BALANCE SHEET

The balance sheet is a significant financial statement of the firm. In fact, it is called the fundamental accounting report. Other terms to describe this financial statement are the statement of financial position or the position statement. As the name suggests, the balance sheet provides information about the financial standing / position of a firm at a particular point of time, say as on March 31. It can be visualized as a snap shot of the financial status of a company. The position of the firm on the preceding or the following day is bound to be different.

The financial position of a firm as disclosed by the balance sheet refers to its resources and obligations, and the interest of its owners in the business. In operational terms, the balance sheet contains information regarding the assets, liabilities and shareholder’s equity. The balance sheet can be present in either of the two forms:Report form or Account form.

Contents of the balance sheets:

1) Assets

2) Liabilities

Assets:

Assets may be described as valuable resources owned by a business which have been acquired at a measurable money cost. As an economics resource, they satisfy three requirements. In the first place, the resource must be valuable. A resource is valuable if it is in cash or convertible into cash or it can provide future benefits to the operations of the firm. Secondly, the resources must be owned in the legal sense of the term.

Finally, the resource must be acquire at a measurable money cost. In case where an asset is not acquired with cash or promise to pay cash, the criterion is, what the asset would have cost, had cash been paid for it. The assets in the balance sheet are listed either in the order of liquidity promptness with which they are expected to be converted into cash- or in reverse order, that is, fixity or listing of the least liquid asset first, followed by others. All assets are grouped into categories, that is, assets with similar characteristics are put into one category. The assets included in one category are different from those in other categories.

The standard classification of assets divides them into:

1) Fixed assets/ long term assets

2) Current assets

3) Investments

4) Other assets

Liabilities:

The second major content of the balance sheet is liabilities of the firm. Liabilities may be defined as the claims of outsiders against the firm. Alternatively, they represent the amount that the firm owes to outsiders that is, other than owners. The assets have to be financed by different sources. One source of funds is borrowing- long term as well as short term. The firms can borrow on a long term basis from financial institutions/ banks or through bonds/ mortgages/ debentures.

The short term borrowing may be in the form of purchase of goods and services on credit. These outside sources from which a firm can borrow are termed as liabilities. Since they finance the assets, they are, in a sense, claims against the assets. The amount shown against the liability items is on the basis of the amount owed, not the amount payable.

Depending upon the periodicity of the funds, liabilities can be classified into

1) Long-term liabilities

2) Current liabilities

DEBENTURES

The issue of debentures by public limited companies is regulated by Companies Act 1956. Debenture is a document, which either creates a debt or acknowledges it. Debentures are issued through a prospectus. A debenture is issued by a company and is usually in the form of a certificate, which is an acknowledgement of indebtedness. They are issued under the company's seal. Debentures are one of a series issued to a number of lenders.

The date of repayment is invariably specified in the debenture. Generally debentures are issued against a charge on the assets of the company. Debentures may, however, be issued without any such charge. Debenture holders have no right to vote in the meetings of the company.

Kinds of Debentures

1. Bearer Debentures: They are registered and are payable to its bearer They are negotiable instruments and are transferable by delivery.

2. Registered Debentures: They are payable to the registered holder whose name appears both on debenture and in the register of debenture holders maintained by the company. Registered debentures can be transferred but have to be registered again. Registered debentures are not negotiable instruments. PI registered debenture contains a commitment to pay the principal sum and interest. It also has a description of the charge and a statement that it is issued subject to the conditions endorsed therein.

3. Secured Debentures: Debentures which create a charge on the assets of the company, which may be fixed or floating, are known as secured debentures

4. Unsecured or Naked Debentures: Debentures, which are issued without any charge on assets, are unsecured or naked debentures, The holders are like unsecured creditors and may sue the company for recovery of debt.

5. Redeemable Debentures: Normally debentures are issued on the condition that they shall be redeemed after a certain period. They can, however, be reissued after redemption under Section 121 of Companies Act 1956.

6. Perpetual Debentures: When debentures are irredeemable they are called Perpetual.

7. Convertible Debentures: If an option is given to convert debentures into equity shares at stated rate of exchange after a specified period they are called convertible debentures. In our country the convertible debentures are very popular. On conversion, the holders cease to be lenders and become owners. Debentures are usually issued in a series with a pari passu (at the same rate) clause which entitles them to be discharged rate ably though issued at different times. New series of debentures cannot rank pari passu with old series unless the old series provides so.

