMEs not only play crucial role in providing employment opportunities at comparatively lower capital cost than large industries but also help in industrialization of rural & backward areas.

1) Nation’s 1.3 million SMEs account for 40% of India’s total exports
2) At 48 million, India is second to China in number of SMEs
3) SMEs employ close to 40% of India’s workforce & contributes 45% to India’s manufacturing output
4) SMEs are expected to drive the next-level growth of Indian economy provided they have enabling platform and avenues
  • SMEs face major problem of capital inadequacy
  • This problem can be tackled through Capital Market
Contribution to GDP 17 %
Share of Industrial output 45 %
Share of Exports 40 %
Total Employment 69 million
Job creation every year 1.3 million

Source: Ministry of Micro, Small and Medium Enterprises, GOI

Lifecycle of SME

Pre seed

Funding Options

Seed/Start up Early growth Expansion
Angel Investors Angel Investors Venture Cap IPO
Govt. Grants Govt. Grants PE Debt
Bank Credits Bank Credits IPO PE
Personal Finances Venture Cap Partnership

SME Listing Background…

BSE and NSE launched their respective platform for SMEs

 

The move aims at providing an opportunity to SME entrepreneurs to raise growth capital and reap benefits of listed space

 

Both BSE & NSE leverage their existing ‘equity platform’ for SME exchange platform

 

As per estimate of SME Chamber of India, over 5000 SMEs have the potential for listing

 

A facilitative framework for SME listing

SME Listing – Evolution…

5-Nov-08 Jan-10 26-Apr-10 17-May-10 18-May-10
SEBI lays down broad framework for SME listing platform PM Task Force recomm-ends SME listing exchange SEBI circular on Guidelines for market making SEBI Circular rolling out model listing agreement for SMEs Amend-ments in SEBI Regulations (ICDR, Merchant Bankers etc.

 

31-Dec-10 05-Feb-15 19-Apr-12 13-Mar-12 21-Feb-12
SEBI Master Circular on SME exchange & Market Making BSE Eligibility Norms for SME listing REVAMPED BSE Eligibility Norms for SME listing BSE SME Exchange launch SEBI circular standardizing lot size for SME exchange

 

14-Oct-11 27-Sep-11
SEBI approval to NSE SME Exchange SEBI approval to BSE SME Exchange

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SME LISTING – Shaping up in a BIG Way…

SME Listing – An Overview of Key Requirements & Eligibility Norms

small and medium enterprises

small and medium enterprises

Improving SME lending with growth in FinTech firms: A major constraint in the growth of the SME sector has been non-availability of easy finance. Not all small and medium enterprises find favor with traditional banks when it comes to lending courtesy lack of experience, absence of collaterals and infrastructure, poor financials, and small ticket size. Given their significant online presence, several modern fintech players are making it convenient for the SMEs to receive loans…

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//economictimes.indiatimes.com/articleshow/56254240.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

SME Listing – Key Requirements & Eligibility Norms

Particulars Requirement
Minimum application amount / trading lot INR 1 Lac
Underwriting 100% Mandatory
(of which 15% to be done by MB in his own account)
Market making (to be undertaken by MB) Through Exchange-registered market makers for min 3 years
Public Shareholding Min. 25%
Min. 50 investors
No post-listing continuous requirement
Provisions for migration to / from Main Board from / to SME Exchange

SME Listing – Key Requirements & Eligibility Norms

Post Issue Capital (FV) Max : INR 25 crore
Min : INR 3 crore
Track Record Net Tangible Assets : INR 3 crore (as per latest audited results)*

Net Worth (excl. Rev. Reserve) : INR 3 crore as per latest audited financial results

Track record of distributable profits for at least 2 years out of preceding 3 completed Fys or NetWorth shall be at least Rs 5 crore

Other Requirement

 

 

Mandatory facilitation of trading in Demat securities

Certificate that no winding petition or reference to BIFR

Mandatory corporate website

Promoters to attend to interview with Listing Advisory Committee

No change in promoter in preceding 1 year

SME Listing – Key Requirements & Eligibility Norms

Post Issue Capital (FV) Max : INR 25 Cr
Track Record Track record of at least 3 years

Positive cash accruals (EBDT) from operations and positive net worth for at least 2 FYs preceding the application

In case the above conditions are not fulfilled, Exchange Authority to decide

Other Requirement

 

Same as BSE plus additional certification / disclosures on litigation etc.

