This document summarizes various sources of finance available to oil, gas, and petroleum companies. It discusses internal sources like profits, customers, and suppliers. It also outlines various external sources of equity and debt finance, including short, medium, and long-term debt options like bank loans, debentures, leasing, etc. Finally, it provides details on important financial items that would be present on the balance sheets of oil companies, such as share capital, long-term borrowings, types of debentures, loans from development boards, and external commercial borrowings.
Call Money
Notice Money
Definition of Call Money
Definition of Notice Money
FEATURES OF CALL MONEY
CALL MONEY MARKET
REASONS FOR EXISTENCE OF CALL MONEY
IMPACT OF CALL MONEY
The presentation was done as a project for a MOOC progamme conducted by the World Bank on Coursera.
The programme "Financing for Development aimed at providing participant with the knowledge of finance and development, the Sustainable Development Goals (SDGs), the challenges of financing the SDGs and sources of financing SDGs
Call Money
Notice Money
Definition of Call Money
Definition of Notice Money
FEATURES OF CALL MONEY
CALL MONEY MARKET
REASONS FOR EXISTENCE OF CALL MONEY
IMPACT OF CALL MONEY
The presentation was done as a project for a MOOC progamme conducted by the World Bank on Coursera.
The programme "Financing for Development aimed at providing participant with the knowledge of finance and development, the Sustainable Development Goals (SDGs), the challenges of financing the SDGs and sources of financing SDGs
IT Infrastructure @ Essar Oil Ltd.(ITIL)Darshan Khant
This Presentation will give you overview about ITIL(It infrastructure Library).It shows you how IT infrastructure management practice implement in companies with huge IT Network and get benefit through Service Management
Pwning Iot via Hardware Attacks - Chase Schultz - IoT Village - Defcon 23Chase Schultz
Slides from Defcon IoT Village Workshop
Ever wondered how people get shells via hooking up to chips or pins on a board? Or how to dump the firmware off a device you own at home? How chips that send those bits, bytes, and nibbles flying across traces on a board can be analyzed for profit? The Pwning IoT Devices via Hardware Attacks workshop is focused on a hands-on learning experience, of how people use hardware attacks to get initial access IoT Devices for security research. This workshop is designed for people new to hardware hacking, looking to have fun exploiting the Internet of (broken) Things. So come on out if you're looking to join the embedded system & IoT exploitation party!
Alternative Structures- PO Financing, Factoring & MCA (Series: Business Borro...Financial Poise
Purchase-order financing (P/O financing) is a type of asset-based loan designed to extend credit to a company that needs cash quickly, to fill a customer order. A company may operate with such a small amount of working capital that it cannot afford to pay the cost of producing a customer’s order. P/O financing enables such a company to not turn away business, by borrowing from a lender using the purchase order itself as collateral to support a loan.
Factoring is one of the oldest forms of business financing. Note that the term is “financing” rather than “loan” because factoring is not actually a loan. In a typical factoring arrangement, the company needing financing makes a sale, delivers the product or service and generates an invoice. The factor (the funding source) then purchases the right to collect on that invoice by agreeing to pay the company in need of financing the amount of the invoice minus a discount.
MCA lending is, in summary, an advance on a company’s sales. Financing through a merchant cash advance (MCA) is used mostly by companies that accept credit and debit cards for most of their sales, typically retailers and restaurants. The concept is this: funder purchases a portion of the company’s future credit card receivables for a discounted lump sum. The MCA funder receives the purchased credit card receivables as they are generated either by taking a percentage of the company’s daily credit card proceeds or by debiting a certain amount of funds from the company’s bank account. Depending on the risk profile of the company, it can be a more expensive form of financing for a business compared to other types of financing.
What these three things have in common is that they are each a type of “alternative lending.” Alternative to what? To the type of loan a company can get from a “regulated” commercial bank. This webinar explains these types of financing arrangements, what to consider before entering into them, and provides some tips on how to negotiate them.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/alternative-structures-po-financing-factoring-mca-2020/
Alternative Structures - PO Financing, Factoring & MCA (Series: Business Borr...Financial Poise
Purchase-order financing (P/O financing) is a type of asset-based loan designed to extend credit to a company that needs cash quickly, to fill a customer order. A company may operate with such a small amount of working capital that it cannot afford to pay the cost of producing a customer’s order. P/O financing enables such a company to not turn away business, by borrowing from a lender using the purchase order itself as collateral to support a loan.
Factoring is one of the oldest forms of business financing. Note that the term is “financing” rather than “loan” because factoring is not actually a loan. In a typical factoring arrangement, the company needing financing makes a sale, delivers the product or service and generates an invoice. The factor (the funding source) then purchases the right to collect on that invoice by agreeing to pay the company in need of financing the amount of the invoice minus a discount.
MCA lending is, in summary, an advance on a company’s sales. Financing through a merchant cash advance (MCA) is used mostly by companies that accept credit and debit cards for most of their sales, typically retailers and restaurants. The concept is this: funder purchases a portion of the company’s future credit card receivables for a discounted lump sum. The MCA funder receives the purchased credit card receivables as they are generated either by taking a percentage of the company’s daily credit card proceeds or by debiting a certain amount of funds from the company’s bank account. Depending on the risk profile of the company, it can be a more expensive form of financing for a business compared to other types of financing.
