Final Project for Marketing Puneet

8/8/2019 Final Project for Marketing Puneet

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Table of contents:

Executive Summary 2

Company profile3

Business overview3

Competitor analysis4

Financial structure6

y Balance sheet

y Cash flow statement

y Financial Ratios

Weighted Average Cost of Capital

Project analysis

Risk and Risk Management

Net Present Value

Quarterly Project Report Format

EXECUTIVE SUMMARY-

This assignment deals with the company Reliance infrastructure Limited financial

information. There is a complete description of the balance sheet and the financial ratios

to analyze the financial structure of the company. Weighted Average Cost of Capital is

also calculated to show the financial position of the company. This coursework also

contains the project analyzes on one of the project of company. I, as a manager have

gathered the financial information of the project by its financial information analysis by

calculating Net Present Value (NPV) and also have described the methods to deal with

the risk the project. This coursework also contains the format of the quarterly report

prepared by me which has to be send to the company. For the analysis of the project,certain assumptions have made which are clearly mentioned. The coursework is solely

completed by self.

Answer 1


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Reliance Infrastructure Ltd

BSE: 500390 | NSE: RELINFRA | ISIN: INE036A01016

Market Cap: [Rs.Cr.] 27,814 | Face Value: [Rs.] 10

Industry: Power Generation And Supply

Company Profile

R-Infra, originally named Bombay Suburban Electric Supply Limited (BSES), was incorporated in the year 1929.The company has been in the power distribution business for nearly eight decades and today, it is a fully integratedutility engaged in the generation, transmission and distribution of electricity. R-Infra generates 941 MW ofelectricity through its power stations located in Maharashtra, Andhra Pradesh, Kerala, Karnataka and Goa, anddistributes power in the Mumbai and Delhi areas spanning over 1,24,300 sq. kms.R-Infra has also emerged as a leading player in India in the Engineering, Procurement and Construction (EPC)segment of the power sector. The company has also forayed into the infrastructure business and has undertaken thedevelopment of the Mumbai and Delhi metro rail projects and various road projects of the National HighwaysAuthority of India.

Business Overview

Power Business EPC Business Infrastructure

businessGenerationTransmissionDistributionTrading

Power sectorRoad sector

RoadsMetrosAirportReal Estate

Competitor analysis

Top infrastructure companies of India

1. HCC Infrastructure: HCC Infrastructure Ltd. is a wholly owned subsidiary of

HCC Ltd with infrastructure projects in the transportation (viz, roads, bridges,ports, airports). Mainly operating through the public-private partnershiproute, this player has huge scope. Over US $250 billion needs to be imbibedthrough varied investments in the infrastructure sector in the next five years.

2. Maytas Infra Limited: This leading player in the infrastructure segment hasmore than 20 years of experience in infrastructure development, constructionand project management.

3. Patel Engineering: This Indian Infrastructure Company has handled buildingBridges to dams to highways and varied other infrastructure projects.


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4. Reliance Infrastructure: It is India's largest private sector power utilityEnterprise and has been the pioneer in the Indian infrastructure sector.

5. Punj Lloyd: This Company is a diversified conglomerate, which has forayedinto aviation, defence, real estate and marine. With integrated design, andManagement services for infrastructure projects like roads, highways,

Flyovers, bridges, elevated railroads, metro rail, underground tunnels,Seaports and airport terminals, this company has stood up the test of time.

6. GMRInfrastructure: With interests in the Airports, Energy, Highways andUrban infrastructure (including SEZ) sector, GMR Group has been the pioneerin the core infrastructure areas.

Answer 2

The financial structure of the company is being compared with other three companies of the same field.

