Project Reoprt on SIDCO 2010 - 2013 (2)

8/17/2019 Project Reoprt on SIDCO 2010 - 2013 (2)

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PROJECT REPORT ON

“A STUDY ON THE FINANCIAL

PERFORMANCE OFSIDCO”

Submitted to the regular fulllment of the requirementsFor the award of degree of

BACHELOR OF BUSINESS ADMINISTRATION

By

HANAVA . , ACHIN U.G,

& ARUN J MOHAN ANANTHU GOKUL

Under The Gud!n"e #$ Mr%S'UMARIPREETHA(Le")urer n C#**er"e+

UNI,ERSITY INSTITUTE OF TECHNOLOGY

NEYYATTIN'ARA CENTRE

UNI,ERSITY OF 'ERALA

-.// 0 -./1


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PROJECT REPORT ON

“A STUDY ON THE FINANCIAL

PERFORMANCE OFSIDCO”

Submitted to the regular fulllment of the requirementsFor the award of degree of

BACHELOR OF BUSINESS ADMINISTRATION

By HANAVA . ACHINU.G

2Re3 n#4/--5167892Re3n#4/-51678:9 &

ARUN J MOHAN

ANANTHU

GOKUL

2Re3 n#4/-51678;92Re3n#4/-51678;9

Under The Gud!n"e #$

Mr%S'UMARIPREETHA

(Le")urer n C#**er"e+




-.// < -./1


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CERTIFICATE

This to certify that the project report titled “A STUDY ON THE

FINANCIAL PERFORMANCE OF SIDCO” submitted by

SHANA,ASS= SACHINUG= ARUN J MOHAN=ANANTHU GO'UL in partial fulllment of the requirements for

the award of Degree of Bachelor of Business Administration,

ni!ersity of "erala, is the project wor# underta#en by during

the year $%&&'$%&( under my super!ision and guidance)

Pr#$ N SADASI,AN NAIRS*) S 'UMARIPREETHA

Prn">!?Le")urer n C#**er"e


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Un@er%)y In%))u)e #$ Te"hn#?#3yUn@er%)y In%))u)e #$ Te"hn#?#3yUn@er%)y #$ 'er!?!Un@er%)y #$ 'er!?!Neyy!))n!r! Cen)re

Neyy!))n!r! Cen)re

DECLARATION

e undersigned, SHANA,ASS=SACHIN UG=ARUN JMOHAN=ANANTHU GO'UL= hereby declare that this thisproject entitled “A STUDY ON THE FINANCIALPERFORMANCE OF SIDCO”= Thiru!ananthapuramhas been done under the guidance of S'UMARIPREETHA LECTURER*n commerce,ni!ersity *nstitute of Technology+eyyatin#ara entre, Tri!andrum)-e also declare that

this project report has not been submitted by us fully orpartial for the award of any degree or diploma earlier)

SHANA,AS

S

D!)e 4 .1-./1 SACHIN UG

P?!"e 4 Thru@!n!n)h!>ur!* ARUN J MOHAN


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ANANTHU GO'UL

AC'NOLEDGEMENT

Gratitude is certainly to be placed on record at the righttime with the right sense of morality)

*n ta#e this opportunity to ac#nowledged by indebtednessto all those who ha!e helped me in carrying my project wor#)-e e.press our sincere than#s to Pr#$ N SADASI,AN NAIR/rincipal, *T, +eyyattin#ara centre for his encouragement and

e0cient help) -e are than#ful to Smt) S'u*!rPree)h! 1ecturer inommerce, ni!ersity *nstitute of Technology +eyyattin#araentre, ni!ersity of "erala for the !aluable ad!ices and timelyassistance during the course of the study) -e e.press mysincere gratitude to 2r) Dinu 3aj)3)/, pper Di!ision Accountantof S*D4 and 2r) ") SAS*, Sr) 2anager for Accounts in this4rgani5ation)

-e e.press my than#s to all my teachers, friends andclassmates for their support and encouragement) And nally,we bow head before 64D Almighty who blessed me withenough physical and mental strength for successful completionof project)


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CONTENTSCh!>)

erDe%"r>)#n P!3e N#

LIST OF TABLES

LIST OF CHARTS

/ INTRODUCTION

OBJECTI,ES OF THE STUDY

SCOPE AND SIGNIFICANCE OF THESTUDY

RESEARCH METHODOLOGY

LIMITATION OF THE STUDY

/ 0 ;

- RE,IE OF RELATEDLITERATURE

-/ COMPANY PROFILE -- INDUSTRY PROFILE -5 OR'ING CAPITALMANAGEMENT -1 FINANCIAL STATEMENT

: 0 -8

5 ANALYSIS ANDINTERPRETATION

-; < 8.


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1FINDINGS

SUGGESTIONS

CONCLUSION

8/ < 86

6 APPENDI 87 <

7 BIBILIOGRAPHY

A STUDY ON THE FINANCIAL PERFORMANCE OF SIDCO

-./1

LIST OF TABLES

S? n# P!r)"u?!r% P!3e n#I LIUIDITY RATIOS! Curren) R!)# u" R!)#

"A%#?u)e Lud)y R!)#

-: < 51

II LE,ERAGE RATIOS! Pr#>re)!ry R!)#

Fed A%%e) T# Ne) #r)h56 < 5;

III ACT,ITY RATIOS

! Fed A%%e) Turn #@er R!)# 5: < 1.I, PROFITABILITY RATIOS

! Ne) Pr#) R!)# O>er!)n3 R!)#" Re)urn On T#)!? A%%e)

d Re)urn On Sh!reh#?der% Fund

1/ < 1;

, C#*>!r!)@e B!?!n"e %hee) -..7 < -..8 7.,I C#*>!r!)@e B!?!n"e %hee) -..8 < -..; 7/

,II C#*>!r!)@e B!?!n"e %hee) -..; < -..: 7-,III C#*>!r!)@e B!?!n"e %hee) -..: < -./. 75


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I C#*>!r!)@e B!?!n"e %hee) -./. < -.// 71 C#*>!r!)@e In"#*e S)!)e*en) -..7!r!)@e In"#*e S)!)e*en) -..8!r!)@e In"#*e S)!)e*en) -..;!r!)@e In"#*e S)!)e*en) -..:!r!)@e In"#*e S)!)e*en) -./.


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! Ne) Pr#) R!)# 66

O>er!)n3 R!)# 67

"Re)urn On T#)!? A%%e) 68

dRe)urn On Sh!reh#?der%Fund

6;


-./1

CHAPTER < /


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*+T34DT*4+


-./1

INTRODUCTION OF THE STUDY The nancial statement of the company pro!ides a richinformation about the operational result of the company and much

can be learned from a careful e.amination of these statement for

decision ma#ing purpose) The prot and loss account and balance

sheet are indicators of two signicant factors 7 protability and

nancial soundness)

The nancial statements are mirrors which re8ect the

nancial position and operating strength or wea#ness of the

company) A proper analysis and interpretation of these statements

enable a person to judge the protability and nancial strength of

the company) Financial analysis includes detailed enquiry of nancial

data) *t is a grad 7 stic# which measures relationship between

!ariables) *t is the technique to chec# upon the e0ciency with which

wor#ing capital is being used in the company)

The company can easily perform forecasting, inter'

rm comparison, cost control through nancial analysis) Financial


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analysis is the powerful tool in the hands of the management) So it

always maintains a signicant !alue to the management)


/


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DESIGN OF THE STUDY


-

OKe")@e%

The *!n #Ke")@e% #$ )he %)udy !re4<

To analyse liquidity position of the company)

To analyse protability and nancial soundness of the

company) To analyse .ed asset, wor#ing capital and total asset)

To ascertain the nature of assets and liabilities of the rm)

To analyse net worth of the company)

To disclose the information according to the needs of the

user)


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5

S"#>e !nd %3n"!n"e #$ )he %)udy

The scope of nancial statement analysis is comparati!elywider than other method of analisation and this include bothanalysis and interpretation of the nancial data) The nancialstatements are the mirror which re8ects the nancial position andoperating strength or wea#ness of the concern) Through the

interpretation anything change can be ma#ing in the nancialstructure of the organi5ation and study the running in !arioussituations in the economy and nd out solution to the nancialposition to arri!ed change to loss)

C#??e")#n #$ d!)!