What these three things have in common is that they are each a type of “alternative lending.” Alternative to what? To the type of loan a company can get from a “regulated” commercial bank. This webinar explains these types of financing arrangements, what to consider before entering into them, and provides some tips on how to negotiate them.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/alternative-structures-po-financing-factoring-mca-2021/
The Basics of Accounts Receivable Financing: What You Need to KnowM1xchange
Are you a business owner looking to optimize your cash flow and unlock the potential of your accounts receivable? Accounts receivable financing might just be the solution you need. In this comprehensive guide, we'll delve into the basics of accounts receivable financing, exploring its benefits, how it works, and important considerations. Whether you're a small business owner or an experienced entrepreneur, understanding this financial tool can give your business the boost it needs.
The Ultimate Guide to Invoice Financing: Everything You Need to KnowM1xchange
Cash flow is the lifeblood of any business. However, sometimes it can be a struggle to maintain a steady stream of cash, especially for small businesses. This is where invoice financing comes in. In this guide, we'll cover everything you need to know about invoice financing, including what it is, how it works, and the benefits and drawbacks.
Open Business Council offers resources, Trade Finance, business advice, SME Finance and a forum and directory for businesses!
http://www.openbusinesscouncil.org/
What all financing options are available for SMEs .pptxM1xchange
The financing options available to SMEs vary from industry to industry. Financing options will also change as the business owner's needs change over time. From start up through growth and expansion, SMEs have many different ways to secure funding for their businesses.
Invoice Financing A Quick and Easy Way to Get Your Cash.pptxM1xchange
Invoice financing is the fastest and easiest way to get cash for your business. It's a simple solution for any business that needs working capital without having to jump through hoops with banks or other traditional lenders.
Approaching Your BankerTips1. Keep in mind tha.docxrossskuddershamus
Approaching Your Banker
Tips
1. Keep in mind that to stay in business banks need to make loans.
Do not be afraid to ask for one. That is what the Commercial Account Manager wants you to do. To increase your chances of getting a loan, look for a bank that is familiar with your industry and who has done business with companies like yours. Seek out banks that are active in small business financing. Some banks lend on a conventional basis (lending money without government support), while some banks participate in government programs (in the form of government participations involving direct government funds or loan guarantees). However, be aware that banks often demand stiff collateral requirements for start-ups.
2. As an entrepreneur, make sure that you are thoroughly prepared when you go to your banker's office to request a loan.
You need to show your bankers that a loan to you is a low-risk proposition. Have on hand a completed Business PlanManagementMarketsMaterialsMoney Copies of cash flow (12Mth) Financial statement projections (3-4yrs)
3. Learn to anticipate every question that he or she has. Remember, the combination of information and preparation is the most powerful negotiating tool in the world. A confident and thoroughly prepared borrower is four times more likely to have his or her loan approved than a borrower who does not know the answer to some of the basic questions a banker asks. To show the extent of your preparedness, your business plan should also include answers to your banker's questions.
These questions normally are:
How much money do you need? Be as exact as possible; although adding a little extra for contingencies will not hurt. How long do you need it for? Be prepared to go into detail about what the money will do for you and why your business is a good risk. What are you going to use it for? Businesses use loans for three things: to buy new assets, pay off old debts, or pay for operating expenses. When and how you will repay for it? Your cash flow projections should provide a repayment time frame. Convince the banker of the long-term profitability of your business and your ability to repay the loan by using your financial projections and business plan. What will you do if you do not get the loan? Is your request Safe and Sound.
4. Do not take an apologetic and negative attitude. Keep your negativity in check. Present yourself as an entrepreneur who can and will repay the loan. Boost your image by providing your Commercial Account Manager with any promotional materials about your business, such as brochures, ads, articles, press releases, etc.
5. Dress in a professional manner for the interview. This is a business transaction, so treat it as such.
6. Do not stretch the truth in your loan application. Broad, unsubstantiated statements should be avoided. The lender can easily check many of the facts on your application. If you cannot support statements with solid data, then don't make them.
10 Ways for Hiring a Debt collection Agency.pptxDebt Nirvana
Navigating the complexities of debt collection is a common challenge for businesses, regardless of their size or industry. Debt Nirvana, a reliable and professional debt collection agency, offers a solution to this predicament. With a focus on addressing the intricacies of financial sectors, including banks, Debt Nirvana understands the importance of maintaining a healthy financial standing. The agency provides a range of services, from recovering long-term debts efficiently to increasing overall productivity by allowing internal teams to focus on core business functions. Debt Nirvana's involvement goes beyond debt collection, offering additional services such as legal support, investigative agents, and credit reports, making it a one-stop-shop for comprehensive credit control needs. With a qualified team of debt collection agents and a transparent fee structure, Debt Nirvana ensures a professional and ethical approach to debt recovery. For businesses seeking timely and effective debt resolution, Debt Nirvana can be reached at +91-9810010294 or via email at rvm@debtnirvana.com. Secure your financial well-being with Debt Nirvana's expertise and experience in debt collection.