Company

P/E

(x)

P/S

(x)

P/BV

(x)

EV/EBITDA

(x)

EV/Sales

(x)

ROE

(%)

ROCE

(%)

EPS

FY10EFY11EFY10EFY11E FY10EFY11E FY10EFY11E FY10EFY11E FY10E FY10E FY10E

Reliance 23.219.1

2.5 2.1 2.6 2.3 25.0 19.9 2.9 2.3 11.4% 8.7% 21.3%

Power Grid 25.7NA NTPC Ltd. 17.117.6Tata Power 21.313.3

5.5 NA3.4 3.11.5 1.3

2.5 NA2.6 2.52.5 1.9

13.0 NA12.8 12.213.2 8.4

10.5 NA4.1 3.52.4 1.9

9.7%15.6%12.0%

8.711.36.8

NA8.4%6.8%

BALANCE SHEET OF THE RELIANCEINFRASTRUCTURE LIMITED--------- in Rs. Cr. -------------------

RelianceInfra

NTPC Power Grid Corp Reliance Powe

Mar '09 Mar '09 Mar '09 Mar '09

Sources Of Funds

Total Share Capital 226.07 8,245.50 4,208.84 2,396.80

Equity Share Capital 226.07 8,245.50 4,208.84 2,396.80

Share Application Money 783.49 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00

Reserves 10,308.14 50,749.40 9,325.14 11,396.01

Revaluation Reserves 589.74 0.00 0.00 0.00

Networth 11,907.44 58,994.90 13,533.98 1

Secured Loans 1,848.33 8,969.60 25,288.25 0.00

Unsecured Loans 5,483.85 25,598.20 3,177.18 0.00


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Total Debt 7,332.18 34,567.80 28,465.43 0.00

Total Liabilities 19,239.62 93,562.70 41,999.41 13,792.81

RelianceInfra


Mar '09 Mar '09 Mar '09 Mar '09

Application Of FundsGross Block 6,922.69 62,353.00 40,319.33 78.18

Less: Accum. Depreciation 3,582.52 29,415.30 9,190.89 1.58

Net Block 3,340.17 32,937.70 31,128.44 76.6

Capital Work in Progress 564.42 26,404.90 13,286.00 55.84

Investments 12,147.10 13,983.50 1,592.83 6,282.71

Inventories 440.68 3,243.40 297.57 0.00

Sundry Debtors 1,523.33 3,584.20 1,373.56 0.00

Cash and Bank Balance 249.97 271.80 53.06 14.37

Total Current Assets 2,213.98 7,099.40 1,724.19 14.37

Loans and Advances 6,757.39 7,826.10 2,928.01 7,407.58

Fixed Deposits 1.04 15,999.80 2,375.82 0.06

Total CA, Loans & Advances 8,972.41 30,925.30 7,028.02 7,422.01

Deffered Credit 0.00 0.00 0.00 0.00

Current Liabilities 5,018.23 7,439.20 8,851.56 43.05

Provisions 766.25 3,249.50 2,189.82 1.30

Total CL & Provisions 5,784.48 10,688.70 11,041.38 44.35

Net Current Assets 3,187.93 20,236.60 -4,013.36 7,377.66

Miscellaneous Expenses 0.00 0.00 5.50 0.00

Total Assets 19,239.62 93,562.70 41,999.41 13,792.81

Contingent Liabilities 3,934.79 66,083.20 16,590.93 8.13

Book Value (Rs) 465.97 71.55 32.16 57.55

Profit & Loss account ------------------- in Rs. Cr. -------------------

RelianceInfra


Mar '09 Mar '09 Mar '09 Mar '09

Income

Sales Turnover 9,640.16 42,196.80 6,579.81 0.00Excise Duty 0.00 221.60 0.00 0.00

Net Sales 9,640.16 41,975.20 6,579.81 0.00

Other Income 1,281.19 3,012.80 496.99 334.72

Stock Adjustments 0.00 0.00 0.00 0.00

Total Income 10,921.35 44,988.00 7,076.80 334.72

Expenditure

Raw Materials 4,272.53 31.00 0.02 0.00


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Power & Fuel Cost 1,166.78 27,292.30 55.16 0.00

