SUMMER INTERNSHIP PROJECT

“A STUDY ON ROLE OF FINANACE IN AN MAHINDRA

ENTERPRISE”

SUBMITTED BY-KAVYA GAUR

Under the guidance of

FACULTY GUIDE-R.P.S TOMAR
( Lecturer in Commerce department )

DEPARTMENT OF COMMERCE
Y.D.P.G COLLEGE LAKHIMPUR KHERI
2023 -24

CERTIFICATE
 This is to certify that Miss Kavya gaur is a regular student of
department of commerce in Y.D.P.G College lakhimpur kheri and
this report entitled “A Study on role of in an enterprise has been
prepared by her in partial fulfillment of the requirement of the
award of degree of “BACHELOR OF COMMERCE”of the Lucknow
University during the year 2023-24
Under my Guidance.

She is permitted to submit the report

Place Lakhimpur kheri
Date-

Counter signed by-

MR. R.P.S Tomar
Lecturer in Commerce Departartment
Y.D.P.G College Lakhimpur kheri
Examiner:

ACKNOWLEDGEMENT
First of all I thank “Almighty God” to his grace upon me to do
this poject successfully. I thank to my loving parents and
friends for giving me strength and determination to
complete this project successful.
I express my profound gratitude to my guide Mr.R.P.S
Tomar Lecturer in commerce department of Y.D.P.G College
for his excellent advice and corporation and valuable
guidance to the study.
My sincere thanks also goes to Principal Dr.Hemant
Kumar Pal of Y.D.P.G College .for their help and guidance .

KAVYA GAUR
 DECLARATION

Kavya gaur hereby declare that the project entitled “A study on

role of finance in an enterprise”is a bonafide of work done by me
under the supervision of Mr.R.P.S Tomar
I also declared that thus report has been not submitted by my fully
or partly for the award of any degree ,diploma or another titles of
any other University

Place:Lakhimpur Kavya Gaur

Date:
 INTRODUCTION
Project finance refers to the funding of long terms projects,such as
public infrastructure or services,industrial projects and others
through a specific financial structure Finanaces can consist of a mix
of debt and equity. The cash flows from the project enable
servicing of the debt and repayment.

Project finance risks are therefore highly specific and its essential
that participants such as commercial bankers ,general
contractors ,subcontractors, insurance companies ,suppliers and
customers understand these risks since they will all be participating
in an interlocking structure of debt and equity.

Project finance is generally used to refer to a recourse or limited

recourse financing structure in which debt ,equity and credit
enhancement are combined for the construction and Operation ,or
the refinancing of a particular facility in a capital intensive industry.
 COMPANY PROFILE

MOSARAM ENTERPRISES LMITED

Mosaram Enterprises Limited ,a public limited

company ,waspromoted by Shri Prem Shankar Agarwal in 1990
with a vision to make the company as leading business entity with
ethical values in its area of Operation .

MOSARAM GROUP established in 1907 has its presence in many

fields like Agri Inputs ,Cement ,Petroleum,Automotive(2-
wheelers&4-wheelers),salt,DTH & Telecom and many other
industries .Delivering quality sales and services experience to all
our customer have been the founding values of our automotive
business and what we do . The Company has a strong culture of
excellence in everything that it does. This has helped it earn
tremendous loyalty from customer , resulting in a large percentage
of its business coming through refrences from the existing
Customers.
Dealership maintains high standard of excellence in sales and
services by sending its personnel for training on a regular basis to
keep the teams skill levels at the peak.
We have designed this website keeping you in mind .Everything
you wish to know about Mahindra cars ,in India ,is here at your
fingertips so that you can sit back and choose a vehicle, checkout
the features & specifications ,compare options ,getprice, find
finance ,book a test drive ,insure your new car.
MISSION STATEMENT
“To achieve the highest possible standards in all that we do.
Our number one priority and commitment is therefor to
offer ,at all times ,aworld class service to our customers
which in turn will increase our revenue”

VISION STATEMENT
“Be the best in the eye s of our customers,employees and
shareholders & be best run, most profitable automotive
retailer.”
values
R- Reliable
E -Excellence
S- Speed
P-Passion
E- Empowerment
C- Committed &Consistent
T- Transparent
 TERMINOLOGIES
CURRENT RATIO :
Current ratio =Current Assests +Current Liabilities
The current ratio is a liquidity ratio measures a companys ability to
pay short term and long term obiligations . To gauge this
ability ,the current ratio considers the current total assets of a
company relative to that companys current total liabilities .

