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LEASE
TYPES OF LEASE
Financial Lease Operating Lease Leveraged Lease Single Investor Lease Domestic Lease International Lease Sale & Lease Back Direct Lease
Why Lease???
Plausible ReasonsConvenience Benefits of Standardisation Better Utilisation of Tax Shields Fewer Restrictive Covenants Lower Cost of Obsolence Risk Expeditious Implementation
Contd
Dubious ReasonsHundred Percent Financing Circumvention of Certain Controls Favourable Financial Ratios
MECHANICS OF LEASING
Legal Aspects of Leasing
Contents of a Lease Agreement
Procedural Aspects
Sales Tax provisions Income Tax Provisions
Accounting Treatment
HIRE PURCHASE ARRANGEMENT
Choice between Leasing & Hire Purchase
LEASING IN INDIA
ADVANTAGES OF LEASING
Protects Against Leasing Faster and Cheaper Credit Enhance Liquidity Boon for Small Firms Absence of Restrictive Covenants Convenience and Flexibility Whole Financing Tax Benefits
DISADVANTAGES OF LEASINGDeprived of Ownership No Scope for Modernization Case of Default Costly
CASE
CASE
VENTURE CAPITAL
CHARACTERISTICS
Long Time Horizon Lack of Liquidity High Risk High Returns Equity Participation Participation in Management
METHODS
Seed Money FinancingFunds are provided for testing the Product & examining the commercial viability of the Product
D
Contd
Development FinancingAlso known as Expansion Financing Funds are provided to
Contd
Later Stage Financing
Contd
Turn AroundMainly for the sick inputs Financial Turn Around Management Turn Around
MODES
Equity Quasi Equity
INVESTMENT PROCESS
Deal Origination Screening Evaluation Deal Structuring Post Investment Activities and Exit
FACTORS DETERMINING INV
Management and Organization pattern Production Process Marketing and Sales Profitability
VALUATION METHODS
Conventional Valuation Method Present-Value Method Revenue Multiplier Method
EXIT MECHANISM
Sale of Share on Stock Exchange after Listing IPO/ Offer for Sale Strategic Sales Buy Back of Equity by Company Promoters Buy Back
COMPANY ACT
IT ACT
VENTURE CAPITAL IN INDIA
ADVANTAGES
Economy Oriented Investor Oriented Entrepreneur Oriented
DISADVANTAGES
ISSUES IN INDIA
Limitations on Structuring of VC Funds Problems in Raising of Funds Lack of Incentive to Investors Domestic VCFs via Offshore Funds Limitations on Industry Segments Limitations on Exit Mechanism Legal Framework
CASE
CASE