8. New debt instruments issued by public limited companies are participating debentures, convertible debentures with options, third party convertible debentures, and convertible debentures redeemable at premium, debt equity swaps and zero coupon convertible notes.

9. Participating Debentures: They are unsecured corporate debt securities, which participate in the profits of the company. They might find investors if issued by existing dividend paying companies.

10. Convertible Debentures with Options: They are a derivative of convertible debentures with an embedded option, providing flexibility to the issuer as well as the investor to exit from the terms of the issue. The coupon rate is specified at the time of issue.

11. Third Party convertible Debentures: They are debt with a warrant allowing the investor to subscribe to the equity of a third firm at a preferential vis-à-vis the market price. Interest rate on third party convertible debentures is lower than pure debt on account of the conversion option.

12. Convertible Debentures Redeemable at a premium: Convertible debentures are issued at face value with an option entitling investors to later sell the bond to the issuer at a premium. They are basically similar to convertible debentures but embody less risk.

SPECIAL SCHEME FORWOMEN ENTREPRENEURS

With a view that women entrepreneurs should come forward in industrial field and become self- sufficient, government and financial institutions have announced many schemes of providing financial assistance.

1. Seed Capital Scheme: In order to start one’s own business this scheme is undertaken by the government. Government provides funds @ 10% to unemployed youths and women. The seed capital provided is 10% to 15% of the total cost of the project. The percentage of seed capitalist 22.5% for backward class candidates. The woman is treated unemployed even if their husbands are in business or service. The qualification is they should have passed at least the standard and should be between 18- 50 years of age. The maximum capital available is 5 lacs. For a partnership firm, the contribution of employed should be more than 75%. The seed capital granted is to be aid within the period of 7 years. More details in regard are provided by District Industries Centre.

2. National equity Fund: National Bank or State finance Corporation implements this scheme. There is no condition of age or education under this scheme. Loan granted for industrial or service oriented business purpose. It is expected that the candidate should contribute minimum 105 of the cost of the project. 15% of the project cost is granted by the bank towards capital @ 10% equity fund as loan.75% of project cost is granted by the bank in the form of loan.

3. Finance Corporation Scheme: All the schemes announced by the finance corporation scheme are applicable to women entrepreneurs. Prime minister’s employment guarantee scheme, Central government’s scheme for educated unemployment: This scheme is sponsored by central government. The age limit applicant is 35 years and minimum education is Std.Xth. Under this scheme 95% of loan is granted by the bank. 15% subsidy is available. Rs. 5,000 for business purpose. Rs. 25,000 for service industry and Rs. 35,000 for the purpose of individual loan is granted. The candidate is not expected to contribute his share. 15% of subsidy is directly remitted to bank by central government. This scheme has been revised from April 1999. The income limit of the partners of the women should not be more than Rs. 24,000 p.a. for availing loan under this scheme, the candidate has to make an application to District Industries Center.

4. Women Industries Fund scheme: Under this scheme women entrepreneur’s get 15% seed capital of total cost of the project for starting a new business. The seed capital money is restricted to Rs. 4 lacs. The cost of the project should not exceed 10 lacs. It is expected that women entrepreneurs should contribute 10% of total project cost.

Incase of partnership firms/ private limited company the contribution of women entrepreneurs should be minimum 51% of the total project cost. For availing this facility application must be made to nationalized banks or State Finance Corporation.

5. Single Window Scheme: To facilitate women entrepreneurs in getting term loan and working capital from one and the same institution, the Small Industrial Development bank of India has started this scheme. It is applicable to both, male and female entrepreneurs. This scheme is applicable to project where total expenses are up to 20 lacs (excluding working capital and margin money). The loan is too repaid within the period of 1 year. Entrepreneurs share in the project should be 25%. This scheme is implemented through Finance Corporation. The corporation also provides term loan and working capital. Bank has to take the responsibility of providing working capital.

