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TERM PAPER
TITLE: ANALYSIS OF THE CAPITAL STRUCTURE OF THECOMPANY-JK LAKSHMI CEMENT, MAHINDRA SATYAM AND SOUTH
INDIAN BANK.
COURCE INSTRUCTOR: MR. AMARJIT SIR
DATE OF ALLOTMENT:
DATE OF SUBMISSION: 6/05/10
STUDENTS ROLL NO: B37
SECTION NO: RS 1901.
DECLARATION
I hereby declare that this assignment is my individual work. I have not copied from
any other students work or from any other source except where due
acknowledgment is made explicitly in the text, nor has any part been written for
me by another person.
Evaluators comments: Student signature:
MOHIT RANJAN
MARKS OBTAINED: OUT OF:
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ACKNOWLEDGMENT
Firstly, I would like to express my extreme and heart gratitude to my teacher, Mr. Amarjit Sir,
who give me this most interesting term paper topic, as well as for all his assistance and support
me to producing this work.
I would like to thank the department of library of my LPU who
provide me the useful book on the basis of which I try to make my term paper effective.
would also like to thank my parents for ... well ... just about everything.
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CONTENTS:
1. CAPITAL STRUCURE
2. RATIO
3. INDUSTRY OUTLOOK
JK LAKSHMI CEMENT- INTRODUCTION
BALANCE SHEET AND P&L ACCOUNT
RATIO ANALYSIS AND INTERPRETATION
4. MAHINDRA SATYAM- INTRODUCTION
BALANCE SHEET AND P&L ACCOUNT
RATIO ANALYSIS AND INTERPRETATION
5. SOUTH INDIAN BANK- INTRODUCTION
BALANCE SHEET AND P&L ACCOUNT
RATIO ANALYSIS AND INTERPRETATION
6. OVERALL ANALYSIS OF CAPITAL STRUCTURE/ DEBTEQUITY MIX OF
THESE COMPANIES IN LAST THREE YEAR.
7. BIBLIOGRAPHY
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INTRODUCTION:
Capital Structure
This is the mixture of a company's long-term debt, specific short-term debt, common equity and
preferred equity. The capital structure is how a firm finances its overall operations and growthby using different sources of funds.
Debt comes in the form of bond issues or long-term notes payable, while equity is classified as
common stock, preferred stock or retained earnings. Short-term debt such as working capital
requirements is also considered to be part of the capital structure.
A company's proportion of short and long-term debt is considered when
analyzing capital structure. When people refer to capital structure they are most likely referring
to a firm's debt-to-equity ratio, which provides insight into how risky a company is. Usually a
company more heavily financed by debt poses greater risk, as this firm is relatively highly
levered.
RATIO:
The most prevalent method of comparative analysis is through ratio analysis. The ratio analysis
can be for a single year or it may extend to more than one year. The ratios can also be compared
with similar ratios of others concerns to make a comparative study.
First, all ratios will be worked out for each year and each set of comparable items.
The ratios worked out will be put in the context of a trend over several years. They will be compared with similar companies/ standard ratios.
i. For the year concerned, and
ii. Over a period of time.
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Types of Ratio
Here for the analysis of the capital structure of the company we should focus
on the LEVERAGE RATIO of the company:
Leverage Ratio
i). Debt-Equity Ratio
Also known as external - Internal equity ratio is calculated to measure the relative claims of
outsiders against the firms assets. This ratio indicates the relationship between the external
equities or the equities or the outsiders funds and the internal equities or the shareholders funds.
ii). Interest Coverage Ratio
Higher the ratio better is the coverage. The firm may not fail on its commitments to pay interest
even if profits fall substantially.
Cement Industry OutlookCement consumption has seen double-digit growth continuously for the last 2 years. By all
indications, the growth momentum would continue. Indias per capita consumption of cement
has grown by 30% to 130 kegs in 6 years. However, it still remains much below the average
World per capita consumption of 355 Kgs as also the per capita consumption of growing
economies like Brazil (191 Kgs), Thailand (366 Kgs), etc. This reflects the great potential,
which the Indian cement industry has.
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The Indian economy registered another year of impressive growth, driven by the
manufacturing sector. Acceleration in the development of various real estate and infrastructure
projects resulted in increase in cement consumption.
The infrastructure boom will generate an additional cement requirement of 50 Million Tons
(MT) in next 3 years and about 100 MT in next 5 years. The capacity addition announcementstotal to 75 to 80 MT in the course of next 3 to 4 years. Therefore the growth in capacity would
be in tandem with the cement requirement of the country.
National domestic cement demand has been at 150 MT during 2006-07. The CAGR of cement
consumption has been at around 8.5% during the last 5 years and 10% during the last 2 years.
The Ministry of Commerce and Industry has projected an average growth of 8.5% in GDP and
11% growth in cement consumption for the next 5 years.