The secondary data ha!e been used for the study) Thesecondary data ha!e been obtained from annual reports and otherpublished documents of the company) Besides, information has also

collected from !arious boo#s connected with the subject)


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T##?% #$ An!?y%%

For analysing data simple mathematical and percentageshas been employed)

Per#d #$ S)udy

A !e year period was ta#en for the purpose of the studybeginning from the nancial year $%%9 7 $%%: and ending on thenancial year $%&& 7 $%&$)


1

RESEARCH METHODOLOGY

Research methodology is a science) *t is a way tosystematically sol!e the research problem) *t e.plains why aresearch has been underta#en, how the research problem has beendened, in what way and why the hypothesis has been formulated,what data ha!e been collected, how to calculate !arious statisticalmeasures how to apply a particular research technique, which of the!arious research method a!ailable is more rele!ant and so on)3esearch methodology helps in studying how research is donescientically) 3esearch methodology pro!ides !arious steps that canbe adopted by the researcher in studying his research problems)

3esearch methodology e.plains why we are using a particularmethod and why we are not using another so that research results


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are capable of being e!aluated either by the researcher or by others) The research design refers to preplanning of what a researcher doesin his study) The design adopted in the study comes undere.ploratory and e!aluatory research) Since the data collected fromthe nancial statements of the company is analy5ed under !ariousnancial and tactical tools) 3esearch design indicates the plan if action to be carried out in connection with a proposed researchwor#) As such the design includes an outline of what the researcherwill do from writing hypothesis and its operational implications tothe nal analysis of data in operational point of !iew)

DATA COLLECTION4 The study is based on the two types data is obtained fromthe "erala S*D4, Thiru!ananthapuram)They !re

Pr*!ry D!)!

Se"#nd!ry D!)!Pr*!ry D!)! /rimary data obtained through the discussion with sta;s ofthe "erala S*D4, Thiru!ananthapuram)

Se"#nd!ry D!)!

Secondary data is based on the past data, i)e)


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• The sources information for this project belongs to annual

reports published by the organi5ation)

• Time constraint is also a limiting factor)


7

RATIO ANALYSIS 0 AN O,ER,IE

3atio analysis is a powerful tool of nancial analysis) A ratio isdened as >the indicated quotient of two mathematical e.pressions?and as >the relationship between two or more things?) Therelationship between the two gures e.pressed mathematically iscalled ratio)

S3n"!n"e #$ R!)# An!?y%%


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Basically, ratio analysis is useful to the same e.tent and in thesame way, for nancial analysis a statistics are useful in the study of numerical aspect of a problem) *t simplies, summari5es andsystemati5es a long array of accounting gures) The following are itsad!antages@'

i *t is an instrument for diagnosis of the nancial health of anenterprise) *t facilitates the comprehension of nancialstatement and e!aluation of se!eral aspects such asprotability and operational e0ciency of the underta#ing)

ii 3atio analysis can be of in!aluable aid to management inthe discharge of its basic function of forecasting, planning,co'operation, communication and control with the help of trend analysis which is possible)

iii *t pro!ides inter'rm comparison to measure e0ciency and

helps the management to ma#e remedial measures)i! *t is helpful in forewarning corporate sic#ness and helps the

management to ta#e remedial measures)! *t helps in in!estment decisions in the case of in!estor and

lending decisions in the case of ban#s and nancialinstitutions)

!i *t helps to ascertain the soundness of the rm)


8

LIMITATIONS OF RATIO ANALYSIS

3atio analysis has a number of pitfalls and in many respects it isequally important to ha!e an idea of these as it is to #now the


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mechani5ation process of calculating ratios any deri!ing results) They are as follows@'

&) 3atios are useful so far as they gi!e e.pression to a study of the relati!e aspect of a problem because ratio is meaningless

by itself and acquire signicance only when it is studied withother ratios)

$) 3atios are tools of quantitati!e analysis and it is quite possiblethat quantitati!e factors may o!er ride numerical aspects)

) The data are usually estimates) Cstimates regarding the life of the assets, the rate of depreciation, pro!ision for doubtfuldebts etc) may or may not correct)

() 3atio analysis is only a beginning and gi!es just a fraction of information needed for decision ma#ing)

) *n a way ratios are an attempt of del!e in the past as nancial

statements, from which they are deri!ed, are historicaldocuments) 4n the other hand in modern business it is moreimportant to ha!e an idea of the probable happening in futurerather than those in the past)

E) 3atio share with other statistical concepts all the limitations of the later'determination of proper standard for comparison, lac#of the homogeneity of data, danger of fallacious conclusions if accounting data is form from its conte.t, susceptibilities of theaccounting data to manipulation etc), and to that e.tent, ratioanalysis becomes wea# as a tool of nancial analysis)

8 *n the ratio analysis arithmetical window dressing is possibleand rms may be successful in concealing the real position


;


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CHAPTER < -

3C*C- 4F 3C1ATCD 1*TC3AT3C

-/ COMPANY PROFILE-- INDUSTRY PROFILE-5 OR'ING CAPITAL MANAGEMENT-1 FINANCIAL STATEMENT


-./5


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-/ PROFILE OF THE COMPANY

The "erala S*D4, a go!ernment owned public sectorcorporation, was established in +o!ember &G9 for the de!elopmentand promotion for small scale industries) urrently, S*D4 *Se.panding its area of wor#s by di!ersication to gi!e new !ision tothe small scale industries)

6odHs own country, "erala, is gifted with abundant naturalresources essential for establishing industrial units and S*D4 ista#ing the initiati!e to set up industrial units) "erala S*D4 is theITotal solution pro!iderH for small scale sector as it o;ers all facilities

and help to set up a small scale unit) This corporation is rendering !aluable assistance to small

scale units in the state, including consultancy at the beginning of the project to the identication of industrial site, commissioning of project, pro!iding infrastructure facilities, distribution of essentialraw material, mar#eting of the small scale industrial products,underta#ing ci!il and electrical wor#s, and setting up of the smallscale unit, "erala S*D4 competently handles the necessaryrequisites of any project)

"erala S*D4 is now in the path of considerable prot and isnow granting basic facilities and mar#eting security to theindustrialists and new entrepreneurs through its di!ersied acti!itiesand new wor#ing style)


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:

ORGANIATIONAL STRUCTURE

CHAIRMAN

MANAGING DIRECTOR

AGM

2Indu%

)r!?

P!r

D@%#

GM "

EI&P

D@%#n

Sen#r

M!n!3e

r2M!re)

n39

AGM

2IT & TC

D@%#n

9

Sen#r

M!n!3er2He!d#r! &8 *!re)n3Cen)re% &

- M!re)n3

/1 RMDe>#)%

;

Pr#du")#

n Indu%)r!? P!r%

28Indu%)r

,3?!n"eSn

M!n!3er2Ad*n9

/8Indu%)r!?

E%)!)e% &57Mn


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/.

2.2 INDUSTRIAL PROFILESIDCO

Ever since its establishment in 1975 by amalgamating erstwhile Kerala Small

Industries Corporation and Kerala Employment Promotion Corporation Kerala

SI!C" caters overarching needs o# Small Scale Industries in the State

$provision #or land and building supply o# scarce raw materials at low cost

mar%eting o# &S&E Products etc to name a #ew' SI!C" is a #ully owned

(overnment Corporation with its registered o##ice at )rivandrum' SI!C" owns

and operates production units raw materials depots Industrial Estates* &ini

Industrial Estates mar%eting cell*emporia*centers Civil Construction !ivision

I)+)C !ivision E,port + Import* Pro-ect !ivision and Industrial Par%s' Kerala

SI!C" has been distinguished as .o'1 SI!C" among South Indian SI!C"/s

during 01$011 in the wa%e o# the achievement o# an unprecedented

turnover o# 2s'107'31 Crores' 4dd to its credential (overnment o# Kerala

recognied the I)+)C !ivision o# Kerala SI!C" as a )otal Solution Provider

to (overnment o# Kerala' !uring 011$10 SI!C" achieved a total

turnover o# 2s' 06 crores #rom its activities with a pro#it o# 2s' 0'9 crores'

