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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



5. SOUTH INDIAN BANK- INTRODUCTION



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/India

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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



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



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


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



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


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



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



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. -------------------



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


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



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


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


Capital

Issued

Capital

- P A I D U P -

Bibliography:

1. Annual Report JK Cement Ltd.

Capital Structure


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.

MOHIT B37,1901,FM,TP.

Documents

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