Cement prices may see a marginal hike this year due to increase in the input cost. The cost of
input (coal, freight) has gone up by 5-6% in 2007, which is likely to reflect in the cement
prices.
JK Lakshmi Cement Ltd
J.K. Cement is an affiliate of the J.K. Organization, which was founded by Lala Kamlapat
Singhania. The J.K. Organization is an association of industrial and commercial companies and
has operations in a broad number of industries.
JK cement operations commenced commercial production in May 1975 at its first plant at
Nimbahera in the state of Rajasthan. At Nimbahera, it started with a single kiln with a production
capacity of 0.3 million tons. JK Cement Ltd added a second kiln in 1979 with production
capacity of 0.42 million tons, and a third kiln in 1982 with a production capacity of 0.42 million
tons. They added a precalciner with a capacity of 0.4 million tons in 1988, which increased their
capacity at Nimbahera to 1.54 million tons. During the years 1998 through 2003, it continued to
implement modifications to each of their kilns, which increased their aggregate capacity at
Nimbahera to 2.8 million tons as of September 30, 2005.
JK commissioned a second grey cement plant at Mangrol plant in 2001, with a production
capacity of 0.75 million tons. As of September 30, 2005, it had an aggregate production capacity
of 3.55 million tons per annum of grey cement. JK white cement plant was completed in 1984
with a capacity of 50,000 tons. Their continuing modifications to the plant have increased its
production capacity to 300,000 tons as of September 30, 2005.
Today, J. K. Cement Ltd. is one of the largest cement manufacturers in Northern India. They are
also the second largest white cement manufacturer in India by production capacity. While the
grey cement is primarily sold in the northern India market, the white cement enjoys demand in
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the export market including countries like South Africa, Nigeria, Singapore, Bahrain,
Bangladesh, Sri Lanka, Kenya, Tanzania, UAE and Nepal.
Their access to high quality limestone reserves that are suitable for production of white cement
provides them with a competitive advantage. Based on geological surveys conducted by
independent agencies on their mines between 1996 and 2001, their limestone reserves for bothgrey and white cement are expected to meet their existing and planned limestone requirements of
4.0 MnTPA of grey cement and 0.4 MnTPA of white cement, for approximately 40 years.
Backed by state-of-the-art technology and highly skilled manpower against the backdrop of
Indias infrastructural growth in an overdrive, they are upbeat about the future. They are
Confident of contributing heavily in Indias journey of development. They see a world of
concrete ideas on the horizon.
OBJECTIVE OF THE STUDY:
The study deals in brief to evaluate and analyze various aspects of companys capital structure of
JK Cement Ltd, Mahindra Satyam and South Indian Bank.
Main objective of this term paper is as follows-
To find out debt-equity mix in capital structure of company, its financial leverage,
its external and internal liability, etc. This will help to find out that which
company is opting optimum capital structure as per nature of its business.
CURRENT PERFORMANCE:
JK Cement Limited engages in the manufacture and trade of cement and related products
primarily in India. It produces grey and white cement, as well as white cement based Wall Putty
and JK Water Proof cement. The companys grey cement consists of ordinary Portland cement
(OPC) and Portland pozzolana cement (PPC). It markets OPC products under the brand names
J.K. Cement and Sarvashaktiman; PPC products under J.K. Super; and white cement products
under J.K. White and Camel. The company also involves in the generation of electricity through
its waste heat recovery plant. JK Cement Limited exports white cement to South Africa, Nigeria,Singapore, Bahrain, Bangladesh, Sri Lanka, Kenya, Tanzania, the United Arab Emirates, and
Nepal. The company was founded in 1975 and is based in Kanpur, India.
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PERFORMANCE ANALYSIS:
Financial statements are an important source of information for evaluating the performance and
prospects of a firm. If properly analyzed and interpreted, financial statements can providevaluable insights into a firms performance. Financial statement analysis may be done for a
variety of purposes, which may range from a simple analysis of the short-term liquidity position
of the firm to a comprehensive assessment of the strengths and weaknesses of the firm in various
areas.
The balance sheet
The balance sheet shows the financial condition of a business at a given point of time. As per the
Companies Act, the balance sheet of a company shall be in either the account form or the report
form.