The five step guide to financing recruitment business growthOutsauce
Make the most informed decisions on your journey to business growth.
Find out:
How to prepare for success
The pros and cons of every funding option
The unique benefits of factoring and invoice discounting
The power of corporate finance
Tips to take it to the next level - including acquiring another business and selling your agency
How Accounts Receivable Financing Can Help Your Business Grow.pptxM1xchange
Accounts receivable financing is a viable option for businesses that need to improve their cash flow and grow their business. By using their invoices as a source of funding, they can access immediate cash without taking on debt or equity. They can also benefit from flexible and scalable financing that depends on their sales volume and quality. Moreover, they can outsource their credit management to the financier and focus on their core operations.
Need capital to start, grow and manage your business, we provide loans in the form of short term loans and long term loans, check your ability to get a loan by bank loan rating and credit score check. Get complete information about the Syndication & Funding right from Term Loans to Unsecured Loans and the Process.
We understand the unique challenges that come with debt collection in a city as dynamic as London. But we're not just any debt collection agency. We're Frontline Collections. We have the expertise, the dedication, and the drive to deliver the results you need.
So, if you're seeking a reliable partner for your debt collection needs in London, look no further than Frontline Collections. We're not just in the heart of the city; we're also at the heart of successful debt recovery.
Frontline Collections' London Office - your trusted partner in debt recovery.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
NO1 Uk Black Magic Specialist Expert In Sahiwal, Okara, Hafizabad, Mandi Bah...Amil Baba Dawood bangali
Contact with Dawood Bhai Just call on +92322-6382012 and we'll help you. We'll solve all your problems within 12 to 24 hours and with 101% guarantee and with astrology systematic. If you want to take any personal or professional advice then also you can call us on +92322-6382012 , ONLINE LOVE PROBLEM & Other all types of Daily Life Problem's.Then CALL or WHATSAPP us on +92322-6382012 and Get all these problems solutions here by Amil Baba DAWOOD BANGALI
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Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
NO1 Uk Divorce problem uk all amil baba in karachi,lahore,pakistan talaq ka m...Amil Baba Dawood bangali
Contact with Dawood Bhai Just call on +92322-6382012 and we'll help you. We'll solve all your problems within 12 to 24 hours and with 101% guarantee and with astrology systematic. If you want to take any personal or professional advice then also you can call us on +92322-6382012 , ONLINE LOVE PROBLEM & Other all types of Daily Life Problem's.Then CALL or WHATSAPP us on +92322-6382012 and Get all these problems solutions here by Amil Baba DAWOOD BANGALI
#vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore#blackmagicformarriage #aamilbaba #kalajadu #kalailam #taweez #wazifaexpert #jadumantar #vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore #blackmagicforlove #blackmagicformarriage #aamilbaba #kalajadu #kalailam #taweez #wazifaexpert #jadumantar #vashikaranspecialist #astrologer #palmistry #amliyaat #taweez #manpasandshadi #horoscope #spiritual #lovelife #lovespell #marriagespell#aamilbabainpakistan #amilbabainkarachi #powerfullblackmagicspell #kalajadumantarspecialist #realamilbaba #AmilbabainPakistan #astrologerincanada #astrologerindubai #lovespellsmaster #kalajaduspecialist #lovespellsthatwork #aamilbabainlahore #Amilbabainuk #amilbabainspain #amilbabaindubai #Amilbabainnorway #amilbabainkrachi #amilbabainlahore #amilbabaingujranwalan #amilbabainislamabad
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Sources of finance for Oil,Gas and Petroleum companies.
1. SOURCES OF FINANCE
FOR OIL, GAS & PETROLEUM COMPANIES
BY:
M.HARISH-2B4-15
A.SAI KUMAR-2B4-1
SAI SARATH
SRI SUDHA
VARSHA
SWAPNA
2. INTERNAL SOURCES OF FUNDS
There are three sources of funding within your business – profits, customers and
suppliers.
Profits
Profit management and distribution is the first internal funding source. When a
business makes a profit, the owners have two choices. They can either take the
money out of the business or leave it in the business. Money taken out reduces the
capital or equity of the business. However, if the owner chooses to leave the profits
in the business, the capital increases and can be used to finance the expansion of
the business. Even more important, in inflationary times, these retained profits
canbe used to offset the increased replacement costs of both current and fixed
assets.
Profits are like the interest on a savings account. If you take the interest out of
your savings account every year, the balance of the account will grow only if you
add more money. However, if you leave the interest in the account, then it starts to
compound and your account balance grows faster.
As an internal source of finance, assets and liability management must also be
carefully watched. If an item is stock is a slow mover, you may wish to sell it at a
discount and stop ordering it. You might also consider selling some of your fixed
assets in favor of a less costly alternative in order to generate cash. For example,
it might be cheaper to reimburse your employees for the use of their personal cars
rather than buy or lease vehicles for the business.
For an example of liability management see details under the heading “Suppliers
Credit.
