Project Finance EMBA - Nandakumar

8/2/2019 Project Finance EMBA - Nandakumar

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CHAPTER 1 RATIONALE FOR THE STUDY

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Project finance is the financing of long-term infrastructure and industrial projects based upon acomplex financial structure where project debt and equity are used to finance the project.

Usually, a project financing scheme involves a number of equity investors, known as sponsors, as

well as a syndicate of banks which provide loans to the operation. The loans are most commonly

non-recourse loans, which are secured by the project itself and paid entirely from its cash flow,

rather than from the general assets or creditworthiness of the project sponsors. The financing is

typically secured by all of the project assets, including the revenue-producing contracts. Project

lenders are given a lien on all of these assets, and are able to assume control of a project if the

project company has difficulties complying with the loan terms.

Generally, a special purpose entity is created for each project, thereby shielding other assetsowned by a project sponsor from the detrimental effects of a project failure. As a special

purpose entity, the project company has no assets other than the project. Capital contribution

commitments by the owners of the project company are sometimes necessary to ensure that the

project is financially sound. Project finance is often more complicated than alternative financing

methods. It is most commonly used in the mining, transportation, telecommunication and public

utility industries.

Risk identification and allocation is a key component of project finance. A project may be subjectto a number of technical, environmental, economic and political risks, particularly in developing

countries and emerging markets. Financial institutions and project sponsors may conclude that

the risks inherent in project development and operation are unacceptable (unfinanceable). The

financing of these projects must also be distributed among multiple parties, so as to distribute

the risk associated with the project while simultaneously ensuring profits for each party involved.

A riskier or more expensive project may require limited recourse financing secured by a surety

from sponsors. A complex project finance scheme may incorporate corporate finance,

securitization, options, insurance provisions or other further measures to mitigate risk.

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WHY WE ARE TAKEN THIS PROJECT ON PROJECT FINANCING.

Finance can be defined as funds management, involving processes like resource allocation as well as

resource management, acquisition and investment. Finance deals with matters related not only to

money but also with matters related to market. Areas of concern within the field include business

finance, Risk Management, Audit and Accounting, public finance, balance sheet, personal finance,

International Finance, Inventory Control, Money & Banking, Budgeting/Cost Control, Corporate

Finance, Business Valuations, Cost Benchmarking, Personal Finance, Project finance, Trade finance,

income statement, FASB, Initial Public Offering, Insurance, cash flow, wire transfer, opportunity

cost, money market fund and the like. Our writers resolve all such issues and accomplish assignments

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substance of high interest.

WHY COMPANY HAS GIVE THE PROJECT TO THE MANAGEMENT STUDENT.

The value of the term and money is best understood by the finance manager and student of finance

who are doing specialization in the Finance. Both the these term are closed linked to each other

Taking into account the importance of both these terms the expert team work on it.The company get

the expert decision on the from Capital Budgeting, Working Capital Management, Foreign Exchange,

Portfolio Management were the company get idea where there is deficit in the planning because the

planning and decision making run in hand to hand and which is very important in the term of value

and Money.

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The company gives us case studies which help them with the new idea to solve the problem with the

new technique and idea after researching by the finance person.

HOW WILL COMPANY GET BENEFIT FROM THIS PROJECT REPORT.

The companies get the benefit by keeping control the expenses which they occur every month or

every day such you can canteen, printing and stationery and many more head each head has the

budget amount which the company does not cross but the company. Every time in the expenses

amount has to be properly utilized in the proper held otherwise it will over the budget which will

create problem at the time of the provision which the company make the project which we make it

help the company to keep watch the expenses head and budget given to that expenses does not

cross which they keep every finance year.

HOW WE WILL GET BENEFIT BY DOING THIS STUDY.

We can get the benefit in the many way such we come to know the various thing such working

capital, budget, prepaid expenses and provision know the question arise that these we learn from

the 11th standard but the thing is that the learning and actually doing the work is different one can

make the file but managing we can learn from the project which we make for the finance.

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CHAPTER 2 OBJECTIVE OF THE STUDY

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2.1 Title Of The Project : Project FinanceDesignation (your co name)

2.2 Objective of the Study Financial Position of the company. Various projects taken by the company for the growth and expansion. To be a profitable company with a steady growth in earnings. To set an example as a socially responsible company. History of the company including the formation the company. Quarterly and sale wise performance of the company

2.3 Scope of the Study The Finance department deals in the best utilization of the available financial resources

irrespective of the constraints. It is key department in any organization and plays major role in

company s success and failure. All other departments whether HR, Marketing or Production

revolves around the Finance dept only. Finance doesn t only means currency notes or money, but

any asset or liability in the company is a part of finance as the money is invested in all these and

the profitability of the company is measured after considering all the factors. The finance

department makes the resources available to different departments and at the end of the year it

analyzes the results received from utilization of those available resources. It also analysis the

opportunities to make best utilization of resources to increase the profitability of the company by

maintaining the liquidity and at the minimum risk.

Here in this Project I have learn how the company plan the finance from the staring of theproject the WIP and finished good until the report is generated (for e.g in my co the important is

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sample as a WIP until it is put in the testing laboratories it is raw material once it is generated itis finished good)

I have learned how the company manages the Provision, Expenses and budget for the Same andhow it utilize in the different dept for the output.

I want to learn the suspenses account item and contingent item which I have not cover in theproject because I have no knowledge in it I want to have the idea how the company show it in the

suspense account and contingent in the balance sheet and how it prove it presence in the front of

the auditor for the audit.

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CHAPTER 3 PROFILE OF SAVAIR ENERGY LTD

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Vision of the company In line with our Mission and vision. The Company plans to increase its product range by adding a

manufacturing a variety of SKIDS which have huge potential in India and abroad.

The company is starting its new 3 acre facility at the Ambernath by October 2009 which will beused for heavy fabrication, skidding, manufacture of process equipments packaging

Diversification.

SAVAIR intends to qrow by entering into a new sectors such as industrial gases, process water,fire fighting etc which will provide a competitive edge as compared to its competitor which cater

to clients in one sector.

The company is aiming to diversify into the new segment by building new technical collaborationand by partnering with internationally renowned DEMS and other players.

100 Million Dollar company SAVAIR aims to grow its revenues to reach the target of $ 100 millionby 2014 As reiterated, SAVAIR plans to achieve its vision by expanding into the same / similar line

of business as well as by diversifying these services to various sectors.

The company will partner with other renowned companies for realizing its vision. SAVAIR plansfocus on increasing its product and service portfolio by setting up a new manufacturing and

assembly unit at Ambernath

The new product/ service to be provided includes skidding, packaging, process equipmentpackaging, gas compressor plants, DG sets, Heat Exchangers etc.

SAVAIR plans to focus on mega infrastructure projects and Government Funded Projects whichhas less impact of recession.