QUICK RATIO:
Indicates the ability to meet short term payments using the most
liquid assets. This ratio is more conservative than the current ratio
because it excludes inventory and other current assets , which are
more difficult to turn into cash.

RETURN ON CAPITAL EMPLOYED

This ratio complements the return on equity ratio by adding a
companys debt liabilities,or funded debt to equity to reflect a
company total “capital employed”.The measure narrows the focus
to gain a better understanding of a companys ability to generate
returns from its available capital base.
GROSS PROFIT RATIO
A Companys cost of goods sold represents the Expenses related to
labor ,raw material and manufacturing overhead involved in its
production process. This expense is deducted from the companys
net sales /revenue ,which results in acompanys gross profit. The
gross profit margin is used to analyze how efficiently a company is
using its raw materials ,labor and manufacturing related fixed
assests generate profits

OPERATING PROFIT:
By subtracting selling general and administrative expenses from a
Companys gross Profit number ,we get operating
income.Management has much more control over operating
expenses than its cost of saleas outlays .It measures the relative
impact of operating expenses.

NET PROFIT RATIO.:

This ratio measures the ultimate profitability.
EQUITY RATIO:
This ratio measures the strength of the financial structure of the
company.

DEBT RATIO:
This compares companys total debt to its total assets,which is used
to gain a general idea as to the amount of leverage being used by a
Company. This is the measure of financial strength that reflects the
proportion of capital which has been funded by debt including
preferences shares.

INTREST COVERAGE RATIO:

This ratio measures the number of times a company can meet its
intrest expenses

AVERAGE COLLECTION RATIO:

The average collection ratio is a financial metric that measures
the efficiency of a company's accounts receivable
management.
 OBJECTIVE OF THE STUDY

 To obtain knowledge for future

 To develop and discover my vision into pragmatic action, as

a performance- oriented.

 To build upon my existing corporate finance skill set in both

analytics and transaction, execution leading to increasingly

responsible position in treasury.

 To employ my knowledge and experience with the intention

of securing a professional career with opportunity for

challenges and career advancement, while gaining

knowledge of new skills and expertise.

 To make a proper study on internship.

 .SCOPE OF THE STUDY
 Internship at Mosaram Enterprises was my first experience.

I learnt allot more new things in accounting/ Finance sector.

 Initially I knew only about GST Accounting, The ITR process

taxation. Here, I learned more about Project Financing.

 ThendeeplyIlearnedabout,whatisthemainprocessofdoingallt

hese.Mymain focus in these 45 days was on the filling the

ITR and maintaining the balance sheet.

 After getting detailed information about the service which is

exactly given by a CA to the clients, I started implementing

the kinds of services.

 And then the most important thing which i came to know

was, if any of the clients wants to open up a new factory so

firstly they will come to A Chartered Accountant for making

a financial report, regarding the loan sanction if needed.

 NEED OF THE STUDY
1. Helps inidentifying need to determine its worth pursuing.

2. The decision-making process takes place to prioritize and select

project with greatest news

3. Project finance is used to build energy infrastructure in industrialized

countries as well as in emerging markets.

4. Project finance helps finance new investment by structuring the

financing around the project's own operating cash flow and assets,

without additional sponsor guarantees.

5. It primarily helps in financing the broad range of economic

unit’sworldwide, which sets many of the examples.

 CONTRIBUTION DURING SIP
Documents and information done while preparing project report

1. Past2 years Audited Financial statement.

2. Provisional financial for the current year in the absence of

provisional financials, details of the top line shall be essential.

3. Latest Sanction letter(in case of renewal).

4. Term Loan Repayment Schedule,ifany.

In the third week I learnedhow to make project report of different

companies .
 LIMITATIONS

 Complexity of the process due to the increase in the number

of parties and the transaction cost.

 Expensiveastheprojectdevelopmentanddiligenceprocessisacos
tlyaffair.

 Complexity due to lengthy documentation.

 Requires qualified people for performing the complicated

procedures of project finance.

 Higher level of control which might be exercised by the

banks, which might bring conflict with the businesses or

contracts.
 RESEARCH METHODOLOGY

Data collection is the systematic approach to gather and

measure information from variety of sources to get a complete

and accurate picture of an area of interest.

It mainly includes two types of data:

 Primary data

 Secondary data.

Primarydata:-

Data used in research originally obtained it through the direct

efforts of the researchers through surveys,interviews and direct

observations. For this report primary data is collected through

surveys interviews and direct observstion . For this report primary

data is collected through online surveys and interactions.