P&L of Companies
Profit & Loss account also known as income statement of a company, depicts all the information
regarding Income and expenditure of company
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JK Cement Ltd (Balance Sheet)
Accounting Period (Rs. In Lacs)
2005-06 2006-07 2007-08 2008-09
Sources of Fund
Shareholders Fund Capital 69.93 69.93 69.93 69.93
Reserve & Surplus
604.3
5 750.18 983.41
1,116.1
3
674.27 820.11
1,053.3
4 1,186.06
Loan Fund
Secured Loan
443.1
4 429.94 382.79 436.86
Unsecured Loan
139.0
2 127.77 127.74 127.54
582.16 557.71 510.53 564.40
Deferred Tax Liability 17.40 43.19 50.99 100.60
Total
1,273.8
3
1,421.0
1
1,614.8
6 1,851.06
Application Of Fund
Fixed Assets
Gross Block
959.2
0
1,029.4
2
1,249.7
7
1,441.1
5
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Less: Depreciation 61.21 106.98 160.63 225.40
Net Block
897.9
9 922.44
1,089.1
3
1,215.7
5
Capital Work in Progress 56.90 164.39 133.84 35.06
954.89
1,086.8
3
1,222.9
7 1,250.81
Investment 0.00 15.91 9.50 10.74
Current Assets, Loan &
Advances
Inventories 83.98 110.01 114.53 136.13
Sundry Debtors 46.13 62.16 57.26 53.04
Cash & Bank Balance
285.4
2 192.54 145.44 125.20
Other Current Assets 1.20 1.29 1.33 1.32
Loan & Advances 92.67 165.10 352.50 581.49
509.3
9 531.09 671.06 897.17
Less: Current Liabilities &
Provision
Liabilities
179.7
0 172.85 238.63 266.37
Provision 12.65 41.72 52.01 43.74
192.3
5 214.57 290.64 310.11
Net Current Assets 317.04 316.52 380.42 587.07
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Miscellaneous Expenditure
Preliminary Expenses 0.13 0.08 0.04 0.00
Deferred Revenue Expenditure 1.78 1.90 1.66 1.74 1.92 1.96 2.44 2.44
Total
1,273.8
3
1,421.0
1
1,614.8
6 1,851.06
Balance Sheet of JK Cement Ltd
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JK Cement P&L
2005-06 2006-07 2007-08 2008-09
Income
Gross Sales 1,108.68 1,529.67 1,812.85 1,876.45
Less: Excise Duty 167.51 184.96 218.34 210.95
Sales Tax 67.47 234.98 111.37 296.33 136.26 354.59 168.67 379.62
Net Sales 873.70 1,233.33 1,458.25 1,49
Other Income 9.38 10.69 7.86 7.91
Total 883.08 1,244.03 1,466.11 1,504.75
Expenditure
Manufacturing Expenses 455.17 535.85 604.16 659.32
Provision for Employee 41.20 48.84 67.64 83.78
Selling, Administration and other expenses 245.31 319.48 370.80 429.73
Interest 58.17 34.72 35.88 45.53
Total 799.85 938.89 1,078.47 1,218.36
Profit Before Depreciation 83.23 305.14 387.64 286.38
Depreciation 43.41 45.95 53.81 65.10
Less: Transfer for Revaluation Reserve 12.39 31.02 12.79 33.16 12.74 41.07 12.68 52.42
Profit Before Tax 52.21 271.98 346.57 233.96
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P&L of JK Cements Ltd
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DebtEquity
Earnings before Interest & TaxInterest
Market Value of EquityTotal Debt
RATIO ANALYSIS AND INTERPRETATION:
For the capital structure analysis of the company we will discuss the LEVERAGE RATIO
of the company.
Leverage Ratio
1. Debt-Equity Ratio:
Debt-Equity Ratio=
2005-06 2006-07 2007-08 2008-09
JK Cement 0.86 0.68 0.48 0.48
Interpretation:Here the company is in good position because debt-equity ratio is less than 1.
In 2005-06 JK Cement Ltd ratios was 0.86 which is now decreasing to 0.48. It means companyhas redeemed its debt and enjoying its reserves & Surplus for further financing.
2. Interest Coverage Ratio
Interest Coverage Ratio=
2005-06 2006-07 2007-08 2008-09
JK Cement 1.90 8.83 10.66 6.14
Interpretation: Here in 2005-06 interest coverage Ratio of was very low for JK cement
because they have to pay more interest due to more debt in capital structure. From next years,
their interest coverage ratio is increased because of lesser debt fund
Market Value of Equity / Total Debt
Market Value of Equity to Total Debt=
2005-06 2006-07 2007-08 2008-09
JK Cement 1.53 1.81 2.23 0.49
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Interpretation: Market Value of Equity to Total Debt ratio is measure of Leverage of
company. For JK Cement Ltd it is constant i.e. 1.53 in 2005-06, 1.81 in 2006-07, 2.23 in 2007-
08 and 0.49 in 2008-09.
