Income from Salaries

Basic Concepts that one must know:

1.      This income is chargeable under section 15, 16 and 17 of the income tax act.

Salary means any payment made at a regular intervals for the service rendered. The same need not be of a permanent nature. Even as employment if a temporary mature would still qualify for the chargeability under the income of salaries.

To charge any income under this head, the basic requirement is that there should be employer and employee relationship between the 2 parties

Are as follows :-

1)      The employer-employee relationship is essential. This is the most important condition for the income to be taxed  under the head salaries. If your boss gives you a gift in the occasion of your marriage then the same is not taxed as salaries

2)      The relationship must be real and not illusionary: It means there should be two different persons involved in giving salary and receiving it. In one famous school case the owner of the school paid the salary to himself in various capacities like peon, teacher, principal and accountant because he was the person who did all the jobs. This is not allowed in salary. It means that the employer and the employee are two different people and should not be one and the same person.

Salary may be received for the past and for the future services also

Salary is taxable on the receipt or accrual basis. Whichever occurs first.

Salary once taxed on the receipt basis (Advance salary) will not be taxed again on due basis. If it is taxed again on due basis them to will lead to double taxation.

Unlike accounts conceptually salary and wages are same for the purpose of income tax.

Accounts treats that wages are paid to the factory workers debited to trading accountant and salaries are paid to the office employees, which is debited to P & L account. But income tax makes no such difference.

Salary Donated is taxable as Salary

 Strange but true even if the employee has not received the same in his hands it would be taxable.

Similarly Salary forgone is also taxable.

Salary paid tax-free is also taxable.

Salary surrendered is also taxable, except one

It is still taxable. But if the same were surrendered under the section 2 of the voluntary surrender of salaries exemption from taxation act 1961 then the same would be exempted from tax.

Like all cases of direct taxed there are 2 authorities in salaries. The tax collecting authority i.e. Govt. of India and the tax paying body which is the assessee.

Full salary is not taxable.

If you are earning a salary of Rs. 5,000 per month then the full amount is not taxable. Some expenses that must have been incurred for earning the salary are allowed as deduction. Thus the concept is as follows:

“TAXABLE SALARY = GROSS SALARY–EXPENSES INCURRED FOR EARNING SALARY”

           

The income side of salary consists of 4 heads

1.      Salary: these are contractual payments that are agreed upon between the employer and the employee under the terms of employment. Theses are statutory in nature and would include the following items:

Salary, wages, advance salary, commission, arrears of salary, leave salary, annuity, gratuity, pension, bonus, ex-gratia payments etc.

2.      Allowance: these are the amount given by the employer to the employee for carrying out the job responsibilities in an efficient manner. E.g. an air-hostess is give a kit allowance and a wardrobe allowance so that she can carry out her duties properly and stay beautiful which is a requirement of her job. Similarly sales man is given traveling allowance because it is the requirement of the job that he should travel extensively for procuring business.

3.      Perquisites: there are the non-cash benefits, which an employee receives from his employer during the course of employment. The main important difference between the allowance and the perquisites is that the allowance are received by the employee in his hands and then they are spent, where as in the case of perquisite the money is not received, it is only the advantage that is received E.g. free car given to the employee does not receive any money but he gets non-monetary benefit of using the car.

4.      Profit In Lieu of Salary: These are the payments that are made by the employer to the employee on account of distribution of the profit, which he shares, with the employee. These may include the direct and the indirect benefits of profits that may accrue to the employee from the employment. E.g. ESOP or employee sweet option schemes are the best example of profits in lieu of salary (now included in salary so not taxable). It also includes any amount of any compensation due to or received by an assessee from is employer or former employer in connection with the termination of his employment. The amount of any compensation due to or received by as assessee from his employer or former employer ub connection with the modification of terms and conditions of the employment.

Ratios and Formulas in Customer Financial Analysis

Ratio Analysis Notes

Financial statement analysis is a judgmental process. One of the primary objectives is identification of major changes in trends, and relationships and the investigation of the reasons underlying those changes. The judgment process can be improved by experience and the use of analytical tools. Probably the most widely used financial analysis technique is ratio analysis, the analysis of relationships between two or more line items on the financial statement. Financial ratios are usually expressed in percentage or times. Generally, financial ratios are calculated for the purpose of evaluating aspects of a company's operations and fall into the following categories:

• liquidity ratios measure a firm's ability to meet its current obligations.
• profitability ratios measure management's ability to control expenses and to earn a return on the resources committed to the business.
• leverage ratios measure the degree of protection of suppliers of long-term funds and can also aid in judging a firm's ability to raise additional debt and its capacity to pay its liabilities on time.
• efficiency, activity or turnover ratios provide information about management's ability to control expenses and to earn a return on the resources committed to the business.

A ratio can be computed from any pair of numbers. Given the large quantity of variables included in financial statements, a very long list of meaningful ratios can be derived. A standard list of ratios or standard computation of them does not exist. The following ratio presentation includes ratios that are most often used when evaluating the credit worthiness of a customer. Ratio analysis becomes a very personal or company driven procedure. Analysts are drawn to and use the ones they are comfortable with and understand.

Liquidity Ratios
Working Capital
Working capital compares current assets to current liabilities, and serves as the liquid reserve available to satisfy contingencies and uncertainties. A high working capital balance is mandated if the entity is unable to borrow on short notice. The ratio indicates the short-term solvency of a business and in determining if a firm can pay its current liabilities when due.

·  Formula

Current Assets
- Current Liabilities

Acid Test or Quick Ratio
A measurement of the liquidity position of the business. The quick ratio compares the cash plus cash equivalents and accounts receivable to the current liabilities. The primary difference between the current ratio and the quick ratio is the quick ratio does not include inventory and prepaid expenses in the calculation. Consequently, a business's quick ratio will be lower than its current ratio. It is a stringent test of liquidity.

·  Formula

Cash + Marketable Securities + Accounts Receivable
Current Liabilities

Current Ratio
Provides an indication of the liquidity of the business by comparing the amount of current assets to current liabilities. A business's current assets generally consist of cash, marketable securities, accounts receivable, and inventories. Current liabilities include accounts payable, current maturities of long-term debt, accrued income taxes, and other accrued expenses that are due within one year. In general, businesses prefer to have at least one dollar of current assets for every dollar of current liabilities. However, the normal current ratio fluctuates from industry to industry. A current ratio significantly higher than the industry average could indicate the existence of redundant assets. Conversely, a current ratio significantly lower than the industry average could indicate a lack of liquidity.

·  Formula

Current Assets
Current Liabilities

Cash Ratio
Indicates a conservative view of liquidity such as when a company has pledged its receivables and its inventory, or the analyst suspects severe liquidity problems with inventory and receivables.

·  Formula

Cash Equivalents + Marketable Securities
Current Liabilities

Profitability Ratios
Net Profit Margin (Return on Sales)
A measure of net income dollars generated by each dollar of sales.

·  Formula

Net Income *
Net Sales

* Refinements to the net income figure can make it more accurate than this ratio computation. They could include removal of equity earnings from investments, "other income" and "other expense" items as well as minority share of earnings and nonrecuring items.
Return on Assets
Measures the company's ability to utilize its assets to create profits.

·  Formula

Net Income *
(Beginning + Ending Total Assets) / 2

Operating Income Margin
A measure of the operating income generated by each dollar of sales.

·  Formula

Operating Income
Net Sales

Return on Investment
Measures the income earned on the invested capital.

