Financial Management-Ii: Group Assignment

INSTITUTE OF MANAGEMENT, NIRMA UNIVERSITY
FINANCIAL MANAGEMENT-II
Group Assignment
A Study on Capital Structure of Companies
AGRICULTURE/FOOD INDUSTRY
SUBMITTED TO:
AMOLA BHATT
SUBMITTED BY:
GROUP NO: 9
Roll No. Name Signature
151318 Chetan Sharma
151319 Darshana Bhati
151350 Shaishav Pansuria
151351 Shitanshu Gupta
DATE OF SUBMISSION: MARCH 17, 2016
0
ACKNOWLEDGEMENT
We would like to sincerely thank our subject head, Prof. Amola Bhatt, faculty of Financial
Management, who has supported us throughout our assignemnt with her patience and
immense knowledge. This assignment helped us in accessing various companies within the
industries that were provided. We would have not been able to finish this assignment
without her guidance and encouragement.
1
INDEX
2
INTRODUCTION
Agriculture plays a vital role in India’s economy. Over 58 per cent of the rural households depend on
agriculture as their principal means of livelihood. Agriculture, along with fisheries and forestry, is one of
the largest contributors to the Gross Domestic Product (GDP).
As per estimates by the Central Statistics Office (CSO), the share of agriculture and allied sectors
(including agriculture, livestock, forestry and fishery) was 15.35 per cent of the Gross Value Added
(GVA) during 2015–16 at 2011–12 prices.
India is the largest producer, consumer and exporter of spices and spice products. India's fruit production
has grown faster than vegetables! making it the second largest fruit producer in the world. India's
horticulture output, comprising fruits, vegetables and spices, -year in 2014-15 to a record high of 283.5
million tonnes (MT) It ranks third in farm and agriculture outputs. Agricultural export constitutes 10 per
cent of the country’s exports and is the fourth-largest exported principal commodity. The agro industry in
India is divided into several sub segments such as canned, dairy, processed, frozen food to fisheries, meat,
poultry, and food grains.
The Department of Agriculture and Cooperation under the Ministry of Agriculture is responsible for the
development of the agriculture sector in India. It manages several other bodies, such as the National Dairy
Development Board (NDDB), to develop other allied agricultural sectors.
Market Size
Over the recent past, multiple factors have worked together to facilitate growth in the agriculture sector in
India. These include growth in household income and consumption, expansion in the food processing
sector and increase in agricultural exports. Rising private participation in Indian agriculture, growing
organic farming and use of information technology are some of the key trends in the agriculture industry.
As per the 4th Advance Estimates, food grain production is estimated at 253.16 million tonnes (MT) for
2015-16. Production of pulses estimated at 17.33 million tonnes.
With an annual output of 146.3 MT, India is the largest producer of milk, accounting for 18.5 per cent of
the total world production. It also has the largest bovine population. India, the second-largest producer of
sugar, accounts for 14 per cent of the global output. It is the sixth-largest exporter of sugar, accounting for
2.76 per cent of the global exports.
Spice exports from India are expected to reach US$ 3 billion by 2016–7 due to creative marketing
strategies, innovative packaging, strength in quality and strong distribution networks. The spices market
in India is valued at Rs 40,000 crore (US$ 5.87 billion) annually, of which the branded segment accounts
for 15 per cent.
The procurement target for rice during marketing season (MS) 2015–16 has been finalised as 30 MT.
3
COMPANY 1. ESTEEM BIO ORGANIC FOOD PROCESSING
Financial Statements
Balance Sheet
DESCRIPTION Mar-15 Mar-14 Mar-13