6. Joint Loan Scheme: Under this scheme, the artisans living in rural areas, where the populations is up to 5 lacs get the loans to purchase instruments and working capital needs. Financial assistance is available cent per up to Rs. 50,000 lacs with minimum rate of interest. Loan granted is to repaid within a period of 8 years. There is no restriction of age education qualification of the candidate.

7. District Industries Center Scheme: The main objective of this scheme is to start industries in rural areas where the population is less than 1 lacs. The industries with investment in machinery not exceeding Rs. 2 lacs are eligible for financial assistance under this scheme. 20% of 2 lacs for general category and 30%incase of backward people are granted as seed capital from the District Industries Center. The remaining amount of entrepreneur has to invest rest of the amount. The government sponsors this scheme. The rate of interest on seed capital is 4%. The District Industries Center implements the scheme and the applicant has to apply to them for financial assistance.

8. Scheme of KVIC: Many schemes are implemented by KVIC for women entrepreneurs to start their own business (cottage industries) in rural and semi- urban areas.

9. Women Financial Corporation: For overall financial development of women, Government establishes Women Financial Corporation.

10. Training For Women Entrepreneurs: The Indian small development bank has undertaken training programme for women entrepreneurs with an object of getting more opportunities for starting self employment industries/ business for women. This scheme is implemented in the state of Maharashtra at Maharashtra District Center, Aurangabad and other centers.

11. Banks Scheme for women entrepreneurs: Bank implements various scheme for women entrepreneurs, one of which is “streeshakti” in State bank of India.

12. Subsidy on Interest Scheme: The Indian Finance Corporation ahs implemented this scheme. The subsidy is granted loans up to Rs. 10 lacs. The women entrepreneurs are encouraged to start their own business. They are encouraged to undergo training in industrial development. The industry should be run by the women entrepreneur with the contribution of 51% of total cost of project. The amount of subsidy available is interest for 1 year or Rs. 20,000 granted through financial institution to women entrepreneurs. Indian Financial Corporation reimburses this amount to the financial institutions.

PROBLEMS OF WOMEN ENTREPRENEURSHIP

Women entrepreneurs encounter two sets of problems, viz, general problems of entrepreneurs and problems specific to women entrepreneurs. These are discussed as follows:

1. Problem of finance: Finance is regarded as “life blood” for any enterprise, be it big or small. However, women entrepreneurs suffer from shortage of finance on two counts. Firstly, women do not generally have property on their names to use them as collateral for obtaining funds from external sources. Thus, their access to the external sources of funds is limited. Secondly, the banks also consider women less credit- worthy and discourage women borrowers on the belief that they can at any time leave their business. Given such situation, women entrepreneurs are bound to rely on their own savings, if any and loans from friends and relatives who are expectedly meager and negligible. Thus, women enterprises fail due to the shortage of finance.

2. Scarcity of raw material: Most of the women enterprises are plagued by the scarcity of raw material and necessary inputs. Added to this are the high prices of raw material, on the other. The failure of nay women co- operatives in 1971 engaged in basket making is an example how the scarcity of raw material sounds the dealth- knell of enterprises run by women.

3. Stiff Competition: Women entrepreneurs do not have organization set- up to pump in a lot of money for canvassing and advertisement. Thus, they have to face a stiff competition for marketing their products with both organized sector and their male counterparts. Such a competition ultimately results in the liquidation of women enterprises.

4. Limited Mobility: Unlike men, women mobility in India is highly limited due to various reasons. A single woman asking for room is still upon suspicion. Cumbersome exercise involved in starting an enterprise coupled with the officials humiliating attitude towards women compels them to give up an idea of starting an enterprise.

5. Family Ties: In India, it is mainly a woman’s duty to look after the children and other members of the family. Man plays a secondary role only. In case of married woman, she has to strike a fine balance between her business and family. Her total involvement in family leaves little or no energy and time to devote for business. Support and approval of husbands seem necessary condition or women’s entry in to business. Accordingly, the educational level and family background of husbands positively influence women’s entry into business activities.

6. Lack of Education: In India, around three- fifths (60%) of women are still illiterate illiteracy is the root cause of socio- economic problems. Due to the lack of education and that too qualitative education, women are not aware of business, technology and market knowledge. Also, lack of education cases low achievement motivation among women. Thus, lack of education creates problems for women in the setting up and running of business enterprises.

