Leasing,venture Capital & Export Financing 8 November

Leasing,Venture Capital & Export Financing AFTERSCHO☺OL – DEVELOPING CHANGE MAKERS CENTRE FOR SOCIAL ENTREPRENEURSHIP PGPSE PROGRAMME – World’s Most Comprehensive programmes in social entrepreneurship & spiritual entrepreneurship OPEN FOR ALL FREE FOR ALL

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Leasing,Venture Capital & Export Financing Dr. T.K. Jain.

AFTERSCHO☺OL Centre for social entrepreneurship Bikaner M: 9414430763 [email protected] www.afterschool.tk, www.afterschoool.tk www.afterschoool.tk

AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

What are the various sources of Long term finance? • • • • • •

Equity Preference Retained earnings Bonds (it is just like debenture, it carried interest). Loans Venture capital (when you start a high-tech business, there are people, who give you money as equity/ seed capital – this is called venture capital). • Foreign currency loans, Euro issues, ADRs, GDRs, • Debentures.

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

What are the various sources of short term finance? • • • • • • • • • •

CC account (cash credit account) Packing credit & letter of credit Bill discounting Forfaiting & Factoring Trade creditors Accrued expenses Deferred income Fixed deposits Working capital loans. Inter-corporate borrowings

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

What are the various sources of medium term finance? • Debentures • Bonds • Securitisation (here we pool together some assets and issue securities on the basis of those assets) • Deposits

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Pre-shipment finance • Obtaining packing credit before exports is called pre-shipment finance. There are many types of pre-shipment finances: • Clean packing credit • Packing credit against pledge / hypothecation • ECGC (export credit guarantee corporation) • Forward exchange contract www.afterschoool.tk

AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

CD (certificate of deposit) • It is an instrument sold by bank. It is similar to fixed deposit. The bank issues CD and gets money. CD can be sold in secondary market also. The bank can sell the securities in the secondary market any time. It is generally in very large amount. It is a source of short term finance for Banks / very reputed corporate houses. It’s credit rating is given by credit rating agencies. www.afterschoool.tk

AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Seed Capital • Seed capital means the capital that is given to start a business (just like a seed). It is given in the beginning = so that the business may start as a small enterprise and grow larger and larger day by day.

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

IDBI issued DDB (deep discounting bond) in 1992 (face value Rs. 1 Lakh) issue price Rs. 2700. What is the yield (interest rate) to the customer, if its life is 25 years? • 15.54% annual compounding interest rate.

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

F.R.N. • Floating rate note (these are issued for 7 year maturity). They provide foreign exchange finance.

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Fully hedged funds? • These are bonds that do not have currency fluctuation risk as the entire payments are hedged by forwards (for both principal and interest). Thus there is no exchange risk.

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

ADR • American depository receipt • These are issued in American market as per SEC (securities exchange commission) USA requirements • The requirements include that the company should disclose accounts as per GAAP. ADRs are traded in NYSE (new york stock exchange) through depository trust company. • Infosys, ICICI etc. have issued ADRs. www.afterschoool.tk

AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

GDRs • Global Depository Receipts – they are securities issued against shares. They are also traded in stock exchanges of other countries. Companies have raised GDRs from European countries.

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Commercial paper • It is also a short term financing instrument. It is also in huge amount.

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Zero coupon bonds? • They are just similar to deep discount bonds.

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Ploughing back of profit? • It is like retained earning. When you plough back profit, you are putting profits back in the business and thereby you are able to earn even more profits. For example, if you earn Rs. 30 on 100, instead of giving dividends, keep it. Now you have 130, next time you will earn 39 Rupees. You can further retain it and next year you will have 50 rupees – and so on. Your assets will also increase. It is cheaper than raising fresh capital. www.afterschoool.tk

AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Lease financing ? • Kapsa wants to start a travel agency. He doesn’t have either money or taxis. He takes taxis on lease (he will pay lease rentals). Now he is comfortable – as he earns, he pays lease rentals and retains some money for the growth of business.

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Capital budgeting • The decision to analyse a capital investment project is called capital budgeting. In capital budgeting, we analyse a project on the merit of capital budgeting. We look at returns and evaluate the returns on the criteria of our minimum expected return on investments.