FINDINGS:
Ratio Company 2005-06 2006-07 2007-08 2008-
09
Net Sales JK Cement Ltd 873.70 1233.33 1458.25 1796.84
Profitability Ratio
Gross Profit Margin JK Cement Ltd 43% 53% 54% 50%
Net Profit Margin JK Cement Ltd 4% 14% 18% 10%
Return on Assets JK Cement Ltd 2% 12% 15% 7%
Earning Power JK Cement Ltd 8% 20% 22% 14%Prism Cement Ltd. 23% 53% 43% 18%
Return on Capital JK Cement Ltd 7% 14% 17% 9%
Return on Equity JK Cement Ltd 6% 24% 28% 13%
Asset Management Ratio
Inventory Turnover JK Cement Ltd 14.73 15.77 16.15 14.97
Debtors Turnover JK Cement Ltd 25.08 28.25 30.36 34.03
Fixed Assets turnover JK Cement Ltd 0.97 1.35 1.45 1.30
Total Assets Turnover JK Cement Ltd 0.66 0.80 0.82 0.74
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WC To Total Assets JK Cement Ltd 0.24 0.20 0.21 0.29
RE to Total Assets JK Cement Ltd 0.46 0.48 0.56 0.55
Liquidity Ratio
Current Ratio JK Cement Ltd 2.65 2.48 2.31 2.89
Acid Test Ratio JK Cement Ltd 2.21 1.96 1.91 2.45
Debt Management Ratio
Debt-Equity Ratio JK Cement Ltd 0.86 0.68 0.48 0.48
Interest Coverage ratio JK Cement Ltd 1.90 8.83 10.66 6.14
Valuation Ratio
PE Ratio JK Cement Ltd 27.35 5.66 4.30 1.95
EV-EBIDTA Ratio JK Cement Ltd 9.58 4.45 3.78 2.44
Earnings Per Share JK Cement Ltd 6.36 25.54 37.92 20.36
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1. JK Cement Ltd is using approximately 40% debt in its capital structure in last three
year. In 2005-06 it was using some part of debt but after this year they redeemed all debt
and relay on equity financing only.
2. JK Cement ltd is maintaining large cash balance. This is good because they can meet
their current liabilities very easily but this is also leading to idle fund which inunproductive.
3. JK Cement ltd is using liberal policy and providing credit period of 12 15 days.
4. JK Cement is also ahead on working capital management. Because they are maintaining
sufficient amount of current assets to make its WC positive
5. If we see bankruptcy prediction then company is performing very well. There is no sign
of bankruptcy.
CONCLUSION:
1. Working capital position of company is not good.
2. As cement industry require more investment on fixed assets, thats why they rely more on
equity financing. Although JK Cement Ltd. is using 40:60 debt equity mix
3. JK cement Ltd. is opting liberal policy to increase its sales.
4. JK Cement Ltd has issued lower equity.
5. PE Ratio of JK Cement Ltd. is high which shows good future prospects, good return for
investors.
Suggestion & Recommendation
1. JK Cement Ltd is maintaining huge cash balance which is symptom of idle/unproductive
fund.
1. Company have huge administrative and other expenses, this reduces its net profit. So,
company tries to minimize its administrative expenses to enhance its sales.
MAHINDRA SATYAM:
INTRODUCTION:
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Founded 1987
Headquarters Hyderabad,India
Key people
Vineet Nayyar Vice Chairman,
Mahindra Satyam Board
C.P. Guaran, CEO, Mahindra Satyam
Industry Information Technology
Website www.Mahindrasatyam.net
Mahindra Satyam (formerly known as Satyam Computer Services Ltd) was founded in 1987
by B Ramalingam Raju. The company offers consulting and information technology (IT)
services spanning various sectors, and is listed on the New York Stock Exchange, the National
Stock Exchange (India) and Bombay Stock Exchange (India). In June 2009, the company
unveiled its new brand identity Mahindra Satyam subsequent to its takeover by the Mahindra
Groups IT arm, Tech Mahindra.
Overview
Satyam Computer Services Ltd was founded in 1987 by B Ramalingam Raju. The company
offers consulting and information technology (IT) services spanning various sectors, including
engineering and product development, client relationship management, business process
management and business intelligence. The company listed on the New York Stock Exchange,
National Stock Exchange (India) and Bombay Stock Exchange (India). In June 2009, the
company unveiled its new brand identity Mahindra Satyam.
Mahindra Satyams presence spans over 60 countries across six continents. Mahindra Satyam
development and delivery centers are located in the US, Canada, Brazil, the UK, Hungary,
Egypt, UAE, India, China, Malaysia, Singapore, and Australia serve numerous clients, including
many Fortune 500 organizations. Apart from Hyderabad, it has development centers in India at
Bangalore, Chennai, Pune, Mumbai, Delhi, Kolkata, Bhubaneswar, and Visakhapatnam.
Satyam plunged into a crisis in January 2009 after its founder B Ramalingam Raju, stated that
the company's profits had been overstated. Satyam had engaged PricewaterhouseCoopers as its
auditors over past 10 years. The company's accounts are currently being restated.