·  Formula

Net Income *
Long-term Liabilities + Equity

Return on Equity
Measures the income earned on the shareholder's investment in the business.

·  Formula

Net Income *
Equity

Du Pont Return on Assets
A combination of financial ratios in a series to evaluate investment return. The benefit of the method is that it provides an understanding of how the company generates its return.

·  Formula

Net Income * Sales

x

Sales Assets

x

Assets Equity

Gross Profit Margin
Indicates the relationship between net sales revenue and the cost of goods sold. This ratio should be compared with industry data as it may indicate insufficient volume and excessive purchasing or labor costs.

·  Formula

Gross Profit
Net Sales

Financial Leverage Ratio
Total Debts to Assets
Provides information about the company's ability to absorb asset reductions arising from losses without jeopardizing the interest of creditors.

·  Formula

Total Liabilities
Total Assets

Capitalization Ratio
Indicates long-term debt usage.

·  Formula

Long-Term Debt
Long-Term Debt + Owners' Equity

Debt to Equity
Indicates how well creditors are protected in case of the company's insolvency.

·  Formula

Total Debt
Total Equity

Interest Coverage Ratio (Times Interest Earned)
Indicates a company's capacity to meet interest payments. Uses EBIT (Earnings Before Interest and Taxes)

·  Formula

EBIT
Interest Expense

Long-term Debt to Net Working Capital
Provides insight into the ability to pay long term debt from current assets after paying current liabilities.

·  Formula

Long-term Debt
Current Assets - Current Liabilities

Efficiency Ratios
Cash Turnover
Measures how effective a company is utilizing its cash.

·  Formula

Net Sales
Cash

Sales to Working Capital (Net Working Capital Turnover)
Indicates the turnover in working capital per year. A low ratio indicates inefficiency, while a high level implies that the company's working capital is working too hard.

·  Formula

Net Sales
Average Working Capital

Total Asset Turnover
Measures the activity of the assets and the ability of the business to generate sales through the use of the assets.

·  Formula

Net Sales
Average Total Assets

Fixed Asset Turnover
Measures the capacity utilization and the quality of fixed assets.

·  Formula

Net Sales
Net Fixed Assets

Days' Sales in Receivables
Indicates the average time in days, that receivables are outstanding (DSO). It helps determine if a change in receivables is due to a change in sales, or to another factor such as a change in selling terms. An analyst might compare the days' sales in receivables with the company's credit terms as an indication of how efficiently the company manages its receivables.

·  Formula

Gross Receivables
Annual Net Sales / 365

Accounts Receivable Turnover
Indicates the liquidity of the company's receivables.

·  Formula

Net Sales
Average Gross Receivables

Accounts Receivable Turnover in Days
Indicates the liquidity of the company's receivables in days.

·  Formula

Average Gross Receivables
Annual Net Sales / 365

Days' Sales in Inventory
Indicates the length of time that it will take to use up the inventory through sales.

·  Formula

Ending Inventory
Cost of Goods Sold / 365

Inventory Turnover
Indicates the liquidity of the inventory.

·  Formula

Cost of Goods Sold
Average Inventory

Inventory Turnover in Days
Indicates the liquidity of the inventory in days.

·  Formula

Average Inventory
Cost of Goods Sold / 365

Operating Cycle
Indicates the time between the acquisition of inventory and the realization of cash from sales of inventory. For most companies the operating cycle is less than one year, but in some industries it is longer.

·  Formula

Accounts Receivable Turnover in Days
+ Inventory Turnover in Day

Days' Payables Outstanding
Indicates how the firm handles obligations of its suppliers.

·  Formula

Ending Accounts Payable
Purchases / 365

Payables Turnover
Indicates the liquidity of the firm's payables.

·  Formula

Purchases
Average Accounts Payable

Payables Turnover in Days
Indicates the liquidity of the firm's payables in days.

·  Formula

Average Accounts Payable
Purchases / 365

Additional Ratios
Altman Z-Score
The Z-score model is a quantitative model developed in 1968 by Edward Altman to predict bankruptcy (financial distress) of a business, using a blend of the traditional financial ratios and a statistical method known as multiple discriminant analysis.
The Z-score is known to be about 90% accurate in forecasting business failure one year into the future and about 80% accurate in forecasting it two years into the future.

·  Formula

Z =

1.2 +1.4 +0.6 +0.999 +3.3

x x x x x

(Working Capital / Total Assets) (Retained Earnings / Total Assets) (Market Value of Equity / Book Value of Debt) (Sales / Total Assets) (EBIT / Total Assets)

---

Z-score	Probability of Failure
less than 1.8 greater than 1.81 but less than 2.99 greater than 3.0	Very High Not Sure Unlikely

Bad-Debt to Accounts Receivable Ratio
Bad-debt to Accounts Receivable ratio measures expected uncollectibility on credit sales. An increase in bad debts is a negative sign, since it indicates greater realization risk in accounts receivable and possible future write-offs.

·  Formula

Bad Debts
Accounts Receivable

Bad-Debt to Sales Ratio
Bad-debt ratios measure expected uncollectibility on credit sales. An increase in bad debts is a negative sign, since it indicates greater realization risk in accounts receivable and possible future write-offs.

·  Formula

Bad Debts
Sales

Book Value per Common Share
Book value per common share is the net assets available to common stockholders divided by the shares outstanding, where net assets represent stockholders' equity less preferred stock. Book value per share tells what each share is worth per the books based on historical cost.

·  Formula

(Total Stockholders' Equity - Liquidation Value of Preferred Stocks - Preferred Dividends in Arrears)
Common Shares Outstanding

Common Size Analysis
In vertical analysis of financial statements, an item is used as a base value and all other accounts in the financial statement are compared to this base value.
On the balance sheet, total assets equal 100% and each asset is stated as a percentage of total assets. Similarly, total liabilities and stockholder's equity are assigned 100%, with a given liability or equity account stated as a percentage of total liabilities and stockholder's equity.
On the income statement, 100% is assigned to net sales, with all revenue and expense accounts then related to it.
Cost of Credit
The cost of credit is the cost of not taking credit terms extended for a business transaction. Credit terms usually express the amount of the cash discount, the date of its expiration, and the due date. A typical credit term is 2 / 10, net / 30. If payment is made within 10 days, a 2 percent cash discount is allowed: otherwise, the entire amount is due in 30 days. The cost of not taking the cash discount can be substantial.

·  Formula

% Discount 100 - % Discount

x

360 Credit Period - Discount Period

Example
On a $1,000 invoice with terms of 2 /10 net 30, the customer can either pay at the end of the 10 day discount period or wait for the full 30 days and pay the full amount. By waiting the full 30 days, the customer effectively borrows the discounted amount for 20 days.

$1,000 x (1 - .02) = $980

This gives the amount paid in interest as:

$1,000 - 980 = $20

This information can be used to compute the credit cost of borrowing this money.

% Discount 100 - % Discount	x		360 Credit Period - Discount Period
=    2       98	x	360 20	=    .3673

As this example illustrates, the annual percentage cost of offering a 2/10, net/30 trade discount is almost 37%.
Current-Liability Ratios
Current-liability ratios indicate the degree to which current debt payments will be required within the year. Understanding a company's liability is critical, since if it is unable to meet current debt, a liquidity crisis looms. The following ratios are compared to industry norms.

·  Formulas

Current to Non-current	=	Current Liabilities Non-current Liabilities
Current to Total	=	Current Liabilities Total Liabilities

Rule of 72
A rule of thumb method used to calculate the number of years it takes to double an investment.

