Investing Basics - Feel free to ask the most basic questions


(inonix) #767

Question on ESOP, from AgroTech AR 2018, **
The Company instituted the "Agro Tech Foods Limited Employee Stock Option Plan’ (“Plan”) to grant equity
based incentives to its eligible employees. The Company has established a trust called the Agro Tech ESOP
Trust (“Trust”) to implement the Plan. The Company has given advance to the “Trust” for purchase of the
Company’s shares and advance outstanding as at 31 March 2018 is 502.38 ( 558.00 as at 31 March 2017
and 560.35 as at 1 April 2016). Under the plan a maximum of 23,436,926 options will be granted to the eligible employees. All these options are planned to be settled in equity at the time of exercise at the option of the employee. These options have an exercise price of 561.00, 597.55 and 589.75 per share granted during the years ended 31 March 2014,
31 March 2015 and 31 March 2016 respectively and vests on a graded basis as follows** .
Does this mean , once all the options are exercised, the outstanding shares will be almost double?
Also for the options exercised this year, I couldn’t find any increase in outstanding shares from last year. And Other Equity shows employee share based payment as 21.14 ?
Any clarification on this much appreciated.


(VijayShetty) #768

Do any of the aggregator sites (sites like screener.in, morningstar etc) give R&D expenses in the P & L Statement? I looking for either 5 year or 10 year data


(lalani123) #769

When a company acquires a different company, where does it go in Cash Flow. I was looking at Cash Flow of 8K Miles Software in screener.in and know they acquired many companies over the last few years and was expecting to see them in Cash Flow Investing Activities but didn’t see that. Also cash flow statements Upto March 2016 shows no taxes paid - however in Yearly P&L, it displays that. How can that be tied.


(pennywise) #770

Most companies are reporting their sensitivity to USD/Eur/Yen etc under the currency risk section of the annual report. Most companies’ sensitivity analysis shows that the impact of fluctuations in USD does not impact their bottom line materially (For eg TCS annaul report 17-18 page 154 - https://www.tcs.com/content/dam/tcs/investor-relations/financial-statements/2017-18/ar/annual-report-2017-2018.pdf).

My question is : Why does the market not consider this sensitivity analysis useful and continue to buy exporters in times of rupee depreciation even though companies have hedged their positions?


(Karan Sharma) #771

The participants who read the annual report and base their decision making on the inferences from the content are investors while the market participant’s who you talk about are traders who want to take advantage of a situation for a small amount of time without knowing the subject matter in detail or whether it actually will have any effect at all


(pennywise) #772

Makes sense. Thanks !


(sainkar) #773

How to calculate IRR or portfolio returns?

Can anyone please guide me on how to calculate yearly portfolio returns. Or provide pointers on blog / site for clarification.

Let’s take a base example so my query makes clear:

  • Assume by 31 Dec 2017 I have portfolio of 1 Lac comprising TCS (Rs 60000) and BSE (Rs 40000)
  • During August I added Rs 20000 TCS shares and in October Rs 10000 HDFC Life Insurance shares.
  • By 31 Dec 2018 my current Portfolio is of 1.26 Lac
    So what is the Portfolio return?
    How to know PF performance with Nifty?

(Chandragupta) #774

Check out the XIRR function in excel. You just have to write the cash flows and dates in two columns side-by-side. Write the portfolio value for the last date. XIRR will give you the portfolio returns.


(Yogesh Sane) #775

Here you go.

image

All cash inflows should be negative including starting balance. All cash outflows should be positive including ending balance.
For Nifty performance, take starting and ending index.


(sainkar) #776

Thanks Chandragupta & Yogesh_s

IRR including Dividend - How to calculate?

  • Where I need to put stock specific Dividend. [Should I suppose to include under Cash flow?]
  • From where I can get Nifty Dividend?

(sarthak kumar) #777

I have a question regarding buybacks.

If promoters are not participating, would that increase the acceptance ratio of retail shareholders or would it remain unaffected.

Also, when does a buyback have to be approved by shareholders.

Thanks


(EL) #778

Its not possible and not safe to hedge all your position.
Companies usually only hedge their receivables or payables or in most cases net exposure on their balance sheet

Future Revenue or future costs are usually is not hedged atleast not long term. There was a case of many companies in South America that went bankrupt during gulf oil crises when they hedged their oil revenue.
When a company hedges a position usually they have to provide 10 or 20pc margin for the hedge. Hence if you are forward selling $10m of oil, you pay a margin of say $1m
If the price goes a lot against you, then you have to come up with extra margin. Although your cost of production will still mean profit but in the short term the company has a big liquidity problem

Due to this generally its not considered wise to hedge a lot of forward revenue or cost. Around 3-6 months is probably safe

As rates increase or decrease, as revenues are not hedged, the companies margins will get affected and share prices reflect this


(Niraj) #779

Found a couple of articles. I think should help a little on clearing on buyback of shares.

Have put them in order from latest to oldest.


(suhagpatel) #780

Infosys announced buyback @ 800/Share. The buyback will be done through open market route and not typical tendering process.

While i am aware how tendering process works, i wanted to know how the buyback will work in open market case.

I did search and found out that we have to sell the shares in open market during the dates announce by company. My query is if i sell the shares in open market and the price on that day is say 700/share, how the company will come into picture to accept those shares and what price i will be paid considering max buyback price of Rs. 800/Share.

Regards,
Suhag


(sarthak kumar) #781

I went through the articles but couldn’t find the answer.


(sarthak kumar) #782

I have a question regarding buybacks.

If promoters are not participating, would that increase the acceptance ratio of retail shareholders or would it remain unaffected.

Also, when does a buyback have to be approved by shareholders.

Thanks


(sarthak kumar) #783

I want to know from where we can download audio of conference calls. One source I am aware of is stockadda. But shouldn’t they also be available on the company websites or some official source.

Thanks


(EL) #784

Does anyone know how record day and settlement for cash based trading works

So if record date for determining rights or dividend is 15th Feb and I sell on 15th Feb, does it mean I am still eligible to apply for rights issue as I have to only deliver the stock later on settlement date

Would appreciate if anyone knows how it works

Thanks


(EL) #785

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(EL) #786

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