In March 2009 the company announced it would begin soliciting bids from potential buyers. In
April 2009, Venture bay Consultants Private Limited, a subsidiary controlled by Tech Mahindra
emerged as the highest bidder to acquire a controlling stake in Satyam. A US-based investment
firm owned by billionaire Wilbur Ross and an Indian construction and IT services firm, Larsen
and Toubro were the other bidders.
http://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Engineeringhttp://en.wikipedia.org/wiki/Hyderabad,_Indiahttp://en.wikipedia.org/wiki/Engineeringhttp://en.wikipedia.org/wiki/Hyderabad,_Indiahttp://en.wikipedia.org/wiki/India8/8/2019 MOHIT B37,1901,FM,TP.
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On June 21, 2009, Satyam unveiled its new corporate identity Mahindra Satyam. On June
23, Viet Nayyar was appointed as Executive Vice Chairman on Mahindra Sat yams Board of
Directors, C.P. Gurnani was appointed as the Chief Executive Officer (CEO) of Mahindra
Satyam, and S Durgashankar was appointed as the Chief Financial Officer (CFO). As part of the
internal reorganization, A.S Murthy was appointed as the Chief Technology Officer (CTO),
while Hari Thalapalli was appointed as the Chief Marketing Officer (CMO) & Chief People
Officer (CPO). Rakesh Soni was appointed as the Chief Operating Officer (COO).
Industry Presence
Mahindra Satyam provides services in the following areas:
Aerospace and Defense
Banking, Financial Services &Insurance
Energy and Utilities Life Sciences & Healthcare
Manufacturing, Chemicals & Automotive
Public Services & Education
Retail and Consumer Packaged
Telecom, Infrastructure, Media and Entertainment & Semiconductor
Travel and Logistics & Industrial Equipment
BALANCE SHEET OF COMPANY
Balance Sheet of MahindraSatyam
------------------- in Rs. Cr. -------------------
Mar '04 Mar '05 Mar '06 Mar '07 Mar '08
12 mths 12 mths 12 mths 12 mths 12 mths
Sources Of Funds
Total Share Capital 63.25 63.85 64.89 133.44 134.10
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Equity Share Capital 63.25 63.85 64.89 133.44 134.10
Share Application Money 0.19 0.45 1.78 7.85 1.83
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 2,517.52 3,153.17 4,268.75 5,648.07 7,221.71
Revaluation Reserves 0.00 0.00 0.00 0.00 0.00Net worth 2,580.96 3,217.47 4,335.42 5,789.36 7,357.64
Secured Loans 7.30 9.87 12.57 13.79 23.67
Unsecured Loans 0.00 0.00 0.00 0.00 0.00
Total Debt 7.30 9.87 12.57 13.79 23.67
Total Liabilities 2,588.26 3,227.34 4,347.99 5,803.15 7,381.31
Mar '04 Mar '05 Mar '06 Mar '07 Mar '08
12 mths 12 mths 12 mths 12 mths 12 mths
Application Of Funds
Gross Block 847.16 937.70 1,153.16 1,280.40 1,486.53
Less: Accum. Depreciation 597.76 685.41 803.74 930.45 1,062.04
Net Block 249.40 252.29 349.42 349.95 424.49
Capital Work in Progress 22.17 64.68 76.84 290.05 458.63
Investments 74.75 78.48 155.74 201.15 493.80
Inventories 0.00 0.00 0.00 0.00 0.00
Sundry Debtors 592.82 765.17 1,122.81 1,649.86 2,223.41
Cash and Bank Balance 346.20 558.92 1,144.18 593.16 1,143.10
Total Current Assets 939.02 1,324.09 2,266.99 2,243.02 3,366.51
Loans and Advances 187.34 155.06 298.12 394.07 766.04
Fixed Deposits 1,469.16 1,804.38 1,908.15 3,366.66 3,318.58
Total CA, Loans & Advances 2,595.52 3,283.53 4,473.26 6,003.75 7,451.13
Deferred Credit 0.00 0.00 0.00 0.00 0.00
Current Liabilities 194.53 262.87 435.71 621.30 896.46
Provisions 159.06 188.77 271.56 420.45 550.28
Total CL & Provisions 353.59 451.64 707.27 1,041.75 1,446.74
Net Current Assets 2,241.93 2,831.89 3,765.99 4,962.00 6,004.39
Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00
Total Assets 2,588.25 3,227.34 4,347.99 5,803.15 7,381.31
Contingent Liabilities 8.68 38.22 134.45 267.20 623.28Book Value (Rs) 81.60 100.76 133.57 86.65 109.71
P & L ACCOUNT:
Profit & Loss account of ------------------- in Rs. Cr. -------------------
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Mahindra Satyam
Mar '04 Mar '05 Mar '06 Mar '07 Mar '08
12 mths 12 mths 12 mths 12 mths 12 mths
Income
Sales Turnover 2,541.55 3,464.23 4,634.31 6,228.47 8,137.28
Excise Duty 0.00 0.00 0.00 0.00 0.00
Net Sales 2,541.55 3,464.23 4,634.31 6,228.47 8,137.28
