A STUDY ON FINANCIAL SOUNDNESS AND OPERATIONAL ANALYSIS ON
DEEP VALUE TECHNOLOGIES
BY
H. RAMAKRISHNAN
(REG.NO: A7101PBA3087)
OF
INSTITUTE OF DISTANCE EDUCATION
UNIVERSITY OF MADRAS
A PROJECT REPORT
Submitted to the
FACULTY OF MANAGEMENT SCIENCE
In partial fulfillment of the requirement
For the award of the degree
OF
MASTER OF BUSINESS ADMINISTRATION
IN
FINANCE
JUNE 2009
ACKNOWLEDGEMENT
I express my thanks to Mr. VENKATRAMANAN general manager (finance) of DVT INDUSTRIES providing me an opportunity to work on this project.
I gratefully thank of PROF. SRIRAM, M.COM, M.A, M.PHIL, and PHD., Director and staff members for helping me with this research work and for their valuable suggestions and guidance to complete this project report successfully.
I gratefully thank to MR. NARASIMHAMOORTHY , MFM, my internal guide who shared infinite interest and helped me at all time with valuable suggestions which enabled me to carry out my research work with great confidence and enthusiasm.
PREFACE
The institutional training, which is an integral part of the corporate secretayship course, plays an important role to build knowledge of the student.
The institutional training is a glorious opportunity for the student to gain Experience the actual application of their subjects in various fields .There is a difference between a theoretical concept and its practical application.
This training helps in bringing the gap closer between understanding the conceptual knowledge and applying it in a practical way.
The students have benefited much them selves with the practical exposure of appraising in different functional areas like finance and marketing. This study is very useful for their future career.
MANAGEMENT INFORMATION
SYSTEM
MIS reviews current roles,
Planning evaluates next goals,
Internal Audit assesses that rules are met,
Compliance handles the Regulatory net,
CCU advises cost trends,
Distribution Payouts handles Sales spends,
EPU keeps customers thrilled,
Investment Operations measures the coffers filled,
Accounts provides the overall view,
That’s the 9-jewels team for you;
The CFO is at the helm,
Now, let’s get to know each of them!!!
Planning & MIS – Monitoring of Organization performance - Sales, Quality, Trends - on a continuous basis. With insights into MIS, socio economic factors & competitor behavioral patterns, They contribute to sales targets, strategic initiatives, projected branches, projected work force…the road ahead!!!
Internal Audit – Risk Management, Business Continuity Plan, Best practices, policy manuals are not mere words on paper…adhere to them. They ensure ‘Practice what you Preach’!!!
Compliance – They ensure that every action is within the regulatory framework!!!
CCU – They ensure that every rupee is spent economically, prudently, cost effectively!!!
Distribution Payouts – They roll out commission payouts, referral, bonuses, contest spends & effectiveness…basically the sales goodies!!!
EPU – Cost discipline, expense processing, vendor payments, reimbursements, salary payouts…we handle E-TRACK!!!
Investment Operations – They being the custodian of investments, benchmark our performance with the best in the industry. We manage the cash flow!!!
Accounts – Financial Accounting, Expense provisioning, Income Accruals…They strive on the excellence & transparency of our systems & controls, to keep the auditors, customers & shareholders assured that the financial story is said right!!!
Driven by sheer professionalism, They strive relentlessly towards their Organizational Vision.
Together we can…and will make a difference!!!
GENERAL
INTRODUCTION:
In present day economy, finance is defined as the provision of money at time when it required. Every enterprise whether it is big or small, needs finance to carry on its operation and to achieve its target. In fact finance is so indispensable today. It is the life-blood of any finance, no enterprise can possible accomplish its objectives.
The basis for financial planning and analysis is financial information. Financial information is needed to project, compare and evaluate the firms learning ability. It is also required to aid in economic decision making investment finance decision making.
The financial information of an enterprise is contained in the financial statement or annual reports. It contains summarized information of the firms financial affairs, organized systematically. They should be prepared very carefully and contain as much information as possible because they very useful to judge the financial efficiency of the company.