Secondarydata:-

It refers to the data that was collected by someone other than

users .Secondary data can be collected through refrences.

 SWOT ANALYSIS FOR PROJECT FINANCE

STRENGTHS:

 Distinguish financial services provider ,with local talent catering to

local customers.

 Vast distribution network especially in rural areas and small

towns ,diversified product range and robust collection systems.

 Simplified and prompt appraisal and disbursements.

 Product innovation and superior delivery.

Weakness:

 Regulatory restrictions- continuously evolving government

regulations may impact operations.

 Uncertain economic and political environment.

Opportunities:

 Demographic changes and under penetration.

 Large untapped rural and urban markets.

 Growth in industrial sector.

Threats:

 High cost of funds.

 Restrictions on deposit.
Project Financing

Project finance is the financing of long-term infrastructure,

industrial projects and public services based upon a non-recourse

or limited recourse financial structure, in which project debt and

equity used to finance the project are paid back from the cash

flow generated by the project.

Financial model

 A financial model is constructed by the sponsor as a tool to conduct negotiations with

the investor and prepare a project appraisal report. It is usually a computer spreadsheet

designed to process a comprehensive list of input assumptions and to provide outputs

that reflect the anticipated real-life interaction between data and calculated values for a

particular project.

 Properly designed, the financial model is capable ofsensitivity analysis, i.e., calculating

new outputs based on a range of data variation

Contractual framework:

The typical project finance documentation can be reconducted to four main types:

 Shareholder/sponsor documents

 Project documents

 Finance documents

 Security documents

 Other project documents

 Director /promotore Contribution

PROBLEM FACED BY THE SECTOR IN GENERAL
AND THE COMPANY

In order to ensure lower levels of project risk, equity and debt provider perform a large

amount of due diligence so as to get a better idea about risks associated with a

project.One of the major risk elements in the project finance is Repayment Risk. The

mitigation process for this is to establish the preferential claim of investors to a project’s

cash flows. The higher the seniority, the lesser risk one has in a project. Debt holders

mostly have the primary claim on cash flows, followed by tax equity investors, and then

project sponsors.

Project finance life cycle is a long and complex one and it is but natural to have multiple

risk elements.
 FUTURE POTENTIALS OF THE COMPANY

Project finance is a rapidly expanding field . While project finance has its origins in the natural

resource and infrastructure sectors, the current demand for infrastructure and capital investments is

primarily fueled by deregulation in the power, telecommunications, and transportation sectors; by

the globalization of product;and by the privatization of government Own edentities in developed

and developing countries. The long-term prospects are strong, as countries with limited government

resources try to meet the growing demand for infrastructure assets. Given the right applications and

structures, the benefits of project finance can more than off setthe higher transaction

costs,increased time commitments, and higher debt rates typically associated with project

financings. However, project finance may result in unsustainable practices because banks and

projectt sponsors (bank clients) often do not carry out adequate environmental and social impact

assessments of the projects they are financing. In addition, financiers often take inadequate steps to

address the issue of sustainability, as environmental and social regulations in some host countries

can be weak.This is especially true in developing countries.As aresult of the adverse consequences

big infrastructure projects may have, civil society has increasingly targeted the financiers involved

in the projects to act more responsibly.

 NET WORTH STATEMENT

A personal net worth statement is a snapshot of an individual's financial

health, at one particular point in time. It is a summary of what is

owned(assets), less what is owed to others (liabilities).The formula used

is :assets- liabilities=networth.

In second week of my SIP I was guided by my seniors about how to make

network statements and which helped me a lot due to which I was able

to make such statements of different companies it gave me a great

exposure about the organization.

 CREDIT MONITORING ARRANGEMENT

CMA Data means credit Monitoring data .As per RBI guidelines ,CMA is

required for project loans, Terms Loans provided by a company to bank

for getting the loan from bank and every year, for renewing or

enhancing their existing Bank loan. CMA Data is a systematic analysis of

working capital management of the borrower and the purpose of this

statement is to ensure the use of funds effectively.

CMA data generally include 2 years Audited Financials and 3 future

years Financial Projection of company, Fund flow statement, Changes in

Working Capital report, Ratio analysis and Maximum Permissible Bank

Finance (MPBF) report.

The banks rely very much on this report and carefully evaluate CMA

data for eligibility of funding. Our experts help to highlight the potential

of your business in CMA data to be submitted to the bankers at the

time of sanction and renewal.

It basically contains 7 statements which help Banker to understa nd the

financial health of the company:

1. Particulars about the present limit and the proposed limit. It will

show both Fund and Non-fund based limits of the borrower and usage

limit or current balance.