Customers
You can raise money from your customers by expediting your collections from
them. If you can get money moving into your business faster, you will have more
available for your needs. For instance, if your customers pay you quickly, you will
have the cash necessary to take advantage of cash or quantity discounts. These
discounts can reduce the cost of your merchandise and thereby increase your
profits. You can increase customer collections in two ways. Firstly, you can
encourage partial payments on long term projects where appropriate. Secondly,
you can put an aggressive credit collection policy into effect. This should reduce
the number of bad debts that you might acquire as well as encourage your
customers to pay their debts quickly. Both of these methods will increase your
cash-flow.
3. Suppliers’ credit
This is an excellent source of low –or no-cost money. Suppliers may be willing to
extend interest free credit on purchases of goods or services to well established
customers. This means that you may be able to order, obtain delivery, and sell an
item before you have to pay for it. This is the same as an interest free loan. To keep
this source available to you, however, it is essential that you build and safeguard
your relationships with your suppliers carefully
EXTERNAL SOURCES OF FUNDS
Equity
Equity is one of the two external funding sources available to you. Equity funds are
those generated by the invested capital of a firm. The best source of start-up funds
is equity and if you do not have the funds available personally, you should look to
other sources such as partners, co members in a close corporation, or coshareholders in a private company. Of course, if you want to “go it alone” or
cannot find willing investors, you may need to resort to borrowing (debt).
Remember, however, that you will encourage financial backing from outsiders if
you show that you are making an adequate financial contribution yourself. One of
the causes of applications for finance being rejected is the failure by the owners of
the business to make an adequate personal capital contribution. Your potential
financial backer may regard this as lack of commitment.
Borrowing (debt)
The prospects of a small business depend almost entirely on the ability, energy and
character of the person in charge. Whoever supplies the business with debt finance
is in fact risking his capital on the accuracy of his judgment of the personal
capacity of the owner of the business.
Thus, however good the small business manager may be, only those who have had
the opportunity to become closely acquainted with him are likely to have the
necessary confidence to entrust him with their money.
The amount of cash required by you is likely to be raised in direct proportion to
your financier‟s willingness to invest based on his assessment of your training,
experience, expertise, etc. Every Financier will have his own individual approach
to the client, but if one takes the average bank Manager as an example, one thing
is certain: the banker regards his relationship with his client as a Partnership and,
like all good partners, he is trying to be as difficult as possible or to make the
Maximum amount of money out of his customer.
4. The banker knows that success is dependent upon the success of his client and the
building of along term relationship between the bank and the client and the
building of a long term relationship between the bank and the client. With this in
mind, the relationship with your banker should be one of complete honesty. Always
keep your bank manager informed – if things are going wrong, tell him; if things
are going right, also tell him! In this way both parties will be better equipped to
make progress into the future.
SHORT –TERM SOURCES OF DEBT FINANCE
The most common forms are:
Bank overdraft
This is probably the most available and appropriate source of short-term
borrowings. Subsequently to negotiation, the bank allows the borrower to
overdraw his account up to a specified limit, which is reviewed on a regular basis,
normally annually. This gives the entrepreneur the flexibility of altering his
financing requirements from day to day according to his cash flow.
With overdrafts, interest is calculated on the daily outstanding balance. This
means that no interest is paid on any unutilized portion of the facility. Interest
rates charged fluctuate with the prime rate and this facility is generally used for
financing increases in working capital. However, it is also useful when bridging
finance is required where a gap exists between a long-term debt and the long-term
Source of finance becoming available. It is important to realize that bank
overdrafts are repayable on demand.
Factoring
Factoring is a term referring to the raising of funds by the sale or assignment of
book debts to a third person i.e. a factor. The sale is normally with recourse to the
“seller” for uncollectable debts. It may include all or some of the debts sold. The
system may require the debtor to pay direct to the factor or via the original
creditor as an agent for the factor, and completes the transaction as agent of the
factor. This latter method has the advantage of maintaining the confidentiality of
the arrangement between the seller and the factoring house.
Factoring is a very convenient method of financing shortages in working capital
and is frequently an attractive proposition to a new business faced with a
substantial growth in sales which need to be financed. However, one needs to
ensure that gross income margins generated by these sales can satisfactory absorb
the costs of the factoring procedure.
An additional advantage of factoring accrues to the seller by the possible savings
in staff and paperwork associated with maintaining accounts and monitoring
5. debtors. Furthermore, cash isreceived immediately and the seller is not obliged to
include a discount for prompt payment. Mostbanks have factoring divisions.
Shippers finance
A shipper (or customer) is a financial institution which provides finance and a host
of other services to its clients.Today, the functions of the confirming houses take
the following basic forms:
· Providing working capital:The confirmer provides facilities to clients, to create
additional working capital and enable the client to finance his stock and
receivables.
Sophisticated forms of finance are provided which can briefly be summarized into
three broad
Categories:
· An overseas purchase facility.
· A local purchase facility.
· The discounting of customers‟ bills.
· Providing services:The confirmer attends to the physical handling of the goods
and the documentation relative thereto, and provides specialized services in order
to expedite receipt and reduce the cost of imports into South Africa.
· Providing backing, assistance and financial expertise:The confirmer backs and
assists the client with the technical and credit expertise that the confirming house‟s
management possesses, thereby increasing profitability and thus helping
companies to grow from small to large organizations.