·  Formula

72
Rate of Return

Example
Paul bought securities yielding an annual return of 9.25%. This investment will double in less than eight years because,

72 9.25

= 7.78 years

Technorati

SBSTP6GPBCT8

Finance Question Bank

The Finance Function
1. What does financial management mean? Explain the major finance function.
2. State in brief any three functions of finance manager.
3. Corporate houses today are increasingly moving towards wealth maximization from profit maximization. Comment on this movement.
4. The objective of financial management is wealth maximization and not profit maximization. Comment.
5. Discuss wealth maximization and shareholder value maximization as objectives of financial management.
6. Describe agency problem in achievement of objectives of financial management.

Analysis Of Financial Statements
1. What is balance sheet what are the basic concepts related to balance sheet.
2. Explain following concepts in context with financial statements:
a) Money measurement concept
b) Going concern concept
3. What is meant by matching concept while preparing income statement?
4. Discuss the income statement, its contents and concepts related to the same.

Ratio Analysis
1. Financial ratios may be classified according to their utility. How?
2. Discuss the significance of liquidity ratios. Explain with examples the interpretation of these ratios.
3. Discuss important profit margin ratios.
4. Illustrate importance and significance of turnover ratios.
5. What are liquidity ratios and what is their significance?
6. What are the limitations of ratio analysis?
7. What do leverage ratios indicate?
8. Explain the significance of capital gearing ratio.

Interpretation of Ratios
1. ‘Ratio Analysis’ is only a tool and not a final decision Discuss.
2. Ratio analysis is only a technique for making judgments and not a substitute for it. Comment.
3. What are the precautions to be taken in trend analysis?
4. What are common-size statements?

Funds Flow Statements
1. Explain the rationale of classification as sources and uses of funds, based on companies of successive year’s balance sheets.
2. What is the purpose of preparing funds flow statement based on changes in working capital?
3. What are the sources and uses of working capital?
4. Discuss the advantages of funds flow statement.

Cash Flow Statement
1. Explain the structure of cash flow statement.
2. What are funds flow statement and cash flow statement? How are they different from each other?
3. What are the uses of Cash Flow Statements?
4. Differentiate between cash flow and funds flow.
5. Cash flow is a special version of funds flow. Discuss.

Capital Structure
1. What are the characteristics of loan funds and equity funds?
2. Explain the methods of measuring cost of debt capital and cost of equity capital with illustrations (Nov 2001)
3. Why is cost of debt normally less than the cost of equity? Is it always so? (Nov 2002)
4. What is the meaning and significance of Weighted Average Cost of Capital? (Nov 2003)
5. Discuss Net Income Approach and Net Operating income Approach to capital structure.
6. What are the main propositions of traditional approach?
7. Explain Miller and Modigliani Position.
8. What is weighted average cost of capital?

Break Even and Leverage
1. What do you understand by the term’ financial break-even point’?
2. What is the relevance of Operating Leverage and Financial Leverage in taking business decisions?
3. Define operating leverage.
4. What do you understand by combined leverage?
5. Explain Margin of Safety.

Working Capital
1. What do you understand by gross working capital and net working capital?
2. Distinguish between permanent and temporary working capital.
3. What is operating cycle? How are its components calculated?
4. Compare usage of long-term and short-term funds for working capital.
5. What are the factors that determine working capital requirements?
6. Explain the concept of working capital. How is working capital affected by
(a) Sales (technology and manufacturing policy and
(b) price level changes?
7. Risk-return trade-off in working capital management. Discuss.
8. What is cash operating cycle?

Cash Management
1. What is cash budgeting? What is time horizon for it?
2. Distinguish between a cash budget and a cash flow statement?
3. How cash inflows can be improved or managed?
4. Discuss importance of Internet in cash management.
5. What are disadvantages of default in payment?
6. How and in which avenues surplus cash may be invested?
7. What are the motives of holding cash?

Receivables Management
1. What is the purpose of maintaining receivables?
2. What are the various costs associated with A/C receivables? (May 2003)
3. Credit policy relate to which dimensions and decisions?
4. Explain the steps involved in credit analysis in detail. (Nov 2001)
5. What are the mechanisms to monitor receivables? Write a short note on each of them.
6. What is delinquency cost and del credre commission? (May 2004)

Working capital finance
1. What is meant by “”Letter of credit”?
2. Explain why Letter of credit is less risky for a banker as compared to cash credit facility.
3. What is the meaning of following terms?
(a) Commercial Papers.
(b) Bills Discounting
4. Explain Inter Corporate Deposits
5. Explain advantages and disadvantages of inter corporate deposits.
6. Explain briefly “factoring” as a method of financing
7. Discuss the advantages and functioning of factoring arrangement.

Long Term Finance
1. What are the various sources of long-term finance?
OR Explain long-term sources of finance
2. Discuss features of equity as funding instrument. What are the advantages and disadvantages of equity?
3. What is preference capital? How is it different from equity? From company’s point of view, what is the advantage of issuing preference capital?
4. Explain how long term loan is obtained from the lenders. What are the security covers involved? Discuss favorable features of term loan.
5. Examine the pros and cons of long term financing by issue of equity and preference shares.
6. Write short notes on:
(a) Debentures. (b) Convertible debentures.

Project on Option Strategies

Most strategies that options investors use have limited risk but also limited profit potential. For this reason, options strategies are not get-rich-quick schemes. Transactions generally require less capital than equivalent stock transactions, and therefore return smaller amounts - but a potentially greater percentage of the investment - than equivalent stock transactions.
Before you buy or sell options you need a strategy, and before you choose an options strategy, you need to understand how you want options to work in your portfolio. A particular strategy is successful only if it performs in a way that helps you meet your investment goals.
One of the benefits of options is the flexibility they offer—they can complement portfolios in many different ways. So it's worth taking the time to identify a goal that suits you and your financial plan. Once you've chosen a goal, you'll have narrowed the range of strategies to use. As with any type of investment, only some of the strategies will be appropriate for your objective.
Some options strategies, such as writing covered calls, are relatively simple to understand and execute. There are more complicated strategies, however, such as spreads and collars, that require two opening transactions. These strategies are often used to further limit the risk associated with options, but they may also limit potential return. When you limit risk, there is usually a trade-off.
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ppt on Options

ppt on options.

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Futures & Forwards ppt

Futures & Forwards ppt. tells everything such as what are futures & forwards etc.

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Mutual Funds ppt

A brief ppt telling everything about mutual funds.

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Introduction to Accounting - Basics of Accounting

Accounting Concepts
1. Separate Entity Concept
Every business is a separate entity from the proprietor. Business and owners are distinct.
2. Dual aspect Concept: Every business
Every business transation has two aspects – Debit. For example “Cash Received from Mr. Samtha Rs. 5000” has two aspects “Cash” – Real account and “Mr.Samtha” – Personal Account.
3. Going Concern Concept
It is assumed that the business will exist for an indefinite period of time and transactions are recorded from this point of view.
4. Money Measurement Concept
Those transactions and events are recorded in accounting only when they can be expressed in terms of money. Accounting records only financial character of the business
5. Cost Concept
All transactions are to be recorded in the books of accounts at their Cost Price when purchased, not on Market Price.
6. Matching Concept
At the end of the financial year all costs (expenses) of the organisation are to be matched against the revenues of the organization of the current year. Increments made by the business during a period can be measured only when the revenue earned during a period is compared with the expenses incurred for earning that revenue.
7. Accounting Period Concept
Uniformity in accounting period should be maintained in order to provide for intra firm comparison. Performance of one year can be compared with other only when uniformity in accounting period is maintained.
8. Accrual concept / Realisation Concept.
Transaction should be recorded on due basis. Expenses / Incomes are recognised and recorded on accrual basis. Actual receipt/payment is irrelevant for recognizing income/expense.
Accounting Conventions
1. Materiality
An accountant should disclose all the material facts and should ignore insignificant details. Accounting records should consist only of such events as are significant from the point of view of income determination.
2. Consistency
Accounting procedures or practices should remain the same(consistent) from one year to another.
3. Conservatism
An accountant should be conservative and prudent. Profits are not to be expected and provision should be made to encounter losses. Valuing stock at Cost Price or Market Price whichever is lower, and creating provision for doubtful debts are the examples of applications of the principle of conservatism.

