CHAPTER 1 RATIONALE FOR THE STUDY

 Project finance is the financing of long-term infrastructure and industrial projects based upon a complex 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. 2

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 through a well structured team of assignment writers and assignment helpers who specialize in the subjects like finance. Have subjects like finance messed your overall grades and you are still tensed how to accomplish the assignments on time not missing on your grades. Finance Assignment Help provides you with absolutely plagiarism free content and 100% deadline deliveries. The basic

requirement for a perfect content involves long drilling hours of research work but our highly qualified assignment writers have already done the field work for you and provides you the best services in the industry. Finance may cause weariness for many students but we make the subject a 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. 3

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.

CHAPTER 2 OBJECTIVE OF THE STUDY

2.1

Title Of The Project : Project Finance

Designation (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 the project the WIP and finished good until the report is generated (for e.g in my co the important is 6

 sample as a WIP until it is put in the testing laboratories it is raw material once it is generated it is finished good) I have learned how the company manages the Provision, Expenses and budget for the Same and how 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 the project 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.

CHAPTER 3 PROFILE OF SAVAIR ENERGY LTD

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 be used 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 collaboration and 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 million by 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 plans focus 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 equipment packaging, gas compressor plants, DG sets, Heat Exchangers etc. SAVAIR plans to focus on mega infrastructure projects and Government Funded Projects which has 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.

 SAVAIR plans to build up a strong technical collaboration which will allow the company to grow by providing its customer with the latest technology. This will help the company to increase its presence by providing need based solution to the client as per its needs

History
Headquarters Company Name Mahape, Navi Mumbai, India 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-acres at Ambernath

Founded

Company incorporated in January 2001 Prior to this the promoters were in energy audits and project management services One of the up coming players in the mid-segment LSTK, EPC & skidding market which has a presence of very few large players

Position

Founded in 2001
Awarded its first Energy Saving Project from Tata Steel in 2002 Undertook many Energy Audits and low-value projects Total number of employees: 4

10

 Diversification to New Area of Process Cooling Moved into new premises with 9000 sq. of operating area 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 Directors

DATE OF BIRTH DATE OF APPOINTMENT PERMANENT ADDRESS
501, 5* Floor, Karuna Bldg., 11th road, Plot no. 537, Chembur, Mumbai 71. NL-6, Bldg. No. 18, Room No.-101, Phase 11, sector18, * Nerul, Navi Mumbai. 201, Jay Shivshakti CHS,Jawaharlal Nehru Road,Mulund(w),Mumbai 80.

NAME OF DIRECTORS
Mr. Saji Joseph Antony

PAN NO.

TELEPHONE NO.

21.05.1960

22.01.2001

AABPA7533K

022-27781916

Mr. Mathai Thomas

09.11.1948

01.02.2002

ANCPM8550G

022-27781916

Mr. Arvind Hemraj Nagda

27.03.1974

14.01.2008

ABZPN0360J

022-25900870

Mr.Pashupathy Puthuseri Veedu

30.07.1961

14.01.2008

3, Ashwini B-Wing, Apna Ghar Housing society, Andheri(w), Mumbai- 53

AGUPP0672M

022-27781916

11

What they deal in ( Company Profile )

12

Growth Statistics

13

CHAPTER 4 REVIEW OF LITERATURE

14

 Project finance is the financing of long-term infrastructure and industrial projects based upon a complex 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.

15

16

 SOURCES OF FUNDS
A 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) SHARES

Ordinary 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. 17

 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 company is 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 acceptance of 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 FINANCING

1.

TECHNICAL APPRAISAL
Clearly, every project must be technically feasible. Technical Appraisal provides a comprehensive 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 that success be replicated in current context and conditions. Does the technology/ process/ equipment technically fit with the facilitys existing technology/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 the equipment. Equipment capacity & whether it is as per requirement List of recommended equipment suppliers. 18

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.