Amount in Rs. crores
EQUITY AND LIABILITIES
Share Capital 24.86 14.92 14.92
Share Warrants & Outstandings 0.00 0.00 0.00
Total Reserves 13.63 12.40 10.56
Shareholder's Funds 38.49 27.32 25.48
Long-Term Borrowings
Secured Loans
Unsecured Loans
Deferred Tax Assets / Liabilities
Other Long Term Liabilities 2.12 1.60
Long Term Trade Payables
Long Term Provisions
Total Non-Current Liabilities 2.12 1.60 0.00
Current Liabilities
Trade Payables 0.22
Other Current Liabilities 0.71 0.38 0.03
Short Term Borrowings 0.34 0.39 0.73
Short Term Provisions 0.07 0.03 0.02
Total Current Liabilities 1.33 0.80 0.78
Total Liabilities 41.94 29.72 26.26
ASSETS
Non-Current Assets
Gross Block 20.29 13.32 12.59
Less: Accumulated Depreciation 2.79 1.10 0.52
Less: Impairment of Assets
Net Block 17.49 12.22 12.07
Lease Adjustment A/c
Capital Work in Progress
Intangible assets under development
Pre-operative Expenses pending
Assets in transit
Non Current Investments 0.66 3.15 2.73
Long Term Loans & Advances 0.31 0.21 0.21
Other Non Current Assets 0.00
Total Non-Current Assets 18.47 15.58 15.02
Current Assets Loans & Advances
Currents Investments
Inventories 0.35 0.16 0.38
Sundry Debtors 2.07 0.32 2.45
Cash and Bank 1.21 0.37 0.04
4
Other Current Assets
Short Term Loans and Advances 19.31 12.80 8.13
Total Current Assets 22.94 13.66 10.99
Net Current Assets (Including Current Investments) 21.61 12.85 10.21
Total Current Assets Excluding Current Investments 22.94 13.66 10.99
Miscellaneous Expenses not written off 0.53 0.48 0.25
Total Assets 41.94 29.72 26.26
Contingent Liabilities
Total Debt 0.34 0.39 0.73
Book Value 1.53 17.99 16.91
Adjusted Book Value 1.53 1.10 1.03
Profit and Loss Statement
No of Months 12.00 12.00 12.00
INCOME :
Gross Sales 3.40 3.20 6.43
Less: Inter divisional transfers
Less: Sales Returns
Less: Excise Duty
Net Sales 3.40 3.20 6.43
EXPENDITURE :
Increase/Decrease in Stock -0.19 0.21 2.75
Raw Material Consumed
Power & Fuel Cost 0.04 0.07 0.06
Employee Cost 0.06 0.06 0.16
Other Manufacturing Expenses 0.18 0.16 0.17
General and Administration Expenses 0.31 0.12 0.16
Selling and Distribution Expenses 0.12 0.12 0.06
Miscellaneous Expenses 0.11 0.11 0.06
Less: Expenses Capitalised
Total Expenditure 0.63 0.85 3.42
Operating Profit (Excl OI) 2.77 2.35 3.02
Other Income 0.22 0.11 0.08
Operating Profit 2.99 2.46 3.09
5
Interest 0.00 0.00 0.00
PBDT 2.99 2.46 3.09
Depreciation 1.69 0.59 0.52
Profit Before Taxation & Exceptional Items 1.30 1.87 2.57
Exceptional Income / Expenses
Profit Before Tax 1.30 1.87 2.57
Provision for Tax 0.07 0.03 0.02
Profit After Tax 1.23 1.84 2.55
Extra items
Adjustments to PAT
Profit Balance B/F 4.37 2.53 7.78
Appropriations 5.60 4.37 10.33
Equity Dividend %
Earnings Per Share 0.05 1.23 1.71
Adjusted EPS 0.05 0.08 0.10
Cash Flow
Adjustment 1.57 0.81 0.50
Changes In working Capital -1.39 2.69 2.06
Cash Flow after changes in Working Capital 1.48 5.37 5.14
Interest Paid
Tax Paid -0.03 -0.02 -0.02
Other Direct Expenses paid
Extra & Other Item
Cash From Operating Activities 1.44 5.35 5.11
Cash Flow from Investing Activities -10.86 -6.23 -17.48
Cash from Financing Activities 10.26 1.22 11.85
Net Cash Inflow / Outflow 0.84 0.34 -0.51
Opening Cash & Cash Equivalents 0.37 0.04 0.55
6
Cash & Cash Equivalent on Amalgamation / Take over / Merger
Cash & Cash Equivalent of Subsidiaries under liquidations
Translation adj. on reserves / op cash balances frgn subsidiaries
Effect of Foreign Exchange Fluctuations
Closing Cash & Cash Equivalent 1.21 0.37 0.04
Capital Structure
Mar-15 Mar-14 Mar-13

Total Worth 37.96 26.83 25.23
Total Debt 0.34 0.39 0.73
Debt to Equity Ratio 0.008825079 0.014535967 0.028834721
Promoters Stake
No of No Of % of
Particulars (201509)
Shareholders Shares Shares
Promoter and Promoter Group
Indian Promoters 2 51159990 20.58
Foreign Promoters 0 0 0
Total of Promoter and Promoter Group 2 51159990 20.58
Public Shareholding
Institutions 0 0 0
Non-Institutions 1033 197473340 79.42
Total Public Shareholding 1033 197473340 79.42
Total of Promoter and Public Shareholding 1035 248633330 100
Shares held by Custodians and against which Depository

Receipts have been issued 0 0 0
ADRs 0 0 0
GDRs 0 0 0
Other 0 0 0
Grand Total 1035 248633330 100
No of % of
No Of % of Pledged Pledged
Name Shares Shares Shares Shares
AMAR SINGH BISHT 887330 0.36 0 0
BRIJ KISHORE 50272660 20.22 0 0
7
SABHARWAL
Detailed Break Up Of Equity

Share Capital 24.86 14.92 14.92
Equity – Authorised 25.00 25.00 16.50
Equity – Issued 24.86 14.92 14.92
Equity - Subscribed 24.86 14.92 14.92
Equity - Called Up 24.86 14.92 14.92
Less : Calls in Arrears
Equity Paid Up 24.86 14.92 14.92
Equity Shares Forfeited
Adjustments to Equity
Preference Capital Paid Up 0.00
Convertible Pref.
Shares
Non - Convertible
Pref. Shares
Sources of Financing Under Debt
Since there is no debt in the company, hence there are no sources of finance which could
be gathered from the information seeked.
Cost of Equity

ER(m) 20 20 20
Rf 7.5 7.5 7.5
Beta 0.16 0 -21.81
-
Re 9.5 7.5 265.125
Notes
Ratios and their analysis

Total Worth 37.96 26.83 25.23
Total Debt 0.34 0.39 0.73
8
The debt-equity ratio of the firm is around 1% of the total it had in its capital structure
which shows that company is highly unleveraged company and is far away from the
financial charges that it need to pay in form of interest.
They have raised funds entirely through equity shares and no preference dividends are to
be paid to the shareholders.