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Solve it • Kap Ltd is evaluating the purchase of a new project with a depreciable base of Rs. 1,00,000; expected economic life of 4 years and change in earnings before taxes and depreciation of Rs. 45,000 in year 1, Rs. 30,000 in year 2, Rs. 25,000 in year 3 and Rs. 35,000 in year 4. Assume straight-line depreciation and a 50% tax rate. You are required to compute relevant cash flows. www.afterschoool.tk

AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Solution EBIT` Depre. EAT Add : dep. Total cash inflow www.afterschoool.tk

1 45000

2 30000

3 25000

4 35000

25000 10000 35000

25000 2500 27500

25000 O 25000

25000 5000 30000 117500

AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

ABOUT AFTERSCHO☺OL Afterschoool conducts three year integrated PGPSE (after class 12th along with IAS / CA / CS) and 18 month PGPSE (Post Graduate Programme in Social Entrepreneurship) along with preparation for CS / CFP / CFA /CMA / FRM. This course is also available online also. It also conducts workshops on social entrepreneurship in schools and colleges all over India – start social entrepreneurship club in your institution today with the help from afterschoool and help us in developing society.

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Why such a programme? • To promote people to take up entrepreneurship and help develop the society • To enable people to take up franchising and other such options to start a business / social development project • To enable people to take up social development as their mission • To enable people to promote spirituality and positive thinking in the world www.afterschoool.tk

AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Who are our supporters? • Afterschoolians, our past beneficiaries, entrepreneurs and social entrepreneurs are supporting us. • You can also support us – not necessarily by money – but by being promotor of our concept and our ideas.

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

About AFTERSCHO☺OL PGPSE – the best programme for developing great entrepreneurs • • • • •

Most flexible, adaptive but rigorous programme Available in distance learning mode Case study focused- latest cases Industry oriented practical curriculum Designed to make you entrepreneurs – not just an employee • Option to take up part time job – so earn while you learn • The only absolutely free course on internet www.afterschoool.tk

AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Workshops from AFTERSCHO☺OL • • • • • • • • •

IIF, Delhi CIPS, Jaipur ICSI Hyderabad Branch Gyan Vihar, Jaipur Apex Institute of Management, Jaipur Aravali Institute of Management, Jodhpur Xavier Institute of Management, Bhubaneshwar Pacific Institute, Udaipur Engineering College, Hyderabad

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Flexible Specialisations: • • • • • • • • • •

Spiritualising business and society Rural development and transformation HRD and Education, Social Development NGO and voluntary work Investment analysis,microfinance and inclusion Retail sector, BPO, KPO Accounting & Information system (with CA / CS /CMA) Hospital management and Health care Hospitality sector and culture and heritage Other sectors of high growth, high technology and social relevance

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Salient features: • The only programme of its kind (in the whole world) • No publicity and low profile course • For those who want to achieve success in life – not just a degree • Flexible – you may stay for a month and continue the rest of the education by distance mode. / you may attend weekend classes • Scholarships for those from poor economic background • Latest and constantly changing curriculum – keeping pace with the time • Placement for those who are interested • Admissions open throughout the year • Latest and most advanced technologies, books and study material www.afterschoool.tk

AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Components • • • • • • • • • • • • • •

Pedagogy curriculum and approach based on IIM Ahmedabad and ISB Hyderabad (the founder is alumnus from IIMA & ISB Hyderabad) Meditation, spiritualisation, and self development EsGotitial softwares for business Business plan, Research projects Participation in conferences / seminars Workshops on leadership, team building etc. Written submissions of research projects/articles / papers Interview of entrepreneurs, writing biographies of entrepreneurs Editing of journals / newsletters Consultancy / research projects Assignments, communication skill workshops Participation in conferences and seminars Group discussions, mock interviews, self development diaryng Mind Power Training & writing workshop (by Dr. T.K.Jain)

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Pedagogy • • • • • • • • •

Case analysis, Articles from Harvard Business Review Quiz, seminars, workshops, games, Visits to entrepreneurs and industrial visits PreGotitations, Latest audio-visuals Group discussions and group projects Periodic self assessment Mentoring and counselling Study exchange programme (with institutions out of India) • Rural development / Social welfare projects www.afterschoool.tk

AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Branches • AFTERSCHO☺OL will shortly open its branches in important cities in India including Delhi, Kota, Mumbai, Gurgaon and other important cities. Afterschooolians will be responsible for managing and developing these branches – and for promoting social entrepreneurs.

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Case Studies • We want to write case studies on social entrepreneurs, first generation entrepreneurs, ethical entrepreneurs. Please help us in this process. Help us to be in touch with entrepreneurs, so that we may develop entrepreneurs.

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

Basic values at AFTERSCHO☺OL • • • • • •

Share to learn more Interact to develop yourself Fear is your worst enemy Make mistakes to learn Study & discuss in a group Criticism is the healthy route to mutual support and help • Ask fundamental questions : why, when, how & where? • Embrace change – and compete with yourself only www.afterschoool.tk

AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS

www.afterschoool.tk social entrepreneurship for better society

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AFTERSCHO☺OL's MATERIAL FOR PGPSE PARTICIPANTS