Annexure to Notification No.

No: F {Pres/Repet Syllabus-MFC}Acad/KU/12 Dated: 01-09-2012

SYLLABUS for
Master of Finance & Control (MFC)
(w.e.f. 2012 and onwards)

Department of Business & Financial Studies

University of Kashmir Hazratbal, Srinagar

Annexure to Notification No. No: F {Pres/Repet Syllabus-MFC}Acad/KU/12 Dated: 01-09-2012

Subject Code MFC-301 MFC-302 MFC-303 MFC-304 MFC-305 MFC-306 MFC-307 MFC-308

Name of the Subject

MFC Semester III Effective from academic session-2013

Theory Max Min 35 35 35 35 35 35 35 35 Cont. Assessment Max Min 30 30 30 30 30 30 30 30 15 15 15 15 15 15 15 15 Max ___ ___ ___ ___ ___ ___ ___ ___

Syllabi and courses of study For

Viva-voce Min ___ ___ ___ ___ ___ ___ ___ ___

Project Report Max Min ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___

ORGANIZATIONAL BEHAVIOUR

70 70 70 70 70 70 70 70

Management Control System Risk Management in Financial Institutions Financial Management Project Planning & Evaluation Corporate Tax Planning & Management Insurance Management Financial Services Marketing

Annexure to Notification No. No: F {Pres/Repet Syllabus-MFC}Acad/KU/12 Dated: 01-09-2012

MFC Semester III Effective from academic session-2013

ORGANIZATIONAL BEHAVIOUR
Course Code :MFC-301 Semester : 3rd Max. Marks :100 Term End Exam : 70 Cont. Assessment : 30

Course Objectives: This course is designed to equip the students with the tools necessary to
understanding the dynamics of individual and group behaviour for efficient and effective utilization of human resources in the organizations.

Unit - I Organisational Behaviour the human context of a managerial job, Contributing disciplines, Emerging trends in OB, Historical evolution of OB; Perception: Process & errors, Improving perceptions, managerial implications of perception ;Personality development, Determinants of Personality, Personality traits relevant to OB; Learning, Theories , Principles of Learning , Contingencies & Schedules of Reinforcement. Unit - II Motivation: Early theories, contemporary theories; Stress: Concept of stress, Sources & Effects of stress on humans, Management of Stress; Concept of Group Dynamics and Teams, Theories of Group Formation, Team Development, Communication: Concept of two-way & Open Communication, Transactional Analysis. Unit - III Organisational Conflict: Traditional & Modern view of conflict, Constructive & Destructive conflict, Conflict Process, Strategies for encouraging constructive conflict, Strategies for resolving destructive conflict, Leadership Styles, Models and Theories of Leadership. Unit - IV Elements of Organisational Structure, Traditional & Modern Organisational Design, Power & Politics: Sources & Consequences of Power, Organisational Politics, Types of Political Activity, Controlling Political Behaviour, Organisational culture: Elements of Organisational Culture, Hofstedes culture typology, Management of Change, Forces responsible for change, Resistance to change, Overcoming resistance to change. Suggested Readings:
1. 2. 3. 4. 5. Steven McShane & Van Glinar, Organizational Behavior, Tata McGraw Hill Publishing Co. Stephen Robbins, Organizational Behavior. Prentice Hall India Pvt. Ltd New Delhi. Fred Luthans, Organizational Behavior. McGraw Hill Book Company. Kavita Sharma, Organizational Behavior, Pearson India. Ricky Griffin & Georgy Moorehead, Organizational Behavior, Hongh Co. Boston.

Annexure to Notification No. No: F {Pres/Repet Syllabus-MFC}Acad/KU/12 Dated: 01-09-2012

MFC Semester III Effective from academic session-2013

MANAGEMENT CONTROL SYSTEM
Course Code :MFC-302 Semester : 3rd Max. Marks :100 Term End Exam : 70 Cont. Assessment : 30

Course Objective: This course is aimed at introducing the process and techniques of Management
Controls as practiced in the organizations.