Total Debt 0.34 0.39 0.73
Total Assets 41.94 29.72 26.26
Debt to Assets Ratio 0.007987885 0.013122598 0.02770617
The debt to equity ratio provide us with the fact that how much of the valuation of assets
are required to fund-off the liability of the company in case of the insolvency. Here the
company hold ample amount of assets in its organizational structure that it can easily
trade-off all the debt it owns. There is also a trend in the financial figures where the
company is acquiring assets without increasing the debt of the company.

PBIT 1.3 1.87 2.58
Interest 0.00 0.00 0.00
Interest Coverage Ratio 0 0 0
Interest coverage ratio provides about the company’s capacity of paying interest over the
earnings it had from its operations. Since the company is highly unleveraged, there is no
amount of interest to be paid. The debt therefore must be paid with the credit period being
offered to the company.
9
Profit After Tax 12300000 12300000 12300000
Number of outstanding shares 248633330.00 14918000.00 14918000.00
Earning Per Share(EPS) 0.049470439 0.824507307 0.824507307
The earnings per share of the company have significantly reduced from the previous years
which were about 82% to 4% as of now.

Dividend paid 0 0 0
Dividend per Share(DPS) 0.00 0.00 0.00
Since there is no preference shares held up by the company, there is no chance of paying-
off preference dividend. Owners are not interested in paying any sort of dividends to the
shareholders of the firm.

EPS 0 0 0
DPS 0.00 0.00 0.00
dividend payout ratio 0.00 0.00 0.00
Since no dividends, hence no dividend pay-out ratio.

Market value 23.00 33.29 3.17
DPS 0.00 0.00 0.00
Dividend Yield 0.00 0.00 0.00
Dividend Yield ratio provides with the dividend per share to the market value that
company has in market.
10
Market value 23.00 33.29 3.17
EPS 1828.869565 1252.598378 13039.11672
Earnings yield 7951.61 3762.69 411328.60
The earnings yield ratio provides with the information about the earnings that have been
provided as a part of the surplus to the shareholders. This was pretty high in the year of
2013 where the market value of shares was quite low and earnings yield ratio was
henceforth pretty high. In the subsequent years when the market value went up, the
earnings yield ratio started falling and in the year of 2015, it was around 7951%.

Market value 23.00 33.29 3.17
Book Value (Rs) 1.53 17.99 16.91
M/B ratio 15.06 1.85 0.19
The market value of the company has increased over the period of time and subsequently
the book value has also decreased. Therefore this ratio has increased. It only shows the
amount of premium or discount the share has been issued to public.
11
12
COMPANY 2. SHREE MAHALAXMI AGRICULTURE PVT. LTD.
Balance Sheet
Share Capital 10.16 10.16 10.16
Secured Loans
Unsecured Loans -0.72 1.13
Other Long Term Liabilities
Total Non-Current Liabilities -0.72 1.13 0.00
Current Liabilities
Trade Payables 3.31 5.09 0.48
Other Current Liabilities 0.86
Short Term Borrowings
Short Term Provisions 0.13 0.02
ASSETS
Non-Current Assets
Gross Block 0.12
Less: Accumulated Depreciation 0.07
13
Net Block 0.05
Assets in transit
Non Current Investments 1.56 5.58
Long Term Loans & Advances
Currents Investments 8.28
Inventories
Cash and Bank 0.14 0.11 0.03
Other Current Assets 0.05 0.01 0.05
Miscellaneous Expenses not written off
Total Assets 13.68 17.05 11.87
Total Debt -0.72 1.13 0.00
Book Value 10.78 10.63 10.37
No of Months 12.00 12.00 12.00
INCOME :
14
Gross Sales 3.35 5.54 0.86
Less: Sales Returns
Less: Excise Duty
Net Sales 3.35 5.54 0.86
EXPENDITURE :
Increase/Decrease in Stock
Raw Material Consumed 3.26 5.20 0.54
Power & Fuel Cost 0.01 0.00
Other Manufacturing Expenses 0.14
Selling and Distribution Expenses 0.06 0.00
Operating Profit (Excl OI) -0.40 0.11 0.27
Interest 0.00 0.00 0.00
PBDT 0.14 0.33 0.39
Depreciation 0.01
Provision for Tax 0.02
Extra items
Adjustments to PAT -0.02
Profit Balance B/F 0.65 0.34
Equity Dividend %
15
Cash Flow
DESCRIPTION Mar-15 Mar-14
Profit Before Tax 0.14 0.33
Adjustment -0.53 -0.21
Changes In working Capital -2.29 -3.30
Cash Flow after changes in Working Capital -2.67 -3.18
Interest Paid
Tax Paid -0.02
Extra & Other Item
Cash From Operating Activities -2.67 -3.20
Cash Flow from Investing Activities 4.56 2.98
Cash from Financing Activities -1.85 0.29
Net Cash Inflow / Outflow 0.03 0.08
Opening Cash & Cash Equivalents 0.11 0.03
Closing Cash & Cash Equivalent 0.14 0.11
16
Capital Structure
Sources of Funds
Equity Paid Up 10.16 10.16 10.16
Reserves and Surplus 0.79 0.64 0.37
Net Worth 10.95 10.80 10.53
Total Debt -0.72 1.13 0.00
Capital Employed 10.24 11.93 10.53

