1. into duct ion to financial management 6.6.08

8/3/2019 1. Into Duct Ion to Financial Management 6.6.08

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` Finance is a life blood of

business.

` Finance is the most

encompassing of allbusiness enterprises. Ravi M. Kishore, Taxmann.

` The study of money and

other assets.` The art and science of

managing money. Wikipedia, the free encyclopedia


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` Finance is the study and practice

of making Rupee denominated

decisions. Dakota State University Madison, SD, USA

` The commercial activity of

providing funds and capital.

`

The branch of economics thatstudies the management of

money and other assets.


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` To obtain or provide money.

` To sell or provide on credit.

` The management of money

and credit and banking andinvestmentswordnet.princeton.edu/perl/webwn

` Web Results There are about

26,900,000links on - What is finance?


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` Management is an organizational function.

` Management is the act of directing andcontrolling a group of people for the purpose ofcoordinating and harmonizing the group towardsaccomplishing a goal beyond the scope of individual effort. en.wikipedia.org/wiki/Management


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` Management is the process of

getting activities completed

efficiently and effectively with

and through other people.

` Management means to get the

work done

` Web Results There are about 79,100,000links on What is management?


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` The study about the process of procuring and judicious use of financial resources with a view tomaximizing the value of the firm

thereby the value of the owner. Ravi M. Kishore, Taxmann.

` It is concern with duties of thefinancial managers in the

business firm. -Khan and Jain


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It is all about money, Honey!


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` How to eat money?

` How to drink money?


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` How to ware money?

` How to think money?


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How to see money?

How to talk money?


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How to walk with money?

How to sleep with or without money?


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` How to plan money?

` How to get money?


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` How to use money?

` How to risk money?


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` How to control money?

` How to run with or without money?


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Do business with

others money

Money brings

money

Dream money to

earn money


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The purpose of the Financial Management is to makesure that the money flows to those who value it thehighest.

(that is those who can put it to the "best" use).

Now

Corporations Households / Investors

(Need Money) Rs. (have money to invest)

Futu

reCorporations Households / Investors

(have money) Rs. (Want money back)


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` The role of the financial manager is central in the

flow ofmoney from investors into the firm and then

back to those same investors.


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To maximize the owners wealth.

How?..........

By maximization of profits.


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` How to maximize the owners wealth?

By maximizing the profits of the company

[in short term]

By increasing the shareholders worth[in long term]


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` How to maximize

profits?

Increasing sales

Decreasing cost


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Procurements of funds at

lowest cost possible.

Investment of funds forhighest returns.


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Control on use of funds.

Risk Return Trade off.


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` Mobilization of funds Financial decision

` Deployment of funds Investment decision

` Control over the use of funds Monitoring and

controlling

` Risk Return trade off Balancing - Debts Serving.


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` Treasury Operations Short term fund management and speculative gain by

anticipation interest rate movement.

` Foreign exchange rates Predicting future value of a currency.


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` Financial structuring Optimum mix between and equity.

` Maintaining share prices Appropriate dividend and bonus policies

` Ensuring management control Prevent dilution of management control


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` Role of a Finance Managerx Goal of finance manager

x Objectives of finance manager

x Functions of finance manager.

x Challenges to finance manager.

` Get details from: At least 5 Books and 10 web sites.

Or, Meet a finance manager of a public limited company and

discuss he/her role as a finance manager.


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Give the details of the books referred e.g. title, author, page

no. etc

Full web links [in case web search]

Visiting card of the finance manager with office phone

number [if role is discussed by meeting a Fin. Manager]` Date of Submission :

Jan. 2012,

by 4 pm.


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` Finance is pervasive, all-encompassing,

omnipresent, persistent, insidious and invasive innature.

` It is directly or indirectly present in all function and

areas of business.

` It is a common thread passing through all andnetting every thing in business.


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` Forms of Business Organization Sole proprietorship

x One man army [unlimited liability]

Partnership

x 2 or more with [unlimited liability]

Company

x Ownership and management is in

different hands [unlimited liability]


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The Companies (Amendment) Act, 2006 Amendment ofsection 253- "Provided that no company shall

appoint or re-appoint any individual as director of the company

unless he has been allotted a Director Identification Number

under section 266B.

Why ?

Because. The provisions of the Companies Act, allow an individual to be a

director of up to fifteen companies. There is a need for identity of

person(s) intending to be directors of companies to beestablished, to facilitate effective legal action against the directors

of such companies.


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` Companies in the UK must include certain

regulatory information on their websites and in

their email footers or they will breach the

Companies Act and risk a fine.Why?

Because

` To avoid having to decide whether each email

amounts to a 'business letter' or not.


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` Regulatory Framework Industrial Policy

Industrial Licensing Provisions and Procedures

Regulations of foreign collaboration and investments

FEMA

Company Act

SEBI


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Industrial Policy

x Industrial policy 1956

x Industrial Licensing policy 1973

x Industrial Policy Statement resolutionWhy a Finance manager should

have knowledge about these

policies and provisions?

These provisions defines the investment

avenues open to the enterprise.


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` Resent Developments Abolition of licensing requirements

Raising of investment ceilings for SSI

Permitting the private sector to telecom equp.

manufacturing. Encouraging foreign investments in the equity of our

co.

Encouraging foreign equity to manufacture computers.

Disinvestment in selected PSU

x www.dipp.nic.in [up dates up to 9/5/2008]


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` Industrial Licensing, Provisions and Procedures

[underIDRA]

` Industries reserved for public sector.

` Industries subject to Compulsory licensing.

` Products reserved for SSI[not exceeding 5 crore]

` Ancillary units [sell > 50% of the products to Industries]


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` Industrial Licensing is abolished for all projects except for

industries related to:

` Security and strategic concerns for social reasons

` Hazardous chemicals for environmental reasons` Items of elitist consumption

` Central Advisory Council to represent the interest of owners,employees and consumers

` Development Council to increase the efficiency or productivityin terms of economy and interest of the community.


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` Regulations of foreign collaboration and

investments` FEMA-The object of the Act is to consolidate and amend the

law relating to foreign exchange with the objective of

facilitating external trade and payments and for promoting theorderly development and maintenance of foreign exchange

market in India.


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` Regulations of foreign collaboration and

investments The Securities and Exchange Board of India was

established on April 12, 1992 in accordance with the

provisions of the Securities and Exchange Board ofIndiaAct, 1992.


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The Preamble of the SEBI describes the basic functions:

..to protect the interests of investors in

securities and to promote the development of, and

to regulate the securities market and for matters

connected therewith or incidental thereto

http://www.sebi.gov.in/Index.jsp


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` Financial System [chapter 2] http://finance.wharton.upenn.edu/~allenf/download/Vita/ind

ias%20financial%20system.pdf

` Authors Franklin Allen -Finance Department, The Wharton

School, University ofPennsylvania

Rajesh Chakrabarti -Finance Area, Indian School of

Business, Hyderabad 500 032, India

Sankar De- Centre for Analytical Finance, IndianSchool of Business, Hyderabad 500 032, India

x Submitted on October 27, 2007


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` Tax Aspects Direct taxes Income tax, wealth tax, gift tax etc.

Indirect taxes sales tax, excise, custom, service etc.

Finance Act 2008

http://incometaxindia.gov.in/

1. into duct ion to financial management 6.6.08

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