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Excise Duty in India

Central excise duty is an indirect tax which is charged on such goods that are manufactured in India and are meant for domestic consumption. The taxable fact is "manufacture" and the liability of central excise duty arises as soon as the goods are manufactured. The tax is on manufacturing, it is paid by a manufacturer, which is then passed on to the customer.

The term "excisable goods" means the goods which are specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act 1985.

The term "manufacture" refers to any process
• Related or supplementary to the combination of a manufactured product.
• Which is specified in relation to any goods in the Section or Chapter Notes of the First Schedule to the Central Excise Tariff Act 1985 as amounting to manufacture or
• Which in relation to the goods specified in the Third Schedule involves packing or repacking of such goods in a unit container or labeling or re-labeling of containers including the declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer.
Three different types of Central Excise Duties exist in India. They are listed below:

Basic Excise Duty In India
Excise Duty, imposed under section 3 of the ‘Central Excises and Salt Act’ of1944 on all excisable goods other than salt produced or manufactured in India, at the rates set forth in the schedule to the Central Excise tariff Act, 1985, falls under the category of Basic Excise Duty In India.

Additional Duty of Excise
Section 3 of the ‘Additional Duties of Excise Act’ of 1957 permits the charge and collection of excise duty in respect of the goods as listed in the Schedule of this Act. This tax is shared between the Central and State Governments and charged instead of Sales Tax.

Special Excise Duty
According to Section 37 of the Finance Act, 1978, Special Excise Duty is levied on all excisable goods that come under taxation, in line with the Basic Excise Duty under the Central Excises and Salt Act of 1944. Therefore, each year the Finance Act spells out that whether the Special Excise Duty shall or shall not be charged, and eventually collected during the relevant financial year.

India Budget 2008
Excise Duty
• The general rate of CENVAT has been brought down from 16 per cent to 14 per cent.
• The CENVAT on many goods like cars, writing paper, printing paper and packing paper, drugs and pharmaceuticals, water filtration and purification devices, pan masala not containing tobacco etc have been decreased.
• For goods like anti AIDS drugs and bulk drugs, packaged tender coconut water, tea and coffee mixes, specified refrigeration equipment, etc have been exempt from excise duty.
• For packaged software the duty has been increased from 8 per cent to 12 per cent.
• The duty of 1 per cent on National Calamity and Contingent Duty has been imposed on mobile phones.

Project on SIDBI

Contents
• SSI as a Sector
• Introduction to SIDBI
• History
• Objectives
• Mission
• Products and Services

SSI as a Sector
It has been said in the past that SSI has outperformed the overall industrial sector. As per the estimates available in third census of SSIs, the production in the SSI sector, at current prices is estimated to have increased to Rs.3,48,059 crore during FY2004 from Rs.3,11,993 crore in the previous year, thus recording a growth of 11.5 per cent in output at current prices, as compared to growth of 6.6 per cent registered in the industrial sector and 7.1 per cent growth in the manufacturing sector. Employment in the sector is estimated at the level of 273.97 lakhs at end-March 2004 as compared with 261.38 lakhs at end-March 2003. SSI exports increased from Rs.71,244 crore in FY2002 to Rs.86,013 FY2003. The share of SSIs in output was 39 percent and in exports it was 34 percent during the year.

Small Industries Development Bank of India (SIDBI)
An Act of Parliament set up SIDBI, as an apex institution for promotion, financing and development of industries in small-scale sector and for coordinating the functions of other institutions engaged in similar activities. It commenced operations on April 2, 1990. SIDBI extends direct/indirect financial assistance to SSIs, assisting the entire spectrum of small and tiny sector industries on All India basis.

The range of assistance comprising financing, extension support and promotional, are made available through appropriate schemes of direct and indirect assistance for the following purposes:-
• Setting up of new projects
• Expansion, diversification, modernization, technology upgradation, quality improvement, rehabilitation of existing units
• Strengthening of marketing capabilities of SSI units.
• Development of infrastructure for SSIs and
• Export Promotion.

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Foreign Direct Investment

Foreign direct investment in India:
Liberalization of the Indian economy in the early 1990s boosted the inflow of Foreign Direct Investments (FDI) to India. It also helped to open Indian markets to foreign direct investment. Further the government of India simplified the procedures for foreign direct investment in the country in order to encourage the foreign investors to invest in the country. Foreign direct investment in India, came from non resident Indians, international companies, and other foreign investors. FDI inflows to India grew significantly over the years and assumed significant proportions by 2006-2007.
Sectors attracting FDI inflows in India during 2006- 2007 are:
• Real estate
• Construction activities
• Services sector
• Telecommunications
• Electrical equipments that includes electronics and computer software
Countries contributing to FDI inflows in India during 2006- 2007 are:
• USA
• Singapore
• UK
• Netherlands
• Mauritius
In 2006-07, FDI comprised 2.31% of the GDP of India. This was merely 0.77% in 2003-04. FDI comprised 6.42% of total investments in India in 2006-07 which was a significant growth 2.55% in 2003-04. The remarkable growth of FDI in India during 2006-07 had major impacts on the economic growth of the country boosting output and employment significantly.
The rapid growth of the economy, favourable investment regime, liberal policy changes and procedural relaxations, has resulted in a horde of global corporations investing in India. The generous inflow of FDI is playing a significant role in the economic growth of the country.
In 2007-08, India's FDI touched US$ 25 billion, up 56 per cent against US$ 15.7 billion in 2006-07, and the country's foreign exchange reserves had crossed US$ 341 billion as on May 21, 2008. In 2005-06, the growth was even sharper at 184 per cent, up from US$ 5.5 billion in 2004-05.
Projections say that the country will attract US$ 35 billion in FDI in 2008-09 (as per data released by the Ministry of Commerce and Industry).
India: A much favoured destination
India has been rated as the fourth most attractive investment destination in the world, according to a global survey conducted by Ernst and Young in June 2008. India was after China, Central Europe and Western Europe in terms of prospects of alternative business locations. With 30 per cent votes, India emerged ahead of the US and Russia, which received 21 per cent votes each.
According to a report by the National Council of Applied Economic Research (NCAER), "In the first nine months of 2007-08, the net capital flows rose to US$ 83 billion from US$ 30 billion the country received during the corresponding period of the previous year." The funds coming in as foreign direct investment (FDI) or external commercial borrowing, had also upped portfolio funds, as between FY 2004 and FY 2008, the reserves increased by more than US$ 150 billion. The influx of foreign funds during the period was sufficient to finance the current account deficit, the report further said.
As per the global survey of corporate investment plans carried out by KPMG International, released in June 2008, (a global network of professional firms providing audit, tax, and advisory services), India will see the largest overall growth in its share of foreign investment, and it is likely to become the world leader for investment in manufacturing. Its share of international corporate investment is likely to increase by 8 per cent to 18 per cent over the next five years, helping it rise to the fourth, from the seventh position, in the investment league table, pushing Germany, France and the UK behind.
According to the AT Kearney FDI Confidence Index 2007, India continues to be the second most preferred destination for attracting global FDI inflows, a position it has held since 2005. India topped the AT Kearney's 2007 Global Services Location Index, emerging as the most preferred destination in terms of financial attractiveness, people and skills availability and business environment. Similarly, UNCTAD's World Investment Report, 2005 considers India the 2nd most attractive investment destination among the Transnational Corporations (TNCs).
A recent survey conducted by the Japan Bank for International Cooperation (JBIC) shows that India has become the most-favoured destination for long-term Japanese investment.
Sector-wise FDI
A large portion of the FDI has been flowing into the skill-intensive and high value-added services industries, particularly financial services and information technology. India, in fact, dominates the global service industry in terms of attracting FDI with its unassailable mix of low costs, excellent technical and language skills, mature vendors and liberal supportive government policies.
Now, global investors are also evincing interest in other sectors like telecommunication, energy, construction, automobiles, electrical equipment apart from others.
• Leading Japanese, Korean, European, French, and American automobile companies have set up their manufacturing base in India.
• Currently, FDI inflows into the Indian real estate sector are estimated to be between US$ 5 billion and US$ 5.50 billion. Investment in the Indian realty market is set to increase to US$ 20 billion by 2010. Prominent foreign players include Emaar Properties (Dubai), IJM Corp (Malaysia), Lee Kim Tah Holding (Singapore) and Salim Group (Indonesia).
• Many big names in international retail are also entering Indian cities. Global players, such as Wal Mart, Marks & Spencers, Roseby, etc, have lined up investments to the tune of US$ 10 billion for the retail industry.
• According to Mines Minister, Sis Ram Ola, "FDI of about US$ 2.5 billion per annum is expected in the mining sector from the fifth year of implementation of the new National Mineral Policy (NMP)."
• The surge in mobile services market is likely to see cumulative FDI inflows worth about US$ 24 billion into the Indian telecommunications sector by 2010, from US$ 3.84 billion till March 2008.
Aggressive Investment Plans
The surging economy has resulted in India emerging as the fastest growing market for many global majors. This has resulted in many companies lining up aggressive investment plans for the Indian market.
• Panasonic is planning to line up US$ 200 million investment in India over the next 3 years for setting up new units, brand positioning and upgrading its facilities.
• Japanese engineering major, Toshiba plans to put up a power boiler plant at Ennore, north of Chennai with an initial investment of around US$ 232.91 million.