Total Worth 10.95 10.8 10.53
Total Debt -0.72 1.13 0.00
Debt to Equity Ratio -0.065359315 0.105056991 0
Promoters Stake
Particulars No of No Of % of
Indian Promoters 0 0 0
Total of Promoter and Promoter Group 0 0 0
Public Shareholding
Institutions 0 0 0
Non-Institutions 700 20322600 100
Total Public Shareholding 700 20322600 100
Shares held by Custodians and against which Depository Receipts 0 0 0

have been issued
17
ADRs 0 0 0
GDRs 0 0 0
Other 0 0 0
Grand Total 700 20322600 100
Share Capital 10.16 10.16 10.16
Equity - Authorised 11.00 11.00 11.00
Equity - Issued 10.16 10.16 10.16
Equity - Called Up 10.16 10.16 10.16
Equity Paid Up 10.16 10.16 10.16
Convertible Pref. Shares
Non - Convertible Pref. Shares
Unclassified Shares Paid Up
Face Value 10.00 10.00 10.00
18
Cost Of Equity

ER(m) 20 20 20
Rf 7.5 7.5 7.5
Beta 0 0 0
Re 7.5 7.5 7.5
Ratios

Total Worth 10.95 10.8 10.53
Total Debt -0.72 1.13 0.00
Debt to Equity Ratio -0.065359315 0.105056991 0
The debt of the company is on the negligible side as compared to that of the equity as in
the year of 2013, the debt of the company is 0%, which was on the negative side in 2015.
This shows the high cash resource with the company and the ability of it to meet the debt
of the company.

Total Debt -0.72 1.13 0.00
Total Assets 13.68 17.05 11.87
Debt to Assets Ratio -0.0523018 0.066536961 0
The company is completely unleveraged company since the debt does not exist. All the
assets which are acquired are either financed by self or by the amount raised through the
equity shares.

PBIT 0.14 0.33 0.38
Interest 0.00 0.00 0.00
Interest Coverage Ratio 0 0 0
Since there is no debt, there is no chance of paying the interest to the debenture holders.
19
Profit After Tax 1400000 3300000 3600000
Number of outstanding shares 10161300.00 20625000 10161300.00
Earning Per Share(EPS) 0.137777647 0.16 0.354285377
There has been a part of profit which was used in paying off the dividends on the
outstanding shares. This has reduced over the period of time from 35% in the year of 2013
to 13.77% in the year of 2015.

Dividend paid 0 0 0
Number of outstanding shares 10161300.00 20625000 10161300.00
Since there are preference shares of the company in the capital structure, there is no
dividend paid to be paid.
EPS 0.137777647 0.16 0.354285377
DPS 0.00 0.00 0.00
The source of dividend is not present in the capital structure, hence no dividend pay-out
ratio.
Market value 23.00 33.29 3.17
DPS 0.00 0.00 0.00
Dividend yield 0.00 0.00 0.00

Market value 23.00 33.29 3.17
EPS 0.137777647 0.16 0.354285377
Earnings yield 0.60 0.48 11.18
Earnings yield ratio is calculated as the proportion of the EPS and Market Value. Since
there is an increase in the value of market price of the share as compared to that of the
2013, there is a difference in the earnings Yield ratio.
20
Market value 23.00 33.29 3.17
Book Value (Rs) 10.78 10.63 10.37
M/B ratio 2.13 3.13 0.31
If we look at the book value of the share, it has been roughly the same all the three years.
But the market value has changed over the period of time which is due to the change in the
premium amount asked on the number of shares allotted in the recent years or due to the
fluctuations in the market.
21
COMPANY 3. ECO FRIENDLY FOOD PROCESSING PARK LTD
Balance Sheet

Share Capital 24.77 9.91 9.91
Secured Loans
Unsecured Loans
Other Long Term Liabilities 0.56
Total Non-Current Liabilities 0.56 0.00
Current Liabilities
Trade Payables 0.33 0.67
ASSETS
Non-Current Assets
Gross Block 19.25 13.26 11.96
Net Block 16.83 12.14 11.40
Assets in transit
Non Current Investments 0.30 0.10
22
Cash and Bank 0.39 0.10 0.58
Other Current Assets 0.05
Total Assets 35.75 21.15 22.85
Total Debt 0.30 1.85 5.78
Book Value 1.37 18.04 16.83
DESCRIPTION Mar- Mar- Mar-

15 14 13
No of Months 12.00 12.00 12.00
INCOME :
Gross Sales 3.18 2.80 2.65
Less: Sales Returns
Less: Excise Duty
Net Sales 3.18 2.80 2.65
EXPENDITURE :
Increase/Decrease in Stock -0.01 0.27 -0.02
23
Interest 0.03 0.00 0.00
PBDT 2.56 1.95 2.30
Extra items
Adjustments to PAT
Equity Dividend %
Cash Flow