Unit I Nature of Management Control Systems: Basic concepts; boundaries of management control systems: Strategic planning, management control and operational control. Strategies: Corporate level and business unit strategies. Goal congruence: Factors of goal congruence. Formal management control system: design, implementation and administration. Informal management controls. Unit II Management Control Structure: Decentralized organization and responsibility accounting. Responsibility centres: Concept and characteristic. Types of responsibility centres: Expense centers, revenue centres, administrative and support centres, R&D centres and marketing centres. Profit centres: General considerations, role and performance measurement. Transfer pricing; different methods. Investment centres: Performance measure of investment centres. Unit III Management Control Process: Strategic planning, programming and budgeting. Classification of budgets, preparation of sales, production, production cost, (Material, Labour and overhead), Flexible, Cash and master budgets. performance and zero base budgeting. Performance evaluation and reporting. Unit IV Balance score card as a measure of business strategy. Perspectives of measurement: financial, customer, internal-business-process and learning & growth perspectives. Linking balanced scorecard measures to the business strategy. Implementing balanced scorecard management programme. Controls for Differentiated Strategies: Corporate strategies and business unit strategies. Management styles in differentiated strategies. Management control systems in service organizations: Banks and insurance companies. Management control systems in multinational corporations.
Note: This paper shall have 50% numerical & 50% theoretical questions.

Suggested Readings:
1. 2. 3. 4. Anthony, Robert N and Govindrajan, Vijay: Management Control Systems, Tata McGraw Hill. Merchant, K.C. : Modern Management Control Systems, Prentice Hall. Solomons, David, :Divisional Performance:Measurement and Control, Richard D Irwin. Mohi-ud-Din, Ghulam; Management Control Systems in Banks, Anmol Publications

Annexure to Notification No. No: F {Pres/Repet Syllabus-MFC}Acad/KU/12 Dated: 01-09-2012

MFC Semester III Effective from academic session-2013

RISK MANAGEMENT IN FINANCIAL INSTITUTIONS
Course Code :MFC-303 Semester : 3rd Max. Marks :100 Term End Exam : 70 Cont. Assessment : 30

Course Objectives: The course is intended to acquaint students with necessary analytical skills in
the area of management of risk in financial institutions.

Unit I Risk Management: Concept, objectives, sources of risk, types of financial risks- market risk, liquidity risk, credit risk, operational risk, systemic risk: definition, causes, the banking book, the trading book and off balance sheet exposures: types and associated risks, Scientific risk management process; Regulatory mechanism for risk management, Regulatory capital, economic capital, components, RAROC, concept, measurement. Unit-II Risk Measurement: Market Risk sources: currency risk, fixed income risk, equity risk, commodity risk, modeling risk factors, computing returns, time aggregation , measuring volatility, VaR as downside risk measure, VaR caveats, VaR parameters, Correlation effect, VaR back testing and stress testing, Credit risk Drivers, Probability of default, Measuring Credit exposure, Loss given default, measurement of expected credit loss, unexpected credit loss. Unit-III Operational Risk Management: Concept of operational risk (OR), importance of OR, OR drivers, peculiarity of OR, BIS definition of OR, Categorization of OR, OR measurement models: earnings volatility method, CAPM based method, Operational risk management process, Regulatory Approaches for attribution of capital charge for operational risks- Basic Indicator Approach, Standardized Approach and Advanced Measurement Approaches. Unit-IV Asset-Liability Management: Concept, evolution, significance, scope and objectives of ALM, Liquidity Risk, dimensions of liquidity risk, measurement of liquidity gaps, static gaps, dynamic gaps, Sources of interest rate risk, measurement of interest rate gap, The Repricing Gap Model, price-yield relationship of fixed income securities, duration and convexity, The Duration Model. Introduction to Derivatives: Use of Futures and options in Hedging.
Note: This paper shall have 50% numerical & 50% theoretical questions.

Suggested Readings:
1. 2. 3. 4. 5. 6. 7. 8. John C Hull, Risk Management and Financial Institutions, 3rd Edition, 2009, Pearson Education, India. Reto Gallati, Risk Management and Capital Adequacy, 2003 Edition, McGraw Hill Series. Karen. A Horcher, Essentials of Financial Risk Management, 2005 Edition, John Wiley & Sons. Joel Bessis, Risk Management in Banking, 2nd Edition, 2002, John Wiley & Sons. Andrea Resti & Andrea Sironi, Risk Management and shareholders value in banking, 2007, John Wiley & Sons. S. Scott McDonald & Timothy W. Koch, Management of Banking, Sixth Edition, Cengage Learning India. Philippe Jorion, Value at Risk, 3rd edition, 2007, The McGraw Hill Company. Websites: www.rbi.gov.in; www.bis.org, www.nseindia.com

MFC Semester III

Annexure to Notification No. No: F {Pres/Repet Syllabus-MFC}Acad/KU/12 Dated: 01-09-2012