Other Income 78.61 80.96 377.08 180.82 255.43
Stock Adjustments 0.00 0.00 0.00 0.00 0.00
Total Income 2,620.16 3,545.19 5,011.39 6,409.29 8,392.71
Expenditure
Raw Materials 0.00 0.00 0.00 0.00 0.00
Power & Fuel Cost 13.43 18.68 26.98 34.68 47.04
Employee Cost 1,338.84 1,999.10 2,702.24 3,692.92 4,964.84Other Manufacturing Expenses 27.53 41.50 31.23 34.67 36.75
Selling and Admin Expenses 370.73 415.92 544.51 764.67 982.49
Miscellaneous Expenses 97.21 98.77 135.01 171.62 275.85
Preoperative Exp Capitalized 0.00 0.00 0.00 0.00 0.00
Total Expenses 1,847.74 2,573.97 3,439.97 4,698.56 6,306.97
Mar '04 Mar '05 Mar '06 Mar '07 Mar '08
12 mths 12 mths 12 mths 12 mths 12 mths
Operating Profit 693.81 890.26 1,194.34 1,529.91 1,830.31
PBDIT 772.42 971.22 1,571.42 1,710.73 2,085.74Interest 0.75 0.76 2.72 7.61 5.94
PBDT 771.67 970.46 1,568.70 1,703.12 2,079.80
Depreciation 111.62 103.94 122.81 129.89 137.94
Other Written Off 0.00 0.00 0.00 0.00 0.00
Profit Before Tax 660.05 866.52 1,445.89 1,573.23 1,941.86
Extra-ordinary items 1.90 0.47 0.00 0.00 0.00
PBT (Post Extra-ord Items) 661.95 866.99 1,445.89 1,573.23 1,941.86
Tax 106.15 116.74 206.14 150.00 226.12
Reported Net Profit 555.79 750.26 1,239.75 1,423.23 1,715.74Total Value Addition 1,847.75 2,573.96 3,439.97 4,698.56 6,306.97
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 126.72 159.63 229.56 231.85 234.89
Corporate Dividend Tax 16.24 20.86 32.02 37.55 39.86
Per share data (annualized)
Shares in issue (lakhs) 3,162.52 3,192.65 3,244.50 6,671.96 6,704.79
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Debt
Equity
Earning Per Share (Rs) 17.57 23.50 38.21 21.33 25.59
Equity Dividend (%) 200.00 250.00 350.00 175.00 175.00
Book Value (Rs) 81.60 100.76 133.57 86.65 109.71
Leverage Ratio
1. Debt-Equity Ratio:
Debt-Equity Ratio=
06 07 08
MAHINDRA
SATYAM 2.89 2.38 3.21
Interpretation: Here the companys debt-equity ratio is much more than 1. Inc 06 MahindraSatyam ratios was 2.89 which is now decrease to 2.38 it means company has redeemed its debt
and enjoying its reserves & Surplus for further financing but again increase 3.21 which shows
that performance is not too good.
SOUTH INDIAN BANK:
INTRODUCTION:
South Indian Bank Limited (BSE: 532218, NSE: SOUTHBANK) is a private sector bank
headquartered at Thrissur in Kerala, India. It is headed by V a Joseph, Managing Director &
CEO of the bank. South Indian Bank has 575 branches and extension counters spread across
more than 23 states and union territories in India. It has set up around 344 ATMs all over India.
The bank offers major services in various segments of accounts and deposits, loans, mutual
funds, insurance, money transfers and other value added services. The Kerala Government had
given permission to SIB to accept commercial taxes.
HISTORY:
South Indian Bank was formed on the 29th January 1929 by a group of 44 enterprising men, who
with a capital of only Rs 22,000.00 joined together at Thrissur city to liberate the business
community from the clutches of greedy money lenders. The bank gained the confidence and
received the patronage of the public in increasing measure over the years and in the 1960s when
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there was a crisis in the banking industry in Kerala, South Indian Bank took over fifteen other
smaller banks.
Tie ups
ING Life have a tie-up with SIB to collect insurance policy renewal payments for ING Lifecustomers.SIB also has bancassurance arrangements with both Bajaj Allianz General Insurance
Company Ltd for distribution of non-life insurance products and the Export Credit Guarantee
Corporation of India for distribution of export risk covers. It has also tied up with ICICI
Prudential AMC, Franklin Templeton, TATA Mutual Fund, Sundaram BNP Paribas, UTI Mutual
Funds, Reliance Mutual Funds, HSBC Investments, HDFC Mutual Fund, Fidelity Fund
Management Pvt Ltd, Principal Mutual Funds, Fortis Investments, Birla Sun Life Asset
Management Company Ltd and DSP BlackRock Mutual Funds, all mutual fund houses, for
distribution of their mutual fund products. In March, 2020, the bank signed an agreement with
Sri Lanka's Hatton National Bank (HNB) for exchange of services and expertise between them.