BSE SME vs. Main Board

Parameters Main Board SME Exchange
Post – issue paid up capital Min INR 10 crore Min INR 3 crore on BSE SME; Max INR 25 crore
Minimum Allotees in IPO 1000 50
IPO underwriting Non Mandatory

(Under 50% compulsory subscription to QIB’s)

Mandatory

(100% underwritten with MB underwriting 15%)

Track record Stringent track record norms like Operating Profit of 15 Cr Relaxed track record norms
Offer Document vetting By SEBI By Exchange
IPO Application Size INR 10000 – INR 15000 Min. INR 1 lac
IPO Time frame 6 months – 1 year 2 – 3 Months
Reporting Requirements Quarterly Half yearly
Reporting Requirements Quarterly Half yearly

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SMEs – The backbone of Indian economy

SEBI ICDR As Applicable to SMEs

SEBI ICDR As Applicable to SMEs

SEBI ICDR As Applicable to SMEs

SEBI ICDR As Applicable to SMEs

SEBI ICDR applies to SME listing with specific relaxations

·         Offer document requirements and eligibility norms relaxed

Appointment of Merchant Banker, and other intermediaries required
·         Lead Merchant Banker to the issue
·         Rights, obligations and responsibilities relating to disclosures, allotment, refund, and underwriting obligations
Book building or fixed priced issue permitted
Lock-in conditions apply
·         20% of post-issue capital to be locked in for 3 years; balance promoter shareholding to be locked in for 1 year·         Non-promoter pre-IPO shareholding to be locked in for 1 year with exception to ESOP shares and shares held by VCF or FVCIs for more than 1 year pre IPO

·         Locked-in shares permitted to be transferred inter se promoters incl. new promoter(s)

SME Listing Agreement

All SMEs getting listed need to enter into Listing Agreement (LA) with the relevant stock exchange.
BSE and NSE has adopted model LA released by SEBI.
Key Requirements include the following:

·         Half-yearly results (Audit / limited review)

·         Half-yearly shareholding pattern

·         Advance notice of Board meetings with specified agenda (e.g. dividend, bonus, buy back etc.)

·         In-principle approval for any further issuance of shares

·         Disclosure of price sensitive information

·         Annual report containing inter alia full financials, consolidated financials, related party disclosures etc. to be uploaded on corporate website

·         Full annual report to be emailed; Abridged annual report to shareholders not on email ids

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SME Listing – An Overview of Key Requirements & Eligibility Norms

Core Advantages of SME Listing

Rise of SME focused B2B

Core Advantages of SME Listing

Core Advantages of SME Listing

in 2017-18: The advent of advanced technology is opening newer channels for businesses across several sectors. This is particularly true for B2B eCommerce firms focused on the Indian SME sector. Hitherto overlooked, the presence of innovative technological platforms is bringing on board a rising number of small players including the neighborhood kirana store. This is a win-win situation for all involved enabling smoother transactions, procurement of raw…

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Implications of Listing Resulting Benefits
Collateral Value Listed securities can serve as collateral for raising additional loans
Improved Credit Rating Cost of finance (Rate of Interest) likely to come down
Increased Visibility Brand building
Stock Exchange quotations
Analyst coverage
Lender’s / Supplier’s increased comfort Increased acceptability and prestige among suppliers
Lesser negative covenants
Transferability of shares at market price ESOPs – Higher compensation for senior executives without cash outgo
Overseas listing possible

Core Advantages of SME Listing

Operational Benefits of listing – Illustrative Case Study

Particulars Unlisted Listed Remarks
Sales 4000 4400 Branding & visibility will likely to result in increased sales / orders
Total Expenses 3000 3100 Expenses increase in a lower proportion due to economies of scale such as higher bargaining power, bulk discounts etc.
EBITDA 1000 1300 Increase in sales at reduced expenses results in increased EBIDTA & EBIDTA Margin
EBITDA % 25 29.55
Interest 84 66 Listing likely to result in cheaper cost of funding (assumed debt of INR 600 lakhs @ int rate of 14% pre-listing and 11% post-listing)
Dep. 10 10
PBT 906 1224
PAT 634 857 Increase in PAT and PAT margins due to increased EBITDA and reduced borrowing cost
PAT % 15.85 19.47

Amounts in INR Lakhs.

Core Advantages of SME Listing (3 of 7)

No Tax on No Tax on Lower Tax on
Entry and exit (through buy back, transfer, fund infusion) Purchase of distressed assets Share transfers (eg. Family Succession, Intra-Group Transfers, Third-party Transfers etc.)