)he various divisions under Kerala SI!C" include8

1. Marketing Division

2. Prod!tion Division

". Indstria# Estate Division

$. Indstria# Park Division

%. Ra& Materia# Division

'. Constr!tion Division

(. IT)TC and Trading Division

*. E+,ort- I,ort ) Pro/e!t Division

0. Cons#tan! Division


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//

Marketing Division

SI!C" provides mar%eting support to &icro Small and &edium Enterprises

#unctioning in the State' !uring 01$11 a total o# 5'71 Crore worth SSI

Products have been mar%eted success#ully to various (overnment

!epartments and PS/s' In the course o# this mission we have contributed

2s'1 la%hs to state e,che:uer towards collections and remittance o# ;4)'

!uring 010$1 the division achieved a turnover o# 2s' 76 crores' SI!C" is

also entrusted as the nodal agency #or the #i,ing o# prices #or electrical items$

one among the reserved items #or &S&E Sector'

Prod!tion Division

SI!C" owns 3 Production nits across the States manu#acturing igs

and #i,tures and machining o# precision component' 4 ma-or e,pansion and

moderniation policy has set in motion to transmute the !ivision to enlarge the

product line'

Indstria# Estate Division

SI!C" presently manages 17 ma-or Industrial Estates and ? &ini IndustrialEstates' )hese estates are the havens o# numerous SSIs where SI!C"

provides common in#rastructural #acilities #or all the units'

Indstria# Park Division

(overnment has devised Industrial Par% as a tool #or developing industries in

our State #or which SI!C" is accepted as a .odal 4gency #or constructing

such Par%s' (overnment o# Kerala envisages at least one IP in each

assembly constituency as a measure #or employment generation' In this


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venture SI!C" has completed 7 Industrial Par%s that host 013 Industrial

nits with a direct employment opportunity #or nearly 1 people'


/-

Ra& Materia# Division

)his division aims to distribute scarce raw materials to small scale industries'

4s low cost raw materials is inevitable to sustain the &S&E in the #ield owing

to cutthroat competition SI!C" sacri#icing its margin while supplying

essential raw materials at the lowest possible cost' )he !ivision achieved aturnover o# 2s'56 Crore during 01$11 and 79 crores during 011$10' SI!C"

see%s to widen its horion by wor%ing in tandem with other central and state

public sector underta%ing #or the best help o# &S&E Sector .

Constr!tion Division

"ur Civil Construction !ivision that underta%es civil construction wor%s caters

the needs #or various PS/s )ourism !epartment various (overnment

!epartments Industrial Estates * &ini Industrial Estates etc' )he !ivision is at

the behest o# a Chie# Engineer whose mission is assisted and supplemented

by a group o# e,perienced civil and Electrical engineers' )he !ivision o##ers a

host o# integrated services$Structural design preparation o# detailed estimate

surveying e,ecution and management o# civil and electrical wor%s'

IT)TC Division

)he division now con#erred as a )otal Solution Provider o# (overnment o#

Kerala underta%es all gamuts o# activities related to the arena o# in#ormation

technology' .ow it ventures )elecom City a ma-or pro-ect with a total outlay o# 2s'? Crores on @") basis with a 5 .os o# prospective employment

opportunities' )he prestigious )ool 2oom cum )raining Centre with state$o#$

the art technology set up with a total outlay o# 2s' 10 crore #or the

manu#acture o# tooling e:uipments and training is also #unctioning under the

!ivision'

E+,ort- I,ort ) Pro/e!t Division

)his division is created to underta%e special pro-ects' nder this division it isproposed to start I"C*".(C Petro*!iesel Pumps at Cherthala "llur


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Kanichu%ulangara "lava%%ode Pachalam and Erna%ulam' )his division also

underta%es supply * installation o# AE! Street Aights e$toilets Bigh Security

.umber Plates etc' SI!C" is playing a vital role #or the promotion o# Small

&icro and &edium Industries in the State that provides more than 1


/5

!irect employment opportunities and over 0 indirect employment

opportunities its activities to li#t this sector is very vital #rom social and

economic view point'

Cons#tan! Division

)his division is mainly constituted #or assisting entrepreneurs and

(overnment*semi (overnment institutions right #rom pro-ect development to

its e,ecution' Consultancy e,tends its service #or pro-ect development

preparation o# pro-ect report assistance #or obtaining term loans and #inally its

implementation' So #ar the division has bagged a hand#ul o# prestigious pro-ect

#or the consultancy services'


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/1

-5 OR'ING CAPITAL MANAGEMENT

-or#ing capital refers to that part of the capital which isrequired for nancing short'term or current assets such as cash,mar#etable securities, debtors and in!entories) Funds thus in!estedin current assets #eep re!ol!ing fast and are being constantly

con!erted into cash and this cash 8ow out again in e.change forother current assets) Jence, it is also #nown as re!ol!ing orcirculating capital or short'term capital)

The wor#ing capital requirements of a concern depend upon alarge number of factors such as@

&) +ature or character of business)$) Si5e of businessK scale of operations)) /roduction policy)() 2anufacturing processK length of production cycle)) Seasonal !ariation)

E) -or#ing capital cycle)9) 3ate of stoc# turno!er):) redit policy)G) Business cycle)&%) 3ate of growth of business)&&) Carning capacity and di!idend policy)&$) /rice le!el changes)&) 4ther factors)

To a!oid the shortage of wor#ing capital at once, an estimate

of wor#ing capital requirements should be made in ad!ance so thatarrangements can be made to procure adequate wor#ing capital) The wor#ing capital should be determined by estimating thein!estments in current assets minus money e.pected from currentliabilities) The following factors should be ta#en into considerationwhile ma#ing an estimate of wor#ing capital requirements@

&) Total assets incurred on material, wages and o!erhead)$) The length of time for which raw materials are to remain

in stores before they are issued for production)) The time ta#en for con!ersion of raw material into

nished goods)


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() The length of sales cycle during which nished goods areto be #ept waiting for sales)

) The a!erage period of credit allowed to customers)E) The amount of required to pay day'to'day e.penses of

the business)9) The a!erage amount of required to ma#e ad!ance

payments, it any):) The a!erage credit period e.pected to be allowed by

suppliers)G) Time lag in payment of wages and other e.penses)


/6

From the total amount bloc#ed in current assets estimated onthe basis of the rst se!en items gi!en abo!e, the total of thecurrent liabilities, i)e) the last two items deducted to nd out therequirements of wor#ing capital)


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/8 In"#*e S)!)e*en)

The income statement is generally considered to be the most

useful of nancial statements) *t e.plains what has happened to abusiness as a result of operation between two balance sheet dates)

For this purpose it matches the re!enue and costs incurred in the

process of earning re!enues and shows the net prot earned or loss

su;ered during a particular period)

B!?!n"e Shee)

*t is a statement of nancial position of a business at a specied

moment of time) *t represents all assets owned by the business at aparticular moment of time and the claims of the owners and

outsider against those assets that time)

S)!)e*en) #$ Re)!ned E!rnn3%

The term retained earnings means the accumulated e.cess of

earnings o!er loss M di!idends) The statement is also termed as

/rot M 1oss appropriation Account in case of companies)

S)!)e*en) #$ Ch!n3e% n Fn!n"!? P#%)#n 2SCFP9

The Balance Sheet shows the nancial condition of the business

at a particular moment of time while the *ncome Statement

discloses the result of operation of business o!er a period of time)

S)!)e*en)

O$ "h!n3e%

n n!n"!?

>#%)#n

S)!)e*en)#$

Re)!ned

E!rnn3%

B!?!n"e

%hee)

In"#*e

S)!)e*en)


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/;

ELEMENTS OF FINANCIAL STATEMENT The main purpose of nancial statements is to pro!ide nancial

information to the users to assist them in their economic decisions)

The nancial statement basically presents the nancial information

in such form that it is not only understandable but also useable) That

is why nancial statements present the nancial e;ects of di;erent

business e!ents that also include business transition)

*n order to enhance the quality information in nancial

statements, business transaction is grouped in di;erent classes or

categories on the basis of their economic characteristics) The board

classes or categories are called elements of nancial statements)

There are !e elements of nancial statements which are as follows)

a) Assets

b) 1iabilities

c) Cquity

d) *ncome

e) C.pense

Frame wor# went on further to e.plain which combination of

elements are used to measure nancial position, nancial

performance and changes in nancial position of the study)

• The elements directly related to the measurement of nancial

position of the entity are assets, liabilities and equity) There


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elements are presented in the statement of nancial position

which was pre!iously #nown as Balance sheet)

• The elements directly related to the measurement of nancial

performance of the entity are income and e.pense) Theseelements are presented in the income statement)

• The element directly related to the measurement of changes in

nancial position in!ol!es the elements of both balance sheet and

income statement and depends on the circumstances) So

elements that are used to measure the change in nancial

position cannot be strictly specied)


/:• Statement of changes in equity and statement of cash 8ows

collecti!ely pro!ide an insight into the changes in nancial

position of the company) And as we how both of these statements

in!ol!es mostly all of the abo!e !e items and sometimes less

therefore, elements are not mentioned in the framewor# for such

measurement)


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A STUDY ON THE FINANCIAL PERFORMANCE OF SIDCO-.

