Tuesday, June 2, 2015
Pre Shipment credit is issued by a financial institution when the seller wants the payment of the goods before shipment. The main objectives behind
pre-shipment credit or pre export finance are to enable exporter to:
Procure raw materials.
Carry out manufacturing process.
Provide a secure warehouse for goods and raw materials.
Process and pack the goods.
Ship the goods to the buyers.
Meet other financial cost of the business.
Types of Pre Shipment credit Packing Credit Advance against cheques/draft etc. representing Advance Payments.
This facility is provided to an exporter who satisfies the following criteria
A ten digit importer exporter code number allotted by DGFT.
Exporter should not be in the caution list of RBI. If the goods to be exported are not under OGL (Open General License), the exporter should have the required license /quota permit to export the goods.
Packing credit facility can be provided to an exporter on production of the following evidences to the bank:
Formal application for release the packing credit with undertaking to the effect that the exporter would be ship the goods within stipulated due date and submit
the relevant shipping documents to the banks within prescribed time limit.
Firm order or irrevocable L/C or original cable / fax / telex message exchange between the exporter and the
License issued by DGFT if the goods to be exported fall under the restricted or canalized category. If the item falls under quota system, proper quota allotment proof needs to be submitted.
The confirmed order received from the overseas buyer should reveal the information about the full name and address of the overseas buyer, description quantity and value of goods (FOB or CIF), destination port and the last date of payment.
Advance against Cheque/Drafts received as advance payment
Where exporters receive direct payments from abroad by means of cheques/drafts etc. the bank may grant export credit at concessional rate to the exporters of goods track record, till the time of
realization of the proceeds of the cheques or draft etc. The Banks however, must satisfy themselves that the proceeds are against an export order.
Monday, June 1, 2015
LIBOR stands for London Interbank Offered Rate. The world's most widely used benchmark for short term bank borrowing rates.
LIBOR is the average interbank interest rate at which a selection of banks on the London money market are prepared to lend to one another. LIBOR comes in 7
maturities (from overnight to 12 months) and in 5 different currencies. The official LIBOR interest rates are announced
once per working day at around 11:45 a.m. In the past, the BBA/ICE published LIBOR rates for 5 more currencies
(Swedish krona, Danish krone, Canadian dollar, Australian dollar and New Zealand dollar) and 8 more maturities (2
weeks, 4, 5, 7, 8, 9, 10 and 11 months).
LIBOR is watched closely by both professionals and private individuals because the LIBOR interest rate is used as a base rate (benchmark) by banks and other financial institutions. Rises and falls in the LIBOR interest rates can therefore have consequences for the interest rates on all sorts of banking products such as savings accounts, mortgages and loans.
This site shows you the current and historic rates for all LIBOR interest rates. The interest rates on this site are
updated daily at around 6.00 p.m. (CET) so that you always have access to current, almost real-time LIBOR information. The table below shows a summary of the current rates for all LIBOR interest rates. If you click on the
links you will be able to view extensive current and historic information for the maturity concerned. The tabs allow you
to view the LIBOR interest rates for other currencies. At the bottom of the page you will find links to other pages with LIBOR information.