The Company also plans to serve across the industry verticals covering industries such as power,shipyard, laboratories, Oils and Gas.

SAVAIR plans to increase its presence across India by opening up new regional offices in North,East and south to tap the new opportunities developed due to the industrialization of states such

as Uttaranchal, Himachal Pradesh and madras.

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SAVAIR plans to build up a strong technical collaboration which will allow the company to grow byproviding its customer with the latest technology.

This will help the company to increase its presence by providing need based solution to the clientas per its needs

HistoryHeadquarters Mahape, Navi Mumbai, India

Company Name Formerly known as Energy Logistics Pvt Ltd.

Changed its name to SAVAIR Energy Limited in 2007

Manufacturing Operations Design, Engineering facility covering 9000 square feet area in Navi Mumbai

New factory facility with 25000 square feet factory spread across 3-acresAmbernath

Founded Company incorporated in January 2001

Prior to this the promoters were in energy audits and project managemeservices

PositionOne of the up coming players in the mid-segment LSTK, EPC & skiddmarket which has a presence of very few large players

Founded in 2001Awarded its first Energy Saving Project from Tata Steel in 2002 Undertook many Energy Audits and low-value projects

Total number of employees: 4

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Diversification to New Area of Process Cooling Moved into new premises with 9000 sq. of operatingarea and assembly section Awarded a number of EPC contracts from top National and Multinational

companies Employee strength increased to double digit

Employee strength increased to 40 across various functional teams SAVAIR participated in first mega infrastructure (shipyard) project The company was awarded INR120 million EPC project by Reliance The Company entered into new services of gas, fire and hydrant systems Bought a 3-acre land to construct a new operational facility Projects from customers such as ITC, Cairn Energy, IOTL, BARC.NCL, EPI etc Aiming to diversify into the new segment by building new technical collaboration Expected to shift to a new factory at 3 acres land at MIDC Ambarnath by 2010

Key Management/ Board of DirectorsNAME OFDIRECTORS

DATE OFBIRTH

DATE OFAPPOINTMENT

PERMANENT ADDRESS PAN NO.TELEPHO

NO.

Mr. Saji JosephAntony

21.05.1960 22.01.2001501, 5* Floor, Karuna Bldg.,11th road, Plot no. 537,Chembur, Mumbai 71.

AABPA7533K 022-27781

Mr. MathaiThomas

09.11.1948 01.02.2002NL-6, Bldg. No. 18, RoomNo.-101, Phase 11, sector-18, *Nerul, Navi Mumbai.

ANCPM8550G 022-27781

Mr. ArvindHemraj Nagda

27.03.1974 14.01.2008

201, Jay ShivshaktiCHS,Jawaharlal NehruRoad,Mulund(w),Mumbai -80.

ABZPN0360J 022-25900

Mr.PashupathyPuthuseri Veedu

30.07.1961 14.01.20083, Ashwini B-Wing, ApnaGhar Housing society,Andheri(w), Mumbai- 53

AGUPP0672M 022-27781

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What they deal in ( Company Profile )

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Growth Statistics

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CHAPTER 4 REVIEW OF LITERATURE

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Project finance is the financing of long-term infrastructure and industrial projects based upon acomplex financial structure where project debt and equity are used to finance the project.

Usually, a project financing scheme involves a number of equity investors, known as sponsors,

as well as a syndicate of banks which provide loans to the operation. The loans are most

commonly non-recourse loans, which are secured by the project itself and paid entirely from its

cash flow, rather than from the general assets or creditworthiness of the project sponsors. The

financing is typically secured by all of the project assets, including the revenue-producing

contracts. Project lenders are given a lien on all of these assets, and are able to assume control

of a project if the project company has difficulties complying with the loan terms. Generally, a

special purpose entity is created for each project, thereby shielding other assets owned by a

project sponsor from the detrimental effects of a project failure. As a special purpose entity,

the project company has no assets other than the project. Capital contribution commitments by

the owners of the project company are sometimes necessary to ensure that the project is

financially sound. Project finance is often more complicated than alternative financing

methods. It is most commonly used in the mining, transportation, telecommunication and public

utility industries. Risk identification and allocation is a key component of project finance. A

project may be subject to a number of technical, environmental, economic and political risks,

particularly in developing countries and emerging markets. Financial institutions and project

sponsors may conclude that the risks inherent in project development and operation are

unacceptable (unfinanceable). The financing of these projects must also be distributed among

multiple parties, so as to distribute the risk associated with the project while simultaneously

ensuring profits for each party involved. A riskier or more expensive project may require limited

recourse financing secured by a surety from sponsors. A complex project finance scheme may

incorporate corporate finance, securitization, options, insurance provisions or other further

measures to mitigate risk.

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SOURCES OF FUNDSA company might raise new funds from the following sources:

The capital markets:

new share issues, for example, by companies acquiring a stock market listing for the first time rights issues Loan stock Retained earnings Bank borrowing Government sources Business expansion scheme funds Venture capital Franchising

ORDINARY (EQUITY) SHARESOrdinary shares are issued to the owners of a company. They have a nominal or 'face' value, typically

of 1 or 50 cents. The market value of a quoted company's shares bears no relationship to their

nominal value, except that when ordinary shares are issued for cash, the issue price must be equal to

or be more than the nominal value of the shares.

DEFERRED ORDINARY SHARES Are a form of ordinary shares, which are entitled to a dividend only after a certain date or if

profits rise above a certain amount. Voting rights might also differ from those attached to other

ordinary shares. Ordinary shareholders put funds into their company:

By paying for a new issue of shares Through retained profits. Simply retaining profits, instead of paying them out in the form of dividends, offers an important,

simple low-cost source of finance, although this method may not provide enough funds, for

example, if the firm is seeking to grow.

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RIGHTS ISSUES A rights issue provides a way of raising new share capital by means of an offer to existing

shareholders, inviting them to subscribe cash for new shares in proportion to their existing

holdings.

For example, a rights issue on a one-for-four basis at 280 per share would mean that a companyis inviting its existing shareholders to subscribe for one new share for every four shares they

hold, at a price of 280 per new share.

A company making a rights issue must set a price which is low enough to secure the acceptanceof shareholders, who are being asked to provide extra funds, but not too low, so as to avoid

excessive dilution of the earnings per share

TYPES OF APPRAISALS WHICH ARE REQUIRED FOR PROJECT FINANCING1. TECHNICAL APPRAISAL

Clearly, every project must be technically feasible. Technical Appraisal provides acomprehensive review of all technical aspects of the project such as rendering judgment on

merits of technical proposals and operating costs. Here is a checklist that can be used:

Is the technology proven or tested? If not, has it ever been successful elsewhere and can thatsuccess be replicated in current context and conditions.

Does the technology/ process/ equipment technically fit with the facilitys existingtechnology/process/ equipment & machinery? If not, what aspects of the technology /

process do not fit and what measures is the implementing agency planning to take in this

regard.