19

CHAPTER 5 RESEARCH METHODOLOGY

20

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 was necessary 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. 21

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 Data
The 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 Method
I as a researcher interviewed the internal dept by Face to Face interview.

22

CHAPTER 6 DATA ANALYSIS AND INTERPRETATIONS

23

 ONGC PROJECT ( TOTAL PROJECT VALUE 700 LACS) OF 2004

ONGC Project

AMOUNT IN LACS BUDGET EXPNESES 320.00 70.00 60.00 35.00 67.00 16.00 15.00 583.00 ACTUAL EXPENSES 358.00 83.00 64.00 49.00 86.00 23.00 20.00 683.00 ADDITIONAL EXP. ABOVE BUDGET 38.00 13.00 4.00 14.00 19.00 7.00 5.00 100.00

ITEMS Material Expenses Labour Expenses Overhead Expenses Administrative Expenses House keeping expense Water charges Seminars & training TOTAL VALUE

800.00 700.00 600.00 500.00 400.00 300.00 200.00 100.00 AMOUNT IN LACS ADDITIONAL EXP. ABOVE BUDGET AMOUNT IN LACS BUDGET EXPNESES AMOUNT IN LACS ACTUAL EXPENSES

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

24

 ONGC PROJECT ( TOTAL PROJECT VALUE 1300 LACS) OF 2005

ONGC Project

AMOUNT IN CRORE BUDGET EXPNESES 720.00 135.00 108.00 60.00 120.00 30.00 20.00 1,193.00 ACTUAL EXPENSES 753.00 144.00 124.00 55.00 115.00 43.00 22.00 1,256.00 ADDITIONAL EXP. ABOVE BUDGET 33.00 9.00 16.00 (5.00) (5.00) 13.00 2.00 63.00

ITEMS Material Expenses Labour Expenses Overhead Expenses Administrative Expenses Housekeeping expense Water charges Seminars & training TOTAL VALUE

100% 80% 60% ADDITIONAL EXP. ABOVE BUDGET 40% ACTUAL EXPENSES 20% 0% -20% BUDGET EXPNESES

Net Profit By Project 44Lacs (Total Project Value Less Total Actual Exp.)

25

 ONGC PROJECT ( TOTAL PROJECT VALUE 1500 LACS) OF 2006

ONGC Project

AMOUNT IN CRORE BUDGET EXPNESES 840.00 155.00 120.00 70.00 125.00 38.00 22.00 1,370.00 ACTUAL EXPENSES 876.00 162.00 138.00 71.00 133.00 44.00 23.00 1,447.00 ADDITIONAL EXP. ABOVE BUDGET 36.00 7.00 18.00 1.00 8.00 6.00 1.00 77.00

ITEMS

Material Expenses Labour Expenses Overhead Expenses Administrative Expenses House keeping expense Water charges Seminars & training TOTAL VALUE

3,500.00 3,000.00 2,500.00 2,000.00 1,500.00 1,000.00 500.00 ADDITIONAL EXP. ABOVE BUDGET ACTUAL EXPENSES BUDGET EXPNESES

Net Profit By Project 53Lacs (Total Project Value Less Total Actual Exp.)

26

 ONGC PROJECT ( TOTAL PROJECT VALUE 1800 LACS) OF 2007

ONGC Project

AMOUNT IN CRORE BUDGET EXPNESES 1,075.00 165.00 127.00 78.00 122.00 48.00 24.00 1,639.00 ACTUAL EXPENSES 1,125.00 176.00 137.00 87.00 121.00 52.00 23.00 1,721.00 ADDITIONAL EXP. ABOVE BUDGET 50.00 11.00 10.00 9.00 (1.00) 4.00 (1.00) 82.00

ITEMS

Material Expenses Labour Expenses Overhead Expenses Administrative Expenses House keeping expense Water charges Seminars & training TOTAL VALUE

TOTAL VALUE Seminars & training Water charges House keeping expense Administrative Expenses Overhead Expenses Labour Expenses Material Expenses -20% 0% 20% 40% 60% 80% 100% AMOUNT IN CRORE BUDGET EXPNESES AMOUNT IN CRORE ACTUAL EXPENSES AMOUNT IN CRORE ADDITIONAL EXP. ABOVE BUDGET

Net Profit By Project 79Lacs (Total Project Value Less Total Actual Exp.)