• Dell would be investing more in India to commensurate with the growth of its products.
• Intel Corp will invest US$ 40 billion in partnership with Indian IT companies to create an end-to-end IT solution for the health sector in the country.
• Cairn India, the Indian arm of British oil and gas company Cairn Energy, will invest about US$ 2 billion over the next 18 months for the development of oil fields and building a pipeline.
• HPCL and Mittal Energy will together put in US$ 81.94 billion worth investment in developing a petrol hub.
• Havells India will bring in US$ 64.92 million as issue of shares and convertible warrants.
• Essar Power will infuse up to US$ 2 billion as foreign equity for undertaking various downstream projects, including power and coal mining.
• Coca Cola India plans to invest US$ 250 million over the next three years in equipment purchases, brand promotion and marketing.
• Goldman Sachs (Mauritius) NBFC LLC will invest US$ 46.51 million in NBFC activities.
• A Merrill Lynch & Co entity had bought 49 per cent equity in seven residential projects in Chennai, Bangalore, Kochi and Indore for US$ 345.78 million.
• Zoom Entertainment Network will bring in US$ 28.02 million through induction of foreign equity.
• Toyoda Gosei Company Ltd of Japan will set up a wholly owned subsidiary worth US$ 10.51 million to manufacture automobile safety systems, body sealing and steering parts.
• Another Japanese company, T S Tech Company, will invest US$ 3.50 million to set up a joint venture firm to manufacture seats and interior of doors for cars.
• UAE mobile retailer, Cellucom, will invest US$ 116.79 million for rolling out 500 stores across India by the end of 2009.
Government Initiatives
The Indian Government's approach towards foreign investment has changed considerably during the past decade. Foreign investment, which was permitted only in restricted industries under exceptional conditions, has been liberalised across the board, excluding certain restricted or prohibited industries. The sweeping economic reforms undertaken by the government aimed at opening up the economy and embracing globalisation have been instrumental in the surge in FDI inflows.
The government has taken various steps to further facilitate and augment the inflow of foreign investment into India.
• The government would soon remove the compulsory disinvestment clause on overseas companies in major sectors like food processing and chemicals, a move aimed at simplifying foreign direct investment (FDI) rules further. The finance ministry is weighing the proposal after the Department of Industrial Policy and Promotion (DIPP, which formulates FDI policy) suggested waiving the clause for all companies that have decided on divestment.
• The government may allow 49 per cent FDI in segments such as gems & jewellery and apparel after National Council of Applied Economic Research (NCAER), which studies the effects of multi-brand retail in India, submits its report.
• Restructuring the Foreign Investment Promotion Board (FIPB).
• Shri Kamal Nath, Union Minister of Commerce & Industry, has stated that Foreign Direct Investment (FDI) up to 100 per cent is permitted under the automatic route in most of the sectors.
• Establishment of the Indian Investment Commission to act as a one-stop shop between the investor and the bureaucracy.
• Progressively raising the FDI cap in other sectors like telecom, aviation, banking, petroleum and media sectors among others.
• Removal of the investment cap in the small scale industries (SSI) sector.
• Companies will now require only an FIPB approval for investments up to US$ 231.90 million (Rs 1,000 crore). Clearance from Cabinet Committee of Economic Affairs (CCEA) will be imperative only for investments above US$ 231.90 million (Rs 1,000 crore).
These measures will greatly enhance the global community's confidence in the fundamentals of the Indian economy, and reflect the efforts of the Indian Government to integrate with the global economy. With government planning more liberalisation measures across a broad range of sectors and continued investor interest, the inflow of FDI into India is likely to further accelerate. Already, upbeat due to the buoyant FDI growth in the country, the government has put a target of US$ 35 billion in FDI, in 2008-09.

Project Report on HDFC Bank

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalization of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995.

HDFC is India's premier housing finance company and enjoys an impeccable track record in India as well as in international markets. Since its inception in 1977, the Corporation has maintained a consistent and healthy growth in its operations to remain the market leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing related credit facilities. With its experience in the financial markets, a strong market
reputation, large shareholder base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian environment.

HDFC Bank began operations in 1995 with a simple mission : to be a “ World Class Indian Bank.” We realized that only a single minded focus on product quality and service excellence would help us get there. Today, we are proud to say that we are well on our way towards that goal.

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Notes on Portfolio Managment

Notes on Portfolio Management in PPT format. Contains 9 powerpoint presentations.

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Project Financing ppt

A Nice Presentation on Project Financing.

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Moeny Market Instruments Project Report

The term "Money Market" refers to the market for short-term requirement and deployment of funds. Money market instruments are those instruments, which have a maturity period of less than one year. The most active part of the money market is the market for overnight and term money between banks and institutions (called call money) and the market for repo transactions. The former is in the form of loans and the latter are sale and buy back agreements – both are obviously not traded. The main traded instruments are commercial papers (CPs), certificates of deposit (CDs) and treasury bills (T-Bills). All of these are discounted instruments i.e. they are issued at a discount to their maturity value and the difference between the issuing price and the maturity/face value is the implicit interest. One of the important features of money market instruments is their high liquidity and tradability. A key reason for this is that these instruments are transferred by endorsement and delivery. Another important feature is that there is no tax deducted at source from the interest component.