List of equipments and machinery to be installed with cost and specifications of theequipment.

Equipment capacity & whether it is as per requirement List of recommended equipmentsuppliers.

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2.SOCIAL APPRAISAL A social appraisal reviews the project design and the process of project identification through to

implementation and monitoring, from a social perspective. Particular attention is paid to the

likely impact of the project on different stakeholders, their opportunities for participation, and

the projects contribution to poverty reduction.

3.GENDER APPRAISAL The Gender Analysis Matrix (GAM) (Table 2) is a tool for conducting a gender analysis of a

project (Parker, 1993). It may be used at the planning stage to determine whether the

potential gender impacts of a project are desirable and consistent with the project purpose

and goal. The GAM may also be used during implementation to monitor the impacts of a

project and address any unexpected results. It can also be used during project evaluation.

4.ECONOMIC & FINANCIAL APPRAISAL This includes an analysis of economic soundness of the project and the quantification and

valuation of costs and benefits to ensure financial viability.

5.ENVIRONMENTAL APPRAISAL (ENVIRONMENTAL IMPACT ASSESSEMENT) Environmental Assessment (EA) is supposed to provide the project analyst with a good

quantification of the biophysical and social impacts from developments. Environmental

Assessment generally refers to the broader system of environmental analysis, including

project-specific Environmental Impact Assessment (EIA). Most countries have an EIA policy

and supporting legislation. Traditionally, EIA was designed to operate at the project level;

that is to identify impacts and mitigation measures for an individual project.

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CHAPTER 5 RESEARCH METHODOLOGY

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Research Design Research design means adopting that type technique of research which is most suited for the

research and study of the problem. For the study and the research of the problem proper

material has to be selected and collected for the investigation.A research design is the

arrangement of conditions for collection and analysis of data in a manner that aims to

combine relevance to the research purpose with economy in procedure.- Jahoda, deutish.

Cook..

In order to know about effectiveness of Finance Dept of Super religare Labrotoreis Ltd., it wasnecessary to interact with the Vedor (Client) and various Dept in the company. The sample

taken comprised of respondents from Mumbai city. A questionnaire had to be designed to

collect valuable information from the different Vendor and Carious Dept. The questionnaire

which was designed suitably to meet the objective of research work.

Nature of Research In this project report I have undertaken quantitative type of study.

Type of the questions The questions in the questionnaire asked to the Vendors and Various Dept of Super Religare

Laboratories Ltd, Regional office in Mumbai are Straight Forward and Limited Probing.

Type of the Questionnaire

The questionnaire in this project report is straight forward and formalized.

Type of Analysis The analysis done in this particular project report is statistical.

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Data Collection Methods / Sources Primary Data

The Primary data are those data which are collected fresh and for the first time and thus happen to

be original in character. The primary data that was collected through interview conducted in

Regional Branch with daily visiting customers. The primary data sources include copies of

questionnaire and data of their respective responses.

Secondary DataThe secondary data are those which have already been collected by someone else and which have

been passed through the statistical process. Secondary data was collected through company

websites.

PRIMARY DATA COLLECTION Research Technique

As the researcher, I adopted survey method as a research technique for this particular project report.

Contact MethodI as a researcher interviewed the internal dept by Face to Face interview.

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CHAPTER 6 DATA ANALYSIS AND INTERPRETATIONS

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ONGC PROJECT ( TOTAL PROJECT VALUE 700 LACS) OF 2004ONGC Project AMOUNT IN LACS

ITEMS

BUDGET

EXPNESES

ACTUAL

EXPENSES

ADDITIONAL EXP.

ABOVE BUDGET

Material Expenses 320.00 358.00 38.00

Labour Expenses 70.00 83.00 13.00

Overhead Expenses 60.00 64.00 4.00

Administrative Expenses 35.00 49.00 14.00

House keeping expense 67.00 86.00 19.00

Water charges 16.00 23.00 7.00

Seminars & training 15.00 20.00 5.00

TOTAL VALUE 583.00 683.00 100.00

Net Profit By Project 17Lacs (Total Project Value Less Total Actual Exp.)

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-

100.00

200.00

300.00

400.00

500.00

600.00

700.00

800.00

AMOUNT IN LACS BUDGET

EXPNESES

AMOUNT IN LACS ACTUAL

EXPENSES

AMOUNT IN LACS

ADDITIONAL EXP. ABOVE

BUDGET


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ONGC PROJECT ( TOTAL PROJECT VALUE 1300 LACS) OF 2005ONGC Project AMOUNT IN CRORE

ITEMSBUDGET

EXPNESESACTUAL EXPENSES

ADDITIONAL EXP.ABOVE BUDGET




Administrative Expenses 60.00 55.00 (5.00)

Housekeeping expense 120.00 115.00 (5.00)

Water charges 30.00 43.00 13.00


TOTAL VALUE 1,193.00 1,256.00 63.00


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-20%

0%

20%

40%

60%

80%

100%

ADDITIONAL EXP. ABOVE BUDGET

ACTUAL EXPENSES

BUDGET

EXPNESES


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ITEMSBUDGET

EXPNESESACTUAL

EXPENSESADDITIONAL EXP.ABOVE BUDGET








TOTAL VALUE 1,370.00 1,447.00 77.00


26

-

500.00

1,000.00

1,500.00

2,000.00

2,500.003,000.00

3,500.00


ACTUAL EXPENSES

BUDGET

EXPNESES


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ITEMS

BUDGET

EXPNESES

ACTUAL

EXPENSES

ADDITIONAL EXP.

ABOVE BUDGET

Material Expenses 1,075.00 1,125.00 50.00




House keeping expense 122.00 121.00 (1.00)


Seminars & training 24.00 23.00 (1.00)

TOTAL VALUE 1,639.00 1,721.00 82.00


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-20% 0% 20% 40% 60% 80% 100%

Material Expenses

Labour Expenses

Overhead Expenses

Administrative Expenses

House keeping expense

Water charges

Seminars & training

TOTAL VALUE

AMOUNT IN CRORE BUDGET

EXPNESES

AMOUNT IN CRORE ACTUAL

EXPENSES

AMOUNT IN CRORE ADDITIONAL

EXP. ABOVE BUDGET


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ITEMS

BUDGET

EXPNESES

ACTUAL

EXPENSES

ADDITIONAL EXP.