After duly recognizing the importance financial analysis, the topic has been chosen as the focus of project. It analysis the various facts like ratio, trend percentage, fund flow analysis, comparative and common size balance sheet of DVT INDUSTRIES.
Objectives of analysis and interpretation:
The users of financial statements have definite objectives to analyze and interpret. Therefore, there are variations in the objectives of interpretation by various classes of people. However, there are certain specific and common objectives
Ratio analysis:
An analysis of financial statement based on ratios is known as ratio analysis. A ratio is a mathematical relationship between two or more items taken from the financial statements. Ratio analysis is the process of computing, determining, and presenting the relationship of items. It also includes comparison and interpretation of ratios and using them as basis for the future projections, ratio analysis is helpful to management and outsiders to diagnose the financial health of a business concern. It helps in measuring the profitability, solvency, and activity of a firm.
Current ratio:
The ratio of current assets to current liabilities is called ‘current ratio’. In order to measure the short-term liquidity or solvency of a concern, comparison of current assets and current liabilities is inevitable. Current ratio indicates the abilities of a concern to meet its current obligations as and when they are due for payment.
Formula:
Current ratio= Current assets
Current liabilities
The term current assets includes debtors, stock, bills receivables, bank and cash balances, prepaid expenses, income due and short-term investments.
The term current liabilities includes creditors, bank overdraft, bills payables, outstanding expenses, income received in advance, etc.
Fixed assets ratio:
The ratio establishes the relationship between fixed assets and long-term funds. The objective of calculating this ratio is to ascertain the proportion of long-term funds invested in fixed assets. The ratio is calculated as given below:
Formula:
Fixed assets ratio= Fixed assets
Long-term funds
The ratio should not generally be more than ‘1’ if the ratio is less then one it indicates that a portion of working capital has been financed by long-term funds. It is desirable in that part of working capital is core working capital and it is more or less a fixed item.
Liquid ratio:
This ratio is also called Quick or Acid test ratio. It is calculated by comparing the quick assets with current liabilities.
Formula:
Liquid ratio= Quick assets or liquid assets
Current liabilities
Quick or liquid assets refer to assets which are quickly convertible into cash current assets other than stock and prepaid expenses are considered as quick assets.
Capital turnover ratio:
Managerial efficiency is also calculated by establishing the relationship between cost of sales or sales with the amount of capital invested in the business.
Formula:
Capital turnover ratio = Sales
Capital employed
Higher ratio indicates higher efficiency and lower ratio indicates ineffective usage of capital.
Total assets turnover:
Some analysis likes to compute the total assets turnover in addition to or instead of the net assets turnover. This ratio shows the firm’s ability in generating sales form all financial resources committed total assets.
Formula:
Sales
Total assets turnover= Total assets
Comparative financial statements:
This is yet another technique used in financial statement analysis. This statements summaries and present related data for a number of years, incorporating therein changes (Absolute and relative) in
Individual items of financial statements. These statements normally comprise comparative balance sheets, comparative profit and loss account, and comparative statements of change in total capital as well as in working capital. These statements help in making inter-period and inter-firm comparisons and also highlight the trends in performance efficiency, and financial position.
Common size statements:
Common size statements indicate the relationship of various items with some common items, (expressed as percentage of the common item). In the income statements, the sales figure is taken as basis band all other figures are expressed as percentage of sales. Similarly, in the balance sheet the total assets and liabilities is taken as base and all other figures are expressed as percentage of this total.
The percentages so calculated are compared with corresponding percentages, in other periods or other firms and meaningful conclusions are drawn. Generally, a common size income statement and common size balance sheet is prepared.
Trend analysis:
‘Trend’ signifies a tendency and as such the review and appraisal of tendency in accounting variables are nothing but trend analysis. Trend analysis is carried out by calculating trend ratios (percentage) and or by plotting the accounting data on graph paper or chart. Trend analysis is significant for forecasting and budgeting. Trend analysis discloses the changes in financial and operating data between specific periods.