The MoU set out a framework between the two banks to enter into mutually beneficial
arrangements to offer banking services to their respective customers. The tie-up was expected to
foster trade-related cross border business like advising and confirming Letter of credit,
negotiating and discounting of export-import bills and providing credit report of customers
between the two countries. It would also enable the customers of HNB to utilize the services of
Hade Express Exchange, for which management support was provided by SIB
BALANCE SHEET OF SOUTH INDIAN BANK:
Balance Sheet of South Indian ------------------- in Rs. Cr. -------------------
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Bank
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
12 mths 12 mths 12 mths 12 mths 12 mths
Capital and Liabilities:
Total Share Capital 47.68 70.41 70.41 90.41 113.01
Equity Share Capital 47.68 70.41 70.41 90.41 113.01
Share Application Money 0.00 0.00 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves 407.58 570.45 653.56 1,051.81 1,172.59
Revaluation Reserves 0.00 0.00 0.00 18.77 18.41
Net Worth 455.26 640.86 723.97 1,160.99 1,304.01
Deposits 8,492.31 9,578.66 12,239.21 15,156.12 18,092.33
Borrowings 3.73 0.72 32.51 27.59 257.01
Total Debt 8,496.04 9,579.38 12,271.72 15,183.71 18,349.34Other Liabilities & Provisions 526.22 607.19 656.90 745.24 730.18
Total Liabilities 9,477.52 10,827.43 13,652.59 17,089.94 20,383.53
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
12 mths 12 mths 12 mths 12 mths 12 mths
Assets
Cash & Balances with RBI 433.16 546.08 699.67 973.65 997.73
Balance with Banks, Money at
Call268.06 797.39 1,245.80 729.00 1,038.13
Advances 5,365.26 6,370.23 7,918.91 10,453.75 11,852.03Investments 3,133.43 2,739.39 3,430.13 4,572.22 6,075.20
Gross Block 132.46 156.90 168.47 203.82 241.28
Accumulated Depreciation 54.86 67.09 78.88 91.07 104.96
Net Block 77.60 89.81 89.59 112.75 136.32
Capital Work In Progress 0.00 0.00 0.00 0.00 0.00
Other Assets 200.00 284.53 268.47 248.55 284.11
Total Assets 9,477.51 10,827.43 13,652.57 17,089.92 20,383.52
Contingent Liabilities 748.90 921.89 1,251.87 1,785.69 1,831.81
Bills for collection 248.34 557.47 556.86 500.11 594.54
Book Value (Rs) 95.49 91.02 102.83 126.34 113.76
PROFIT & LOSS ACCOUNT
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Profit & Loss account of South
Indian Bank------------------- in Rs. Cr. -------------------
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
12 mths 12 mths 12 mths 12 mths 12 mths
Income
Interest Earned 709.00 761.32 976.61 1,309.24 1,686.92
Other Income 108.17 90.50 121.53 142.90 164.27
Total Income 817.17 851.82 1,098.14 1,452.14 1,851.19
Expenditure
Interest expended 452.07 451.14 609.09 915.10 1,164.04
Employee Cost 118.52 139.37 133.23 146.35 214.18
Selling and Admin Expenses 74.21 111.99 129.70 68.28 85.40
Depreciation 12.41 12.23 11.78 12.19 13.90
Miscellaneous Expenses 151.25 86.19 110.21 158.60 178.93
Preoperative Exp Capitalised 0.00 0.00 0.00 0.00 0.00
Operating Expenses 226.61 297.93 302.14 260.99 350.44
Provisions & Contingencies 129.78 51.85 82.78 124.43 141.97
Total Expenses 808.46 800.92 994.01 1,300.52 1,656.45
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
12 mths 12 mths 12 mths 12 mths 12 mths
Net Profit for the Year 8.70 50.90 104.12 151.62 194.75
Extraordinary Items 0.00 0.00 0.00 0.00 0.00
Profit brought forward 0.02 0.04 6.48 8.19 9.08
Total 8.72 50.94 110.60 159.81 203.83
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 0.00 12.67 17.60 27.12 33.90
Corporate Dividend Tax 0.00 1.78 2.99 4.61 5.76
Per share data (annualized)
Earnings Per Share (Rs) 1.82 7.23 14.79 16.77 17.23
Equity Dividend (%) 0.00 18.00 25.00 30.00 30.00
Book Value (Rs) 95.49 91.02 102.83 126.34 113.76
Appropriations
Transfer to Statutory Reserves 8.68 30.01 -41.08 38.01 49.50
Transfer to Other Reserves 0.00 0.00 122.89 81.00 100.00
Proposed Dividend/Transfer to 0.00 14.45 20.59 31.73 39.66
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Debt
Equity
Govt
Balance c/f to Balance Sheet 0.04 6.48 8.19 9.08 14.67
Total 8.72 50.94 110.59 159.82 203.83
Leverage Ratio
1. Debt-Equity Ratio:
Debt-Equity Ratio=
07 08 09
SOUTH INDIAN
BANK 16.95 13.07 14.07
Interpretation: Here the debt-equity ratio is very high because bank has more deposits and less
equity. In 2007 bank debt equity ratio were 16.95 which are now decreasing to 13.07. It means
company has redeemed its debt and enjoying its reserves & Surplus during the year 07-08, but in
year 09 this again increase 14.07.