Employee Cost 536.62 2,897.60 899.86 20.76

Other Manufacturing Expenses 2,142.17 940.00 107.04 0.00

Selling and Admin Expenses 391.62 473.20 222.73 45.62

Miscellaneous Expenses 696.04 394.90 106.58 9.89

Preoperative Exp Capitalised 0.00 -637.40 -913.16 0.00

Total Expenses 9,205.76 31,391.60 478.23 76.27

RelianceInfra


Mar '09 Mar '09 Mar '09 Mar '09

Operating Profit 434.40 10,583.60 6,101.58 -76.27

PBDIT 1,715.59 13,596.40 6,598.57 258.45

Interest 330.50 1,737.00 3,199.94 1.77

PBDT 1,385.09 11,859.40 3,398.63 256.68

Depreciation 244.88 2,364.50 1,093.97 0.20

Other Written Off 0.00 3.60 1.83 0.00

Profit Before Tax 1,140.21 9,491.30 2,302.83 256.48

Extra-ordinary items 127.41 1,305.20 -230.69 0.00

PBT (Post Extra-ord Items) 1,267.62 10,796.50 2,072.14 256.48

Tax 126.89 2,554.70 377.63 7.57

Reported Net Profit 1,138.88 8,201.30 1,690.61 248.90

Total Value Addition 4,933.23 31,360.60 478.21 76.27

Preference Dividend 0.00 0.00 0.00 0.00

Equity Dividend 157.69 2,968.30 505.08 0.00

Corporate Dividend Tax 26.80 501.70 85.84 0.00

Per share data (annualised)

Shares in issue (lakhs) 2,260.70 82,454.64 42,088.41 23,968.00

Earning Per Share (Rs) 50.38 9.95 4.02 1.04

Equity Dividend (%) 70.00 36.00 12.00 0.00

Book Value (Rs) 465.97 71.55 32.16 57.55

Cash flow statement

------------------- in Rs. Cr. -------------------

Tata Power Reliance Infra Power Grid Corp Reliance PowerMar '09 Mar '09 Mar '09 Mar '09

Net Profit Before Tax 12 mths 12 mths 12 mths 12 mths

Net Cash From Operating Activities 1116.68 1193.43 2228.57 256.47

Net Cash (used in)/fromInvesting Activities

648.61 892.64 6641.09 -166.75

Net Cash (used in)/from Financing Activities -2220.52 -992.67 -9156.75 2527.52

Net (decrease)/increase In Cash and CashEquivalents

1588.71 263.16 3078.95 -2707.51


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Opening Cash & Cash Equivalents 16.80 163.13 563.29 -346.74

Closing Cash & Cash Equivalents 28.70 87.88 1865.59 361.11

Financial ratios

Investment valuation Ratios FY05 FY06 FY07 FY08 FY10

Face Value 10 10 10 10 10

Dividend Per Share 4.7 5 5.3 6.3 7

Operating Profit Per Share (Rs) 36.24 35.99 21.75 22.82 19.22

Net Operating Profit Per Share 223.99 186.7 251.72 268.76 426.42

(Rs)

Free Reserves Per Share (Rs) 227.62 292.31 339.74 371.2 396.55

Bonus in Equity Capital 4.35 3.8 3.53 3.43 3.57

Profitability Ratios

Operating Profit Margin(%) 16.18 19.27 8.64 8.49 4.5

Profit Before Interest And Tax 4.32 7.66 3.98 4.45 1.78

Margin(%)

Gross Profit Margin(%) 19.01 25.52 15.18 4.96 1.96

Cash Profit Margin(%) 22.36 23.63 16.15 11.41 8.93

Adjusted Cash Margin(%) 17.9 23.83 12.71 11.41 8.93

Net Profit Margin(%) 11.64 14.39 12.43 15.34 10.73

Adjusted Net Profit Margin(%) 7.18 14.58 8.99 15.34 10.73

Return On Capital 5.41 7.91 6.56 6.56 6.22

Employed(%)

Return On Net Worth(%) 9.31 9.13 9.27 10.57 10.81

Adjusted Return on Net Worth(%) 6.39 9.37 6.71 5.69 6.67

Return on Assets Excluding 4.24 4.45 4.34 5.32 4.55

Revaluations

Return on Assets Including 4.51 4.69 4.51 5.5 4.66


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Revaluations

Return on Long Term Funds 5.85 9.04 9.45 9.67 9.66

(%)

Liquidity And Solvency Ratios

Current Ratio 3.58 2.09 1.51 1.06 0.75

Quick Ratio 3.75 4.07 3.82 2.37 1.45

Debt Equity Ratio 0.74 0.61 0.68 0.49 0.7

Long Term Debt Equity Ratio 0.72 0.42 0.16 0.06 0.14

Comments:

Earnings per share ratio (EPS Ratio)Going by the EPS ratio of the various companies and comparing it with the industry average we find that

Reliance has been profitable since 2005 and displays a high earning power as compared to other companies.