MEDIUM-TERM SOURCES OF DEBT FINANCE
In financial language, „medium-term‟ can be thought of as constituting a broad
and ill-defined border between short-term and long-term. As a result, this type of
finance has a variety of applications such as financing additional working capital,
acquisition of fixed assets, etc.
Medium-term loans
A common form of finance is the “medium-term loan” which normally provides
finance for up to five years and in accordance with a strict set of conditions
outlined in a term loan letter of offer by the financial institution and accepted by
the client.
Generally the lender will require security for the loan and seek to entrench the
safety of the loan by imposing certain restrictions on the borrower, such as
maximum permissible equity to debt and working capital ratios, and limitations on
the sale or pledge of assets and payment of dividends.
6. Term loans are normally tailored to meet the particular cash flow requirements of
a business. They are used for the finance of both current assets and fixed assets.
Installment sale
Previously known as Hire Purchase, the most common application is to finance the
acquisition of vehicles or equipment. In terms of the regulations in the Credit
Agreements Act, a deposit is normally required and, depending on the acquisition,
the period for payment is fixed. The goods purchased are registered in the owner‟s
name and are always taken as prime security for the debt.
Leasing
Leasing is a method of reducing capital funding requirements. Instead of acquiring
finance to purchase fixed assets, the process is cut short by obtaining the use but
not ownership of the required assets in return for a periodic lease payment.
Leasing, based on the principle that income is earned from the use of an asset, not
the ownership, provides the following advantages:
Cash resources may be released for more profitable trading and for the provision
of working capital.
Maintenance costs are reduced to a minimum by immediate replacement with new
equipment at the end of the lease period.
Plant and equipment are financed over a period directly related to their productive
capacity and useful life.
Budgeting is simplified, as the monthly cash flows are known, as is the date when
the equipment must be replaced.
Rental payments are deducted in full for tax purposes. These payments are a
charge against profits before tax, whereas Installment sale payments are paid out
of income after tax.
LONG-TERM SOURCES OF FINANCE
Long-term debt finance
Into this category building societies and insurance companies. Insurance company
policy holders can, under certain conditions, borrow money against the surrender
value of their policies and this may be one way of raising capital for the new
venture of your choice. Building societies, on the other hand, may be open to
entertaining your proposal for long-term loan against the security of your private
residence. These funds could then be injected into your business.
7. Participation bonds
Bond finance for up to 20 years can be arranged for the erection
ofcommercial/industrial property or against commercial/industrial premises
owned by you. No capital (i.e. interest only) is repaid for the first five years.
Thereafter the loan is repaid in annual installments. For bond purposes the value
of the property is based on its revenue-producing potential and not on the
replacement or intrinsic value of the property.
The long-term sources of finances can be raised from the following sources:
· Share capital or Equity Share.
· Preference shares.
· Retained earnings.
· Debentures/Bonds of different types.
· Loans from financial institutions.
· Loan from State Financial Corporation.
· Loans from commercial banks.
· Venture capital funding.
· Asset securitization
IMPORTANT ITEMS IN ALL OF THE OILCOMPANIES:
Share capital:
The amount of share capital a company reports on its balance sheet only accounts
for the initial amount for which the original shareholders purchased the shares
from the issuing company. Any price differences arising from price
appreciation/depreciation as a result of transactions in the secondary market are
not included.
For example, suppose ABC Inc. raised $2 billion from its initial public offering.
Over the next year, the total value of its shares increases to $5 billion. In this case,
the value of the share capital is still only $2 billion because ABC Inc. had received
only $2 billion from the sale of its securities to the investing public.
Long-term Borrowings:
Debentures:
Debentures have no collateral. Bond buyers generally purchase debentures based
on the belief that the bond issuer is unlikely to default on the repayment. An
8. example of a government debenture would be any government-issued Treasury
bond (T-bond) or Treasury bill (T-bill). T-bonds and T-bills are generally
considered risk free because governments, at worst, can print off more money or
raise taxes to pay these type of debts.
Non-convertible Debentures:
Debentures are long-term financial instruments which acknowledge a debt
obligation towards the issuer. Some debentures have a feature of convertibility into
shares after a certain point of time at the discretion of the owner. The debentures
which can't be converted into shares or equities are called non-convertible
debentures (or NCDs).
Description:
Non-convertible debentures are used as tools to raise long-term funds by
companies through a public issue. To compensate for this drawback of nonconvertibility, lenders are usually given a higher rate of return compared to
convertible debentures.
Besides, NCDs offer various other benefits to the owner such as high liquidity
through stock market listing, tax exemptions at source and safety since they can be
issued by companies which have a good credit rating as specified in the norms laid
down by RBI for the issue of NCDs. In India, usually these have to be issued of a
minimum maturity of 90 days.
Loan from oil industry development board:
The OID Board determines the terms and conditions governing the loans from
time to time on the basis of national importance of the project(s) being undertaken
by the Oil PSUs and also the current market scenario for determining the rates of
interest on OIDB loans. An independent Project Appraisal Cell has been formed
to determine the eligibility of OIDB loan assistance.