ABOVE BUDGET






Water charges 28.00 22.00 (6.00)


TOTAL VALUE 1,151.00 1,229.00 78.00


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Material Expenses

Labour Expenses

Overhead Expenses

Administrative Expenses

House keeping expense

Water charges

Seminars & training

TOTAL VALUE


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ITEMS BUDGETEXPNESES

ACTUALEXPENSES

ADDITIONAL EXP.ABOVE BUDGET

Material Expenses 1,625.00 1,632.00 7.00



Administrative Expenses 110.00 109.00 (1.00)



Seminars & training 25.00 24.00 (1.00)

TOTAL VALUE 2,345.00 2,387.00 42.00


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(500.00)

-

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

0 2 4 6 8 10

BUDGET

EXPNESES

ACTUAL EXPENSES



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PROFIT COMPARISON SHEET FOR THE YEAR FROM 2004 TO 2009( Amount in lacs )

Year Project Value Net Profit% of profit on Project

value

2004 700 17.00 2.43%

2005 1300 44.00 3.38%

2006 1500 53.00 3.53%

2007 1800 79.00 4.39%

2008 1275 46.00 3.61%

2009 2500 113.00 4.52%

30

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

1 2 3 4 5 6 7

% of profit on Project value

Net Profit

Project Value

Year


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PROFIT COMPARISON SHEET FOR THE YEAR FROM 2004 TO 2009( Amount in lacs )

Year Project Value Actual Expenses incurred% of Expenses on

Project value

2004 700 683.00 97.57%

2005 1300 1,256.00 96.62%

2006 1500 1,447.00 96.47%

2007 1800 1,721.00 95.61%

2008 1275 1,229.00 96.39%

2009 2500 2,387.00 95.48%

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0

500

1000

1500

2000

2500

1 2 3 4 5 6 7

Year

Project Value

Actual Expenses incurred

% of Expenses on Project value


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Project Report Introduction of Capital

The initial authorized share capital of our Company of 50 million comprising 6,000,000 Equity Shares

was increased to 25 million divided into 15,000,000 Equity Shares pursuant to a resolution of the

shareholders of our Company dated May 17, 1996.

Further, the authorized share capital of our Company was increased to 20 million divided into

20,000,000 Equity Shares pursuant to a resolution of the shareholders of our Company dated October

22, 1997. Further, the authorized share capital of our Company was increased to 30 million divided

into 30,000,000 Equity Shares pursuant to a resolution of the shareholders of our Company dated

February 23, 2009.


20,000,000 Equity Shares and 3,000,000 non-cumulative convertible preference shares of 100 each by

creation of 2,000,000 non-cumulative convertible preference shares of 100 each and re-classification

of the un-issued 100 million equity capital of our Company divided into 10,000,000 Equity Shares was

re-classified into 1,000,000 non-cumulative convertible preference shares of 100 each, pursuant to a

resolution of shareholders of our Company dated June 13, 2009.


65,000,000 Equity Shares by creation of 15,000,000 Equity Shares and reclassification of the existing

3,000,000 non-cumulative convertible preference shares of 100 each into 30,000,000 Equity Shares,

pursuant to a resolution of the shareholders of our Company dated August 4, 2010.Further, the

authorized share capital of our Company was re-organized by re-classification of the existing un-

issued equity capital of 100 million divided into 10,000,000 Equity Shares to 10,000,000 redeemable

preference shares of 10 each, pursuant to a resolution of the shareholders of our Company dated

August 19, 2010.

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80,000,000 Equity Shares of 10 each and 10,000,000 redeemable preference shares of 10 each,

pursuant to a resolution of the shareholders of our Company dated December 21, 2010.


85,000,000 Equity Shares of 10 each and 10,000,000 redeemable preference shares of 10 each,

pursuant to a resolution of the shareholders of our Company dated February 3, 2011.

This Issue has been authorized by resolutions of our Board dated February 7, 2011, and by a special

resolution passed by our shareholders pursuant to Section 81(1A) of the Companies Act, at the EGM

held on February 7, 2011.

Cost of Preference Share CapitalDATE OF

ALLOTMENT

NUMBER OFPREFERENCE

SHARES

FACEVALUE

ISSUEPRICE/REDEMPTION

PRICE

NATURE OFCONSIDERAT

ION

REASONSFOR

ALLOTMENT

20-Aug-10 50,000.00 10 200 CashPreferentialAllotment

4-Feb-11 50,000.00 10 200 - Redemption

Cost of Equity Share Capital

DATE OFALLOTMENT NAME OF THESHAREHOLDER NO. OFSHARES ISSUE PRICE

REASONS

FORALLOTMENT

REASONS

FORALLOTMEN

4-Aug-09 Promoter Group 1,000,000 10 allotmentPreferentiaAllotment

20-Jun-11 Promoter Group 1,000,000 10 allotmentPreferentiaAllotment

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REVENUE VERSUS PROFIT AFTER TAX FROM 2004-2009From FY2004 to FY2009, sales revenue grew from Rs. 100 millions to Rs. 500 millions. The net profit

for the same period increased from Rs. 2 millions to Rs.15 millions. From FY2007 to FY2008 the sales

revenue increased from Rs.350 millions to Rs.500 million. However, the company reported a net loss

of Rs (5) million for FY 2008 compared to net profit Rs 8 million for FY2007.In Q3'08 Consolidated

Revenue was Rs. 150 Mn against Rs.200 Mn in Q3'07, exhibiting a growth of 14.3%.

The growth was due to the weakening in Rupee against US Dollar and sales growth which was 6% in

Rupee terms at 128mn. Sales were hindered by an Savair Dealing in the Enegry and gas Compessor

research sanoperating margin Up to 7.8% in Q3'08 from 16.0% in Q3'07.

The resultant operating profit stood at Rs 14 mn as against 20 mn in Q3'07, up by 45.00%.

ANNUAL SALES : 7 YEARS AT A GLANCEYEAR SALE (AMT MILLION) PROFIT ( AMT MILLION)

2004 100 2

2005 200 5

2006 250 8.5

2007 325 10

2008 410 12.75

2009 500 15

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0

100

200

300

400

500

600

2004 2005 2006 2008 2009 2010

SALE

PROFIT


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QUARTERLY CLOSINGS IN 2009

QUARTER Q109 Q209 Q309 Q409

SALES 120 130 125 125

PROFIT 3.5 3.75 3.25 4.5

PERFORMANCE HIGHLIGHTSNet Sales de-grew by 3.7%: For 1QCY2009, Savair posted Net Sales of Rs 50.17 cr, a de-growth of 3.7%

yoy, which was in line with our estimates For CY2009, the company has guided for Top-line Rs 50.17

cr, a de-growth of 3% over CY2008. The companys guidance does not include any upside from the

launch of Valtrex. The company expects a marginal sequential improvement in Operating Margins by

restructuring costs.Net Profit of Rs 1.5 cr.

35

0

20

40

60

80

100

120

140

Q109 Q209 Q309 Q409

SALES

PROFIT


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BUSINESS PERFORMANCEFor the F.Y 2009, the company posted Net Sales of Rs 50.17 cr registering 8.7% yoy de-growth.