Money Market Instruments :
=> Commercial Papers
=> Commercial Bills
=> Certificates of Deposit
=> Treasury Bills
Project report is attached below. please leave comments.

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NCFM BAsic module notes

Here are notes on NCFM BAsic Module.

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SWOT analysis of ICICI Bank

ICICI Bank Limited, together with its subsidiaries, offers various financial products and services in the areas of commercial banking, investment banking, and insurance to retail and corporate customers primarily in India. The company offers various deposit products, which include time deposits, savings accounts, current accounts, and certificates of deposits. Its loan portfolio includes home loans, automobile loans, commercial business loans, two wheeler loans, personal loans, and credit cards receivables, as well as project and corporate finance. ICICI Bank also offers credit cards, depositary share accounts, distribution of third-party investment and insurance products, fee-based products and services, unsecured redeemable bonds, documentary credits, and standby letters of credit, as well as cash management services, including collection, payment, and remittance services; escrow; trust and retention account facilities; online payment facilities; custodial; and tax collection services. In addition, it offers foreign exchange and derivatives products, investment banking products and services, equity underwriting and brokerage services, venture capital and private equity services, and life and general insurance products and services. Further, the company provides individuals and households various agricultural and rural banking products, including rural credit products loans to farmers, post-harvest financing, loans for purchase of tractors, working capital for trading and small enterprises, loans against jewelry, and micro-finance loans for various purposes. As of March 31, 2007, ICICI Bank had a network of 710 branches and operated 3,271 automated teller machines. It also operates in the United Kingdom, Canada, Russia, Singapore, Dubai, Sri Lanka, Hong Kong, Qatar, Bahrain, the United States, China, the United Arab Emirates, Bangladesh, South Africa, Thailand, Indonesia, and Malaysia. The company was founded in 1955 and is headquartered in Mumbai, India.

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Venture Capital in India Project Report

The Venture capital sector is the most vibrant industry in the financial market today. Venture capital is money provided by professionals who invest alongside management in young, rapidly growing companies that have the potential to develop into significant economic contributors. Venture capital is an important source of equity for start-up companies.

Venture capital can be visualized as “your ideas and our money” concept of developing business. Venture capitalists are people who pool financial resources from high networth individuals, corporates, pension funds, insurance companies, etc. to invest in high risk - high return ventures that are unable to source funds from regular channels like banks and capital markets. The venture capital industry in India has really taken off in. Venture capitalists not only provide monetary resources but also help the entrepreneur with guidance in formalizing his ideas into a viable business venture.

Five critical success factors have been identified for the growth of VC in India, namely:

• The regulatory, tax and legal environment should play an enabling role as internationally
venture funds have evolved in an atmosphere of structural flexibility, fiscal neutrality and operational adaptability.

• Resource raising, investment, management and exit should be as simple and flexible as needed and driven by global trends.

• Venture capital should become an institutionalized industry that protects investors and investee firms, operating in an environment suitable for raising the large amounts of risk capital needed and for spurring innovation through start-up firms in a wide range of high growth areas.

• In view of increasing global integration and mobility of capital it is important that Indian venture capital funds as well as venture finance enterprises are able to have global exposure and investment opportunities

• Infrastructure in the form of incubators and R&D need to be promoted using government support and private management as has successfully been done by countries such as the US, Israel and Taiwan. This is necessary for faster conversion of R&D and technological innovation into commercial products.

With technology and knowledge based ideas set to drive the global economy in the coming millennium, and given the inherent strength by way of its human capital, technical skills, cost competitive workforce, research and entrepreneurship, India can unleash a revolution of wealth creation and rapid economic growth in a sustainable manner. However, for this to happen, there is a need for risk finance and venture capital environment which can leverage innovation, promote technology and harness knowledge based ideas.

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Project Report on ITC

Incorporated on 24 August 1910 as the Imperial Tobacco Company of India Limited, the company's name was changed to ITC Limited in 1974. This company is rated among the 'World's Best Big Companies' by Forbes magazine. ITC ranks third on all major profit parameters among India's private sector corporations. ITC employs over 20,000 people at more than 60 locations across India. ITC is one of India's foremost private sector companies with a market capitalization of over US $ 13 billion and a turnover of US $ 3.5 billion.

ITC's unique e-Choupal initiative began in 2000. ITC e-Choupal, the largest Internet-based intervention in rural India, empowers over 3.5 million farmers in 35,000 villages. It enables them to readily access crop-specific, customized information through vernacular websites. The service also creates a two-way direct marketing channel for rural India, eliminating wasteful intermediation and multiple handling.

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Export Finance Project Report

Credit and finance is the life blood of any business whether domestic or international . It is more important in the case of export transactions due to the prevalance of novel non-price competitive techniques encountered by exporters in various nations to enlarge their share of world markets.

The selling techniques are no longer confined to mere quality, price or delivery schedules of the products but are extended to payment terms offered by exporters . Liberal payment terms usually score over the competitors not only of capital equipment but also of consumer goods.
The payment terms however depend upon the availability of finance to exporters in relation to its quantum, cost and the period at pre-shipment and post-shipment stage.

This project is an attempt to throw light on the various sources of export finance available to exporters , the schemes implemented by ECGC and EXIM for export promotion and the recent developments in the form of tie-EXIM tie-ups , credit policy announced by RBI in
Oct 2001 and TRIMS .

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ICICI Bank Project Report

ICICI Bank is India's second-largest bank with total assets of Rs. 3,767.00 billion (US$ 96 billion) at December 31, 2007 and profit after tax of Rs. 30.08 billion for the nine months ended December 31, 2007. ICICI Bank is second amongst all the companies listed on the Indian stock exchanges in terms of free float market capitalization*. The Bank has a network of about 955 branches and 3,687 ATMs in India and presence in 17 countries. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in Unites States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established a branch in Belgium.
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).

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Portfolio Management and Investment Decision Project Report

INTRODUCTION , IMPORTANCE & NEED OF STUDY
Portfolio management or investment helps investors in effective and efficient management of their investment to achieve this goal. The rapid growth of capital markets in India has opened up new investment avenues for investors.The stock markets have become attractive investment options for the common man.But the need is to be able to effectively and efficiently manage investments in order to keep maximum returns with minimum risk.Hence this study on PORTFOLIO MANAGEMENT & INVESTMENT DECISION” to examine the role process and merits of effective investment management and decision.

PORTFOLIO MANAGEMENT
PORTFOLIO:
A portfolio is a collection of securities since it is really desirable to invest the entire funds of an individual or an institution or a single security, it is essential that every security be viewed in a portfolio context. Thus it seems logical that the expected return of the portfolio. Portfolio analysis considers the determine of future risk and return in holding various blends of individual securities

Portfolio expected return is a weighted average of the expected return of the individual securities but portfolio variance, in short contrast, can be something reduced portfolio risk is because risk depends greatly on the co-variance among returns of individual securities. Portfolios, which are combination of securities, may or may not take on the aggregate characteristics of their individual parts.