Analysis of current assets and current liabilities:
In order to know the current position of the company it is necessary to analyze the current assets and current liabilities of the company. The company should have sufficient current assets to meet it current obligations. The company’s position will be good when there is a short term liability. The analysis helps us to know the position of the current assets and current liabilities of the company and the position of the company too
Current assets:
Current assets are those resources of a firm which are help in the form of cash or expected to be converted in to cash with in the accounting period or the operating cycle of the business, these are also called as liquid assets, these consists of cash in hand, cash at bank, inventory, bills receivable and sundry debtors. The items that are included in the current assets are cash and bank balance, deposits and advances closing stock and sundry debtors etc.
Current liabilities:
Current liabilities are debts payable with in an accounting period current assets are converted into cash to play current liabilities, sometimes new current liabilities recovered may be incurred to liquidate the existing ones. The typical examples of current liabilities are creditor’s bills payables bank overdraft and outstanding expenses. The items that are included in the current liabilities are creditors and provisions of audit fees payable.
Limitation of financial statements:
(i) Information shown in financial statements is not precise since it is based on practical experience and the conventions and rules developed there from.
(ii) Financial statements do not always disclose the correct financial position of business concerns as they are influenced by the personal opinions, judgment, subjective views and whims of accountants of each concern.
(iii) Information disclosed by profit and loss account may not be real profit as many items shown in the profit and loss account are not real but estimated.
(iv) Financial statements are dumb, because they cannot speak themselves. The statements require further detailed analysis and interpretation.
DEEP VALUE TECHNOLOGY INDUSTRIES
We are Manufactures and traders of all kind of gold Jewelry, imitation Jewelry boxes.Our products can be classified broadly in categories such as plastic, paper, hard board, rexin and velvet boxes, which add value to the basic ornament.
“We work on principle of best services and quality”. We are also specialized in manufacturing exclusive branded and standardized products as per the customer requirement depending on the order quantity.
At present we serve few major players in the market hence we would like to expand our customer port folio with a motive to grow together.
INFRASTRUCTURE: - At present we have a sound infrastructure with 4 well maintained injection molding machines and a mixture of 20 skilled and unskilled workers spread over an area of approx 2000 Sq feet and a conducive environment to work in.
We also consider our suppliers and customers as our infrastructure, since a business which follows almost zero lead time and considers service and quality as a basic priority needs to do so.
We have a manufacturing capacity of approximately 7.5 tones of plastic molded boxes per month with different shapes and sizes. The above capacity is just 60% of our optimum capacity which will enable us to expand our business without major capital expenditure. This benefit can be passed on to our customers. Our products at present are also being exported to various countries through distributors.
The rapport we maintain with our customers and suppliers has played a major role in our success.
So we say come and experience “THE EXPERIENCE” and give us a chance to serve you as we believe in growing together.
“LET’S GROW TOGETHER”
History: - The firm was established just 5 years back. It is basically a sister concern to SUNSHINE PLASTICS which has already made its presence felt in the Molding Industry.
The basic idea of this business evolved 3 decades ago, when a fellow from a small town in Tamil Nadu decided to leave his home town with a vision to explore the world. After all kind of struggle in all possible cities, this person decided to come to Mumbai, which I believe is/ was heaven for hardworking people like him. In 1977 the business evolved with some few numbers of hand molding machines. Then it later added on with an automatic machine in1984. This was the year ‘SUNSHINE PLASTIC” was born. Initially with limited resources the company used to deal in labor jobs. It made a mark for itself in molding all kind of material which no one could even think of in those days, as it involved a high amount of risk and effort.
Then in the early 90’s the company got a major break through when it decided to enter the field of Imitation jewellery which was growing leaps and bonds those days.
He decided to combine molding with imitation jewellery market and decided to manufacture packing boxes for the same this was kind of revolution in imitation jewellery industry which was otherwise unorganized when it came to presentations.