Emerging markets, which accounted for 75% of the companys Total Sales, de-grew by 20% to Rs

41.00 cr. For F.Y 2009, Savair has guided for Sales of around Rs 65.00 cr and Net Profit of Rs 2.00

cr.The guidance does not include any upside from the launch of Valtrex.

DEMAND FORECASTING: FY 2009-2010Year Sales in Million

2004-05 100.00

2005-06 200.00

2006-07 250.00

2007-08 325.00

2008-09 410.00

2009-10 500.00

2010-11 550.00

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Sales in Million

2004-052005-06

2006-07

2007-08

2008-09

2009-10

2010-11


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SAVAIR PROFIT/LOSS YEAR WISE:Year

Profit in

Million

2004 2.00

2005 5.00

2006 8.50

2007 10.00

2008 12.75

2009 15.00

2010 17.00

37

0

500

1000

1500

2000

2500

1 2 3 4 5 6 7 8

Profit in

Million

Year


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COMPARISON BETWEEN YEARSFinancial

YearProfit Comparison

(Million)

2004 3.00

2005 3.502006 1.50

2007 2.75

2008 2.25

2009 2.00

2010 3.00

38

1998

2000

2002

2004

2006

2008

2010

2012

2014

1 2 3 4 5 6 7

Profit Comparison

(Million)

Financial

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Sources of Finance:Company can use any of the following sources or combination of finance to their project

1. Initial Public Offer (IPO)2. Private Equity Fund3. Term Loan from Bank4. Venture Capital

1. Initial Public Offer :-IPO in India means the new offer of a company's shares to the public in the country's capital

markets. Initial Public Offer (IPO) in India is done through various methods like method of

book building, Method of fixed price or a mixture of both.

Initial Public Offering (IPO) in India means the selling of the shares of a company, for the

first time, to the public in the country's capital markets. This is done by giving to the public,

shares that are either owned by the promoters of the company or by issuing new shares.

During an Initial Public Offer (IPO) the shares are given to the public at a discount on the

intrinsic value of the shares and this is the reason that the investors buy shares during the

Initial Public Offering (IPO) in order to make profits for themselves

IPO in India is done through various methods like book building method, fixed price method,

or a mixture of both. The method of book building has been introduced in the country in

1999 and it helps the company to find out the demand and price of its shares. A merchant

banker is nominated as a book runner by the Issuer of the IPO

The company that is issuing the Initial Public Offering (IPO) decides the number of shares

that it will issue and also fixes the price band of the shares. All these information are

mentioned in the company's red herring prospectus.

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During the company's Initial Public Offering (IPO) in India, an electronic book is opened for

at least five days. During this period of time, bidding takes place which means that people

who are interested in buying the shares of the company make an offer within the fixed price

band. Once the book building is closed then the issuer as well as the book runner of the

Initial Public Offering (IPO) evaluate the offers and then determine a fixed price.

Procedure for Issuing an IPO

When a company wants to go public, the first thing it does is hire an investment bank, which does the

underwriting. Underwriting is the process of raising money by either debt or equity (in this case we are

referring to equity). Underwriters are middlemen between companies and the investing public. The

biggest underwriters are Goldman Sachs, Merrill Lynch, Credit Suisse First Boston, and Morgan Stanley.

The company and the investment bank will first meet to negotiate the deal. Items usually discussed

include the amount of money a company will raise, the type of securities to be issued and all the

details in the underwriting agreement. The deal can be structured in a variety of ways. For example, in

a firm commitment, the underwriter guarantees that a certain amount will be raised by buying the

entire offer and then reselling to the public. In a best efforts agreement, however, the underwriter

sells securities for the company but doesn't guarantee the amount raised. Also, investment banks are

hesitant to shoulder all the risk of an offering. Instead, they form a syndicate of underwriters. One

underwriter leads the syndicate and the others sell a part of the issue. Once all sides agree to a deal,

the investment bank puts together an offer document to be filed with the SEBI. This document contains

information about the offering as well as company info such as financial statements, management

background, any legal problems, where the money is to be used and insider holdings. The SEBI then

requires a cooling off period, in which they investigate and make sure all material information has

been disclosed. Once the SEBI approves the offering, a date (the effective date) is set when the stock

will be offered to the public.

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ADVANTAGES OF IPOThe Advantages of IPO are numerous. The companies are launching more and more IPOs to raise

funds which are utilized for undertakings various projects including expansion plans.

ADVANTAGES OF IPO OVERVIEWThe Advantages of IPO is the primary factor for the immense growth of the same in the last few

years. The IPO or the initial public offering is a term used to describe the first sale of the shares to

the public by any company. All types of companies with the idea of enhancing growth launch IPOs to

generate funds to cater the requirements of capital for expansion, acquiring of capital instruments,

undertaking new projects.

MAJOR ADVANTAGES OF IPOIPO has a number of advantages. IPO helps the company to create a public awareness about the

company as these public offerings generate publicity by inducing their products to various investors.

The increase in the capital: An IPO allows a company to raise funds for utilizing in various corporate

operational purposes like acquisitions, mergers, working capital, research and development,

expanding plant and equipment and marketing.

Liquidity: The shares once traded have an assigned market value and can be resold. This is

extremely helpful as the company provides the employees with stock incentive packages and

the investors are provided with the option of trading their shares for a price.

Valuation: The public trading of the shares determines a value for the company and sets a

standard. This works in favor of the company as it is helpful in case the company is looking

for acquisition or merger. It also provides the share holders of the company with the present

value of the shares.

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DRAWBACKS OF IPOSIt is true that IPO raises huge capital for the issuing company. But, in order to launch an Initial Public

Offering (IPO), it is also necessary to make certain investments. Setting up an IPO does not always

lead to an improvement in the economic performance of the company. A continuing expenditure has

to be incurred after the setting up of an IPO by the parent company. A lot of expenses have to be

incurred in the form of legal fees, printing costs and accounting fees, which are connected to the

registering of an IPO. Such expenses might cost hundreds of US dollars. Apart from such enormous

costs, there are other factors as well that should be taken into consideration by the company while

introducing an IPO.

Such factors include the rules and regulations involved to set up public offerings and this entire

process on the other hand involve a number of complexities which sometime require the services of

experts in relevant fields. Some companies hire experts to do the needful to ensure a hassle-free

execution of the task. After the IPO is introduced, the expenses become a routine in every activity

involved. Besides, the CEO of the company would have to spend a lot of time in handling the SEC

regulations or sometimes he hires experts to do the same. All these aspects, if not handled with

efficiency, prove to be some major drawbacks related to the launch of IPOs.

The launch of IPO also brings about shareholders of the company. Shareholders have ownership in the

company. The primary owners of the company or the people holding maximum authority in the

company cannot take decisions all by themselves once an IPO has been launched and shareholders

have been formed. The shareholders have an active participation in every decision that is being

taken even if they do not hold 50 percent share of the company. They have their individual demands

to be met as they own a certain percentage of stakes in the company. The SEC regulations require

notifications from the shareholders of the company, meetings, and also approvals from them while

making important business decisions. A major risk with shareholders is that, they can sell off their

stocks any time they want, in case they see the price band of the stakes of that company is going

down.