Since portfolios expected return is a weighted average of the expected return of its securities, the contribution of each security the portfolio’s expected returns depends on its expected returns and its proportionate share of the initial portfolio’s market value. It follows that an investor who simply wants the greatest possible expected return should hold one security; the one which is considered to have a greatest expected return. Very few investors do this, and very few investment advisors would counsel such and extreme policy instead, investors should diversify, meaning that their portfolio should include more than one security.

OBJECTIVES OF PORTFOLIOMANAGEMENT:
The main objective of investment portfolio management is to maximize the returns from the investment and to minimize the risk involved in investment. Moreover, risk in price or inflation erodes the value of money and hence investment must provide a protection against inflation.

Secondary objectives:
The following are the other ancillary objectives:
• Regular return.
• Stable income.
• Appreciation of capital.
• More liquidity.
• Safety of investment.
• Tax benefits.

Portfolio management services helps investors to make a wise choice between alternative investments with pit any post trading hassle’s this service renders optimum returns to the investors by proper selection of continuous change of one plan to another plane with in the same scheme, any portfolio management must specify the objectives like maximum return’s, and risk capital appreciation, safety etc in their offer.

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Working Capital Management Project Report / Notes

Capital required for a business can be classified under two main categories via,
1) Fixed Capital
2) Working Capital

Every business needs funds for two purposes for its establishment and to carry out its day- to-day operations. Long terms funds are required to create production facilities through purchase of fixed assets such as p&m, land, building, furniture, etc. Investments in these assets represent that part of firm’s capital which is blocked on permanent or fixed basis and is called fixed capital. Funds are also needed for short-term purposes for the purchase of raw material, payment of wages and other day – to- day expenses etc.
These funds are known as working capital. In simple words, working capital refers to that part of the firm’s capital which is required for financing short- term or current assets such as cash, marketable securities, debtors & inventories. Funds, thus, invested in current assts keep revolving fast and are being constantly converted in to cash and this cash flows out again in exchange for other current assets. Hence, it is also known as revolving or circulating capital or short term capital.

CONCEPT OF WORKING CAPITAL
There are two concepts of working capital:
1. Gross working capital
2. Net working capital
The gross working capital is the capital invested in the total current assets of the enterprises current assets are those
Assets which can convert in to cash within a short period normally one accounting year.

CONSTITUENTS OF CURRENT ASSETS
1) Cash in hand and cash at bank
2) Bills receivables
3) Sundry debtors
4) Short term loans and advances.
5) Inventories of stock as:
a. Raw material
b. Work in process
c. Stores and spares
d. Finished goods
6. Temporary investment of surplus funds.
7. Prepaid expenses
8. Accrued incomes.
9. Marketable securities.

In a narrow sense, the term working capital refers to the net working. Net working capital is the excess of current assets over current liability, or, say:
NET WORKING CAPITAL = CURRENT ASSETS – CURRENT LIABILITIES.
Net working capital can be positive or negative. When the current assets exceeds the current liabilities are more than the current assets. Current liabilities are those liabilities, which are intended to be paid in the ordinary course of business within a short period of normally one accounting year out of the current assts or the income business.

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Ratio Analysis Notes/ Project

RATIO ANALYSIS
Meaning of Ratio:-
A ratio is simple arithmetical expression of the relationship of one number to another. It may be defined as the indicated quotient of two mathematical expressions.
According to Accountant’s Handbook by Wixon, Kell and Bedford, “a ratio is an expression of the quantitative relationship between two numbers”.

Ratio Analysis:- Ratio analysis is the process of determining and presenting the relationship of items and group of items in the statements. According to Batty J. Management Accounting “Ratio can assist management in its basic functions of forecasting, planning coordination, control and communication”.
It is helpful to know about the liquidity, solvency, capital structure and profitability of an organization. It is helpful tool to aid in applying judgement, otherwise complex situations.
Ratio analysis can represent following three methods.

Ratio may be expressed in the following three ways :
1. Pure Ratio or Simple Ratio :- It is expressed by the simple division of one number by another. For example , if the current assets of a business are Rs. 200000 and its current liabilities are Rs. 100000, the ratio of ‘Current assets to current liabilities’ will be 2:1.
2. 'Rate’ or ‘So Many Times :- In this type , it is calculated how many times a figure is, in comparison to another figure. For example , if a firm’s credit sales during the year are Rs. 200000 and its debtors at the end of the year are Rs. 40000 , its Debtors Turnover Ratio is 200000/40000 = 5 times. It shows that the credit sales are 5 times in comparison to debtors.
3. Percentage :- In this type, the relation between two figures is expressed in hundredth. For example, if a firm’s capital is Rs.1000000 and its profit is Rs.200000 the ratio of profit capital, in term of percentage, is 200000/1000000*100 = 20%

ADVANTAGE OF RATIO ANALYSIS
1. Helpful in analysis of Financial Statements.
2. Helpful in comparative Study.
3. Helpful in locating the weak spots of the business.
4. Helpful in Forecasting.
5. Estimate about the trend of the business.
6. Fixation of ideal Standards.
7. Effective Control.
8. Study of Financial Soundness.

LIMITATIONS OF RATIO ANALYSIS
1. Comparison not possible if different firms adopt different accounting policies.
2. Ratio analysis becomes less effective due to price level changes.
3. Ratio may be misleading in the absence of absolute data.
4. Limited use of a single data.
5. Lack of proper standards.
6. False accounting data gives false ratio.
7. Ratios alone are not adequate for proper conclusions.
8. Effect of personal ability and bias of the analyst.

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International Trade Finance Project Report

This project is based on international Trade finance in Welspun International.

The Indian Textile Industry is one of the largest segments of Indian economy accounting for over 20% of the industrial production as well as providing employment to around 65 million persons. It enjoys the distinction of being the highest foreign exchange earner for the country, accounting for nearly one third of the country’s total exports. Therefore, the sector shoulders a major responsibility in enhancing the foreign exchange reserves.

Despite strong domestic demand-pull, textile exports have witnessed steady growth over the years. The share of India's textile exports in the world has grown from 1.8% in the beginning of 80's to around 3% at present. The advantages arising from a strong raw material base, a well established yarn and fabric industry and relatively low labor cost has led to quick growth in textile exports, from an insignificant base of less than US $3 million in the beginning of 70's to nearly US $ 12-13 billion.

However, with the lowering of tariff barriers, removal of quantitative restrictions and the phase out of MFA regime, the textile industry is poised to enter an era of fierce competition, not only in exports but in the domestic market as well. All these developments are bound to have some effects on Indian textile trade and industry. To meet the emerging competition, the Government is continuously providing an enabling environment for the industry to be globally competitive.

Realizing the vast export and employment potential of textile and clothing industry on one hand and the challenges it faces, a cohesive set of policy initiatives are being taken. The new Textile Policy 2000 (NTxP-2000) has been announced to provide the policy direction for orderly and sustained development and growth of the textile industry. One of the main aims of the policy is to achieve an enhanced target of textiles and apparel exports from the present level of US $ 11.2 billion to US $ 50 billion by 2010.

The world scenario in the textiles and clothing trade is fast changing with the imminent abolition of quota restrictions and emergence of trade blocks. Removal of restraints would provide unrestricted access, but they would also result in unrestricted competition in the world market. The industry in India needs to prepare itself for facing the challenges and exploiting the opportunities that a quota free market would provide.

While, the industry can legitimately demand proper policy inputs from the Government, the initiative for modernization and innovation for improving competitiveness has to come essentially from the industry. The natural advantages in the form of abundant cotton availability and low labor costs need to be skillfully combined with technology up gradation and quality improvement to sharpen the competitive edge resulting in a quantum jump in the global share of textile exports from India in the post quota regime.

