A Presentation on ADR & GDR

Submitted To: Ms. Pooja GadhaviAPresentation onADR & GDRSubmitted By &Presented By: Pioneer GroupDave Rudresh (10)Joshi Bhumika(15)Nayak Akash (29)Introduction

ADR - American Depository Receipts

Method to raise funds from American Markets.

What is ADRIndian companies to adopt US Accounting Norms which is also called as GAAP

maintain accounting practices as per American Financial Year [From 1stJanuary to 31st December]

Also follow variety of stringent standards as per American norms.

How ADR OperatesOne to comply with the laws of Indian Companies Act, and the other to comply with the American Laws.

The role of the American bank which has issued these receipts is very crucial (imp), since it is they who stand guarantee to the issued receipts. Hence they do exhaustive (overall) study of the Indian company from all perspectives, and only then issue the ADR to the Indian company.

How ADR OperatesCont.The full form of GDR is Global Depository Receipt.

It is not a different financial instrument, as it may sound, from that of ADR. In fact if the Indian Company which has issued GDRs in the American market wishes to further extend it to other developed and advanced countries such as Europe, then they can sell these ADRs to the public of Europe and the same would be named as GDR.

What is GDR and how it operatesGlobal depository receipt (GDR) is compulsory for foreign company to access in any other countrys share market for dealing in stock. Indian companies prefer to get GDR due to its global use for getting foreign investment for own business projects.

Both ADR and GDR are depository receipts, and represent a claim on the underlying shares. The only difference is the location where they are traded.

If the depository receipt is traded in the United States of America (USA), it is called an American Depository Receipt, or an ADR.

If the depository receipt is traded in a country other than USA, it is called a Global Depository Receipt, or a GDR.

Difference between ADR & GDRADRs can get from level -I to level III. GDRs are already equal to high preference receipt of level II and level III. ADRs up to level I need to accept only general condition of SEC of USA but GDRs can only be issued under rule 144 A after accepting strict rules of SEC of USA .

Difference between ADR & GDRCont..GDR is negotiable instrument all over the world but ADR is only negotiable in USA .

Even both GDR and ADR is the proxy way to sell shares in foreign market by India companies ADRs is not substitute of GDRs but GDRs can use on the place of ADRs .

Difference between ADR & GDRCont..CompanyADRGDRBajaj AutoNoYesDr. ReddysYesYesHDFC BankYesYesHindalcoNoYesICICI BankYesYesInfosys TechnologiesYesYesITCNoYesIndian companies have ADRs and / or GDRs?CompanyADRGDRL&TNoYesMTNLYesYesPatni ComputersYesNoRanbaxy LaboratoriesNoYesTata MotorsYesNoState Bank of IndiaNoYesVSNLYesYesWIPROYesYesIndian companies have ADRs and / or GDRs?Any Questions?????