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IPO FUNDINGSRules for IPO Fundings Change by RBI-The entire scenario of IPO Fundings went through radical

changes in the year 2007 as per the directives of the Reserve bank of India. According to RBI, the

lending limit for one investor would come down from Rs. 20 lacs to Rs. 10 lacs against any

convertible bonds, equity-mutual funds, convertible debentures, PSU bonds and Equity shares. The

loan limit Set for each investor to invest in IPOs is Rs. 10 lacs and it has been strictly stated by the

Reserve Bank of India that no single investor would be allowed loans more than the limit for investing

in the IPOs. Before 2007, the IPO market in India was rising heavily in terms of booking subscriptions

which accounted for the lining up of at least two issues every week. The market players were

allowed to invest in at least five IPOs in India to make quick profits as it takes only 15 days after the

closing date of the subscription of the company's IPO. The speculators will get a bit affected by the

new set of rules being implemented for the IPO fundings. However, the chances of retail investors

being affected by the same are much less. The banks are allowed to use up to 40 percent of their net

worth for capital market related exposures. ICICI Bank, Kotak Mahindra Bank and HDFC Bank are not

entitled to direct exposure in terms of investing in their own subsidiaries, shares, joint ventures and

regional rural banks. The fundings in IPO are issued to the investors with the aim to meet the

investment requirements in public issues and other projects.

IPO GRADINGThe main objective of issuance of Initial Public Offering (IPO) is to invest the corpus so accumulated,

for either establishing of a new company or expansion of an existing private company. The shares

held by such financer or investors give them the rights of the company and to its future profits,

which are categorically mentioned in the offer document. The process of underwriting determines

the issue size and type, offer price and best time of introduction into the market is called

"underwriting". The underwriting is generally done by the investment bankers.

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These underwriting firms or investment bankers are allotted some specified numbers of shares to sell

to the general investor before the share is being traded on an exchange. IPO Grading also called

Rating is a process by which the back ground of an IPO issuing company is verified. The main

objective of such verification of track record is to provide higher security to the money of the

investor. The IPO Grading process does not involve any "pricing suggestion" related to buying or

selling price. The rating agency only does the IPO Grading on the previous track record of the

company which has issued such IPO. The IPO Grading process mainly checks-for any negative factor in

the track record of the IPO issuing company. Further, IPO Grading also arrests scrupulous or fictitious

company from entering in to the market and run-away with investor's money.

PRIVATE EQUITY FUNDWhat is Private Equity?

Private equity first emerged in the early 1980s, with Kohlberg, Kravis and Roberts (KKR) opening the

first, and still among the largest LBO (Leveraged Buy Out) firms.

The logic for LBO firms, at least initially, was this: Publicly traded companies are forced to focus on

extremely short-term (often quarterly or monthly) results, thus making decisions which may not be in

line with their long-term goals. Going 'private' or delisting from the exchanges allows them to focus

on these goals. Leveraging, that is, taking debt to buyback these shares as well as spending on

longer-term expansion, etc allowed managers to run their companies the way they wanted to.

Moreover, the LBO firms were often run by investment bankers and consultants who contributed

significant financial and industry expertise. Over time, however, the deals also began to be 'hostile',

that is, the LBO managers perceived value in firms which they felt were mismanaged, so they would

buy them out, restructure them, and then sell them off once more. The other side of private equity

investment comes from the world of venture capital, where small companies that need to grow but

are cash-strapped and too small to list on exchanges approach (or are approached by) VC firms to

take a stake in the company, as well as hand-hold them onto a growth path.

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THE INDIAN CASEIn India, private equity is reasonably young, dating back to the mid-1990s. The environment heated

up in the end of the 90s with the IT boom, with companies investing (and getting their finge rs burnt)

with their investments. In recent years, there has been a resurgence of these firms, with Indias

stock markets booming and sectors like the life sciences, infrastructure and most recently, real

estate being growth stories for the future. Global firms such as Warburg Pincus, Blackstone and the

Carlyle Group have a presence in India while Indian players like ICICI Venture and Chrys Capital also

have a large presence.

WHAT DOES THE WORK ENTAIL AND HOW DO THESE FIRMS MAKE MONEY?Essentially, PE funds raise money from high net worth individuals, financial institutions, etc. for a

period of seven-ten years and then invest in opportunities as and when they arise, either in early-

stage, maturing or even public companies. The work involves of course, valuing the companies that

approach you and deciding how much of the company your stake is actually worth, what the

companys growth prospects are, etc. Structuring the transactions for tax-efficiency and industry-

specific reasons is also part of the job. Post-stake taking, day-to-day monitoring and growth plans

are monitored by the fund, with a senior director taking a seat on the companys board. Since the

target is also to exit the investment in a few years and return money to investors, the deal teams

also constantly monitor the capital markets for suitable times to do an Initial Public Offering or find

a strategic investor to sell to.

VENTURE CAPITALStarting and growing a business always require capital. There are a number of alternative methods to

fund growth. These include the owner or proprietors own capital, arranging debt finance, or seeking

an equity partner, as is the case with private equity and venture capital.

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Private equity is a broad term that refers to any type of non-public ownership equity securities that

are not listed on a public exchange. Private equity encompasses both early stage (venture capital)

and later stage (buy-out, expansion) investing. In the broadest sense, it can also include mezzanine,

fund of funds and secondary investing.

Venture capital is a means of equity financing for rapidly-growing private companies. Finance may be

required for the start-up, development/expansion or purchase of a company. Venture Capital firms

invest funds on a professional basis, often focusing on a limited sector of specialization (eg. IT,

infrastructure, health/life sciences, clean technology, etc.).

The goal of venture capital is to build companies so that the shares become liquid (through IPO or

acquisition) and provide a rate of return to the investors (in the form of cash or shares) that is

consistent with the level of risk taken.

With venture capital financing, the venture capitalist acquires an agreed proportion of the equity of

the company in return for the funding. Equity finance offers the significant advantage of having no

interest charges. It is "patient" capital that seeks a return through long-term capital gain rather than

immediate and regular interest payments, as in the case of debt financing. Given the nature of

equity financing, venture capital investors are therefore exposed to the risk of the company failing.

As a result the venture capitalist must look to invest in companies which have the ability to grow

very successfully and provide higher than average returns to compensate for the risk .When venture

capitalists invest in a business they typically require a seat on the company's board of directors. They

tend to take a minority share in the company and usually do not take day-to-day control. Rather,

professional venture capitalists act as mentors and aim to provide support and advice on a range of

management, sales and technical issues to assist the company to develop its full potential.