15 14 13
Interest Paid
Tax Paid -0.03 -0.02 -0.02
Extra & Other Item
24
Cash Flow from Investing Activities - -6.23 -

10.86 17.48
25
Capital Structure

Sources of Funds
Equity Paid Up 24.77 9.91 9.91
Net Worth 33.92 17.87 16.67
Total Debt 0.30 1.85 5.78

Net Worth 33.92 17.87 16.67
Total Debt 0.30 1.85 5.78
Debt to equity ratio 0.008879968 0.103737823 0.346898314
Promoters Stake
Particulars (201509) No of No Of % of
Public Shareholding
Institutions 0 0 0

have been issued
ADRs 0 0 0
GDRs 0 0 0
Other 0 0 0
Grand Total 928 247650000 100
26
Name 201509 201509
No Of % of
Shares Shares
AMAR SINGH BISHT 1220000 0.49
BRIJ KISHORE 49230000 19.88

SABHARWAL
SOURCES OF FUNDS:
Equity - Issued 0.05 0.05 0.05
Equity - Called Up 0.05 0.05 0.05
Preference Capital Paid Up 0.00 0.00 0.00
Face Value 10.00 10.00 10.00
27
Sources Of Financing Under Debt
Mar- Mar- Mar-

DESCRIPTION 15 14 13
Secured Loans
Unsecured Loans
Other Long Term Liabilities 0.56
Total Non-Current Liabilities 0.56 0.00
Current Liabilities
Trade Payables 0.33 0.67
Cost Of Equity

ER(m) 20 20 20
Rf 7.5 7.5 7.5
Beta 0.05 6.2 -0.78
Re 8.125 85 -2.25
Notes of accounts
Ratios & Analysis

Net Worth 33.92 17.87 16.67
Total Debt 0.30 1.85 5.78
Debt to equity ratio 0.008879968 0.103737823 0.346898314
The company has reduced the debt structure of the company making it into more of the
totally leveraged company. As the structure of the company is increasing (in terms of the
net worth), it is ascertained that company is more preferring to the equity source of
financing rather than the debt portion.
28
Total Debt 0.30 1.85 5.78
Total Assets 35.75 21.15 22.85
Debt to assets ratio 0.01 0.09 0.25
Debt of the company to that of the assets it possess is fairly low which provides with the
fact that company is able to meet the debt part of financing at the worst scenarios.

PBIT 1.29 1.39 1.78
Interest 0.03 0 0
Interest coverage ratio 43.00 0.00 0.00
Since there is no debt in the capital, there is no sort of the interest coverage ratio in the
earlier years. Currently, the ratio is 43 times which meant that the company is able to meet
the interest expense easily.

Profit After Tax 12200000 13500000 17500000
Number of outstanding share 247650000.00 9906000.00 9906000.00
EPS 0.05 1.36 1.77
The profit of the company has reduced from the year 2013, and hence the earning per
share has reduced. Earnings per share depict the amount of profit generated from the
issuance of such share. There is also an increase in the number of shares outstanding as
from 2013.

Dividend paid 0 0 0
Number of outstanding share 247650000.00 9906000.00 9906000.00
DPS 0.00 0.00 0.00
Note: DIVIDEND In consideration of future prospects of the Company, Your Board of Directors has decided to
plough back the profits into the business operations of the Company.
Since the company has decided not to provide for dividend, rather invest the earnings back
to business, making dividend per share paid as 0.
29
EPS 0.05 1.36 1.77
DPS 0.00 0.00 0.00
Dividend payout ratio 0.00 0.00 0.00
As dividend per share is 0, hence dividend pay-out ratio has to be 0.

Market value 1.54 23.74 22.15
DPS 0.00 0.00 0.00

Market value 1.54 23.74 22.15
EPS 0.05 1.36 1.77
As the earning per share is reducing yearly, there is an effect of such in earnings yield ratio
even if the market value of the share has dipped to 1.54 from almost 24.
Market value 1.54 23.74 22.15
Book Value (Rs) 1.37 18.04 16.83
M/B ratio 1.12 1.32 1.32
In the given data, the book value of the firm is almost around that of the market value
which shows that company does not ask for too much of the premium over the share price.
The company is also not trading too much over that as there is not sufficient change in the
book value of the share.
In 2015, it could be possible that the company has done share splitting and the price of the
share has fallen down.
30
COMPANY 4. HPC BIOSCIENCES LTD.
Balance Sheet

Share Capital 15.96 15.96 15.96
Secured Loans
Unsecured Loans
Current Liabilities
Trade Payables
Short Term Borrowings 0.38 0.10
ASSETS
Non-Current Assets
Gross Block 12.35 12.35 12.03
31
Net Block 8.12 9.53 10.57
Assets in transit
Other Non Current Assets 0.00 0.00 0.00
Sundry Debtors 1.98 1.09
Cash and Bank 0.86 0.45 0.70
Other Current Assets 0.00
Total Assets 29.70 29.40 27.83
Contingent Liabilities 2.19 2.19
Total Debt 0.00 0.38 0.10
Book Value 1.84 17.90 17.19
32