The OID Board has constituted a Standing Committee for review of the
interest rates on OIDB loans for different tenors after taking into account the
interest rates prevailing in the market and giving its recommendations to the
Board. The Committee meets once in every quarter to review the interest rates on
9. OIDB loans. The formulation for charging interest rates on OIDB loans is as
follows :
a) The month-end interest rates for Government Securities having different
residual maturities as per the latest available RBI's monthly bulletin is taken as
the benchmark rates for computing interest rates on OIDB loans for different
tenures.
b) 50% of the Corresponding month-end margins of AAA rated Bond on
Government securities available in page INCORP (Quote AAA INBMK) is added
to the benchmark rate.
External commercial borrowing:
An external commercial borrowing (ECB) is an instrument used in India to
facilitate the access to foreign money by Indian corporations and PSUs (public
sector undertakings). ECBs include commercial bank loans, buyers' credit,
suppliers' credit, securitized instruments such as floating rate notes and fixed rate
bonds etc., credit from official export credit agencies and commercial borrowings
from the private sector window of multilateral financial Institutions such
as International Finance Corporation (Washington), ADB, AFIC, CDC, etc. ECBs
cannot be used for investment in stock market or speculation in real estate. The
DEA (Department of Economic Affairs), Ministry of Finance, Government of
India along with Reserve Bank of India, monitors and regulates ECB guidelines
and policies. For infrastructure and greenfield projects, funding up to 50%
(through ECB) is allowed. In telecom sector too, up to 50% funding through ECBs
is allowed. Recently Government of India has increased limits on RBI to up to $40
billions and allowed borrowings in Chinese currency yuan.
International bond:
International bonds include eurobonds, foreign bonds and global bonds. A
different type of international bond is the Brady bond, which is issued in U.S.
currency. Brady bonds are issued in order to help developing countries better
manage their international debt. International bonds are also private corporate
bonds issued by companies in foreign countries, and many mutual funds in the
United States hold these bonds.
10. Inter-corporate deposit:
Inter-corporate deposits are deposits made by one company with another
company, and usually carry a term of six months. The three types of intercorporate deposits are: three month deposits, six month deposits, and call
deposits.
Three month deposits are the most popular type of inter-corporate deposits. These
deposits are generally considered by the borrowers to solve problems of short-term
capital inadequacy. This type of short-term cash problem may develop due to
various issues, including tax payment, excessive raw material import, breakdown
in production, payment of dividends, delay in collection, and excessive expenditure
of capital.
The annual rate of interest given for three month deposits is 12%. Six month
deposits are usually made with first class borrowers, and the term for such
deposits is six months.
Deferred tax liability:
An account on a company's balance sheet that is a result of temporary differences
between the company's accounting and tax carrying values, the anticipated and
enacted income tax rate, and estimated taxes payable for the current year. This
liability may or may not be realized during any given year, which makes the
deferred status appropriate.
Because there are differences between what a company can deduct for tax and
accounting purposes, there will be a difference between a company's taxable
income and income before tax. A deferred tax liability records the fact that the
company will, in the future, pay more income tax because of a transaction that
took place during the current period, such as an installment sale receivable.
Other long term liabilities:
Earnest money deposits:
An earnest money deposit shows the seller that a buyer is serious about purchasing
a property. When the transaction is finalized, the funds are put toward the buyer's
down payment. If the deal falls through, the buyer may not be able to reclaim the
deposit. Typically, if the seller terminates the deal, the earnest money will be
returned to the buyer. When the buyer is responsible for retracting the offer, the
seller will usually be awarded the money.
11. Long-term provisions:
Contingent liability:
A potential obligation that may be incurred depending on the outcome of a future
event. A contingent liability is one where the outcome of an existing situation is
uncertain, and this uncertainty will be resolved by a future event. A contingent
liability is recorded in the books of accounts only if the contingency is probable
and the amount of the liability can be estimated.
Outstanding lawsuits and product warranties are common examples of contingent
liabilities.
For example, a company may be facing a lawsuit from a rival firm for patent
infringement. If the company's legal department thinks that the rival firm has a
strong case, and the company estimates that the damages payable if the rival firm
wins the case are $2 million, it would book a contingent liability of this amount on
its balance sheet. If, on the other hand, the company's legal department is of the
opinion that the lawsuit is frivolous and very unlikely to be won by the rival
company, no contingent liability would be necessary.
Provision for employee benefits:
Provision is made in the financial statements for all employee benefits, including
on-costs. In relation to industry-based long service leave funds, the Group‟s
liability, including obligations for funding shortfalls, is determined after deducting
the fair value of dedicated assets of such funds.
SHORT TERM BORROWINGS:
Working capital loan:
A loan whose purpose is to finance everyday operations of a company.
A working capital loan is not used to buy long term assets or investments. Instead
it's used to clear up accounts payable, wages, etc.
12. Term loan:
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.
Collateralized Borrowing and Lending Obligation:
A money market instrument that represents an obligation between a borrower and
a lender as to the terms and conditions of the loan. Collateralized borrowing and
lending obligations (CBLOs) are used by those who have been phased out of or
heavily restricted in the interbank call money market.