Dividends per Share: DPSAs from the DPS of Reliance an increasing trend can be observedwhich shows the confidence of the firm in its

operations which it believes can

be maintained and even improved on. Moreover the value is more than the other companies in the industry sector

which shows its potential to lure more investors as compared to other companies.

Cash Debt Coverage Ratio

The cash debt coverage ratio shows the percent of debt that current cash flow can retire.

Reliance has consistently maintained a cash debt ratio of more than 1 since

2005. Company wise analysis shows that it is less than the industry sector average.


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Fixed-Charge Coverage Ratio


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Fixed-Charge Coverage Ratio

Reliance has maintained a double digit fixed charge ratio which determines that it has that much times cash to

cover its fixed charges. The industry average has increased because of Reliances high ratio which is twice as

much as other companies in the infrastructure sector.

Owners fund as Percentage of total sourceReliance has around 65% of its capital employed through equity.

Fixed assets turnover ratio

Companies with low profit margins tend to have high asset turnover, those with high profit

margins have low asset turnover - it indicates pricing strategy.

This ratio is more useful for growth companies to check if in fact they are growing revenue in

proportion to sales

We see the result of 1.2 for 2005 this means that turnover is 1.2 times bigger than total assets. Another way ofsaying that is that the Reliance infrastructure was able to generate sales of Rs.1.56 for every Rs.1 of assets it

owned and used for the year ended 31 March 2006. For the year ended 25

March 2006, it was at 0.95 times. Currently it has a ratio of 1.01.

Long term debt Equity ratio

A high Long term debt Equity ratio is unfavorable because it indicates possible difficulty in meeting long term

debt obligations .Reliance Infrastructure has a current ratio of 0.59 which has increased from 0.36.It is more

than the industry average of 0.5424.

PROFITABILITY RATIOS

They compare components of income with sales. They give us an idea of what makes up a companys income

and are usually expressed as a portion of each rupee of sales.

Gross profit Margin

Reliance enjoys a gross profit of 13.35% which means that for every rupee of sales it earns 13.35 rupees apart

from its cost on goods sold. Gross profit is the profit we earn before we take off any administration costs, selling

costs and so on. So we should have a much higher gross profit margin than net profit margin.

Operating margin ratio

It indicates how much of each rupee of sales is left over after operating expenses. Reliance enjoys an

operating margin of 17.01.whereas the industry average is of 31.16.

LIQUIDITYRATIOS


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It measures the ability of the firm to meet its short-term obligations that is capacity of the firm to pay its current

liabilities as and when they fall due.

CURRENT RATIO

Reliance has a current ratio of 1.23 as compared to the industry average of

29.755. It has 1.23 times assets to cover its liabilities.

ACID TEST RATIO / QUICKRATIO

Reliance has a quick ratio of 0.9 as compared to 29.75 industry average. Thus comparatively Reliance can not

convert its assets into cash immediately in comparison with the industry companies.

PROFITABILITY IN RELATION TO INVESTMENTS

Return on net worthThe numerator is equal to a fiscal years net income (after payment of preference share dividends but before

payment of equity share dividends).The denominator excludes preference shares and considers only the equity

shareholding. RONW measures how much return the company management can generate for its equity

shareholders. Reliance has a RONW of 13.76 which is more than the industry average of 11.29.

Return on capital employed ratio

This ratio establishes the relationship between net profit and the gross capital employed. The term gross capital

employed refers to the total investment made in business. The conventional approach is to divide Earnings After

Tax (EAT) by gross capital employed. Reliance Infrastructure has an ROCE of 11.34 as compared to the industry

average of 13.1375.

Ans 3.