Venture capital has a number of advantages over other forms of finance, such as:

It injects long term equity finance which provides a solid capital base for future growth.

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The venture capitalist is a business partner, sharing both the risks and rewards. Venture capitalistsare rewarded by business success and the capital gain.

The venture capitalist is able to provide practical advice and assistance to the company based onpast experience with other companies which were in similar situations.

The venture capitalist also has a network of contacts in many areas that can add value to thecompany, such as in recruiting key personnel, providing contacts in international markets,

introductions to strategic partners, and if needed co-investments with other venture capital firms

when additional rounds of financing are required.

The venture capitalist may be capable of providing additional rounds of funding should it

HOW DOES THE VENTURE CAPITAL INDUSTRY WORKVenture capital firms typically source the majority of their funding from large investment institutions

such as fund of funds, financial institutions, endowments, pension funds and banks. These

institutions typically invest in a venture capital fund for a period of up to ten years.

To compensate for the long term commitment and lack of both security and liquidity, investment

institutions expect to receive very high returns on their investment. Therefore venture capitalists

invest in either company with high growth potential where they are able to exit through either an

IPO or a merger/acquisition. Although the venture capitalist may receive some return through

dividends, their primary return on investment comes from capital gains when they eventually sell

their shares in the company, typically between three to five years after the investment.

Venture capitalists are therefore in the business of promoting growth in the companies they invest in

and managing the associated risk to protect and enhance their investors' capital. Venture capital

firms typically source the majority of their funding from large investment institutions such as fund of

funds, financial institutions, endowments, pension funds and banks. These institutions typically

invest in a venture capital fund for a period of up to ten years

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SELECTING THE VC INVESTORSThe members of the Indian Venture Capital Association comprise a number of venture capital firms in

India. The IVCA Directory of Members provides basic information about each member's investment

preferences and is available from the Association.

Prior to selecting a venture capitalist, the entrepreneur should study the particular investment

preferences set down by the venture capital firm. Often venture capitalists have preferences for

particular stages of investment, amount of investment, industry sectors, and geographical location.

An investment in an private, unlisted company has a long-term horizon, typically 4-6 years. It is

important to select venture capitalists with whom it is possible to have a good working relationship.

Often businesses do not meet their cash-flow forecasts and require additional funds, so an investor's

ability to invest in additional financing rounds if required is also important. Finally, when choosing a

venture capitalist, the entrepreneur should consider not just the amount and terms of investments,

but also the additional value that the venture capitalist can bring to the company. These skills may

include industry knowledge, fund raising, financial and strategic planning, recruitment of key

personnel, mergers and acquisitions, and access to international markets and technology.

Entrepreneurs should not hesitate to ask for references from investors.

WHAT DO VENTURE CAPITALIST'S LOOK FORVenture capitalists are higher risk investors and, in accepting these risks, they desire a higher return

on their investment. The venture capitalist manages the risk/reward ratio by only investing in

businesses which fit their investment criteria and after having completed extensive due diligence

Venture capitalists have differing operating approaches. These differences may relate to location of

the business, the size of the investment, the stage of the company, industry specialization, structure

of the investment and involvement of the venture capitalists in the companys activities. The

entrepreneur should not be discouraged if one venture capitalist does not wish to proceed with an

investment in the company.

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The rejection may not be a reflection of the quality of the business, but rather a matter of the

business not fitting with the venture capitalist's particular investment criteria. Often entrepreneurs

may want to ask the venture capitalist for other firms that might be interested in the investment

opportunity. Venture capital is not suitable for all businesses, as a venture capitalist typically

seeks.

SUPERIOR BUSINESSESVenture capitalists look for companies with superior products or services targeted at large, fast

growing or untapped markets with a defensible strategic position such as intellectual property or

patents.

QUALITY AND DEPTH OF MANAGEMENTVenture capitalists must be confident that the firm has the quality and depth in the management

team to achieve its aspirations. Venture capitalists seldom seek managerial control, rather they want

to add value to the investment where they have particular skills including fund raising, mergers and

acquisitions, international marketing, product development, and networks.

APPROPRIATE INVESTMENT STRUCTUREAs well as the requirement of being an attractive business opportunity, the venture capitalist will

also seek to structure a deal to produce the anticipated financial returns to investors. This includes

making an investment at a reasonable price per share (valuation).

EXIT OPPORTUNITYLastly, venture capitalists look for the clear exit opportunity for their investment such as public

listing or a third party acquisition of the investee company. Once a short list of appropriate venture

capitalists has been selected, the entrepreneur can proceed to identify which investors match their

funding requirements.

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At this point, the entrepreneur should contact the venture capital firm and identify an investment

manager as an initial contact point. The venture capital firm will ask prospective investee companies

for information concerning the product or service, the market analysis, how the company operates,

the investment required and how it is to be used, financial projections, and importantly questions

about the management team.

In reality, all of the above questions should be answered in the Business Plan. Assuming the venture

capitalist expresses interest in the investment opportunity, a good business plan is a pre-requisite.

THE BUSINESS PLANVenture capitalists view hundreds of business plans every year. The business plan must therefore

convince the venture capitalist that the company and the management team have the ability to

achieve the goals of the company within the specified time.

The business plan should explain the nature of the companys business, what it wants to achieve and

how it is going to do it. The companys management should prepare the plan and they should set

challenging but achievable goals.

The length of the business plan depends on the particular circumstances but, as a general rule, it

should be no longer than 25-30 pages. It is important to use plain English, especially if you are

explaining technical details. Aim the business plan at non-specialists, emphasizing its financial

viability. Avoid jargons and general position statements.

Consider how the venture capital investors will exit the investment and make a return. Possible exit

strategies for the investors may include floating the company on a stock exchange or selling the

company to a trade buyer.

TERM LOAN

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What Does Term Loan Mean?A loan from a bank for a specific amount that has a specified repayment schedule and a floating

interest rate. Term loans almost always mature between one and 10 years. For example many banks

have term-loan programs that can offer small businesses the cash they need to operate from month

to month. Often a small business will use the cash from a term loan to purchase fixed assets such as

equipment used in its production process.

REQUIREMENTS FOR TERM LOANCompany has to provide the following details / statements to the bank to appraise their project.

1. Statement of Profit & Loss a/c and Balance sheet for last three years2. Statement showing Cost of the Project and means of the finance3. CMA Report for the projections for the next five years related to the existing and proposed plan4. Computation of various ratios like Current Assets Ratio, Debt Equity Ratio, Debt Service Coverage

Service Ratio (DSCR), Debtors Turnover Ration, Creditors Turnover Ratio, Stock Turnover Ration etc.

5. Projected Fund flow statement and Cash Flow Statement6. Net Worth certificate of the company certified by the Statutory Auditor of the Company7. Net Worth certificate of the Directors who are giving guarantee to the term loan8. Business plan for which the bank has to finance9. Bank Statements for last one year10.After getting the above documents bank will go through the documents and do the legal procedure

and bank will check the viability of the project. After approval from legal department bank will

provide the finance to that project. Bank will laid down some terms and conditions and ask the

company to give the repayment schedule for the loan given.

