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Definition of 'Cost Of Acquisition'A business sales term referring to the expense required to attain a customer or a sale. In settinga marketing and sales strategy, a company must decide what the maximum cost of acquisitionwill be, which effectively determines the highest amount the company is willing to spend to
attain each customer.
Investopedia explains 'Cost Of Acquisition'This cost is tied to marketing and sales campaigns because the more streamlined thosecampaigns become, the lower the customer cost of acquisition will be. Conversely, in a high-budget marketing and sales campaign, the acquisition cost may be relatively high depending onhow many sales or customers the campaign draws in
Read more: http://www.investopedia.com/terms/c/costofacquisition.asp#ixzz1rGfBw68l
Amortization of Telecommunications Spectrum Licenses
We own the rights to use and operate specified spectrums in some jurisdictions over a certain period
of time, through annual minimum fees plus a variable portion depending on the future revenues from the
services. License fees payments, the discounted value of the fixed annual fees to be paid over the license
period, and certain other direct costs incurred prior to the date the asset is ready for its intended use are
capitalized. Capitalized license fees are amortized from the date the asset is ready for its intended use until
the expiration of the license.
Interest is accreted on the fixed annual fees and charged to interest expense. Variable license fees are
recognized as period costs.This excerpt taken from theHTX 20-Ffiled May 9, 2008.
Amortization of Telecommunications Spectrum Licenses
We own the rights to use and operate specified spectrums in some jurisdictions over a certain period
of time, through annual minimum fees plus a variable portion depending on the future revenues from the
services. License fees payments, the discounted value of the fixed annual fees to be paid over the license
period, and certain other direct costs incurred prior to the date the asset is ready for its intended use are
capitalized. Capitalized license fees are amortized from the date the asset is ready for its intended use until
the expiration of the license.
http://www.investopedia.com/terms/c/costofacquisition.asp#ixzz1rGfBw68lhttp://www.wikinvest.com/stock/Hutchison_Telecommunications_International_(HTX)/Filing/20-F/2008/F2620298http://www.wikinvest.com/stock/Hutchison_Telecommunications_International_(HTX)/Filing/20-F/2008/F2620298http://www.wikinvest.com/stock/Hutchison_Telecommunications_International_(HTX)/Filing/20-F/2008/F2620298http://www.investopedia.com/terms/c/costofacquisition.asp#ixzz1rGfBw68lhttp://www.wikinvest.com/stock/Hutchison_Telecommunications_International_(HTX)/Filing/20-F/2008/F2620298 -
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GROWTH CAPITAL AND EQUITY ASSISTANCE FOR MSMES (GEMS)
One of the major factors inhibiting the growth of Micro, Small and
Medium Enterprises (MSMEs) is the non availability of adequate owners
capital i.e margin. External equity i.e the PE/ VC investment is also rare
due to various issues in MSMEs viz small ticket size, high transaction
cost, difficulty in understanding equity related complexities in MSME
promoters, valuation and exit issues, lack of preparedness/ willingness
in promoters in diluting ownership/ control, etc.
Due to shortfall in meeting margin requirements, MSMEs often languish
to get adequate working capital, which is the life and blood of their
business. MSMEs also find it difficult to raise loan assistance for other
growth requirements viz investments in marketing, brand building,
creating distribution network, technical know-how, software purchase,
investment in energy efficiency and quality improvement equipments,
R&D, etc., mainly as these investments by nature are non-asset
creating (i.e. intangible assets) and hence do not provide security
comfort to the lenders.
To obviate the aforesaid problems of MSMEs, SIDBI has come out with a
scheme Growth Capital and Equity assistance for MSMEs (GEMs).
Under the scheme, assistance in the form of equity/ quasi-equity is
provided to deserving MSMEs.
In India, more than 90% of the MSMEs are constituted as partnership/
proprietorship concerns, where investment in pure equity form is
difficult. Further, SIDBI also understands that most of MSME businesses
in India are family owned with value built over generations. Due to
these reasons, Indian MSMEs find it difficult to dilute large part of
ownership and control in favour of an external entity. Looking to this,
SIDBI, based on best global practices, has come out with various
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innovative financial instruments for MSMEs of different sizes and
constitutions, including Subordinated debt (SD)/ Optionally Convertible
Subordinated Debt (OCSD), which is treated as quasi-equity by SIDBI.