CBLOs were developed by the Clearing Corporation of India (CCIL) and Reserve
Bank of India (RBI). The details of the CBLO include an obligation for the
borrower to repay the debt at a specified future date and an expectation of the
lender to receive the money on that future date, and they have a charge on the
security that is held by the CCIL.
Foreign Currency Swap
An agreement to make a currency exchange between two foreign parties. The
agreement consists of swapping principal and interest payments on a loan made in
one currency for principal and interest payments of a loan of equal value in
another currency. The Federal Reserve System offered this type of swap to several
developing countries in 2008.
The World Bank first introduced currency swaps in 1981 in an effort to obtain
German marks and Swiss francs. This type of swap can be done on loans with
maturities as long as 10 years. They differ from interest rate swaps because they
also involve principal.
Commercial Paper
An unsecured, short-term debt instrument issued by a corporation, typically for the
financing of accounts receivable, inventories and meeting short-term liabilities.
13. Maturities on commercial paper rarely range any longer than 270 days. The debt
is usually issued at a discount, reflecting prevailing market interest rates.
Commercial paper is not usually backed by any form of collateral, so only firms
with high-quality debt ratings will easily find buyers without having to offer a
substantial discount (higher cost) for the debt issue.
A major benefit of commercial paper is that it does not need to be registered with
the Securities and Exchange Commission (SEC) as long as it matures before nine
months (270 days), making it a very cost-effective means of financing. The
proceeds from this type of financing can only be used on current assets
(inventories) and are not allowed to be used on fixed assets, such as a new plant,
without SEC involvement.
Trade payables:
A trade payable is an amount billed to a company by its suppliers for goods
delivered to or services consumed by the company in the ordinary course of
business. These billed amounts, if paid on credit, are entered in the accounts
payable module of a company's accounting software, after which they appear in
the accounts payable aging report until they are paid. Any amounts owed to
suppliers that are immediately paid in cash are not considered to be trade
payables, since they are no longer a liability.
OTHER CURRENT LIABILITIES:
Unclaimed dividend:
Dividend declared at an annual general meeting is required to be paid within 30
days from the date of declaration of the said dividend. Companies are required to
deposit the balance amount lying in the dividend account to an unclaimed dividend
account within 37 days from the date of declaration. Any amount lying in the said
account is termed as unclaimed dividend amount.
Dividends not encashed or claimed, within seven years from the date of its transfer
to the unclaimed dividend account, will, in terms of the provisions of section 205A
of the Companies Act, 1956, be transferred to the Investor Education and
Protection Fund (IEPF), established by the Central Government . In terms of the
provisions of Section 205C of the Companies Act, 1956, no claim shall lie against
the Corporation or the IEPF after the said transfer.
14. Sales tax:
A tax imposed by the government at the point of sale on retail goods and services.
It is collected by the retailer and passed on to the state.
It is based on a percentage of the selling prices of the goods and services and set
by the state.
Excise tax:
Excise taxes are considered an indirect form of taxation because the government
does not directly apply the tax. An intermediary, either the producer or merchant,
is charged and then must pay the tax to the government. These taxes can be
categorized in two ways:
- Ad Valorem: A fixed percentage is charged on a particular good.
- Specific: A fixed dollar amount dependent upon the quantity purchased is
charged.
2. Here are some examples of situations in which excises taxes are charged on
transactions in retirement accounts:
- A 6% excise tax applies to excess IRA contributions that are not corrected by the
applicable deadline.
- A 10% excise tax applies to distributions from an IRA, qualified plan or 403(b)
accounts that occur before the participant reaches age 59.5.
- A 50% excise tax applies to required minimum distribution amounts not
withdrawn by the applicable deadline (referred to as an excess-accumulation
penalty).
Contractual obligation:
the legal duty to take a specific course of action, as imposed by a
commercial contract or a contract of employment
Advance from customer: A liability account used to record an amount received
from a customer before a service has been provided or before goods have been
shipped. This account is referred to as a deferred revenue account and could be
entitled Customer Deposits or Unearned Revenues.
15. Accrued Interest
A term used to describe an accrual accounting method when interest that is either
payable or receivable has been recognized, but not yet paid or received. Accrued
interest occurs as a result of the difference in timing of cash flows and the
measurement of these cash flows.
The interest that has accumulated on a bond since the last interest payment up to,
but not including, the settlement date.
For example, accrued interest receivable occurs when interest on an outstanding
receivable has been earned by the company, but has not yet been received. A loan
to a customer for goods sold would result in interest being charged on the loan. If
the loan is extended on October 1 and the lending company's year ends on
December 31, there will be two months of accrued interest receivable recorded as
interest revenue in the company's financial statements for the year.
2. Accrued interest is added to the contract price of a bond transaction. Accrued
interest is that which has been earned since the last coupon payment. Because the
bond hasn't expired or the next payment is not yet due, the owner of the bond
hasn't officially received the money. If he or she sells the bond, accrued interest is
added to the sale price.
Customer deposits:
Customer deposits refer to the money received by a company before providing the
product or service to the customer. It is also known as unearned revenueor
prepaid income. In a balance sheet, customer deposit appears on the liability
side as current liabilities.