7. Male dominated Society: Male chauvinism is till the order of the day in India. The constitution of India speaks of equality between sexes. But, in practice women are looked upon as able i.e. Weak in all respects. Women suffer from male reservations about a women’s role, ability and capacity and are treated accordingly. In nutshell, in the male-dominated Indian society, women are not treated equal to men. This in turn, serves as a barrier to women entry into business.

8. Low Risk- Bearing Ability: Women in India lead a protected life. They are less educated and economically not self- dependent. All these reduce their ability to bear risk involved in running an enterprise. Risk bearing is an essential requisite of a successful entrepreneur. In addition to above problems, inadequate infra structural facilities, shortage of power, high cost of production, social attitude, low need for achievement and socio- economic constraints also hold the women back from entering into business.

CONCEPT OF WOMEN ENTREPRENEURSHIP

Based on the general concept of entrepreneurship women entrepreneurs may be defined as a woman or group of women who initiate, organize and run a business enterprise. In terms of Schumpeterian concept of innovative entrepreneurs, women who innovate, imitate or adopt a business activity are called “women entrepreneurs”. The government of India has defined women entrepreneurs based on women participation in equity and employment of a business enterprise. Accordingly, a women entrepreneur is defined as an “enterprise owned and controlled by a women having a minimum financial interest of 51 percent of the capital and giving at least 51 percent of the employment generated in the enterprise to women”. However, this definition is subject to criticism mainly on the condition of employing more than 50 percent women workers in the enterprises owned and run by the women.

In nutshell, women entrepreneurs are those women who think of a business enterprise, initiate it, organize and combine the factors of production, operate the enterprise and undertake risks and handle economic uncertainty involved in running a business enterprise.

GROWTH OF WOMEN ENTREPRENEURS

Women entrepreneurs in India accounted for 9.01% of the total value 11.70 million entrepreneurs during 1988-89.

A cross country comparison reveals that emergence and development of entrepreneurship is largely caused by the availability of supporting conditions in a country. To quote, with improving supporting conditions, the share of women owned enterprises in the United States has risen from 7.1% in 1977 to 32% in 1990. It is likely to reach to 50% by the turn of the 20th century.

In India, women entry into business is a new phenomenon. Women entry into business, or say, entrepreneurship is traced out as an extension of their kitchen activities mainly to 3 Ps viz, pickles, powder and pappad. Women in India plugged into business for both pull and push factors. Pull factors imply the factors, which encourage women to start an occupation or venture with an urge to do something independently. Push factors refer to those factors, which compel to take up their own business to tide over their economic difficulties and responsibilities.

With growing awareness about business and spread of education among women over the period, women have started shifting from 3 Ps to engross to 3 modern E’s, viz. Engineering, Electronics and Energy. They have excelled in these activities. Women entrepreneurs manufacturing solar cookers in Gujarat, small foundries in Maharashtra and T.V. capacitors in Orissa have proved beyond doubt that given the opportunities, they can excel their male counterparts. Smt. Sumati Morarji (Shipping Corporation), Smt. Yumutai Kirloskar (Mahila Udyog Limited), Smt. Neena Malhotra (Exports) and Smt. Shahnaz Hussain (Beauty Clinic) are some exemplary names of successful and accomplished women entrepreneurs in our country.

In India, Kerela is a state with highest literacy (including women literacy) reflecting a congenial atmosphere for the emergence and development of women entrepreneurship in the state. According to a study, the number of women’s industrial units in Kerela was 358 in 1981, which rose to 782 in March 1984. These 782 units included 592 proprietary concerns, 43 partnership firms, 42 charitable institutions, 3 joint stock companies and 102 co- operative societies covering a wide range of activities. On the whole, proper education of women in Kerela resulted in high motivation among them to enter into business. The financial, marketing and training assistance provided by the state government also helped motivate women to assume entrepreneurial career. Women’s desire to work at the place of residence, difficulty of getting jobs in the public and private sectors and the desire for social recognition also motivated women in Kerela for self- employment. Like Kerela, an increasing number of women are entering the business in the state of Maharashtra also.