Effective from academic session-2013

FINANCIAL MANAGEMENT
Course Code :MFC-304 Semester : 3rd Max. Marks :100 Term End Exam : 70 Cont. Assessment : 30

Course Objective: This course is aimed to enable the students to learn the implications of the three
important financial decisions viz; financing, dividend and working capital management decisions. Unit I Operating leverage, financial leverage and combined leverage, uses of leverage, effects of leverage. Capital Structure: theories of capital structure, features of an appropriate capital structure; factors affecting capital structure decision; capital structure planning: EBIT-EPS analysis, ROI-ROE analysis, coverage ratios, cash flow analysis; indifference point. Unit II Dividend Decision: Dividend theories: Walters Model, Gordons Model, M -M-hypothesis. Different dividend policies; Analysis of dividend policies, factors affecting dividend decision, forms of dividend payments, Stock dividend, stock split, stock repurchases, bonus shares. Unit III Working capital: Concepts, and components of working capital, objectives of WCM, determinants of WC, estimating working capital needs. Sources of working capital: Accruals, trade credit, CPs, factoring, public deposits. Bank credit, forms of bank credit, regulations of bank finance. Types of inventories, objectives of inventory management, costs of inventories, techniques of inventory control, selective inventory control techniques. Unit IV Receivables: purpose of receivables, cost of maintaining receivables; credit and collection policy, credit granting decision, control of receivables. Discriminant analysis and customer classification. Cash management: meaning of cash, motives for holding cash, Methods of accelerating cash receipts and decelerating cash payments; cash management models: determining optimum cash balance, forms of liquidity, choosing the liquidity mix; management of surplus cash. Note: this paper shall have 50% numerical and 50% theoretical question. Suggested Readings:
1. 2. 3. 4. 5. Brealey Richard A. & Steward C. Myers : Corporate Finance, McGraw Hill, New York. Block, Stanley B., Geoffrey Ahilt : Foundations of Financial Management, Richard D. Irwin, Homewood, Illinois. Chnadra Prasana: Financial Management, Tata McGraw Hill, New Delhi. Hampton Jhon : Financial Decision Making, Prentice Hall Delhi. Pandey i. M. :Financial Management, Vikas Publishing House Delhi.

MFC Semester III Effective from academic session-2013

Annexure to Notification No. No: F {Pres/Repet Syllabus-MFC}Acad/KU/12 Dated: 01-09-2012

PROJECT PLANNING & EVALUATION

Course Code :MFC-305 Semester : 3rd Max. Marks :100 Term End Exam : 70 Cont. Assessment : 30

Course Objective: The objective of this course is develop a knowledge base of the students about
planning, analyzing & evaluating Capital investment projects.

Unit I Capital budgeting: Significance, process and sources of Capital Investment Proposals. Types of capital projects. Levels of capital budgeting decisions. Facets of capital project analysis. Market Analysis: Basic objective of market analysis, steps involved in market analysis. Unit II Technical Analysis: Basic objectives, different facets of technical analysis. Ecological analysis. Cost of Project; Means of Financing; Cost of Production; Working Capital Requirement; Financial Projections-Projected Balance Sheet, Projected Sources and Uses of Funds Statement; Projected Cash Flow Statement and Projected Income Statement - Estimation of Sales and Costs Financial Analysis: Unit III Estimation of cash flows; Operating cash flows, Cash outflows & terminal cash flows. Capital Budgeting Techniques: PBP, ARR, NPV, IRR, MIRR and PI. Techniques of risk analysis: Sensitivity analysis, scenario analysis, break-even analysis, simulation, risk-adjusted discount rate, standardization of probability distribution. How financial institutions analyze risk. Unit IV Social Cost Benefits analysis: Rationale of SCBA, UNIDO approach, LITTLE-MIRRLEES approach, shadow prices. Social Cost Benefits Analysis by financial institutions, public sector investment decisions in India. Note: This paper shall have 30% numerical & 70% theoretical questions. Suggested Readings:
1. 2. 3. 4. 5. 6. 7. 8. 9. Chandra, P. : Projects Planning, Analysis, Financing Implementation and Review, Tata McGraw Hill, New Delhi. Dhankar, R.S. : Financial Management of Public Sector Undertakings, Westvila, New Delhi. IDBI : Manual of Industrial Project Analysis in Developing Countries. O.E.C.D. : (i) Manual for Preparation of Industrial Feasibility Studies. (ii) Guide to Practical Project Appraisal. Pitale, R.L. : Project Appraisal Techniques, Oxford and IBH. Planning Commission : Manual for Preparation of Feasibility Report. Timothy, D.R. and W.R. Sewell : Project Appraisal and Review, Macmillan, India. Chaudhary, S. : Project Management, Tata McGraw Hill, New Delhi. Singh M.K, Project Evaluation and Management.

