Overview
This section discusses the process of setting up a Compulsorily Convertible Debenture (CCD) within Finvisage. It further covers various fields that go towards setting up an overall issue as well as multiple tranches within that issue.
Navigation
In the side panel, click on Liability, and then - under Liability - select Compulsorily Convertible Debenture to navigate to the blotter for the same.
Steps: Creating a Compulsorily Convertible Debenture (CCD) issue
Select the + button from the menu icon on the bottom right to add a new CCD.
The following are the fields that need to be entered to set up the CCD:
1. External ID - Input the desired reference identification details for the overall issue
2. Issuer - Pull down and select the issuing entity’s name (normally defaulted to your entity name)
3. Counterparty - Pull down and select the name of the bank or financial institution or other entity that is the holder / investor of the CCD (this will normally be the Registrar & Transfer Agent (RTA) that is engaged by your entity, and will be available based on the record being created in the appropriate Counterparty Master.
4. Currency - is defaulted to INR; any other currency may be selected from the dropdown.
5. Form of holding - Pull down and select whether Physical or Demat
6. Secured / Unsecured - Pull down and select as may be applicable
7. Rated / Unrated - Pull down and select as may be applicable
8. Listing - Pull down and select whether Listed or Unlisted
9. Transferability - Pull down and select whether Transferable or Non-Transferable, based on the terms of the issue
10. Authorisation Date - indicates the date on which a particular CCD issue was authorised (not issued) by the approving authority in the company e.g. the Board
11. Tenure type - Select whether the tenure is measured in terms of number of months or number of years
12. Tenure - Enter the value for number of months or years denoting the duration of the issue (value needs to be a whole number greater than or equal to 1)
13. Conversion notice period - Enter the number of days notice required prior to conversion, as per the terms of the issue
14. Authorised number of CCDs - Enter the number of CCDs (units) authorised to be issued as per the relevant Board Resolution or other approving document, as an aggregate of all tranches
15. Face Value - is defaulted as INR 10
16. Aggregate Nominal Value - does not require any input; it is calculated automatically based on the inputs in the preceding two fields
17. Issue price - is to be entered here per unit
18. Coupon - Enter the applicable coupon (%) payable on the Face Value of the CCD
19. Coupon frequency - Pull down and select from among Monthly, Quarterly, Semi-annually or Annually depending upon the terms of the issue
20. Days in a year type - This field allows you to select the basis for considering the number of days per year that are used for coupon calculation. Selecting Actual days in a year from the pulldown will cause Finvisage to use the actual number of days in every calendar year (365 for a normal year and 366 for a leap year). Alternatively, selecting Constant days will allow you to fix a specific number of days to be considered for coupon calculation every year, irrespective of whether the year actually has 365 or 366 days. For example, this could be used to specify the number of days as 360 to be used for all the years during the tenure of the CCD.
The respective Valuer details, Merchant banker details and any Additional information may be captured in the above fields, as free format text.
Recording the issuance of a CCD tranche
Navigating to the section shown above, will allow you to input each individual tranche within the overall authorised issue.
Click on the button shown above and then ‘Add Tranche’. The following screen will appear for entry:
Tranche Number - is assigned by the system
External ID - Input the desired reference identification details for the specific tranche within the overall issue
Tranche date - Record the issue date of the specific tranche
Maturity date - The maturity date for the specific tranche will be auto-calculated by Finvisage based on the tenure specified for the issue
Number of CCDs - Specify the number of units / instruments being issued in the specific tranche (the system will not allow you to specify a number that is greater than the number of CCDs available to be issued)
Total Amount Issued - shall be auto-calculated based on the number of CCDs issued in the tranche and the Face Value specified in the details of the overall issue
Total Proceeds - shall be auto-calculated based on the number of CCDs issued in the tranche and the Issue Price specified in the details of the overall issue
Coupon Payment Day - Please specify here the date on which the coupon payment needs to be made, in each month in which the payment becomes due
TDS Schedule
Additional information - any other information or details requiring to be recorded may be captured in this field, as free format text.
Once completed, click on the ‘Create’ button to record the tranche issued.
The coupon schedule is generated automatically by Finvisage. In order to update the actual payment made against any coupon payment , click on the Make Payment button indicated in the image above. Details of actual payment made may be recorded there (as shown in the image below). The Status column shows details of whether a coupon payment is Pending / Partially Paid / Fully Paid. In case of a partial payment of coupon, the Outstanding Amount column shall reflect the amount pending.
Recording conversion of CCDs into Equity
Select the specific tranche by clicking on the relevant Tranche Number [put arrow here]
Click on the action button with the 3 dots and then on Add conversion.
Conversion Date - Enter the date on which the conversion of the CCD into Equity is effective
Number of CCDs converted - Enter the number of CCDs (units) to be converted; the system will not allow you to enter a number larger than the available CCDs for conversion, which shall be displayed at the top of the screen
Conversion Ratio - Enter the ratio of conversion between CCDs and Equity Shares here; note that this a field meant for recording only; the system does not perform any calculation based on this ratio.
Total Coupon Payable - shall be calculated by the system automatically, indicating the amount of coupon payable until the date of conversion to Equity.
TDS - the amount of tax to be deducted from the coupon payment shall be calculated by the system based on the rate specified in the Counterparty Master.
Conversion Ratio Details - This is a free format text field which can be used to record details of the actual Equity Shares issued, the basis of conversion calculation, any other details etc.
Additional information - any other information or details requiring to be recorded may be captured in this field, as free format text.