While SIDBI provides Equity/ equity linked assistance for deserving
corporatised MSMEs, SD provides quasi equity support to all
constitutions of MSMEs. Subordinated capital is a highly popular
instrument among MSMEs globally, with minimal equity complexities
and simpler documentation and hence quick to deliver and less costly
for MSMEs. It is provided on the strength of business/ backing of cash
flows rather than asset cover/ collateral security. The initial longer
moratorium on principal installments ensures greater chances of success
of the ventures.
Apart from direct funding, SIDBI, in order to reach out to a wider
segment of MSMEs, will use various delivery channels like VC Funds /
NBFCs etc as Channel Partners, Credit Delivery Arrangements with
select NBFCs for providing growth capital to MSMEs for their margin and
other bonafide growth requirements.
Growth Capital and Equity Assistance Scheme
for MSMEs (GEMs)What is Growth
Capital and Equity
Assistance for
MSMEs (GEMs)
o GEMs is given on the strength of business
model/management strength & is not dependent on assetcover/collateral.
o It could be used to bridge the gap between the two chief
sources of finance viz. bank loans (senior debt) andpromoters capital.
o SIDBI offers this assistance in form of mezzanine/
convertible instruments, subordinated debt and equity (indeserving cases). This quasiassistance is collateral free,has higher moratorium on repayment and a flexiblestructuring.
In view of the above, the expected rate of return to SIDBI is
higher than that on secured loan assistance.o
Need for GEMs for
MSMEs
o Promoters financial resources are generally limited and
might not meet the growth aspirations of the business.o Hence the need for equity/quasi equity type of assistance
to enable them to leverage it for conventional bank/debtfunding.
o MajorityMSMEs are generally not able to raise external
equity from Venture Capitalists / PE investors due to
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various issues viz. valuation complexities, lack of clearexit options, small ticket/deal size, expensive duediligence etc.
o Assistance for non asset creating investments is generally
difficult under normal debt schemes.Large number of MSMEs have a non-corporate constitution and
hence cannot raise equity capital.o
Uses of GEMso Bridging the gap in means of finance for scaling up/
expansion/ modernization projects.o For intangible investment viz. Marketing/R&D/product
development/IPR filing etco Working capital margin requirements.
Normal Working capital requirements are not eligible under thescheme.
o
Products o Subordinate debt(with/without conversion options)
o Mezzanine/ Convertible instruments viz Optionally
Convertible Debt/ Debentures, Redeemable PreferenceShares.Equity (on a selective basis) where business model/exit optionsclearly support such investment.
o
Eligibilityo an MSME as per the definition of Government of India
(MSMED Act) And
o SIDBIs existing customers (meeting internal rating
criteria)
or
Units with past 3 years of profitability and 2 years
of satisfactory banking credit track record(meeting internal credit rating criteria)
o Acceptable external rating from CRISIL, ICRA, D&B,
SMERA etc would be desirable.
Security (in case of debtbased investments)
o No collaterals
o Residual charge on available assets of the beneficiary unit
and assets created out of the assistanceSIDBI assistanceo Personal guarantee of the promoters
Rate of returno Please see Interest rate structure chart
Others termso Tenure of assistance could be upto 7 years (with upto 3
years moratorium on principal repayments)
o Subordinated Debt restricted to 1/3rd of Post project
tangible net-worth@ of the unit.
o DER/ DSCR norms as per internal guidelines of the bank.
Advantages too MSMEs can access long term structured assistance
especially for investments in intangible assetso MSMEs can leverage sub debt assistance for raising higher
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MSMEsdebt funds from SIDBI
o As most of the structures are self liquidating in nature,
MSMEs do not face various complexities viz. enterprisevaluation, equon exit issues, etc.
How to approach
SIDBI for Risk
capital
o Customers desirous of availing assistance under GEMs
may send brief information about their business as perAnnexure enclosed.
o The duly filled, signed copy may be mailed/ sent to nearby
SIDBI office. A copy may also be mailed to
[email protected] preliminary approval of SIDBI.o Once, the proposal is found in-principally eligible by
SIDBI, the detailed application would be issued by SIDBIto the customer.
@ Post project Tangible net worth' would mean Tangible net worth as
on date of last audited balance sheet + capital (including share
premium) infused after the date of last audited balance sheet till the
date of present proposal for assistance + additional capital (including
share premium) proposed in the project.
Tangible net worth means Capital + preference shares (excluding that
part which is redeemable within 3 years) + Share premium + Reserves
and Surplus Accumulated losses Revaluation reserves - Misc. exp.
not written off Intangible/ Fictitious assets + capital inducted after
date of last audited balance sheet.
mailto:[email protected]:[email protected]:[email protected]