OVERALL CONCLUSION OF CAPITAL STRUCTURE OF THESE
COMPANIES IN LAST THREE YEAR:
Analysis of capital structure
J.K LAKSHMI CEMENT:
As earlier we have discussed that capital structure is mix of debt and equity. Here watching the
balance sheet of JK LAKSHMI Cement for last three years we can find that the equity share
capital in Mar07 was 69.93 which are same in Mar08 to March 09. The reserve and surplus
of the company is also increased in each year which is 620.11 in March 07, 1053.34 in March
08, and 1186.06 in March 09. Now when we see on the debt of the company we find that the
unsecured loan of the company is approximately same i.e. 127.77 from March 07 to Mar09and furtherthe secured lone of company is in March 07 is 429.94 lac, decreased in March 08
i.e. 382.79 and again increased in March 09 i.e. 436.86 lac.
The condition suggests that the company is not going for leverage because
there are constant unsecured loans in each year instead of issuing equity shares for raising fund.
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MAHINDRA SATYAM:
Here the company in the year 2006 has issued equity share capital of Rs 64.89 crores and this is
increased in March 07 i.e. 133.34 and same in March 08. The company MAHINDRA SATYAM
has not issued further preference shares capital. Moreover the company has raised its fund
through secured loans in year 2008. The reserve of company in March 06 was 4268.42 crores,
increased in March 07 i.e. 5789.36, again rose in March 08 i.e. 7357.64 crores. In the year 2006,
07 and 08 the company had raised secured loans to 12.57 crores from 23.67 crores in the last
year but had not raised the fund through unsecured loans.
SOUTH INDIAN BANK:
Here watching the balance sheet ofSouth Indian Bankfor last three years we can find that the
equity share capital in Mar07 was 70.41 crores which increased in Mar08 to 90.41 and
furtherincreased in mar09 i.e. 113.01 crores. The bank does not issue further preference sharescapital.
Now when we look the debt side in case of bank deposit and borrowings are there. We can see
the deposit in the bank is increasing in mar07 12239.21 crore, in mar08 15156.12 and again
increased in mar09 i.e. 18092.63 crore. This is the good sign for the bank.
The borrowing of the bank in mar07 is 32.51 crore, in March08 is 27.59 crore and again
increase in mar09, 257.01 crore. This may be that bank are going for large investment through
raising the fund by borrowing but the higher the borrowing is not good for the health of the
organization.
This condition suggests that the bank should continuously raise its fund through
deposits instead of increasing borrowings.
CAPITAL STRUCTURE OF JK LAKSHMI CEMENT;
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CAPITAL STRUCTURE OF MAHINDRRA SATYAM;
Capital Structure
Period Instrument Authorized
Capital
Issued
Capital
- P A I D U P -
From To (Rs. cr) (Rs. cr) Shares (nos) Face Value Capital2007 2008 Equity Share 160 134.1 670479293 2 134.1
2006 2007 Equity Share 160 133.44 667196009 2 133.44
2005 2006 Equity Share 75 64.89 324449539 2 64.89
CAPITAL STRUCTURE OF SOUTH INDIAN BANK
Period Instrument Authorized
Capital
Issued
Capital
- P A I D U P -
Bibliography:
1. Annual Report JK Cement Ltd.
Capital Structure
Period Instrument Authorized
Capital
Issued
Capital
- P A I D U P -
From To (Rs. cr) (Rs. cr) Shares (nos) Face Value Capital
2008 2009 Equity Share 125 61.18 61179462 10 61.18
2007 2008 Equity Share 125 61.18 61179462 10 61.18
2006 2007 Equity Share 125 57.08 57076962 10 57.08
From To (Rs. cr) (Rs. cr) Shares (nos) Face Value Capital
2008 2009 Equity Share 125 113.01 113006490 10 113.01
2007 2008 Equity Share 125 90.41 90405192 10 90.41
2006 2007 Equity Share 125 70.41 70405192 10 70.41
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2. www.jkcement.com
3. www.money.rediff.com
4. www.5paisa.com
5. www.wikipedia.com
6. Sharma & Gupta, Management Accounting,
7. www.mahindrasatyam.com
8. www.south Indian bank.
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