15 14 13
No of Months 12.00 12.00 12.00

INCOME :
Gross Sales 3.40 3.20 6.43
Less: Sales Returns
Less: Excise Duty
Net Sales 3.40 3.20 6.43
EXPENDITURE :
Increase/Decrease in Stock -0.19 0.21 2.75
Interest 0.00 0.00 0.00
PBDT 2.99 2.46 3.09
Profit Before Taxation & Exceptional 1.30 1.87 2.57
Items
33
Extra items
Adjustments to PAT
Equity Dividend %
Cash Flow

15 14 13

Interest Paid
Tax Paid -0.03 -0.02 -0.02
Extra & Other Item
Cash Flow from Investing Activities - -6.23 -
10.86 17.48
Cash & Cash Equivalent on Amalgamation / Take over /
Merger
Translation adj. on reserves / op cash balances frgn
subsidiaries
34
Capital Structure

Sources of Funds
Equity Paid Up 24.86 14.92 14.92
Net Worth 37.96 26.83 25.23
Total Debt 0.34 0.39 0.73

Net Worth 29.3 28.57 27.44
Total Debt 0.00 0.38 0.10
Debt to equity ratio 0 0.013227161 0.00357918
Promoters Stake
Particulars (201509) No of No Of % of
Public Shareholding
Institutions 0 0 0
Shares held by Custodians and against which Depository 0 0 0

Receipts have been issued
ADRs 0 0 0
35
GDRs 0 0 0
Other 0 0 0
Grand Total 1035 248633330 100
Name 201509 201509

No Of % of
Shares Shares
BRIJ KISHORE 50272660 20.22

SABHARWAL
Total 51159990 20.58

15 14 13

Share Capital 24.86 14.92 14.92
Equity - Issued 24.86 14.92 14.92
Equity - Called Up 24.86 14.92 14.92
Equity Paid Up 24.86 14.92 14.92
36
Face Value 1.00 10.00 10.00
Mar- Mar- Mar-

DESCRIPTION 15 14 13
Secured Loans
Unsecured Loans
Current Liabilities
Trade Payables
Short Term Borrowings 0.38 0.10
Cost Of Equity

ER(m) 20 20 20
Rf 7.5 7.5 7.5
Beta -0.16 -3.55 0
Re 5.5 -36.875 7.5
Notes of accounts
Ratios:
37
Debt to Equity Ratio:
Net Worth 29.3 28.57 27.44
Total Debt 0.00 0.38 0.10
Debt to equity ratio 0 0.013227161 0.00357918
So, as given in the above table, in the year of 2013, company had a debt of 0.10 cr. but in the subsequent
years like in the year of 2015, they eradicated the debt amount and brought it to zero. So it implies that
they generated better revenue to pay off the debt amount.
Debt to Assets Ratio:

Total Debt 0.00 0.38 0.10
Total Assets 29.7 29.4 27.83
Debt to assets ratio 0.00 0.01 0.00
So if we see at the figures of the year 2013 and 2015 then, debt amount is almost negligible where the
total assets figures are increased. So no further assets are brought by taking debt. So company is working
on full equity basis.
Interest Coverage Ratio:

PBIT 0.76 1.26 2.98
Interest 0 0 0
interest coverage ratio 0.00 0.00 0.00
From the above table, it is clearly implied that company do not have any interest to pay where they have
generated significant amount of profit before interest and taxes. That is the only reason we are getting this
ratio null.
Earning Per Share (EPS):

Profit After Tax 7100000 12400000 29800000
number of outstanding share 159600000.00 15960000.00 15960000.00
EPS 0.04 0.78 1.87
The higher the EPS figure, the better it is. A higher EPS is the sign of higher earnings, strong financial
position and, therefore, a reliable company to invest money. So in the year 2013, EPS is better
comparatively then that of in the year of 2015. This could be due to higher investment in fixed assets or
loss in that particular year.
Dividend per Share (DPS):
Dividend paid 0 0 0
number of outstanding share 159600000.00 15960000.00 15960000.00
DPS 0.00 0.00 0.00
As we see in the above table, company is not giving any dividend so ultimately this ratio comes to zero
value. This could be due to low revenues or no debt taken.
38
Dividend pay-out ratio:
EPS 0.04 0.78 1.87
DPS 0.00 0.00 0.00
dividend pay-out ratio 0.00 0.00 0.00
So as we just show that company is not giving any dividend, which leads to zero dividend pay-out ratio.
A company that has a downward trend of pay-out is alarming to investors. For example, if a company's
ratio has fallen a percentage each year for the last five years might indicate that the company can no
longer afford to pay such high dividends. This could be an indication of poor operating performance.
Dividend Yield:
Market value 46.00 52.60 4.11
DPS 0.00 0.00 0.00
A company with a high dividend yield pays its investors a large dividend compared to the fair market
value of the stock. This means the investors are getting highly compensated for their investments
compared with lower dividend yielding stocks. But here, due to no dividend given, we have no dividend
yield.
Earnings Yield:
Market value 46.00 52.60 4.11
EPS 0.04 0.78 1.87
The earnings yield ratio basically stats that If this stock were a bond, how much would it earn as a
percentage of investment based on this year’s after-tax profits. So if we see the earnings yield in the year
of 2013 to that of 2015, it is decreased sharply which implies that company’s financial position is that
good.
Market to Book Value:
Market value 46.00 52.60 4.11
Book Value 1.84 17.90 17.19
M/B ratio 25.06 2.94 0.24
M/B ratio stats that if a company is trading for less than its book value (or ha a P/B less than one), it
normally tells investors one of two things: either the market believes the asset value is overstated, or the
company is earning a very poor (negative sometimes) return on its assets. Here we have increasing trend
of M/B ratio which shows company’s good performance in the year of 2014-2015.
39
COMPANY 5. LEDO TEA COMPANY LTD.
Balance Sheet