Capital structure and Dividend Policy

Equity share Capital 226.07Debt

7332.18Interest Paid 330.5Interest Rate

0.045075Reserves

10308.14Total

17866.39

Data Values

Covariance of BSE and Reliance 0.027066864

Variance 0.008824014

Beta of stock 3.067409387

market return monthly 0.015419002

annual return 0.185028029

Risk free return, Rf 0.07

require rate of return, Ri 0.422838056

Expected Rate of return,Ri= Rf+ beta (Rm-Rf)


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Where,

Ri is the expected rate of return,

Rf is the risk free return on that market

Rm is the historical return on that stock market/ equity market

Beta is the beta of the stock

According to the CAPM model,

Ri=Rf+beta(Rm-Rf)

= .07+3.067409(.015419-.07)

=.422838

COST OF EQUITY= RISKFREE RETURN ON THAT MARKET + RISKFREE PREMIUM

Re= Rf + (Rm-Rf)

Weighted Average Cost of Capital,(WACC)

WACC= Rd(1-Tc)*D/V+Re*D/V

Where,

Rd= cost of the debt

Re= cost of the equity

E= total value of the equity

D=total value of the debt

V= total value of debt + total value of equity

Putting all the values in the above equation of WACC, we can calculate it

Thus, WACC = 0.280176117

As per the above table its clear that if the company would employ equity as a cost of fund only if it is

sure to earn more than 42%, that is rate of return,Ri.

The cost of debt in case of reliance is only 4.2%.

Ans 4.(a)

Road project

R-Infra is developing five road projects in Rajasthan having a total length of 401 kms at an investment ofRs.31.5 bn. The company has achieved financial closure of the projects, which are in the advance stage ofconstruction. The projects have received concession from the National Highway Authority of India (NHAI),which is providing an average funding of 25% in the form of grants. The IRR of the road projects is around20%.Assumption : the cash flow for the year 2009 and 2010, 2011 will be 25 and 23 and 15 billion respectively.

Road projects bagged by R-Infra

Lenghts Cost (Rs. Bn) Concession period (years) COD

Alwar 44 3.4 20 Q1FY10


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Dholpur 53 4.1 20 Q1FY10

Ajmer 80 7.6 30 Q2FY11

Udaipur 88 5.6 30 Q2FY11Jaipur 136 10.8 25 Q2FY11

ProjectsA project is a specific plan or design presented for consideration. A project can be long term or short term, limitedor comprehensive, single sector concentrated or multi sector concentrated.

Project Analysis

The factors included under project need analysis are the, problem, solutions,beneficiaries and decisions. The problem should exhibit an immediate intervention.The focus should be to identify the beneficiaries. The solutions should be based onthe original problem. The decision to take up the project lies on how these threefactors problem, solutions and beneficiaries are important to project intervention.

The Key Factors of the project are:

Initial Investment Cost- it is the initial budget of the company has to be wisely by the company. It is the amountrequired at the starting of the project. This can be set with the help of the players already existing in the field ofroad construction or government contractors which can be help in analysing the amount required as an initialinvestment.

Annual Revenues- this is the amount of revenue generated by the project in the whole year. In the project of rodconstruction, revenues are the amount given by the government to the private players per kilometres and not onthe sales basis. This figure can be collected from the financial statements of the project.

Annual operating cost- it is the operational cost required by the company to keep the project ongoing. It includesthe cost required by all the operational activities, such as raw material required for the construction of road (likecement, water etc), the wages, machinery maintenance cost, etc. This peice of information can be figured out on

cash flows charts or the financial statements.

Rates of inflammation- this plays an important role as inflation increases the price of everything in the market.Thus, increases the operational cost of the project. The problem with the government based projects is that oncethe rate per kilometre is finalised does not change until high degree of inflammation. Thus, it is must by themanager to keep a record of the inflation which can be found out on the government forecast plans and the dataavailable on their sites. It is important as it reduces the margin of the profit of the company.

Rates of Taxation, and tax reliefs and allowance- these are data which are monitored by the government andcan be found out on the countrys annual budget. This is different for every country. For the tax relief and theallowances, these even are the data provided by the government. There are particular guidelines set by thegovernment for such reliefs and the allowances. These can be figured on the government journals or the books oflaws.