The textile industry is the single largest foreign exchange earner for India. Currently it accounts for about 8 % of GDP, 20 % of the industrial production and over 30 % of export earnings of India and it has only 2-3 % import intensity. About 38 million people are gainfully employed with the industry making it the second largest employment providing sector after agriculture.

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Project report on BANCASSURANCE

‘BANCASSURANCE’ as term itself tells us what does it means. It’s a combination of the term ‘Bank’ and ‘Insurance’. It means that insurance have started selling there product through banks. It’s a new concept to Indian market but it is very widely used in western and developed countries. It is profitable both to Banks and Insurance companies and has a very bright future to be the most develop and efficient means of distribution of Insurance product in very near future.

Insurance company can sell both life and non-life policies through banks. The share of premium collected by banks is increasing in a decent manner from the time it was introduce to the Indian market. In India Bancassurance in guide by Insurance Regulatory and Development Authority Act (IRDA), 1999 and Reserve Bank of India. All banks and insurance company have to meet particular requirement to get into Bancassurance business.

It is predicted by experts that in future 90% of share of premium will come from Bancassurance business only. Currently there are more and more banking and Insurance Company and venturing into Bancassurance business for better business prospect in future.

The banking business is also generating more profit by more premium collected by them and they also receive commission like normal insurance agent which increase there profits and better reputation for the banks as there service base also increase and are able to provide more service to customers and even more customer are attracted toward bank.

It is even profitable for Insurance Company as they receive more and more sales and higher customer base for the company. And they have to directly deal with an organization which reduce there pressure to deal with each customer face to face.

In all Bancassurance has proved to be boom in whole Banking and Insurance arena. Bancassurance is defined as ‘Selling Insurance products through banks’. The word is a combination of two words ‘Banc’ and ‘assurance’ signifying that both banking and insurance products and service are provided by one common corporate entity or by banking company with collaboration with any particular Insurance company. In concrete terms bancassurance, which is also known as Allfinanz - describes a package of financial services that can fulfill both banking and insurance needs at the same time.

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India vs China Service Sector Project report

Service sector is India is booming. Experts say that in the of shoring world, India could be the hub and other asian nations, the spokes. But, china is now catching up with the Indian of shoring industry… at the same time,its manufacturing sector in full fledge. China seems to have realized that any sector, no matter how profitable will slump into recession once it reaches the peak. However, in India, the service sector is still being milked dry, while we actually need to shift our focus toward the manufacturing sectors.
The point however, to be considered, is that china need not be a replacement market for Indian talent but a complementary market for growing business in japan and servicing the local Chinese businesses. But setting up a development centre in china is not that simple. Now, the exit options at the moment are not clear. Even though the cost of a Chinese programmer may be less than that of an Indian programmer, there are other overhead costs which bring the cost of development in china almost on par or above India.

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Project Finance & Project Evaluation at Indian Oil project report

The use of non-recourse project financing has grown steadily in emerging markets, especially in basic infrastructure, natural resources and the energy sector. Because of its cost and complexity, project finance is aimed at large-scale investments. The key is in the precise estimation of cash flows and risk analysis and allocation, which enables high leverage, and in ensuring that the project can be easily separated from the sponsors involved.

Indian Oil Corporation Ltd is India’s largest commercial enterprise with leading market shares in downstream segment of Oil business. A number of projects are undertaken by IOCL to improve its infrastructure and increase its profitability. These projects are to be properly evaluated and their feasibility needs to be checked. And thus the need for Project financing arises.

This project has been undertaken in the Finance department (Pipelines Division) of IOCL, which is responsible for the financing and evaluation of the project in pipeline division. In this project, a modest attempt has been made to study and understand Project finance and project evaluation with respect to Dadri-Panipat R-LNG pipeline.
Project Finance & Project Evaluation at Indian Oil project report

Finance Project Topics

1. JIT (just in time)
2. EOQ
3. ABC analysis
4. vendor performance
5. quality circle
6. TQM
7. ISO 9000
8. value engineering
9. centralize purchase
10. management audit
11. company analysis with ratio/fund flow
12. study of stock exchange
13. role of SEBI
14. joint venture
15. takeover
16. merger
17. marginal cost as management tool
18. product life cycle
19. media plan
20. test marketing
21. export pricing
22. role of small scale industries in developing nation
23. role of SIDBI
24. role of EXLM bank
25. study of financial institute
26. mutual fund
27. Privatization – insurance, road, ports etc.
28. waste management
29. trade union movement in India
30. labour welfare scheme
31. working capital management
32. cash management / fund management
33. importance of budget
34. invisible exports
35. tourism industries
36. brand equity
37. bench marking
38. co-operative movement in Agro-product
39. marketing Agro-product
40. DOT COM company in future
41. IT Parks
42. South East Asian origin
43. FDI
44. Regional Grouping / Trade Block
45. SEZ
46. packing need
47. social forestory
48. comparative study of industries (either financial angle or
marketing angle or techno angle)
49. marketing of SSI produt
50. warehousing
51. transport
52. IATA – role function
53. communication and custom service
54. universal bank
55. credit cards
56. health economics
57. body language
58. role of financial institutions in industrial development
59. NBFC's
60. GDR's / ADR's
61. debt markets
62. securitization
63. commercial paper
64. forex and treasury
65. performance appraisals
66. private sector banks
67. comparative study of 2 financial institutions
68. need and importance of financial analysis
69. tax and non tax revenues
70. deficit financing
71. corporate finance
72. corporate restructuring
73. telebanking
74. internet banking
75. capital markets

76. FII's and India
77. failure of mutual funds
78. comparative study of mutual funds
79. emotional intelligence
80. organization culture in Indian organization
81. conflict management
82. time management
83. interpersonal relations
84. professional stress
85. performance appraisals
86. performance 360 appraisals
87. counseling
88. transactional analysis
89. organizational development
90. motivation
91. group dynamics
92. Vedic management
93. human relations
94. VRS
95. retrenchment
96. layoffs
97. training and development
98. recruitment in Indian organization
99. rural marketing
100. CRM
101. customer retention
102. management of services
103. customer behaviour with product
104. FEMA
105. tele marketing
106. sky shops
107. net work marketing
108. global marketing
109. industrial goods marketing
110. marketing mix case study
111. promotional strategies
112. exchange offers
113. after sales service
114. celebrity marketing
115. PLC
116. role of advertising
117. product diversification
118. product modification
119. product elimination
120. trend in privatization
121. trend analysis in FDI (sector wise / state wise)
122. impact of globalization in any specific industry
123. essentials of a valid contract
124. rights and duties of directors
125. xxxxxxxxxxxxxxxxxxx
126. futures and options
127. financial swaps
128. foreign exchange rates
129. creation of corporate entity
130. dishonour of cheques and liability of directors
131. prospectus for issue of capital
132. role of partners including implied authorities
133. effect of dissolution of partnership
134. MODVAT
135. effect of indirect taxes on industries
136. value added tax
137. meeting and minutes in a company
138. environmental management
139. labour welfare measures under factories act
140. environmental protection measures
141. Stress Management
142. Brand Equity
143. IT management, IT insights
144. Finance Scams in india
145. CONSUMER BEHAVIOR IN RELATION TO HEALTH CARE PRODUCTS
146. INDIAS MAJOR TRADE PARTNERS - UK AND USA
147. ORGANISATIONAL DEVELOPMENT
148. CONSUMER BEHAVIOUR WITH RESPECT TO COLD DRINKS".
149. Working Capital Management