16. Customer deposits are usually created when the company wants the customer to
deposit a certainpercentage of the price of the product or service to be deposited
with them when the order is placed. The customer deposits are opened when a
contract or an agreement is signed by the way company and the customer. This
deposit may or may not be refundable depending upon the purpose of that deposit.
Container deposit legislation
Container-deposit legislation (CDL) is any law that requires collection of a
monetary deposit on soft-drink, juice, milk, water, alcoholic-beverage, and/or
other containers at the point of sale. When the container is returned to an
authorized redemption center, or to the original seller in some jurisdictions, the
deposit is partly or fully refunded to the redeemer (presumed to be the original
purchaser).
Capital reserve:
A type of account on a municipality's or company's balance sheet that is reserved
for long-term capital investment projects or any other large and anticipated
expense(s) that will be incurred in the future. This type of reserve fund is set aside
to ensure that the company or municipality has adequate funding to at least
partially finance theproject.
Contributions to the capital reserve account can be made from government
subsidies, donated funds, or can be set aside from the firm's or municipality's
regular revenue-generating operations. Once recorded on the reporting entity's
balance sheet, these funds are only to be spent on the capital expenditure projects
for which they were initially intended, excluding any unforeseen circumstances.
17. Debenture Redemption Reserve
A provision that was added to the Indian Companies Act of 1956 during an
amendment in the year 2000. The provision states that any Indian company that
issues debentures must create a debenture redemption service to protect investors
against the possibility of default by the company.
Under the provision, debenture redemption reserves will be funded by company
profits every year until debentures are to be redeemed. If a company does not
create a reserve within 12 months of issuing the debentures, they will be required
to pay 2% interest in penalty to the debenture holders. Only debentures that were
issued after the amendment in 2000 are subject to the debenture redemption
service.
General reserve:
Any retained earnings from a company's profits. General reserves can be divided
into either specific, general or legal. Specific reserves can include a reassignment
of dividends to shareholders; general reserves are saved
to offset potential future losses; legal reserves can includemoney set aside
for litigation or revaluation.
18. • Essar Group was incorporated as a Public Limited Company under the
Companies Act, 1956 in the year 1969, with the main objective to provide
Development, Exploration, and Production and related Services in the oil &
gas sector.
• Essar Oil Ltd. Subsidiary of Essar group was founded in 1992
Ravi Ruia, Chairman
Lalit Gupta, MD,CEO
PRODUCTS
• Petroleum
• Fuels
• Natural Gas and
• Other Petro Chemicals
SOURCES OF FUNDS
(all amounts in crores)
19. ONGC was formed in 1956 with the vision of great leaders to make our country
energy-sufficient. Since then, the companyhas taken every step to fulfill this
promise. Over the years, the company has discovered 6 of the 7 producing basins
inIndia and added 6.4 billion tons of Oil and Gas reserves. Today, according to
Platt‟s Top 250 Global Energy Ranking, ONGC is the no. 1 E&P Company in the
world. The company is ready to touch new horizons of growth by resolutely
focusingon its Oil & Gas production capabilities.
SOURCES OF FUNDS
20. Oil India Limited (OIL) is the second largest hydrocarbon exploration &
production (E&P) Indian public sector Company and operational headquarters
in Duliajan, Assam, India under the administrativecontrol of the Ministry of
Petroleum and Natural Gasof the Government of India. However, Company's
corporate office located in Noidain New-Delhi-NCR region.OIL is engaged in the
business of exploration, development and production of crude oil and natural gas,
transportation of crude oil and production of liquid petroleum gas. The story of Oil
India Limited (OIL) traces and symbolizes the development and growth of the
Indian petroleum industry.
SOURCES OF FUNDS
21. Hindustan Petroleum Corporation Limited (HPCL)
(BSE: 500104, NSE: HINDPETRO) is an Indian state-owned oiland natural
gas company with its headquarters at Mumbai, Maharashtra and
with Navratna status. HPCL has been ranked 260th in the Fortune Global
500 rankings of the world's biggest corporations (2013) and 4th among India's
Companies for the year 2012.HPCL has about 20% marketing share in India
among PSUs and a strong marketing infrastructure. The President of India
owns 51.11%shares in HPCL.
SOURCES OF FUNDS
22. Bharat Petroleum Corporation Limited (BPCL) is an Indian state
controlled oil and gas company headquartered in Mumbai, Maharashtra. BPCL
has been ranked 225th in the Fortune Global 500 rankings of the world's biggest
corporations for the year 2012.
Bharat Petroleum owns Mumbai Refinery and Kochi Refinerieswith a capacity of
12 and 9.5 million metric tones‟ per year.
CHAIRMAN AND MD: S. Varadarajan.
SOURCES OF FUNDS
23. GAIL (India) Limited is the largest state-owned natural gas processing and
distribution company headquartered in New Delhi, India. It has following business
segments: Natural Gas, Liquid Hydrocarbon, Liquefied petroleum gas
Transmission, Petrochemical, City Gas Distribution, Exploration and Production,
GAILTEL and Electricity Generation. GAIL has been conferred with the
Maharatna status on 1 Feb 2013, by the Government of India. Currently only six
other Public Sector Enterprises (PSEs) enjoy this coveted status amongst all
central CPSEs.
SOURCES OF FUNDS