TYPES OF FINANCIAL ANALYSIS

Financial analysis can be classied into di;erent categoriesdepending upon)

*) The material used,

ii) The modus operandi of analysis

/9 On )he B!%% #$ M!)er!? U%ed

E)ern!? !n!?y%%

This analysis is done by those who are outsiders for the

business) The term outsiders include in!estors, credit agencies,

go!ernment agencies and other creditors who ha!e no access to the

internal records of the company) These persons mainly depend uponthe published nancial statements) Their analysis ser!es only a

limited purpose) The position of these analysis has impro!ed in

recent times on account of increased go!ernmental control o!er

companies and go!ernmental regulation requiring more detailed

disclosure of information by the companies in their nancial

statements)

In)ern!? !n!?y%%


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This analysis is done by persons who ha!e access to the boo#s of

account and other information related to the business) Such analysis

can therefore, be done by e.ecuti!es and employees of the

organi5ation or by o0cers appointed for this purpose by the 6o!t) or

the court under powers !ested in them) The analysis is donedepending upon the objecti!e to be achie!ed through this analysis)

-9On )he B!%% #$ M#du% O>er!nd

According this nancial analysis can also be of two typesN

9 H#r#n)!? An!?y%%

*n case of this type of analysis, nancial statements for a number of

years are re!iewed and analy5ed the current yearLs gures arecompared with the standard or base year) The analysis statementusually contains gures for two or more years and the changes areshown regarding each item from the base year usually in the form of percentage) Such an analysis ' gi!es the management considerableinsight into le!els


-/

areas of strength and wea#ness) Since this type of analysis is basedon the data from year to year rather than on one date, itLs also

termed as LDynamic AnalysisL)

9 ,er)"!? An!?y%%

*n case of this type of analysis a study is made of the quantitati!e

relationship of the !arious items in the nancial statements on a

particular date) For e.ample, the ratios of di;erent items of costs for

a particular period may be calculated with the sales for that period)Such an analysis is useful in comparing the performance of se!eral

companies in the same group, or di!isions or departments in the

same company) Since this analysis depends on the data for one

period, this not !ery conducti!e to a proper analysis of the

companyLs nancial position) *t is also called LStatic AnalysisHs it is

frequently used for referring to ratios de!eloped on one date or for

one accounting period)

*t is to be noted that both analyses' !ertical and hori5ontal' canbe done simultaneously also) For e.ample, the *ncome Statement of


34/104

a company for se!eral years may be gi!en) Jori5ontally it may show

the change in di;erent elements of cost and sales o!er a number of

years) 4n the other hand, !ertically tie, may show the percentage of

each element of cost to sales)


--

TECHNIUES OF FINANCIAL ANALYSIS

A nancial analyst can adopt one or more following techniquesK

tools of nancial analysis)

Financial

Analysis

Techniques

omparati!e

nancial

Stateme

ommonSi5e

Financial

Statemen

3atioAnalysi

s

/Analysis Trend/ercenta

ges

ashFlow

Analysis

FundFlow

Analysis


35/104

/ C#*>!r!)@e Fn!n"!? S)!)e*en)%

omparati!e nancial statements are those statements which

ha!e been designed in a way so as to pro!ide time perspecti!e to

the consideration of !arious elements of nancial position embodied

in such statements) *n these statements gures for two or more

periods are placed side by side to facilitate comparison)

Both the *ncome statement and Balance sheet can be preparedin the form of comparati!e nancial statements)

9 C#*>!r!)@e In"#*e S)!)e*en)

The *ncome Statement discloses +et prot or +et loss onaccount of operations) A comparati!e *ncome statement will showthe absolute gures for two or more periods, the absolute changefrom one period to another and, if desired, the change in terms of percentages) Since the gures for two or more periods are shown

side by side, the reader can quic#ly ascertain whether sales hasincreased or decreased, etc) Thus only a reading of data included incomparati!e income statements will be helpful in deri!ingmeaningful conclusions)


-5

9 C#*>!r!)@e B!?!n"e %hee)

omparati!e Balance sheet as on two or more di;erentiates can beused for comparing assets and liabilities and nding out any

increase or decrease in those items) The changes in periodic balance

sheet items re8ect the conduct of the business) The changes can be

obser!ed by comparison of the balance sheet at the beginning and

at the end of the period and those changes can help in forming an

opinion about the progress of an enterprise)

- C#**#n %e Fn!n"!? S)!)e*en)%


36/104

ommon si5e nancial statements are those in which gures

reported are con!erted into percentages to some common base) *n

the *ncome Statement the sale gure is assembled to be&%% and all

gures are e.pressed as a percentage of this total) *t is also #nown

as &%%O statements) ommon si5e statement includes common si5ebalance sheet and common si5e income statement)

9 C#**#n %e B!?!n"e %hee)

A statement in which balance items are e.pressed as

percentage of each asset to total of assets and percentage of each

liability total of liabilities is called common si5e balance sheet) This

statement establishes the relationship between each asset to total

!alue of assets and each liability to total of liabilities)

9 C#**#n %e In"#*e S)!)e*en)

A common si5e income statement is a statement in which each

item of e.pense is as shown as percentage of net sales) A signicant

relationship can established between items of income statement

and !olume of sales)

5 Trend Per"en)!3e%

Trend percentages are immensely helpful in ma#ing

comparati!e study of the nancial statement for se!eral years)

The method of calculating trend percentages in!ol!es the

calculation of percentage relationship that each item bears to

the same item in the base


-1year) The method of trend percentage is a useful analytical de!icefor the management since by substituting percentage for largeamountsN the bre!ity M read ability are achie!ed)

1 Fund% F?# An!?y%%

Funds 8ow analysis has become an important tool in theanalytical #it of nancial analysts, credit granting institution M


37/104

nancial managers) This is because the Balance Sheet of a business

re!eals its nancial status at a particular point of time) Funds 8ow

analysis re!eals the changes in wor#ing capital position) *t tells

about the source from which the wor#ing capital was obtained M the

purpose of which it was used)

6 C#%) ,#?u*e Pr#) An!?y%%

ost olume /rot Analysis is an important tool of prot

planning) *t studies the relationship between cost, !olume of

production, sales M prot) *t tells the !olume of sales at which the

rms will brea#'e!en, the e;ect on prot on account of !ariation in

output, selling price M cost, M nally, the quantity to be produced M

sold to reach the target prot le!el)

7 R!)# An!?y%%

This is the most important tool a!ailable to nancial analysts for

their wor#) An accounting ratio shows the relationship in

mathematical terms between to inter related accounting gures) These ratios may be compared with the pre!ious year or base year

ratios of the same rm) A comparison may also be made with the

selection rms in the same industry)


-6

CLASSIFICATION OF ACCOUNTING RATIOS


38/104


-71*2*TAT*4+S 4F F*+A+*A1 A+A1PS*S

Financial statements are based on historical costs and as

such the impact of price le!el changes in completely ignored)

They are incurring reports) The basic nature of nancialstatements is historic) These statements are neither complete

Accounting

3atios

Traditional Functional

/rotab

ility

3atios

Financi

al

3atios

Turn

o!er

3atios

ompo

site

3atios

Balanc

e sheet

3atios

/M1

AK

3atios

o!erag

e 3atios

Stabilit

y

3atios

1iquidit

y

3atios


39/104

nor e.act) They re8ect only monetary transactions of a

business) The following limitations may be noted)

• The nancial position of a business concern is a;ected by

se!eral factors'economic, social and nancial, but nancialfactors are being recorded in these nancial statements)

Cconomic and social factors are left out) Thus the nancial

position disclosed by these statements is not correct and

accurate)

• The prot re!ealed by the prot and loss account and the

nancial position disclosed by the Balance sheet cannot be

e.act) They are essentially interim reports)