Sunday, May 31, 2015
As a result of this narrow perspective, companies overlook the greater opportunity to leverage the power of performance management as a business management tool that aligns decision making differentially across various roles, reflects the unique aspects of the business model and culture, and considers the risk profile of the industry. By ignoring these facets of performance management, companies are missing out on opportunities to generate economic value. Because they have limited visibility into the value of different employee groups and roles, organizations will often opt to spread HR investments equally across organizational units — for example, investing a comparable amount in critical-skill employees as in employees whose skills contribute less economic value. Companies also face similarly negative consequences when key performance management activities such as goal setting are not aligned with a company’s vision and business model. For instance, a company focused on delivering a superior customer experience may fall short of achieving this objective — and realizing the corresponding economic value — if it uses a rigid top-down approach to goal setting that fails to take into account the unique demands of different customer segments. Lastly, value is also lost when organizations fail to fully consider the implications of their industry’s risk and performance tolerance. For example, a computer chip manufacturer that uses too broad a range of performance goals faces a significant risk that its product will not meet the tightly defined set of quality standards demanded by customers and it will lose significant market share as a result of the variance in its product quality. But not all companies are ignoring the power of performance management as a business management tool. Our work reveals that a number of organizations are making strides in aligning performance management with their companies’ business drivers. These players routinely analyze how variances in business models and risk tolerance can influence the performance requirements placed on different employee segments. This knowledge enables these organizations to better calibrate performance management to get the best return on their HR investments and achieve their strategic priorities. Aligning Decision Making With Business Strategy Unlike many HR processes, performance management has a direct and often-missed connection to a company’s business strategy and key value drivers. While much has been written about cascading goals and the importance of aligning individual key performance indicators (KPIs) with business objectives, research would suggest there is plenty of room for improvement. According to the 2012 Towers Watson Global Workforce Study, 37 percent of the global employee sample gave either a negative or neutral response when asked if they understood their company’s business goals. A similar percentage (38 percent) gave either a negative or neutral response when asked if they understood how their job contributes to their organization achieving its business goals. Moreover, in companies that do attempt to align individual KPIs with broader company objectives, the process of cascading goals is often purely a strategy agnostic, financial exercise. While financial goals may be relevant to executive leaders, they often have minimal relevance to employees at lower levels. Towers Watson research over the years has found that high-performing companies emphasize specific cultural attributes based on their chosen strategy:
• Efficiency. An organization focused on efficiency seeks to attract and retain talent that is productive in a way that optimizes processes, technology and resources. Key characteristics of this type of organization include an emphasis on comprehensive training in basic processes and very precise role descriptions accompanied by disciplined workload allocation. In terms of performance focus, the “what” weighs more heavily than the “how” in an 80/20 ratio. An efficient organization values top down goal setting and quantitative performance metrics.
• Quality. A quality organization looks to focus its workforce on excellence, precision and continuous improvement. Employees in this type of organization are empowered to improve processes and share best practices. A quality-driven company typically relies on multi-rater feedback systems, including peer reviews and top-down metric-driven goal setting. While the what weighs more heavily than the how in performance assessment, it does so to a lesser degree (60 percent what versus 40 percent how) than in an efficient organization. The tolerance for performance variance is typically minimal.
• Innovation. An organization that prioritizes innovation requires its employees to be entrepreneurial, creative and proactive. Its culture encourages diverse thinking and supports risk taking. The emphasis is typically on competency-based goals (the how) that are aligned with the company’s longterm vision. In this type of organization, there is a tolerance for wide performance differentiation and less formal top-down goal setting.
• Customer Service. A service-oriented organization seeks talent it can empower to build strong customer relationships. It promotes teamwork and focuses on long-term development. There is strong support for information sharing, which results in an improved understanding of customer needs and preferences. Because there is significant performance differentiation in this type of organization (as a result of its continuous pursuit of individual excellence), it is important to identify top performers. Goals aligned with customer requirements are typically set on a unit-specific basis to recognize differences in customer requirements.
• Brand. An organization pursuing a brand strategy seeks employees capable of serving as its brand ambassadors. These employees focus on building a community in which there is deep pride in the brand and a strong belief in the product. A brand-focused organization emphasizes team-based goals aligned with its vision and typically relies on a multi-rater feedback system, which includes peer reviews. These cultural attributes have significant implication for all aspects of performance management, including determining the types of goals to use, how targets are set, the degree of variance between targets across a given employee population, etc. Yet it is rare for an organization to start with the cultural attributes required to execute its strategy when it thinks about designing its performance management process. Another area of opportunity to reflect an organization’s strategy — the pathway to delivering financial outcomes — is in employee goals. This integration can be accomplished by cascading the nonfinancial goals of the organization into individual employee objectives in various functions. For example, Exhibit 1 illustrates the case of a printing company that used a value tree to disaggregate high-level metrics into lower-level business drivers that employees can understand.