Secured Loans 0.29 0.19 0.25
Unsecured Loans
Deferred Tax Assets / Liabilities -0.42 -0.11 -0.14
Total Non-Current Liabilities -0.13 0.07 0.12
Current Liabilities
Trade Payables 0.91 0.59 0.94
ASSETS
Non-Current Assets
Gross Block 10.17 9.70 9.32
Net Block 5.86 5.75 5.68
Capital Work in Progress 0.00
Assets in transit
40
Cash and Bank 0.07 0.09 0.04
Other Current Assets 0.38 0.34 0.25
Net Current Assets (Including Current Investments) -3.30 -3.27 -2.80
Miscellaneous Expenses not written off
Total Assets 7.86 7.97 8.25
Contingent Liabilities 0.15 0.15 0.20
Total Debt 2.65 3.23 2.54
Book Value 35.76 32.39 36.62
No of Months 12.00 12.00 12.00
INCOME :
Gross Sales 9.80 10.78 11.49
Less: Sales Returns
Less: Excise Duty 0.04 0.04 0.05
Net Sales 9.76 10.73 11.45
EXPENDITURE :
Increase/Decrease in Stock -0.32 0.50 -0.10
Raw Material Consumed 1.97 1.46 2.43
Operating Profit (Excl OI) -1.32 0.15 0.44
41
Operating Profit -1.20 0.35 0.59
Interest 0.24 0.36 0.32
PBDT -1.44 -0.01 0.27
Profit Before Taxation & Exceptional Items -1.80 -0.31 -0.02
Exceptional Income / Expenses 1.83 0.04
Profit Before Tax 0.03 -0.31 0.02
Provision for Tax -0.31 0.05 0.01
Profit After Tax 0.34 -0.37 0.01
Extra items
Adjustments to PAT
Appropriations 0.37 -0.32 0.05
Equity Dividend %
Earnings Per Share 3.92 -4.23 0.08
Adjusted EPS 3.92 -4.23 0.08
Cash Flow

15 14 13
Profit Before Tax 0.03 -0.31 0.02
Adjustment -1.25 0.61 0.56
Changes In working Capital 0.65 -0.25 0.14
Cash Flow after changes in Working Capital -0.58 0.04 0.72
Interest Paid
Tax Paid 0.04 -0.01 -0.01
Extra & Other Item
Cash From Operating Activities -0.53 0.03 0.71
Cash Flow from Investing Activities 1.34 -0.32 -0.54
Cash from Financing Activities -0.82 0.33 -0.20
42
Net Cash Inflow / Outflow -0.02 0.04 -0.03
43
Capital Structure

Sources of Funds
Net Worth 3.09 2.80 3.16
Total Debt 2.65 3.23 2.54

Total Worth 3.09 2.8 3.16
Total Debt 2.65 3.23 2.54
Promoters Stake
Particulars No of No Of % of
Public Shareholding
Institutions 0 0 0

have been issued
ADRs 0 0 0
44
GDRs 0 0 0
Other 0 0 0
Grand Total 2932 863500 100
Name 201509 201509

No Of % of
Shares Shares
Goodfaith Holdings Pvt Ltd 41980 4.86
LEDO finicial Services Ltd 42700 4.94
Nikhil Lohia 112669 13.05
Nirmal Kumar Lohia 139230 16.12
Nirmal Kumar Lohia HUF 25000 2.9
Nirmit Lohia 111657 12.93
Sarita Lohia 115465 13.37

11 10 09
Equity - Issued 0.86 0.86 0.86
Equity - Called Up 0.86 0.86 0.86
45
Face Value 10.00 10.00 10.00
Cost Of Equity

ER(m) 20 20 20
Rf 7.5 7.5 7.5
Beta 0.46 -4.99 0.15
Re 13.25 -54.875 9.375
Notes of accounts
Ratios
Debt to Equity Ratio

Total Worth 3.09 2.8 3.16
Total Debt 2.65 3.23 2.54
The debt of the company is almost equal to that of the equity the company is holding onto
in its capital structure. The company is unleveraged company and is maintain appropriate
balance of both the debt and equity.
46
Total Debt 2.65 3.23 2.54
Total Assets 7.86 7.97 8.25
Debt to Assets Ratio 0.337016645 0.404909745 0.308002037
The debt of the company is around 35% of the assets, which is good. The company has
reduced the debt finance in 2015 as compared to that of 2014 as that was almost around
40% which was too high.

PBIT -1.44 -0.01 0.27
Interest 0.24 0.36 0.32
Interest Coverage Ratio -6 -0.027777778 0.84375
The company has incurred huge expenses in the current financial year and is not able to
cover the interest portion of the capital structure. The company should however reduce the
debt portion and reduce such finance cost.