• Facts which ha!e not been recorded in the nancial boo#s are

not depicted in the nancial statement) 4nly quantitati!e

factors are ta#en into account) But qualitati!e factors such as

reputation and prestige of the business with the public, the

e0ciency and loyalty of its employees, integrity of

management etc) do not appear in the nancial statement)

• 2any items are left to the personal judgment of the

accountant) For e.ample, pro!ision of depreciation, stoc#!aluation, bad debts pro!isions etc) depend on the personal

judgment of accountant)

• 4n account of con!ention of conser!ation the *ncome

Statement may not disclose true income of the business since

probable losses are considered while probable incomes are

ignored)

• The .ed assets are shown at cost less depreciation the basis

of Qgoing concern conceptQ Rone of the accounting concept)

But the !alue placed on the .ed asset may not be the same

which may be reali5ed on their sale)

• The data contained in the nancial statements are dumbN they

do not spea# themsel!es) The human judgment is always

in!ol!ed in the interpretation of statement) *t is the analyst or

user who pro!ides to those data and ma#es them to spea#)


40/104


-8

CHAPTER 0 5

A+A1PS*S A+D *+TC3/3CTAT*4+


41/104


-;

ANALYSIS AND INTERPRETATION OF RATIO

ALIUIDITY RATIOS4

1iquidity is the ability of the rm to meet its currentliabilities as they fall due) Since liquidity is basic to continuousoperations of the rm it is necessary to determine the degreeof liquidity of the rm) The nancial manager analyses thefollowing important ratios for this purpose@

/ CURRENT RATIO

urrent ratio is the relationship between current assetsand current liabilities) *t re!eals how e0ciently the rm canmeet the short term demand) urrent assets include cash inhand, debtors, bills recei!ables, short term mar#etablesecurities and in!entories) urrent liabilities include creditors,bills payable, ban# o!erdraft, pro!ision for ta.ation, unclaimeddi!idend and outstanding e.penses) urrent ratio is also calledwor#ing capital ratio) urrent ratio can be calculated by usingthe formulaN

Curren) r!)# Q Curren) A%%e)Curren) L!?)e%

Curren) r!)# #$ -4/ % )re!)ed !% de!? $#rde)er*nn3 %h#r) )er* %#?@en"y #$ )he u%ne%%

The current assets of S*D4 include in!entories, sundrydebtorHs cash and ban# balances, other current assets and loans and

ad!ances) urrent liabilities are creditors and other liabilities andpro!isions)

Curren) !%%e)%= "urren) ?!?)e% !nd "urren)

r!)# #$ SIDCO % 3@en n T!?e < /


42/104


-: T!?e 0 /CURRENT ASSETS= CURRENT LIABILITIES ANDCURRENT RATIO OF SIDCO DURING -..7


43/104


5.

- UIC' RATIO

This ratio is a measure of judging the immediate ability of

the company to pay o; its current obligations) This is calculatedby di!iding quic# assets by current liabilities) A quic# ratio of &@&is considered as a standard rate)

The quic# assets of the company include cash, debtors,

loans and ad!ances and other current assets) urrent liabilitiesinclude bill payable, creditors and other liabilities and pro!isions)

u" r!)# Q u" #r Lud A%%e)Curren) L!?)e%

The u" !%%e)= "urren) ?!?)e% !nd u" r!)# #$ SIDCO % %h#n n T!?e 0 -


44/104


5/

T!?e 0 -UIC' ASSET= CURRENT LIABILITIES AND

UIC' RATIO OF SIDCO DURING -..7


45/104

The standard !alue of the quic# ratio is &@ &) This graph showsthe company can pay o; current obligations immediately) *n the year$%%9 the quic# ratio was %)& that is increased by %)9( in $%&&)


5-

5 ABSOLUTE LIUIDITY RATIO

This ratio helps the rm to calculate the cash percentage againstthe current liabilities) This ratio is also #nown as cash position ratio)

The cash position ratio is the logical consequences of the eliminationof in!entory from the quic# ratios) Jere, the debtors are eliminatedfrom the computation of cash position ratio)

A%#?u)e Lud)y R!)#

Q C!%h M!re)!?e Se"ur)e%Curren) L!?)e%

The "!%h= "urren) ?!?)e% !nd !%#?u)e?ud)y r!)# #$ SIDCO %h#n n T!?e 0 5


46/104


55 T!?e 0 5CASH= CURRENT LIABILITIES AND ABSOLUTE

LIUIDITY RATIO OF SIDCO DURING -..7<-..8 TO -./.


47/104

The acceptable norm for this ratio is %)@&) *n $%&& theabsolute liquidity ratio is %)&) *t is not satisfactory because it ismuch lower than %))


51

B LE,ERAGE RATIOS

2any nancial analysts are interested in the relati!e use of debt and equity in the rm) These ratios measure the long termsol!ency position of the rm) The following are the importantle!erage ratios@

/PROPRIETARY RATIO

/roprietary ratio relates to the shareholders fund to totalassets) This ratio shows the long term sol!ency of the business) *t is

calculated by di!iding shareholders funds by the total assets)

Pr#>re)!ry R!)# Q Sh!reh#?der%Fund%

T#)!? A%%e)%


48/104

2Sh!reh#?der% Fund Q eu)y %h!re "!>)!? >re$eren"e %h!re "!>)!?

Re%er@e% !nd %ur>?u% 0F"))#u% !%%e)%9

T#)!? !%%e)% n"?ude !?? !%%e)% n"?udn3 3##d??2e"?udn3 "))#u% !%%e)%9 The !""e>)!?e n#r* #$ )her!)# % /45 2e .559

The %h!reh#?der% $und= )#)!? !%%e)% !nd>r#>re)!ry r!)# #$ SIDCO %h#n n T!?e 0 1


56

T!?e 0 1SHAREHOLDERS FUND= TOTAL ASSETS AND

PROPRIETARY RATIO OF SIDCO DURING -..7<-..8 TO -./.re)!ryR!)#

-..7 0-..8

-..8 0-..;

-..; 0-..:

-..: 0-./.

-1/61:.81

-1661:.81

-18;558;-

-6.;558;-

-6-;558;-

-6767/:17

-7:/16866

5111/7;;.

1-.:1/8-.

6.;7-6/8;

.:1

.:/

.8/

.6:

.1:


49/104

-./. 0-.//

S#ur"e4 C#*>?ed $r#* Annu!? Re>#r)

In)er>re)!)#n4 *n $%%E 7 $%%9 the proprietary ratio was %)G( and decreasedto %)(G in $%&&) *t shows that the company is better to meet longterm sol!ency)


57

-FIED ASSET TO NET ORTH

This ratio shows the relationship between .ed assets

and shareholders fund) The purpose of this ratio is to nd outthe percentage of the owners fund in!ested in .ed assets)


50/104

Fed A%%e)% )# Ne) #r)h Q Fed

A%%e)% Ne)

#r)h #r Sh!reh#?der% Fund

I$ )he r!)# % 3re!)er )h!n #ne= ) *e!n% )h!)"red)#r% $und% h!@e een u%ed )# !"ure ! >!r) #$ )he ed !%%e)%

The ed !%%e)%= Ne) #r)h #r Sh!reh#?der%Fund #$ SIDCO %h#n n T!?e 0 6


58 T!?e 0 6

FIED ASSETS= NET ORTH OR SHAREHOLDERSFUND OF SIDCO DURING -..7


51/104


52/104

C ACTI,ITY RATIOS

The published accounts of a rm also pro!ide a useful data for themeasurement of the companyHs le!el of acti!ities) These ratios are

also called as >Turno!er ratios?) This ratio highlights upon theacti!ity and operational e0ciency of the business concern) Acti!ityratios measure how e0ciently the assets are employed by the rm)

These ratios indicate the speed with which assets are beingcon!erted into sales) These ratios are also called as e0ciency ratios)

/FIED ASSETS TURNO,ER RATIO

This ratio indicates the e.tent to which the in!estments in.ed assets contribute towards sales) *f compared with a pre!ious

year, its indicate whether the in!estment in .ed assets has been judicious or not) The ratio is calculated as follows@

Fed A%%e)% Turn#@er R!)# Q Ne)S!?e%

FedA%%e)%

The Ne) %!?e%= Fed A%%e)% #$ SIDCO %h#n nT!?e 0 7


53/104


5:

T!?e 0 7

NET SALES= FIED ASSETS FUND OF SIDCODURING -..7


54/104


1.