Advantages to equity financing:
Advantages to debt financing:
Types and Sources of Financing for Start-up Businesses
Companies may establish different classes of stock to control voting rights among shareholders. Similarly, companies may use different types of preferred stock. For example, common stockholders can vote while preferred stockholders generally cannot. But common stockholders are last in line for the company’s assets in case of default or bankruptcy. Preferred stockholders receive a predetermined dividend before common stockholders receive a dividend.
The ﬁrst place to look for money is your own savings or equity. Personal resources can include proﬁt-sharing or early retirement funds, real estate equity loans, or cash value insurance policies.
Founders of a start-up business may look to private ﬁnancing sources such as parents or friends. It may be in the form of equity ﬁnancing in which the friend or relative receives an ownership interest in the business. However, these investments should be made with the same formality that would be used with outside investors.
Venture capital refers to ﬁnancing that comes from companies or individuals in the business of investing in young, privately held businesses. They provide capital to young businesses in exchange for an ownership share of the business. Venture capital ﬁrms usually don’t want to participate in the initial ﬁnancing of a business unless the company has management with a proven track record. Generally, they prefer to invest in companies that have received signiﬁcant equity investments from the founders and are already proﬁtable.
Angel investors are individuals and businesses that are interested in helping small businesses survive and grow. So their objective may be more than just focusing on economic returns. Although angel investors often have somewhat of a mission focus, they are still interested in proﬁtability and security for their investment. So they may still make many of the same demands as a venture capitalist.
Federal and state governments often have ﬁnancial assistance in the form of grants and/or tax credits for start-up or expanding businesses.
In this situation, the business sells stock directly to the public. Depending on the circumstances, equity offerings can raise substantial amounts of funds. The structure of the offering can take many forms and requires careful oversight by the company’s legal representative.
Initial Public Offerings (IPOs) are used when companies have proﬁtable operations, management stability, and strong demand for their products or services. This generally doesn’t happen until companies have been in business for several years. To get to this point, they usually will raise funds privately one or more times.
Warrants are a special type of instrument used for long-term ﬁnancing. They are useful for start-up companies to encourage investment by minimizing downside risk while providing upside potential. For example, warrants can be issued to management in a start-up company as part of the reimbursement package.
Founders of start-up businesses may look to private sources such as family and friends when starting a business. This may be in the form of debt capital at a low interest rate. However, if you borrow from relatives or friends, it should be done with the same formality as if it were borrowed from a commercial lender. This means creating and executing a formal loan document that includes the amount borrowed, the interest rate, speciﬁc repayment terms (based on the projected cash ﬂow of the start-up business), and collateral in case of default.
Banks and other commercial lenders are popular sources of business ﬁnancing. Most lenders require a solid business plan, positive track record, and plenty of collateral. These are usually hard to come by for a start- up business. Once the business is underway and proﬁt and loss statements, cash ﬂows budgets, and net worth statements are provided, the company may be able to borrow additional funds.
Commercial ﬁnance companies may be considered when the business is unable to secure financing from other commercial sources. These companies may be more willing to rely on the quality of the collateral to repay the loan than the track record or profit projections of your business. If the business does not have substantial personal assets or collateral, a commercial ﬁnance company may not be the best place to secure ﬁnancing. Also, the cost of finance company money is usually higher than other commercial lenders.
Federal, state, and local governments have programs designed to assist the ﬁnancing of new ventures and small businesses. The assistance is often in the form of a government guarantee of the repayment of a loan from a conventional lender. The guarantee provides the lender repayment assurance for a loan to a business that may have limited assets available for collateral. The best known sources are the Small Business Administration and the USDA Rural Development programs.
Bonds may be used to raise ﬁnancing for a speciﬁc activity. They are a special type of debt ﬁnancing because the debt instrument is issued by the company. Bonds are different from other debt ﬁnancing instruments because the company speciﬁes the interest rate and when the company will pay back the principal (maturity date). Also, the company does not have to make any payments on the principal (and may not make any interest payments) until the specified maturity date. The price paid for the bond at the time it is issued is called its face value.