MFC Semester III Effective from academic session-2013

Annexure to Notification No. No: F {Pres/Repet Syllabus-MFC}Acad/KU/12 Dated: 01-09-2012

CORPORATE TAX PLANNING & MANAGMENT

Course Code :MFC-306 Semester : 3rd Max. Marks :100 Term End Exam : 70 Cont. Assessment : 30

Course Objective: This course aims at making students conversant with the concept of Corporate
Tax Planning & Indian Tax Laws, as also their implications for corporate financial management.

Unit I Assessment of Companies: Meaning and kinds of companies under Income Tax Act, determination of residential status of companies, computation of taxable income and tax liability of companies. Advance Tax payment for Companies: Pay as you earn scheme, computation of advance tax and interest payable on shortfall of advance tax. Unit II Corporate Tax Planning : Concept & scope; tax planning differentiated from tax evasion and tax avoidance; tax shifting and its types; areas of tax planning; significance, methods and problems of tax planning. Minimum Alternate Tax (MAT): Scheme of MAT in brief, concept of zero tax company; computation of book profits u/s 115JB; computation of tax liability under MAT provisions. Unit III Tax Planning with regard to Specific Management Decision: : i) Lease or buy; ii) retain or replace; iii) New capital investment; (with practical problems). Tax Planning & Financial Management Decisions: Tax planning and tax implications in developing capital structure; Tax considerations in dividend policy; (with practical problems). Unit - IV Capital Gains Tax: Provisions for computation of capital gains and related exemptions, Sale of Investment and Securities transaction tax (STT). Service Tax: Taxable services and their classification, registration procedure, records to be maintained. Valuation of taxable services and payment of service tax. Note: This paper shall have 60% numerical & 40% theoretical questions. Suggested Readings:
1. 2. 3. 4. 5. 6. 7. Acharya Shuklander : Tax Planning Under Direct Taxes, Modern Law Publication, Allahabad. Bhatnagar, s.p: Customs Law & Procedures, Centax Publications, New Delhi. Datey, V.s : Indirect Taxes : Law & Practice, Taxman Publications, New Delhi. Income Tax Act, BARE act, Taxman Publications, New Delhi. Singhania, V.K : Direct Tax Planning & Management, Taxman Publications, New Delhi. Singhania, V.K : Direct Taxes-Law & Practice, Taxman Publications, New Delhi. Srinivas, E.A : Corporate Tax Planning : Tata McGraw Hill Publishing Co. Ltd. New Delhi.

Annexure to Notification No. No: F {Pres/Repet Syllabus-MFC}Acad/KU/12 Dated: 01-09-2012

MFC Semester III Effective from academic session-2013

INSURANCE MANAGEMENT
Course Code :MFC-307 Semester : 3rd Max. Marks :100 Term End Exam : 70 Cont. Assessment : 30

Course Objective: The objective of this course is to introduce fundamentals of insurance business
and its management.
Unit - I Nature, purpose and need of insurance. Insurance as a social security tool. Functions of insurance: risk sharing and risk transfer, risk reduction through pooling of transactions. The concept of risk - Kinds and classification of risks - Assessment - Transfer; Classification of Insurance - Types of Life Insurance - Pure and Terms - Types of General Insurance, Fire, Marine, Motor, Engineering, Aviation and Agricultural - Insurance of Property, pecuniary interest, liability and person. Privatization of insurance sector and pre-cum-post privatization scenario of insurance industry in India. Role and functions of IRDA. Unit-II Basic principles of Insurance - Utmost Good faith - Insurable Interest - Material facts - Indemnity - Proximate Cause. Economic principles of Insurance - Sharing - Subrogation - Contribution; Insurance company operations; rate making; underwriting; production; claims management; Reinsurance; investments patterns and their regulations; other insurance company functions. Financial soundness indicators and insurance code principles: Selection criteria and implementation issues: core set of indicators. Determination of solvency margins Unit-III Plans of Life Insurance - Need levels - Basic elements - Some popular plans (Limited payment plan, participating policies, convertible plans, joint life policies, Childrens plans, educational annuity plans, variable Insurance plans, riders for the Handicapped, Miscellaneous. Annuities - Nature of annuities, types. Group Insurance - Nature of Group Insurance - Types - Group gratuity schemes. IRDA Regulations on Management of Life Insurance Services/products. Policy Claims - Maturity Claims - Survival benefits - Death claims - Claim Concession - Presumption of Death - Accident benefit and disability benefit - Post-maturity Options - Settlement options - Valuation and surplus. Unit-IV General Insurance forms - Proposal of Insurance - Cover notes - Motor Vehicle Coverage - Fire & Marine Policies and Coverage - Standard policies - Reinstatement value policies - Declaration policy - Floating policy. Policy document in General Insurance - Need and format - Policy preamble - Schedule - Attestation Conditions and privileges - Alteration - Duplicate policy - Policy renewal procedure - Premium payment lapse and revival - Assignment - Nomination loans - Surrenders - Foreclosure. IRDA Regulations on Management of General Insurance Services/products Claims procedure - Preliminary procedure - Investigation and assessment - Role of Surveyors & Loss assessors Claims documents - Arbitration - Limitation - Settlement -Loss minimization and salvage.