KEY FINANCIAL INDICATORSA financial ratio or accounting ratio is a ratio of selected values on Company financial statements.

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There are many standard ratios used to evaluate the overall financial condition of a corporation or

other organization. Financial ratios are used by managers within a firm, by current and potential

shareholders (owners) of a firm, and by a firm's creditors. Security analysts use financial ratios to

compare the strengths and weaknesses in various companies. If shares in a company are traded in a

financial market, the market price of the shares is used in certain financial ratios.

Values used in calculating financial ratios are taken from the balance sheet, income statement, cash

flow statement and (rarely) statement of retained earnings. These comprise the firm's "accounting

statements" or financial statements. Ratios are always expressed as a decimal value, such as 0.10, or

the equivalent percent value, such as 10%. Financial ratios quantify many aspects of a business and

are an integral part of financial statement analysis. Financial ratios are categorized according to the

financial aspect of the business which the ratio measures. Liquidity ratios measure the availability of

cash to pay debt. Activity ratios measure how quickly a firm converts non-cash assets to cash assets.

Debt ratios measure the firm's ability to repay long-term debt. Profitability ratios measure the firm's

use of its assets and control of its expenses to generate an acceptable rate of return. Market ratios

measure investor response to owning a company's stock and also the cost of issuing stock.

Financial ratios allow for comparisons

between companies

between industries

between different time periods for one company

between a single company and its industry average

The ratios of firms in different industries, which face different risks, capital requirements, and

competition, are not usually comparable

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ACCOUNTING METHODS AND PRINCIPLESFinancial ratios may not be directly comparable between companies that use different accounting

methods or follow various standard accounting practices. Most public companies are required by law

to use generally accepted accounting principles for their home countries, but private companies,

partnerships and sole proprietorships may not use accrual basis accounting. Large multi-national

corporations may use International Financial Reporting Standards to produce their financial

statements, or they may use the generally accepted accounting principles of their home country.

There is no world-wide standard for calculating the summary data presented in all financial

statements, and terminology is not always consistent between companies, industries, countries and

time periods.

Net sales Turnover:- Net Sales Turnover Amount which shown in Income Statement .Amount includes sales within and outside India.

Other Income:- Other Income amount which shown in Income Statement Non Operating Income:- Non Operating Income amount which shown in Income

Statement

Total Income:- Total Income amount is a addition of Net Sales Turnover + OtherIncome + Non Operating Income.

PBDIT = Profit before Dividend, Interest & Tax Amount is already calculated in IncomeStatement .

PAT = Profit after Tax Amount is already calculated in Income Statement .

PBDIT/Total Income (%) Profit before Dividend, Interest & Tax / Total Income * 100 PAT/Total Income = Profit after Tax / Total Income

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Cash Profit = Depreciation + Profit after Tax [both figure is already calculated inIncome Statement

Share Capital = Share capital Amount is already calculated in Balance Sheet Total Term Loan = Total Term Loan Amount is already calculated in Balance Sheet Debt-Equity Ratio = Debt / Equity TOL/TNW = Total Outside Liabilities / Total Net Worth Net Fixed Assets = Net Fixed Assets amount is already calculated (Gross Block-

Depreciation) in Balance Sheet .

Fixed Assets coverage Ratio = Profit after Tax / Fixed Assets. Total Current Assets = Total current Assets amount is already calculated Balance

Sheet.

Total Current Liabilities = Total current Liabilities Amount is already calculated inBalance Sheet.

Current Ratio = Current Assets / Current Liabilities Return on capital Employed = Profit after Tax / Capital Employed. No of share = share capital / face value of share EPS ( Face Value Rs.10 Per Share) Earnings Per Share = profit after tax / No. of Equity Share

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CHAPTER 7. OBSERVATION AND FINDINGS

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Companys financial condition is very good. Company is using more own fund rather than borrowed fund. Companys track record is very good. Company doesnt have any litigation regarding the financial matters. Vision of the Board of the company is remarkable.

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CHAPTER 8. LIMITATIONS

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1. In the Case of the finance Department should impose more concentration on the expenses and howthey manage their expenses against budget and actual for this they must have the specified staff who

can concentrate more on the Expenses part so that the flow of the amount is not crossing the river

(Which mean the Budget Amount) So this will not create much problem in managing the finance

expenses.

2. The Company Should more Concentrate on the loss side which mean they should rectify how the lossare occurring in the project and how should they manage it and plan to other project so they dont

occur much loss in the near futhure for the more upcoming project.

3. The company should bring more storage system in the lab so that there is no fear for the damage ofthe sample because in this business sample is the only way for the earning as it is testing industries

otherwise the storage is good but not in advance technology which other lab use for their storage.

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CHAPTER 9. RECOMMENDATIONS AND SUGGESTIONS

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1. The Company should arrange for the training to the persons related to the new project.2. Before installing the plant company should complete all the legal requirements which are

required to install the plant.

3. Company should expand their current laboratory and add department of Research anddevelopment.

4. In the Case of the finance Department should impose more concentration on the expenses andhow they manage their expenses against budget and actual for this they must have the specified

staff who can concentrate more on the Expenses part so that the flow of the amount is not

crossing the river (Which mean the Budget Amount) So this will not create much problem in

managing the finance expenses.

5. The Company Should more Concentrate on the loss side which mean they should rectify how theloss are occurring in the project and how should they manage it and plan to other project so they

dont occur much loss in the near futhure for the more upcoming project.

6. The company should bring more storage system in the lab so that there is no fear for the damageof the sample because in this business sample is the only way for the earning as it is testing

industries otherwise the storage is good but not in advance technology which other lab use for

their storage .

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CHAPTER 10. BIBILOGRAPHY

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www.Savair.co.in WWW.NSE.Com WWW.BSE.Com WWW.NSDL.Com Various Finance book for the understanding of the Finance of Concept Financial Book for the understanding of the share and profit ratio of the company WWW.BSE.Com WWW.NSDL.Com Companys Internal Documents Annual Reports of Last 4 years Journals of Ranbaxy Text Books & Literature Khan, M.Y., Jain, PK, Financial Management, Tata McGraw-Hill,PublishingCompany Ltd., New

Delhi, 2003.

Pandey, I.M., Financial Management, Vikas Publishing House Private Limited, New Delhi, 2001. Chandra Prasanna, Financial Management Theory and Practice, TATAMcgraw-Hill Publishing

Company, 2004

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http://www.savair.co.in/http://www.nse.com/http://www.bse.com/http://www.nsdl.com/http://www.nsdl.com/http://www.bse.com/http://www.nse.com/http://www.savair.co.in/


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