27

 ONGC PROJECT ( TOTAL PROJECT VALUE 1275 LACS) OF 2008

ONGC Project

AMOUNT IN CRORE BUDGET EXPNESES 695.00 130.00 105.00 57.00 118.00 28.00 18.00 1,151.00 ACTUAL EXPENSES 728.00 142.00 118.00 69.00 129.00 22.00 21.00 1,229.00 ADDITIONAL EXP. ABOVE BUDGET 33.00 12.00 13.00 12.00 11.00 (6.00) 3.00 78.00

ITEMS

Material Expenses Labour Expenses Overhead Expenses Administrative Expenses House keeping expense Water charges Seminars & training TOTAL VALUE

Material Expenses Labour Expenses Overhead Expenses Administrative Expenses House keeping expense Water charges Seminars & training TOTAL VALUE

Net Profit By Project 46Lacs (Total Project Value Less Total Actual Exp.)

28

 ONGC PROJECT ( TOTAL PROJECT VALUE 2500 LACS) OF 2009

ONGC Project

AMOUNT IN CRORE

ITEMS

BUDGET EXPNESES

ACTUAL EXPENSES

ADDITIONAL EXP. ABOVE BUDGET

Material Expenses Labour Expenses Overhead Expenses Administrative Expenses House keeping expense Water charges Seminars & training TOTAL VALUE

1,625.00 195.00 180.00 110.00 150.00 60.00 25.00 2,345.00

1,632.00 217.00 187.00 109.00 155.00 63.00 24.00 2,387.00

7.00 22.00 7.00 (1.00) 5.00 3.00 (1.00) 42.00

3,000.00 2,500.00 2,000.00 1,500.00 1,000.00 500.00 0 (500.00) 2 4 6 8 10

BUDGET EXPNESES ACTUAL EXPENSES ADDITIONAL EXP. ABOVE BUDGET

Net Profit By Project 113Lacs (Total Project Value Less Total Actual Exp.)

29

 PROFIT COMPARISON SHEET FOR THE YEAR FROM 2004 TO 2009

( Amount in lacs )

Year

Project Value

Net Profit

% of profit on Project value

2004 2005 2006 2007 2008 2009

700 1300 1500 1800 1275 2500

17.00 44.00 53.00 79.00 46.00 113.00

2.43% 3.38% 3.53% 4.39% 3.61% 4.52%

5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 1 2 3 4 5 6 7 % of profit on Project value Net Profit Project Value Year

30

 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 2005 2006 2007 2008 2009

700 1300 1500 1800 1275 2500

683.00 1,256.00 1,447.00 1,721.00 1,229.00 2,387.00

97.57% 96.62% 96.47% 95.61% 96.39% 95.48%

2500

2000

1500

Year Project Value Actual Expenses incurred

1000

% of Expenses on Project value

500

0 1 2 3 4 5 6 7

31

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. Further, the authorized share capital of our Company was increased to 500 million divided into 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. Further, the authorized share capital of our Company was increased to 650 million divided into 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 unissued 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. 32

Further, the authorized share capital of our Company was increased to 900 million divided into 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. Further, the authorized share capital of our Company was increased to 950 million divided into 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 Capital

DATE OF ALLOTMENT NUMBER OF PREFERENCE SHARES
50,000.00

FACE VALUE

ISSUE PRICE/REDEMPTION PRICE

200

NATURE OF CONSIDERAT ION

Cash

REASONS FOR ALLOTMEN T

Preferential Allotment

20-Aug-10

10

4-Feb-11

50,000.00

10

200

Redemption

Cost of Equity Share Capital

DATE OF ALLOTMENT NAME OF THE SHAREHOLDER NO. OF SHARES ISSUE PRICE REASONS FOR ALLOTME NT allotment REASONS FOR ALLOTMENT Preferential Allotment Preferential Allotment

