PIP Primer

Project Investment Program


Nature and Description

Project Investment Program (PIP) exists to provide

initial funding for selected MEA projects while providing

MEAns an opportunity to invest their own money in the

organization for a modest return. Moreover, it aims to

educate MEAns on the value of investment through

participation in the project, as well as monthly

investment articles that will give MEAns a glimpse and

an idea of the importance of investing for the future.

This project, due to its monetary characteristic, will be

made available only to juniors and seniors as they

should have a better understanding of investments.


Historical Financial Data of Ateneo Management

Engineering Association

Cash Flow Statement

SY 2008-2009

Cash Inflows

Operational Budget from AdMU Php 30,000.00

Subsidy from AdMU for Seminars, Trainings Php 40,500.00

Paskong MEA Bazaar 08-09 Php 129,639.00

Powered by Paint - Net Php 14,000.00

GAP1 Php 41,285.00

LEADS Php 143,600.00

Expo Tour Php 100,550.00

Others – Net Php 114,811.93

Total Cash Inflows Php 614,385.93

Cash Outflows

Paskong MEA Bazaar-Expenses Php 90,520.00

Paskong MEA Bazaar-Donation to World Vision Php 7,000.00

Web & Pub Php 11,600.00

SOM Week Php 4,092.70

GAP1 Php 48,285.00

LEADS Php 184,100.00

Expo Tour Php 117,000.00

Kythe-MEA Reach Out Php 3,880.00

Total Cash Outflows Php 466,477.70

Net Cash Flows Php 147,908.23

DCB Fund Beginning Balance Php 4,015.00

DCB Fund Ending Balance Php 151,923.23

Source: MEA Year-End Status Report


Terms and Conditions of MEA Bonds

1. Investors

· Only junior and senior members of the Management Engineering Association not belonging to MEA’s Central Board nor a core member (or AB) of MEA’s Project Investment Program (PIP)

2. Return

· Whichever is higher between 10% of the purchase price or MEA’s net cash flows before interest and excluding any extraordinary income such as proceeds from Alumni homecoming events multiplied by the bid percentage, then divided by 40. Investors shall receive the lumpsum payment of capital+interest on Meamore week.

3. Issue Date and Bond Maturity

· Bond will be issued on July 13, 2009 and will mature on MEAMore week.

4. In case of a zero-income or loss scenario, note that MEA will have reserve funds to repay the principal+10% of the purchase price

5. Secondary market trading is permitted, provided bond holders disclose the transfer of the MEA bonds, as well as the agreed upon trading price by both the seller and the buyer. MEA would not interfere nor


recommend the fair value of the bond at a particular point in time.

6. A maximum of Php2,000 or 4 bonds is allowed per person.

7. There shall be a bid ceiling of 4%, thus prospective investors must submit bids between 0-4% only in denominations of 1/10 (one tenth) of a percent. Thus, in the event of a bid violating the said condition, the bid shall be rounded up to the nearest tenth of a percentage. (ex. 3.05%>>> bid up to 3.1%)

8. In case of identical bids, the earlier bid shall be prioritized.

9. MEA does not recognize joint holders of a bond. Only one person shall be recognized as the bond holder.

10. Bond holders will be provided with project financial information and updates every month to monitor their potential returns, and estimate a fair value for the bond in case holders want to trade in the secondary market.


Sample computations of returns MEA Profit: P150 000 Profit percentage bid: 2% Bond value: P500 Interest profit: whichever is higher between 10% of bond value, and 2% of 1/40 of MEA’s profits or

a. 10%(500) = 50 b. 2%(1/40)(150000) = 75 = Interest Profit

Total Amount Received at Year’s End = Capital + Interest = P575


Table of Returns

Bid Percentage

4% 3.5% 3% 2.5% 2% 1.5% 1%

MEA Cashflow

Return

150,000 150 131.25 112.5 93.75 75 56.25 50

140,000 140 122.5 105 87.5 70 52.5 50

130,000 130 113.75 97.5 81.25 65 50 50

120,000 120 105 90 75 60 50 50

110,000 110 96.25 82.5 68.75 55 50 50

100,000 100 87.5 75 62.5 50 50 50

90,000 90 78.75 67.5 56.25 50 50 50

80,000 80 70 60 50 50 50 50

70,000 70 61.25 52.5 50 50 50 50

60,000 60 52.5 50 50 50 50 50

50,000 50 50 50 50 50 50 50

40,000 50 50 50 50 50 50 50

30,000 50 50 50 50 50 50 50

20,000 50 50 50 50 50 50 50

10,000 50 50 50 50 50 50 50

0 50 50 50 50 50 50 50


0

20

40

60

80

100

120

140

160

4% bid

3.5% bid

3% bid

2.5% bid

2% bid

1.5% bid

1% bid

MEA CASHFLOWS

Returns Chart


Monthly Updates

Monthly updates containing the following will be emailed to all investors:

Interesting investment article

Updates on projects and financial statements of projects.

Dates to Remember July 10 (Friday, 4:30-6:00): Investor's briefing July 10-17: Bidding Period July 20 (Monday, 4:30-6:00): Investor's Conference Meamore week: bond maturation and redemption of capital+interest by bond-holders.


INTEREST-ed? Follow these 3 easy steps to bid at MEA’s Project Investment Program!

1. Open your email anytime between July 10 and July17, 2009. *may change depending on the date of the briefing

2. Create an email containing the following information:

Name: Year and Course:

Bid percentage: (any bid between 0.0%-4.0%) No. of Bonds:

Bid Amount: (in Php)

3. Send the email to [email protected] with the following format for the subject: MEAPipBid_Name

mailto:[email protected]

PIP Primer

Documents

Transcript of PIP Primer