Profit After Tax 3400000 -3700000 100000
Earning Per Share(EPS) 3.93746381 -4.284887087 0.115807759
Earnings per share has increased as there are many exceptional items in the expense side
which reduced the overall income that was earned during the period and made the profit
before tax a negative balance.

Dividend paid 0 0 0
Note: DIVIDEND In consideration of future prospects of the Company, Your Board of Directors has decided to
plough back the profits into the business operations of the Company.
Since the company is not providing for the dividends and is investing in the course of the
business, there is no dividend per share allotted to the shareholders.
47
EPS 3.93746381 -4.28488709 0.115807759
DPS 0.00 0.00 0.00
No dividend paid, hence no dividend pay-out ratio.

Market value 90.3 77.5 81.25
DPS 0.00 0.00 0.00
Dividend yeild 0.00 0.00 0.00
Dividend per share is 0, which ultimately made the dividend yield ratio equal to 0.
Market value 90.3 77.5 81.25
EPS 465.8250277 538.0516129 508.7261538
Earnings yeild 515.86 694.26 626.12
Since the earnings has reduced over the period of time, and the market share has increased
over the time. The earnings yield ratio has decreased in the subsequent years.

Market value 90.3 77.5 81.25
Book Value (Rs) 35.76 32.39 36.62
M/B ratio 2.52 2.39 2.22
The market value and the book value of the firm has proportionally increased and
decreased over the time, hence the ratio has been almost the same with a slight increase
due to higher increase in the market value.
48
Conclusion:
The agricultural industry depends highly on the natural factors like water, climate and
others. Hence, it is not much reliable which makes it difficult for the companies to get long
term borrowings in this industry. Also the companies don’t prefer paying dividend, they
would rather prefer investing it in the businesses itself. It is difficult for them to borrow
money from other source than the banks and even if they are provided, they get it on
higher rate of interest.
49
REFERENCES
 http://dx.doi.org/10.1108/JMD-11-2013-0140
 http://dx.doi.org/10.1108/17542411011019922
50

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INSTITUTE OF MANAGEMENT, NIRMA UNIVERSITY

Roll No. Name Signature

151318 Chetan Sharma

151319 Darshana Bhati

151350 Shaishav Pansuria

151351 Shitanshu Gupta

DATE OF SUBMISSION: MARCH 17, 2016

DESCRIPTION Mar-15 Mar-14 Mar-13

Profit and Loss Statement

DESCRIPTION Mar-15 Mar-14 Mar-13

No of Months 12.00 12.00 12.00

Gross Sales 3.40 3.20 6.43

Less: Inter divisional transfers

Less: Sales Returns

Less: Excise Duty

Net Sales 3.40 3.20 6.43

Increase/Decrease in Stock -0.19 0.21 2.75

Raw Material Consumed

Power & Fuel Cost 0.04 0.07 0.06

Employee Cost 0.06 0.06 0.16

Other Manufacturing Expenses 0.18 0.16 0.17

General and Administration Expenses 0.31 0.12 0.16

Selling and Distribution Expenses 0.12 0.12 0.06

Miscellaneous Expenses 0.11 0.11 0.06

Less: Expenses Capitalised

Total Expenditure 0.63 0.85 3.42

Operating Profit (Excl OI) 2.77 2.35 3.02

Other Income 0.22 0.11 0.08

Operating Profit 2.99 2.46 3.09

PBDT 2.99 2.46 3.09

Depreciation 1.69 0.59 0.52

Profit Before Taxation & Exceptional Items 1.30 1.87 2.57

Exceptional Income / Expenses

Profit Before Tax 1.30 1.87 2.57

Provision for Tax 0.07 0.03 0.02

Profit After Tax 1.23 1.84 2.55

Profit Balance B/F 4.37 2.53 7.78

Appropriations 5.60 4.37 10.33

Earnings Per Share 0.05 1.23 1.71

Adjusted EPS 0.05 0.08 0.10

DESCRIPTION Mar-15 Mar-14 Mar-13

Profit Before Tax 1.30 1.87 2.57

Adjustment 1.57 0.81 0.50

Changes In working Capital -1.39 2.69 2.06

Cash Flow after changes in Working Capital 1.48 5.37 5.14

Tax Paid -0.03 -0.02 -0.02

Other Direct Expenses paid

Extra & Other Item

Cash From Operating Activities 1.44 5.35 5.11

Cash Flow from Investing Activities -10.86 -6.23 -17.48

Cash from Financing Activities 10.26 1.22 11.85

Net Cash Inflow / Outflow 0.84 0.34 -0.51

Opening Cash & Cash Equivalents 0.37 0.04 0.55

Cash & Cash Equivalent of Subsidiaries under liquidations

Translation adj. on reserves / op cash balances frgn subsidiaries

Effect of Foreign Exchange Fluctuations

Closing Cash & Cash Equivalent 1.21 0.37 0.04

Mar-15 Mar-14 Mar-13

Total of Promoter and Public Shareholding 1035 248633330 100

Shares held by Custodians and against which Depository

Grand Total 1035 248633330 100

Detailed Break Up Of Equity

Mar-15 Mar-14 Mar-13