DPROFITABILITY RATIOS

A business rm is basically a prot earning organi5ation) The income statement of the rm shows the prot earned by therm during the accounting period) /rotability is an indication of the e0ciency with which the operations of the business arecarried on) /oor operational performance may indicate poor sales

and hence poor prots) The prot gure has, howe!er, di;erentmeanings to di;erent parties interested in nancial analysis) Thefollowing are the important protability ratios@ /NET PROFIT RATIO

This ratio is also called as the net prot to sales or netprot margin ratio) *t is determined by di!iding the net incomeafter ta. to the net sales for the period and measures the protper rupee of sales)

Ne) Pr#) R!)# Q Ne) Pr#) /.. S!?e%

In )h% "#n)e)= )he )er* ne) >r#) *e!n% “ne)>r#) !$)er n)ere%) !nd )! u) e$#re d@dend”

The Ne) >r#)= S!?e% #$ SIDCO %h#n n T!?e 08


55/104


1/

T!?e 0 8NET PROFIT= SALES OF SIDCO DURING -..7<

-..8 TO-./.r#) /.. S!?e% Ne) >r#) R!)#

-..7 0-..8

-..8 0-..;

-..; 0-..:

-..: 0-./.

-./. 0-.//

/7./-81:..

1567;6...

--:;161..

5158.:7..

/;5:77;6..

6/1765.1:

6/877;86/

6.656685;

;:./;588:

:/86571;;

5//

.;1

.16

.5;

-..


In)er>re)!)#n4 *n $%%E 7 $%%9 net prot ratio was )&& decreased to %): in$%%G 7 $%&%) *n $%%G it increased to $)%%) +et prot ratio increasesthe o!erall protability of the concern) *n $%&& it is satisfactory)


56/104


1- -OPERATING RATIO4perating ratio is an indicati!e of the proportion that the cost of

sales bears to sales) Iost of salesH includes direct cost of goods soldas well as other operating e.penses) *t is an important ratio that issued to discuss the general protability of the concern) *t iscalculated by di!iding the total operating cost by net sales) Totaloperating e.penses include all costs li#e administration, selling anddistribution e.penses, etc) but do not include nancing cost andincome ta.)

O>er!)n3 R!)# Q 2C#%) #$ 3##d% %#?d O>er!)n3 e>en%e%9/..

Ne) S!?e%

The C#%) #$ 3##d% %#?d #>er!)n3 e>en%e%=Ne) S!?e% #$ SIDCO %h#n n T!?e 0 ;


57/104


15

T!?e 0 ;COST OF GOODS SOLD OPERATING

EPENSES= NET SALES OF SIDCO DURING-..7


58/104

*n $%%E 7 $%%9 operating ratio was G:)9O decreased toG)EOin$%&% 7 $%&&) *t shows the general protability of the concern) 1owerthe ratio shows the more protable are operations indicating ane0cient control o!er cost and an appropriate selling price) *t is oneof most important e0ciency ratio)


11

5RETURN ON TOTAL ASSETS

/rotability can be measured in terms of relationship between netprot and total assets) This ratio is also #nown as return on grosscapital employed) *t measures the protability of in!estment) Theo!erall protability can be #nown by applying this ratio)

Re)urn #n T#)!? A%%e)% Q Ne) Pr#) /.. T#)!? A%%e)%

The )er* “Ne) >r#)” %)!nd% $#r “Ne) >r#)e$#re n)ere%)= )! !nd d@dend”


59/104


60/104

In)er>re)!)#n4 *n $%%E 7 $%%9 the return on total asset was %)%E, increased

up to %):& in $%%G 7 $%&%) Then it increased )G in $%&&) *tmeasures the protability of in!estment) The current amount issatisfactory)


17

1RETURN ON SHARE HOLDERS FUND This ratio shows the rate of prot on share holdersH

fund) *t relates the prot a!ailable for the share holders to theirtotal in!estment) *t is also #nown as Iprot on net worthH ratio)

Re)urn #n %h!re h#?der% $und Q 2Ne) >r#) !$)er

n)ere%) !nd )!9 /.. Sh!reh#?der% $und

here= %h!reh#?der% $und Q Eu)y %h!re "!>)!? >re$eren"e %h!re "!>)!? Re%er@e% !nd %ur>?u%

0 F"))#u% !%%e)%


61/104

The Ne) >r#) !$)er n)ere%) !nd )!=Sh!re h#?der% $und #$ SIDCO %h#n n T!?e 0/.


18

T!?e 0 /.NET PROFIT AFTER INTEREST AND TA=

SHARE HOLDERS FUND OF SIDCO DURING-..7


62/104

-..7 0-..8

-..8 0

-..;

-..; 0-..:

-..: 0-./.

-./. 0-.//

/7-7/.87..

1.:5-68..

-/1-/;5..

5/:.758..

/;-58/1...

-1/61:.81

-1661:.81

-18;558;-

-6.;558;-

-6-;558;-

785

/77

.;7

/-8

8-/


In)er>re)!)#n4 *n $%%E 7 $%%9 the return on share holderHs fund was E)9, itincreased to 9)$& in $%&% 7 $%&&) *t shows the rate of prot on shareholderHs fund) *t relates the prot a!ailability of share holderHs totalin!estment) The current rate is satisfactory)


1;

Eh) N#4 /Eh) %h#n3 >#%)#n #$ CURRENT RATIO


63/104

-..7 < -..8 -..8 < -..; -..; < -..: -..: < -./. -./. < -.//

.

./

.-

.5

.1

.6

.7

.8

.;

Curren) R!)#


1: Eh) N#4 -

Eh) %h#n3 >#%)#n #$ UIC' RATIO


64/104

.

./

.-

.5

.1

.6

.7

.8

.;

u" R!)#


6.

Eh) N#4 5


65/104

Eh) %h#n3 >#%)#n #$ ABSOLUTE LIUIDITY

RATIO

.

..-

..1

..7

..;

./

./-

./1

./7

./;

A%#?u)e Lud)y R!)#


6/


66/104

Eh) N#4 1

Eh) %h#n3 >#%)#n #$ PROPRIETARY RATIO

.

./

.-

.5

.1

.6

.7

.8

.;

.:

/

Pr#>re)!ry R!)#

A STUDY ON THE FINANCIAL PERFORMANCE OF SIDCO6-


67/104

Eh) N#4 6

Eh) %h#n3 >#%)#n #$ FIED ASSET TO

NETORTH

.

../

..-

..5

..1

..6

..7

..8

..;

..:

./

Fed A%%e) T# Ne)#r)h


68/104


65

Eh) N#4 7

Eh) %h#n3 >#%)#n #$ FIED ASSETTURNO,ER RATIO

.

6

/.

/6

-.

-6

5.

56

1.

Fed A%%e) Turn#@er

R!)#


69/104


61

Eh) N#4 8

Eh) %h#n3 >#%)#n #$ NET OPERATING

RATIO

.

.6

/

/6

-

-6

5

56

Ne) Pr#) R!)#


70/104


66

Eh) N#4 ;

Eh) %h#n3 >#%)#n #$ OPERATING RATIO

;1

;7

;;

:.

:-

:1

:7

:;

/..

O>er!)n3 R!)#


71/104


67

Eh) N#4 :

Eh) %h#n3 >#%)#n #$ RETURN ON TOTAL

ASSET


72/104

.

/

-

5

1

6

7

8

Re)urn On T#)!? A%%e)


68

Eh) N#4 /.

Eh) %h#n3 >#%)#n #$ RETURN ONSHAREHOLDERS FUND


73/104

.