2. Operating Statement/Profit and loss account statement, bank will

know performance of company. It also helpful to know earning cycle for

paying the expenses.

3. Balance sheet, bank will know the financial position. Is it sound or

not? Do company has own assets or all assets on debt. So, to study

balance sheet is must.CMA Data will have 2 years Audited balance

sheet and 3 years projected balance sheet. So, analyst can make

comparative balance sheet for knowing the changes in the balance

sheet’s position.

4. With fund flow statement, bank can know the flow of fund. Is

company wasting their fund or applying fund for growing.

5.

6. Changes in working capital report – helps to understand the changes

in current assets and current liabilities. It will also helpful to know short

term solvency of company. I fith as enough money to pay current

liabilities, it cannot misuse its longterm resources.

7. Banks ask the maximum permissible bank finance (MPBF) working. It

should not more than 75% of working capital or 20% of Sales.

DOCUMENTS /INFORMATION REQUIRED
PREPARING CMA:

1. Past 2 years Audited Financial.

2. Provisional Financial for the current year; in the absence of

provisional financials, details of the top line shall be essential.

3. Latest Sanction letter(in case of renewal).

4. Term Loan Repayment Schedule, if any.

5.Details of proposed enhancement (if any) along with the terms and

conditions

In the third week I learned how to make CMA of different companies

 INCOME TAX RETURN
The definition of an income tax return is a document you file with the
Internal Revenue Service or the state tax board reporting your income,
profits and losses of your business and other deductions as well as details
about your tax refund or tax liability

To file income tax, gather relevant financial documents, including W-2s and
1099s. Choose a filing method: online using tax software, hiring a
professional, or filing by mail. Complete the required forms, such as 1040,
and report all income. Verify eligibility for deductions and credits. Submit
your return by the deadline, typically April 15.
 FINANCIAL STATEMENT

Financial statement is a formal record of the financial

activities and position of a business, person or other entity.

Relevant financial information is presented in a structured

manner and in a form easy to understand. The typically

include basic financial statements,accompanied by a

management discussion and analysis:

1. A balancesheet or statement of Financial position,

reports on a company's assets, liabilities, and owners’ at a

given point in time.

2. 2.An income statement or statement of comprehensive

income, statement of revenue & expense, P&L or profit

and loss report, reports on a company's income, expenses,

and profit s over a period of time.

3. A profit and loss statement provides in formation on the

operation of the enterprise.

4. These include sales and the various expenses incurred

during the stated period.

5. A Statement of changes in equity or equity statement or

statement of retained earnings, reports on the changes in

equity of the company during the stated period.

 CONCLUSION

To study at MOSARAM ENTERRISES & LIMITED gave a vast learning

experience to me and has helped to enhance my knowledge during

the study. I learnt how the theoretical financial analysis aspects are

used in practice during the long term assessment . I have realized

during my project that a project financer must have multi-

disciplinary talents like financial, technical as well as legal know how.

The credit appraisal for business loans has been devised in as

systematic way.It is a process of appraising the credit worth in of

loan applicants. The project finance is a financing of a particular

economic unit in which a lender is satisfied to look initially to the

cash flow and earnings of that economic unit.

Thus, I have gained knowledge and learned all the aspects which

are covered below related to my project:-

1. Filling Income Tax Return

2. Financial Statement Analysis

3. Working Capital and its Assessment Techniques

4. Documentation

5. Preparation of Net Worth Statement

6. Preparation of Credit Monitoring Arrangement

MOSARAM ENTERPRISES & LIMITED is promoted by qualified

professional shaving strong execution, capabilities in the entire

Project Life Cycle, in sectors like Infrastructure, Pharmacy, Energy

and Natural Resources, Agro Processing, Real estate etc, through

its service offerings in Investment Banking & Management

Consultancy.

Besides we also represent CRISIL for their risk management

services.
 BIBLOGRAPHY

1. Information is collected from Director of MOSARAM

ENTERPRISES & LIMITED and team.

2. The information to be collected from Wikipedia.

3. Market survey.
 INDEX

SERIAL NO. TOPICS

1. INTRODUCTION
2. COMPANY PROFILE
3. TERMINOLOGIES
4. OBJECTIVE OF THE STUDY
5. SCOPE OF THE STUDY
6. NEED OF THE STUDY
7. CONTRIBUTION DURING SIP
8. LIMITATIONS
9. RESEARCH METHODOLOGY
10. CONCLUSION
11. BIBLOGRAPHY