Suggested Readings:
1. 2. 3. 4. 5. 6. 7. 8. 9. Majumdar, P.I and Diwan, M.G:Principles of Insurance, Insurance of India, Mumbai. Pai, V.A and Diwan, M.G : Practice of General Insurance, Insurance Institute of India, Mumbai. Pai, V.A and Diwan, M.G : Practice of Life Insurance, Insurance Institute of India, Mumbai. Sharma,R.s:Insurance:Principles and Practice, Vora Publications, New Delhi. Athearn, James. L :Risk and Insurance, West Publishing Co. USA. Gupta P. K., Insurance & Risk Management, Himalaya Publishing House, New Delhi. Dinsale, W.A:Elements of Insurance, Pitman. Hubner, S.S:Economics of Life Insurance. Hubner, S.S and Keneth Black: Life Insurance.

Annexure to Notification No. No: F {Pres/Repet Syllabus-MFC}Acad/KU/12 Dated: 01-09-2012

MFC Semester III Effective from academic session-2013

FINANCIAL SERVICES MARKETING Course Code :MFC-308 Semester : 3rd Max. Marks :100 Term End Exam : 70 Cont. Assessment : 30

Course Objectives: The Course aims at developing knowledge for financial services marketing concepts and practices used for managerial decisions. Unit - I Fund Based Financial Services Leasing and Hire Purchase, Consumer Finance, Factoring and Forfeiting, Venture Capital, Securities of Debt. Fee Based Financial Services Merchant Banking, Credit Rating, Bill Discounting, Credit Cards, Underwriting, Depositories. Unit - II Importance of Services Sector in the economy; Characteristics and Classification of Services; Goods Verses Services Marketing. The Services Marketing Triangle. Consumer Behaviour in Services; Customer Expectations of Service; Customer Perceptions of Service; Service Quality, Customer Satisfaction and loyalty. GAP Model-A Conceptual Tool to Identify and Correct Service. Unit - III Services Marketing Mix: Services Offer; Pricing and Revenue Management; Promotion and Distribution of Services; Management of People, Process and Physical Evidence; Matching of Demand and Capacity; Strategies for Matching Capacity and Demand. Unit - IV Relationship Marketing Scope. Need for Relationship Marketing Firm and Customer Perspectives. Developing and Managing Relationships; Relationship Development Strategies; Role of Information Technology in Relationship Building (E-CRM). Customer Feedback and Service Recovery. Customer Complaining Behaviour; Service Recovery Strategies and Service Guarantees.

Suggested Readings:
1. 2. Bateson John E. G., Managing Services Marketing: Text and Readings Dryden Press,Chicago. Berry Leonard L. and Parasuraman A., Marketing Services: Competing Through Quality, The Free Press, New York. 3. Bitner Mary Jo and Valarie A Zeithaml, Services Marketing McGraw-Hill, New York. 4. Christopher, H. Lovelock, Services Marketing, Prentice Hall, Eaglewood Cliffs, New Jersey. 5. Kotlar Philip and Bloom P. N., Marketing Professional Services, Prentice Hall, Eaglewood Cliffs, New Jersey. 6. Verma H.H., Marketing of Services Global Business Press, New Delhi. 7. Avadhani, V.A., Marketing of Financial Services, Himalaya Publishing House, Delh. Mohan Rao, Financial Services Text, Cases and Strategies, Deep and Deep publications Pvt Ltd. Delhi.