/

-

5

1

6

7

8

;

Re)urn On Sh!reh#?der%

Fund


6;


74/104

42/A3AT*C BA1A+C SJCCT

CB /

CB - CB 5

CB 1

CB 6


6:

CB /


75/104

C#*>!r!)@e !?!n"e %hee) durn3 )he ye!r -..7


76/104


7. CB -

C#*>!r!)@e !?!n"e %hee) durn3 )he ye!r -..8


77/104


7/

CB 5

C#*>!r!)@e !?!n"e %hee) durn3 )he ye!r -..;


78/104

utili5ed to purchase .ed assets) *ncrease in current asset shows thesatisfactory liquidity position of the rm which in turn a;ect the wor#ingcapital positi!ely) The o!erall nancial position of the company is satised)


7-

CB 1

C#*>!r!)@e !?!n"e %hee) durn3 )he ye!r -..:


79/104

In)er>re)!)#n4 The current asset shows an upward trend whilecomparing the data in $%%G'$%&%,it results in a increase percentage of

&G)99 percentage which amounts to G$G9G$&,in turn increase wor#ingcapital) Fi.ed also shows an increase amount of &E%&(: depicted thepercentage of E)E )*t is being interepted that long term funds are utili5edto purchase .ed assets) *ncrease in current asset shows the satisfactoryliquidity position of the rm which in turn a;ect the wor#ing capitalpositi!ely) The o!erall nancial position of the company is satised)


75


80/104

CB 6 Ye!r Endn3

5/%) *!r"h

In"re!%e29 De"re!%e2


81/104


71

42/A3*T*C *+42CSTATC2C+T

//

/-

/5

/1

/6


82/104


83/104

Le%% 4

In"#*e )! -1;5-8 -756:5


84/104

Pr#r >er#de>en%e

Add4

Pr#r >er#dn"#*e

/56-;:1- 1/;;77- :51.-;. 7:.5

Pr#) e$#re )! 1567;6. --:;161 -.6;5:7 18-1

Le%% 4

In"#*e )! -756:5 /67-8/ /.85-- 1.8/

Pr#) !$)er )! 1.:5-68 -/1-/;5 /:6/.81 1877

COMPARITI,E INCOME STATEMENT DURING THE YEAR -..8re)!)#n4


78

/-

Ye!r endn3 5/%)

*!r"h

In"re!%e29De"re!%e

2


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e>en%e : -

O>er!)n3 >r#)

2GPer#de>en%e

81;7881 5.56/7; 116/7.7 6:16

Add4

Pr#r >er#d

n"#*e1/;;77- 17/.:7;


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Gr#%% >r#)4

;/5-87;-

5

;1.61;;.

.

/--.8.-.

;

/6;68:/8

/

en%e

/-.-.;:/

-

/5:15./:

5

r#)

2GPer#d

n"#*e17/.:7;

/7./58 116.;5/ :76-

Pr#) e$#re )! 5158.:7 /;-7.66.


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Ye!r endn3 5/%)

*!r"h

In"re!%e29De"re!%e

2


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*n $%&& the operating e.pense was $)(GO and the operatingprot was $)O) *n pre!ious year operating prot was $)9O) *t

shows slight impro!ement in the pro


8.

CHAPTER 0 1

F*+D*+6S, S66CST*4+S M4+1S*4+


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8/

FINDINGS

The current ratio of "erala S*D4 re!eals that the management of

current assets and current liabilities are satisfactory) *t representsthe impro!ement of liquidity position of the company)

uic# ratio shows the increasing trend) *n the year $%%: the quic#

ratio was %)9O that is increased in %)9GO in $%&$)

Absolute liquid ratio re!eals that the company has not

satisfactory) 2ost of the year the company has not achie!edstandard norm of %)@ &)

/roprietary ratio re!eals that the company has good sol!ency

position) *t shows the fa!ourable position of the company)

Fi.ed assets to net worth ratio shows the ratio is less than one, so

the creditor fund ha!e not used to acquire a part of the .edasset)

Fi.ed asset turno!er ratio shows a decreasing trend in $%&& 7

$%&$)

3eturn on share holderHs fund re!eals that the prot on share

holderHs fund) The current rate is satisfactory)

+et prot ratio re!eals that the company is not satisfactory) *n

$%&$ net prot decreased &)&&O)

4perating ratio of the company re!eals that the fa!ourable

condition of the company) 1ow rate of operating ratio indicatese0cient control o!er cost)

The comparati!e balance sheet re!eals that the fa!ourablenancial position of the company@


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• 1iquidity position of the company is fa!ourable)

• -or#ing capital of the company is fa!orable)

• Sol!ency of the company also fa!ourable)

• The o!erall nancial performance of the

company)


8-


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85

SUGGESTIONS

Formulate adequate policies and procedures to impro!e the

sol!ency and nancial le!erage of "erala S*D4)

tili5e the secured and unsecured loans pro!ided by !arious

nancial institutions, whether long term or short term)


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81

CONCLUSION

The study on the >nancial performance of S*D4? wasconducted to analyse the companyHs nancial position, protabilityand performance o!er the years) The study incorporated themethods of 3atio analysis, omparati!e balance sheet, omparati!eincome statement) 1iquidity position and sol!ency has to impro!ingthe concern) The objecti!e of the study is to analyse protability,liquidity, sol!ency and le!erage of the company) The liquidityposition is satisfactory condition)


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86

CHAPTER 0 6

APPENDI


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87

Schedul

es

As at &'%'

$%%:

As at &'%'

$%%9* )S43CS 4F F+D &)SJA3C J41DC3HS F+DS

Ra Share apital A $$9EG&(E( $$:&(E(Rb 3eser!es and surplus B $%&($&: $%&E9E&%

-18;558;- -1661:.81 $)14A+ F+DS

Ra Secured 1one $EE:Rb nsecured 1one D &%G&9(G( &%EGG:$9

/.:6/81:1 /.;-57/:6 T4TA1 56856/-87 5658;6-7:

**) A//1*AT*4+ 4F F+DS&) F*UCD ASSCTS C

Ra 6ross Bloc# (EG& &9%9((:Rb 1ess Accumulated Depreciation EGEGE $$E%&Rc +et Bloc# /8:5::1; /71;/156

Rd apital -or# in /rogress :$G(%&/;87:51: /71;/156

$)*+CST2C+TS F ;/;5.. 6/;5.. )33C+T ASSCTS,14A+S M

ADA+CS

6

A) 33C+T ASSCTSRa *n!entories &$9&$%&% &$9($G(Rb Sundry Debtors $&&&%%($ &99(G%9ERc 3ent M -ater charges

3ecei!able

&$99%GE &&$9:(G

Rd ash and Ban# Balances :9%%: $:G$(G&

5-671865/ -6-7765-. B) 14A+S M ADA+CS (:$%9E9G E$%G:$&

585;66-// 5/186:/1/1ess@ 33C+T 1*AB1*T*CS M

/34*S*4+S

J

Ra urrent 1iablities 9GGG:E $(&$:(&Rb /ro!isions GGG%&&E G:(9%E

186:1::6- 1/::81/68 +CT 33C+T ASSCTS 6'J R&%$%G(9($ R&%$&%&E ()/34F*T M 14SS A4+T R14SS R(G::E: R(($%%%%

T4TA1 56856/-87 5658;6-7:

'ERALA SMALL INDUSTRIES DE,ELOPMENT CORPORATION LIMITED=THIRU,ANANTHAPURAM


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BALANCE HEET A AT 31-03-2008


88

'ERALA SMALL INDUSTRIES DE,ELOPMENT CORPORATION LIMITED=

THIRU,ANANTHAPURAM

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 5/


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Ne) Pr#) 2 L#%%9 $#r )he ye!r --:;161 1567;6. Ta.es 4n *ncomeFringe Benets Ta. &E$9& $EG

Ne) Pr#) 2 L#%%9 !$)er )! $&($&: (%G$9

Accumulated 1osses Brought Forward R(($%%%& R((E%G:%9B!?!n"e C!rred F#r!rd )#

B!?!n"e Shee)

215:;6;57;9 211-...66.

