Financial Management

1. Debentures
Presented by : Rouble (25168)
Semester : 2
Sector : Hospital Management

2. What are Debentures ?
❖ Debenture is an instrument issued by a company under its common
seal, acknowledging it’s debt to the holder and containing an
undertaking to repay the debt on or after a specified period and to
pay interest on the debt at a fixed rate.
❖ Debenture Holder : The person to whom the debentures are issued.

4. Features of Debentures
❖ A debenture acknowledges a debt.
❖ It is in the form of certificate issued under the seal of the
company. It usually shows the amount and date of repayment.
❖ It has a rate of interest & date of interest payment.
❖ Debentures can be secured against the assets of the company
or may be unsecured.
❖ Debenture holders have no rights to vote in the company’s
general meetings of shareholders, but they may have separate
meetings.

5. Advantages :
❖ Does not result in the
dilution of ownership.
❖ Company gets the tax
benefit (Interest paid on
debenture is tax deductible
expense.)
❖ Debenture holders do not
interfere with the working of
the organisation.
❖ Payment of interest is fixed
& the firm does not have to
share profits with them.
Disadvantages :
❖ Payment of interest on
debenture is mandatory.
Non-payment during low
profits can lead to
bankruptcy of the firm.
❖ The company needs to plan
properly and keep funds for
repayment.
❖ It may prove to be costly and
difficult source of finance for
the company.

6. Venture Capital

7. Definition
❖ Venture capital (VC) is a form of private equity and a
type of financing that investors provide to start-up
companies and small businesses that are believed to
have long-term growth potential. Venture capital
generally comes from well-off investors, investment
banks, and any other financial institutions.

9. Features :
❖ High Risk
❖ Lack of Liquidity
❖ Long term horizon
❖ Equity participation and capital gains
❖ Venture capital investments are made in innovative projects
❖ Suppliers of venture capital participate in the management of the
company

10. Advantages of Venture capital :
❖ Economy Oriented
❖ Investor Oriented
❖ Entrepreneur Oriented

11. Thank You !