(c).Project execution risks

Reliance Infrastructure is a relatively new player in the infrastructure segment and a pioneer in the developmentof metro projects in the private sector. The companys inexperience in executing such projects could lead to a

delay in the commissioning of projects, thereby impacting its revenues and cash flows.

The risk factor that may impede achievement of the price target/ investment thesis are-

1. The change in assured returns by the regulator.


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2. Regulatory changes that may affect the industry in an adverse manner.

3. Serious non-availability of fuel to the company.

4. Significant change in the tariff structure by regulatory commission.

Risk: the perceived extent of possible loss is defined as risk of a project. Perception of risk isindividualistic. It can be put into a formula:

Risk of a project = probability of event * cost of event

MANAGING RISK

To manage th risk, we need to keep in mind the cost effectiveness of that approach. If the costinvolvement in eliminating risk is more than the actual cost in the happening of the event, then weshould not apply risk management and accept the risk.

There are certain techniques in which risk can be managed:

Risk may be managed in a number of ways:

y With the use of existing resources:

The risk can be managed with the help of already available resources. With the help of theseresources we can improve the system, operational methods, internal problems, accountingproblems etc

y By contingency planning:By contingency planning: this plan is to minimize the effect the impact of the risk if happens.This plan is very important and effective in controlling the effects. . It also plays a major role inbusiness continuity planning(BCP). The contingency plan is an alternate plan of the company ifat all the normal plan does not work properly due to risk factors which are mentioned above.

y By investing in new resources:Your risk analysis should give you the basis for deciding whether to bring in additionalresources to counter the risk. This can also include insuring the risk: Here you pay someoneelse to carry part of the risk - this is particularly important where the risk is so great as tothreaten your organization's solvency.

y By exploring the new resources;analyze the risk and seek for the requirement of the new

resources to handle the risk.

Answer 5

Net Present Value (NPV)Generally, Net Present Value (NPV) is the sum of all discounted cash flows.Broadly, NPV is an amount which is the result of difference between present value of cash inflows and presentvalue of cash outflows. This amount is the expected result of investment. NPV is used in capital budgeting toanalyse the profitability of an investment or project. If the present value of a project's future cash inflow isgreater than the initial investment, that project should be undertaken for future investment.As perHorne et al (2005)(Pg-323), The net present value (NPV) of an investment proposal is the present valueof the proposal's net cash flows less the proposal's initial cash outflow.

Formula of NPV is following below:NPV= I0 +I1(1+r)1 +I2(1+r)2 +........ +In(1+r)n


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Here:I-0 mean initial investment or cash outflowsI-1 mean cash inflows in first period or first yearI-2 mean cash inflows in 2nd period'n' mean the last number or year to investmentAnd r means discount rate of factor

The calculation of NPV for the project isNPV = -initial investment + cash flow of 1st year/(1+r)^1+cash flow of 2nd year/(1+r)^2

=-31.5 + 25/(1+.20)^1+23/(1+.20)^2 + 15/(1+.20)^3

=-35.5 + 20.83 +15.9722+ 8.6805=9.9072

The net present value of this project is positive, thus we can say that this project is worth doing.

Risk and techniques to manage risk of a project

Definition of risk: the perceived extent of possible loss is defined as risk of a project. Perception of riskis individualistic. It can be put into a formula:

Risk of a project = probability of event * cost of event

The decisions for the risk management are based on decision trees. Certain steps to be followed toanalyse risk which are as follows:

Step 1

THREATS

There can be number of ways in which a project can face threats.

Human- from the working staff, employees problems

Operational- the disruption in the operational activities from the manufacturing to the distributiondepartment can cause risk.

Reputational- loss of fame or brand name in the market or loss of confidence of trade partners etc

Procedural- accounting problems, internal system problems etc

Project- over-runs risk, lack of efficiency, task taking time etc

Financial- from inflation, share price, investment, interest rates, taxation etc

Technical- damage of technology used in the project, system failure etc.

Natural- natural calamities, nature, weather, environmental condition etc

Political- government guidelines, public views, foreign involvement etc

Others- other risk can be identified by using porters five forces.

This analysis of threat is important because it is so easy to overlook important threats. One way oftrying to capture them all is to use a number of different approaches:

y Firstly, run through a list such as the one above, to see if any apply


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y Secondly, think through the systems, organizations or structures you operate, and analyzerisks to any part of those

y See if you can see any vulnerabilities within these systems or structures

y Ask other people, who might have different perspectives.