9

E!rnn3% Per Sh!reBasic Carnings /er Share &% Diluted Carnings /er Share G &:


8;

Schedul

es

As at &'%'

$%%G

As at &'%'

$%%:* )S43CS 4F F+D &)SJA3C J41DC3HS F+DS

Rc Share apital A $%EG&(E( $$9EG&(E(Rd 3eser!es and surplus B $%&($&: $%&($&:

-6.;558;- -18;558;-

$)14A+ F+DSRe Secured 1one &&&&(Rf nsecured 1one D &&G%G &%G&9(G(

/-/./;6.: /.:6/81:1 T4TA1 58/;6--:/ 56856/-87

**) A//1*AT*4+ 4F F+DS$) F*UCD ASSCTS C

Rc 6ross Bloc# E%(G9 (EG&Rd 1ess Accumulated Depreciation 9&:(G EGEGERg +et Bloc# -55/-7.- /8:5::1;Rh apital -or# in /rogress :$G(%& :$G(%&

-1/1-..5 /;87:51: $)*+CST2C+TS F ---1-5.. ;/;5.. )33C+T ASSCTS,14A+S M

ADA+CS

6

A) 33C+T ASSCTSRc *n!entories &$9$%%(( &$9&$%&%Rd Sundry Debtors $G9:(&& $&&&%%($Re 3ent M -ater charges

3ecei!able

&((:&(9 &$99%GE

Rf ash and Ban# Balances 9&9$9$ ::9&9EE 5:78::8/8 5//-:76--

B) 14A+S M ADA+CS &%$:$% E$:E::118;-8:-- 585;66-//


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1ess@ 33C+T 1*AB1*T*CS M

/34*S*4+S

J

Rc urrent 1iablities (($&GE:$ 9GGG:ERd /ro!isions &%(:%9G: GGG%&&E

66:.-8776 186:1::6-

+CT 33C+T ASSCTS 6'J R&&&&GG9( R&%$%G(9($ ()/34F*T M 14SS A4+T R14SS R(EEE99& R(G::E:

T4TA1 58/;6--:/ 56856/-87


THIRU,ANANTHAPURAM



8:


THIRU,ANANTHAPURAM

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED

5/


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Sta; C.penses 1 G$:E$: :$$GE:4perati!e, Administrati!e and 4ther

C.penses

2 &9(%%%( &9&($(

Finance harges + :$%($(G 99%%:Depreciation &9($%9& &E(&(

TOTAL :551;6851 61858:5-:

/34F*TKR14SS /;7/-:7 66:7677/rior /eriod C.penses %&E: 9(:E99(/rior /eriod *ncome (E&%GE: (&::EE$

Ne) Pr#) 2 L#%%9 $#r )he ye!r 5158.:7 --:;161 Ta.es 4n *ncomeFringe Benets Ta. $(E(G &E$9&

Ne) Pr#) 2 L#%%9 !$)er )! &G%E9 $&($&:

Accumulated 1osses Brought Forward (G::E: R(($%%%&B!?!n"e C!rred F#r!rd )#

B!?!n"e Shee)

215777885.9 215:;6;57;

9

E!rnn3% Per Sh!reBasic Carnings /er Share &)&G &%Diluted Carnings /er Share &()%& G


;.

Schedul

es

As at &'%'

$%&%

As at &'%'

$%%G* )S43CS 4F F+D &)SJA3C J41DC3HS F+DS

a Share apital A $$EG&E( $%EG&(E(b 3eser!es and surplus B $%&($&: $%&($&:

-6-;558;- -6.;558;-

$)14A+ F+DSa Secured 1one ($:G:E &&&&(b nsecured 1one D &$$$:G$G: &&G%G

/--8/;-;1 /-/./;6.:TOTAL 58666-.77 58/;6--:/

**) A//1*AT*4+ 4F F+DS& F*UCD ASSCTS C

a 6ross Bloc# E:E$EG E%(G9b 1ess Accumulated Depreciation G&%$$( 9&:(Gc +et Bloc# -187..16 -55/-7.-d apital -or# in /rogress G:GE :$G(%&

-681511/ -1/1-..5 $)*+CST2C+TS F 5.... ---1-5..


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)33C+T ASSCTS,14A+S M

ADA+CS

6

A) 33C+T ASSCTSa *n!entories &(&((:E( &$9$%%((b Sundry Debtors E(9(( $G9:(&&

c 3ent M -ater charges3ecei!able

&E$EE%(: &((:&(9

d ash and Ban# Balances :EGGE$:% 9&9$9$ 1;-;;/858 5:78::8/8 B) 14A+S M ADA+CS :%&99E &%$:$%

675./:185 118;-8:--1ess@ 33C+T 1*AB1*T*CS M

/34*S*4+S

J

a urrent 1iablities (9$G:&:: (($&GE:$b /ro!isions :(9$& &%(:%9G:

75/78/15: 66:.-8776

+CT 33C+T ASSCTS 6'J RE:E&GEE R&&&&GG9( ()/34F*T M 14SS A4+T R14SS 21/;15.6:/9 215777885/9

TOTAL 58666-.77 58/;6--:/


THIRU,ANANTHAPURAM



;/


THIRU,ANANTHAPURAM

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED

5/


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Jire /urchase *nterest*nterest on Ban# Deposit and 4ther

Ad!ances

RTDS +*11

%(::9 &9%9&

4ther *ncome V $%(%9&9 &$(E&9(%

C.cess /ro!ision -ritten Bac# $(::99 $%9&(&TOTAL :::/-8:8/ :56518.5/

EPENDITUREost 4f 6oods Sold K2aterial onsumed " :(%(::%% :&$9E:$Sta; C.penses 1 &%&G99E$ G$:E$:4perati!e, Administrati!e and 4ther

C.penses

2 $E:G$%: &9(%%%(

Finance harges + :$(:EG :$%($(GDepreciation $:( &9($%9&

TOTAL :8::8;::5 :551;6851

/34F*TKR14SS /:/1;:8; /;7/-:7/rior /eriod C.penses &%(:E %&E:/rior /eriod *ncome &E%&9 (E&%GE:

Ne) Pr#) 2 L#%%9 $#r )he ye!r /;-7.66. 5158.:7 Ta.es 4n *ncomeFringe Benets Ta. $(&% $(E(G

Ne) Pr#) 2 L#%%9 !$)er )! &:$9&(% &G%E9

Accumulated 1osses Brought Forward (EEE99& (G::E:

B!?!n"e C!rred F#r!rd )#

B!?!n"e Shee)

21/;15

.6:/9

215777885.

9

E!rnn3% Per Sh!reBasic Carnings /er Share 9G)E& &)&GDiluted Carnings /er Share 9:)G: &()%&


;-

Schedul

es

As at &'%'

$%&&

As at &'%'

$%&%* )S43CS 4F F+D &)SJA3C J41DC3HS F+DS

c Share apital A $9(EG&(E( $$EG&(E(d 3eser!es and surplus B $%&($&: $%&($&:

-:1;558;- -6-;558;-

$)14A+ F+DSe Secured 1one &9%&$ ($:G:E


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f nsecured 1one D &E:E9$$& &$$$:G$G:/7;;16511 /--8/;-;1

TOTAL

17578:/-6

58666-.77

**) A//1*AT*4+ 4F F+DS

$ F*UCD ASSCTS Cc 6ross Bloc# E9:%:G: E:E$EGd 1ess Accumulated Depreciation (&9&$&9 G&%$$(g +et Bloc# -677;6;/ -187..16h apital -or# in /rogress E%((%$( GG$%G

;7//57.6 -68/:-61 $)*+CST2C+TS F 6/;5.. 6/;5.. )33C+T ASSCTS,14A+S M

ADA+CS

6

A) 33C+T ASSCTSc *n!entories &:%:: &(&((:E(

d Sundry Debtors ((%%:EG G(G:&%e 3ent M -ater charges

3ecei!able

&G$((%%9 &E$EE%(:

f ash and Ban# Balances &E$E9(E% :(%9$9 71.176:/: 6.:11811: B) 14A+S M ADA+CS &&:9G$&E E$$&&$E

86:-6:/56 6675;585:1ess@ 33C+T 1*AB1*T*CS M

/34*S*4+S

J

c urrent 1iablities 9%&:$%99 E:9Gd /ro!isions :((:$:9& :(9$&

8;75.5711 71.867::. +CT 33C+T ASSCTS 6'J R$9%((%G RE:G::(& ()/34F*T M 14SS A4+T R14SS 21.1.:/8-:9 21/;5.-:-89

TOTAL 17578:/-6 58666-.77


THIRU,ANANTHAPURAM



;5


THIRU,ANANTHAPURAM


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;1


;6


;7

CHAPTER 0 7


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B*B1*463A/JP

BIBLIOGRAPHY

/ M!n!3e*en) A""#un)n3 < 'GC

NAIR- C#*>!ny D!)! B!%e5 Re%e!r"h Me)h#d#?#3y < LR POTTI1 Annu!? Re>#r) #$ SIDCO6 M!3!ne% !nd Pu?"!)#n%

7 C#*>!ny e%)e

Project Reoprt on SIDCO 2010 - 2013 (2)

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Transcript of Project Reoprt on SIDCO 2010 - 2013 (2)