4-Aug-09

Promoter Group

1,000,000

10

20-Jun-11

Promoter Group

1,000,000

10

allotment

33

REVENUE VERSUS PROFIT AFTER TAX FROM 2004-2009

From 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 GLANCE

YEAR 2004 2005 2006 2007 2008 2009 SALE (AMT MILLION) 100 200 250 325 410 500 PROFIT ( AMT MILLION) 2 5 8.5 10 12.75 15

600 500 400 300 200 100 0 2004 SALE PROFIT

2005

2006

2008

2009

2010

34

QUARTERLY CLOSINGS IN 2009

QUARTER SALES PROFIT

Q109 120 3.5

Q209 130 3.75

Q309 125 3.25

Q409 125 4.5

140 120 100 80 SALES 60 40 20 0 Q109 Q209 Q309 Q409 PROFIT

PERFORMANCE HIGHLIGHTS
Net 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

BUSINESS PERFORMANCE
For 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 2009-2010

Year 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 Sales in Million 100.00 200.00 250.00 325.00 410.00 500.00 550.00

Sales in Million
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

36

SAVAIR PROFIT/LOSS YEAR WISE:

Year 2004 2005 2006 2007 2008 2009 2010 Profit in Million 2.00 5.00 8.50 10.00 12.75 15.00 17.00

2500

2000

1500 Profit in Million Year 1000

500

0 1 2 3 4 5 6 7 8

37

COMPARISON BETWEEN YEARS

Financial Year 2004 2005 2006 2007 2008 2009 2010 Profit Comparison (Million) 3.00 3.50 1.50 2.75 2.25 2.00 3.00

2014

2012

2010

2008 Profit Comparison (Million) Financial Year 2004

2006

2002

2000

1998 1 2 3 4 5 6 7

38

Sources of Finance:
Company can use any of the following sources or combination of finance to their project 1. 2. 3. 4. Initial Public Offer (IPO) Private Equity Fund Term Loan from Bank 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. 40

ADVANTAGES OF IPO
The 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 OVERVIEW

The 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 IPO

IPO 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 IPOS
It 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 FUNDINGS
Rules 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 GRADING
The 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 FUND

What 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 CASE

In 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 fingers 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 earlystage, 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 industryspecific 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 CAPITAL
Starting 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. 46

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

The venture capitalist is able to provide practical advice and assistance to the company based on past 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 the company, 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 WORK

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. 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 47

SELECTING THE VC INVESTORS

The 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 FOR

Venture 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. 48

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 BUSINESSES
Venture 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 MANAGEMENT

Venture 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 STRUCTURE

As 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 OPPORTUNITY
Lastly, 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. 49

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 PLAN

Venture 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 LOAN

Company 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 years 2. Statement showing Cost of the Project and means of the finance 3. CMA Report for the projections for the next five years related to the existing and proposed plan 4. 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 Statement 6. Net Worth certificate of the company certified by the Statutory Auditor of the Company 7. Net Worth certificate of the Directors who are giving guarantee to the term loan 8. Business plan for which the bank has to finance 9. Bank Statements for last one year

10. 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 INDICATORS

A 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 52

ACCOUNTING METHODS AND PRINCIPLES

Financial 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 + Other Income + Non Operating Income. PBDIT = Profit before Dividend, Interest & Tax Amount is already calculated in Income Statement . 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 53

 Cash Profit = Depreciation + Profit after Tax [both figure is already calculated in Income 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 BlockDepreciation) 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 in Balance 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 how 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. 2. The Company Should more Concentrate on the loss side which mean they should rectify how the loss 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. 3. The company should bring more storage system in the lab so that there is no fear for the damage of 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 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 and development. 4. In the Case of the finance Department should impose more concentration on the expenses and how 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 the loss 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 damage of 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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