Once you have identified the threats you face, the next step is to work out the likelihood of the threatbeing realized and to assess its impact.

One approach to this is to make your best estimate of the probability of the event occurring, and tomultiply this by the amount it will cost you to set things right if it happens. This gives you a value for therisk.

Step 2

ANALYSIS OF RISK

The probability of occurrence of the threats should be analyzed and realised and to assess its impactof all threats.

Step 3

MANAGING RISK

To manage th risk, we need to keep in mind the cost effectiveness of that approach. If the costinvolvement in eliminating risk is more than the actual cost in the happening of the event, then weshould not apply risk management and accept the risk.

There are certain techniques in which risk can be managed:

Risk may be managed in a number of ways:

y With the use existing resources: The risk can be managed with the help of already availableresources. With the help of these resources we can improve the system, operational methods,internal problems, accounting problems etc

y By contingency planning: this plan is to minimize the effect the impact of the risk if happens.This plan is very important and effective in controlling the effects. . It also plays a major role inbusiness continuity planning (BCP). The contingency plan is an alternate plan of the company ifat all the normal plan does not work properly due to risk factors which are mentioned above.

Guidelines before commencing the contingency plan:

y Maintain business aims and objectives-analyze the requirement to deliver lowest degree ofservice to provide.

y Structure time schedule- appropriate scheduling of time should be done for theimplementation of plan.

y Decide the trigger- figure what to do at what time to get it implemented properly.

y Simple plan- language of the plans should be simple so everybody can understand it.


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y Take care of other resources restrictions- the effectiveness or capabilities will remain sameor not?

y Realize company staff requirements-the people at minimum will require to keep theoperation ongoing.

y Criteria of success- what will bring you back to normal state?

y Training and awareness- staff should be trained to use contingency plan and must be

updated regularly if changes are made.

y Management of risk- this helps in reducing the levels of contingency plan

Some steps should be carried out in the maintaining the contingency plan:

y Everyone should know the contingency plan.

y Assign the responsibilities and the task to the concerned people.

y Train the people.

y

Assessment of the training programs and results.

y Practically apply disaster drills.

y Assessment of drills and then modify according.

y Bring the change in technology, working way if required.

y Modify the plan and make everybody know it.

y Auditing of the plans periodically while reassessing the risk, changes to be made.

y By exploring the new resources; analyze the risk and seek for the requirement of the newresources to handle the risk.

Answer 6

Road project in Rajasthan.The format for the company project financial performance for the quarter of financial year,X

Actual budget figures

In millions Quarter 1(may-june) Quarter 2(july-sep) Quarter3(oct-dec) Quarter4(jan-march)

Net revenue

Net income

Earnings per share

Return on netrevenue

Cash and short-terminvestments


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Total assets

Shareholders equity

Expected Budget figures

In millions Quarter 1(may-june) Quarter 2(july-sep) Quarter3(oct-dec) Quarter4(jan-march)

Net revenue

Net income

Earnings per share

Return on netrevenue

Cash and short-terminvestments

Total assets

Shareholders equity

NET INCOME GRAPH

The category distribution is on the basis of quarters of the financial analysisCategory1= quarter 1Category2= quarter 2Category3= quarter 3Category4= quarter 4

Division of revenue on pie chart

0

2

4

6

8

10

12

14

Category 1 Category 2 Category 3 Category 4

quarterly Net Income


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The pie graph can be used to demonstrate the revenue generated by the project in the respective quarters of thefinancial year.

Being a manger for this project, I would like to submit my quarterly financial project report as depicted above. I

will do the analysis of every quarter and will look into the possibilities of risk and will take the correctivemeasures to mitigate them.

Refrences:

1. Notes provided in class by lecturer Mr. Mike Russell2. www.moneycontrol.com 3. Google finance4. www.rinfra.com

5. http://www.mindtools.com/pages/article/newTMC_07.htm

revenue

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr


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Final Project for Marketing Puneet

Documents

Transcript of Final Project for Marketing Puneet