 

Tax on Buy Back of Shares Tax on Infusion Capital Gains tax on transfer of shares Purchase of Distressed Asset
Unlisted companies subject to 20% tax on buy back of shares Unlisted Companies subject to 30% tax on issue of new shares at a premium exceeding fair value LTCG @20% Purchase of distressed asset below NAV is subject to tax @ MMR

Core Advantages of SME Listing (4 of 7)

Tax Benefits of listing – Illustrative Case Study

Particulars Transfer Buyback + Infusion SME Listing
Initial Investment 400.00 400.00 400.00
Sale Consideration 1,000.00 1,000.00 1,000.00
Indexed Cost of acquisition 585.56 NA NA
Tax on Sale/Buyback/Infusion (CG/STT) 82.89 240.00 2.00
Net Proceeds 917.11 760.00 998
ROI (Before Taxes) 250% 250% 250%
ROI (After Taxes) 222% 190% 249.50%

In Transfer: Shares are purchased for INR 400 Cr and sold at INR 1000 Cr and assumed shares are purchased in 2008-09 and sold in 2012-13. In Infusion: Fair Value of Shares is assumed at INR 600 Cr.

Core Advantages of SME Listing (5of 7)

Valuation bench-marking

Wealth creation through market cap of shares upon listing (Refer Next Slide)

Listed shares as currency

Use of shares for takeovers / M&A transactions, leading to inorganic growth

Promoter Profile Building

Adds to social reputation and status

Core Advantages of SME Listing (6 of 7)

Wealth Creation – Select Examples

Si. Vi. Shipping AIFL Ultracab Momai Apparels
A. Market Cap INR Crores
Pre Issue Net Worth 3.10 10.98 6.25 17.12
Issue Size 6.86 21.00 7.97 43.33
Market Capitalization* 14.38 310.31 39.47 121.93
B. Price Pattern INR Per Share
Issue Price 25.00 40.00 36.00 78.00
CMP (Face Value INR 10)* 25.00 159.40 49.25 84.50

* Closing Price as on March 31, 2015

Core Advantages of SME Listing (7 of 7)

Internal Controls Improved Systems
Data management Better Information Flow

Good corporate governance helps companies immensely and also increases the confidence among its stakeholders.

SME LISTING – Shaping up in a BIG Way…

So far, 89 Companies have been listed on BSE SME Exchange (of which 3 have migrated to main board) and 6 on NSE Emerge Exchange.

AIFL Ultra Cab Si. Vi. Momai Apparels Women’s Next
A. Market Cap INR Crores
Pre Issue Net Worth 10.98 6.25 3.10 17.12 2.02
Issue Size 21.00 7.97 6.86 43.33 6.50
Market Capitalization* 310.31 39.47 14.38 121.93 14.98

Closing Price as on March 31, 2015

read more: SEBI ICDR As Applicable to SMEs

About SPC Initiatives for Capital Markets

Initiatives for Capital Markets, About SP Chopra & Co

About SP Chopra & Co Initiatives for Capital Markets

We are a global Chartered Accountant firm with 65 years of establishment; consistently ranked amongst the top firms in the country. Our main office is located in the business district of the nation’s capital, Connaught Place and we have our branch offices in several cities in India and our international offices are located in Canada and Dubai. We are one of the 10 prestigious firms in India to be a member of PrimeGlobal, the 3rd largest global association of independent accounting firms in the world; comprising of over 320 highly successful independent public accounting firms in 87 countries.

We are a full services firm with 12 partners and staff of over 100, providing Accounting, Assurance and Consultancy as our core business lines for domestic and global businesses of medium to large size. The firm also has expertise and vast experience in providing end to end solutions for Company Law Matters, IFRS Convergence, Transfer Pricing, Risk and Transaction Advisory.

SPC Initiatives for Capital Markets

Multifarious Initiatives in Capital Markets space
Companies Act Convergence Program
Angel Funding Network
Corporate film on Listing Online SME Market Watch
Wide-spread awareness on Listing
Capital Market Surveys
Active engagement with regulators
SPC’s Initiatives for Capital Markets
Doing business in India
Business Seminars & Workshops Media Coverage
A weekly mailer encapsulating capital market news

Services:

Statutory Audit including Reporting on Internal Financial Control (IFC)
Management and Internal Audit
IFRS Convergence and Reporting
Transaction support, Valuations, Due Diligence
Post Investment, Cash burn audit for Investors
Standard operation procedures (SOPS)
Formation of an appropriate business
Obtaining Registration
Periodic Compliances
Assessment of Statutory Compliances
Tax Compliances
Routine Compliances Matters

read more: Core Advantages of SME Listing