Since then the company has not looked back, with continues innovation and research it comes out with different products periodically which makes a mark for itself immediately.
The person who is responsible for this success is Mr. N.V. Srinivasan
DVT was launched as a sister concern to Sunshine Plastics which is also a proprietary concern with the same area of business. The proprietor of DVT is Mr. RAMABHADRAN son of Mr. N.V. SRINIVASAN who is MBA (Marketing) he has decided to take the business further with his own innovative ideas and sense of systematism.
A PUBLIC COMPANY LIMITED BY SHARES
MEMORANDUM OF ASSOCIATION
of
DVT INDUSTRIES PUBLIC LIMITED COMPANY
(amended by special resolution passed on 9 May 2008)
1. The name of the Company is "DEEP VALUE TECHNOLOGY INDUSTRIES
2. The Company is to be a public company.
3. The registered office of the Company is situated in MADRAS , TAMIL NADU
4. The objects for which the Company is established are: **
(1) To carry on the business of an PLASTIC PRODUCTS MANUFACTURING COMPANY and deal either in the name of the Company, or in that of any nominee, trustee or other legal entity,
(a) shares, stocks, debentures, debenture stock, bonds, notes, obligations and securities issued or guaranteed by any company wherever incorporated or carrying on business; and
(b) debentures, debenture stock, bonds, notes, obligations and securities issued or guaranteed by any government, sovereign ruler, commissioners, public body or authority, supreme, dependent, municipal, local or otherwise in any part of the world.
*Amended by special resolution passed on 16 September 2008
** Clause 4 was adopted as the objects clause by special resolution passed on 9
May 2006
(2) To acquire any such shares, stock, debentures, debenture stock, bonds, notes, obligations, or securities by original subscription, contract, tender, purchase, exchange, underwriting, participation in syndicates or otherwise, and whether or not fully paid up, and to subscribe for the same subject to such terms and conditions (if any) as may be thought fit.
(3) To exercise and enforce all rights and powers conferred by or incident to the ownership of any such shares, stock, obligations or other securities including without prejudice to the generality of the foregoing all such powers of veto or
control as may be conferred by virtue of the holding by the Company of some special proportion of the issued or nominal amount thereof.
(4) To provide, on such terms as may be deemed fit, any services for all or any part of the businesses and operations of any or all companies or persons controlled directly or indirectly by the Company or in which the Company is interested whether as shareholder or otherwise which are suitable and convenient to be provided by a holding company and in particular (but without prejudice to the generality of the foregoing) to provide managerial, executive, supervisory, financial and accounting, investment and administrative services and office accommodation and equipment facilities to any such company or in relation to any person, company, property or business.
(5) To carry on the business of providing financial and investment services, and in particular (but without prejudice to the generality of the foregoing):
(a) to undertake the insurance, re-insurance and counter-insurance of all kinds of risks and generally to carry on the business of an insurance and guarantee company in all its aspects;
(b) to carry on the business of banking in all its aspects, including but not limited to all businesses of a financial or monetary nature and any business which now is or at any time during the existence of the Company may be usually or commonly carried on as part of or in connection with, or which may conduce to or be calculated to facilitate or render profitable or more profitable the transaction of, the business of banking or of dealing in money or securities or the provision of financial services of any kind in any part of the world;
(c) to carry on the business of financial agents, bill discounters, mortgage brokers, rent and debt collectors and stock and share brokers;
(d) to raise or borrow or secure the payment of money and to receive money on deposit or loan in such a manner and on such terms as may seem expedient and in particular by the issue of debentures or debenture stock whether perpetual or otherwise and whether charged upon the whole or any part of the property and rights of the Company both present and future including any uncalled capital or not so
charged and to redeem purchase or pay off any such securities;
(e) to deposit, lend or advance money, securities, investments or property whether in respect of its own obligations or those of same other person or company with or without security, and generally to make or negotiate loans and advances of every kind and give such guarantee or indemnity on any terms and subject to any conditions as may seem expedient to the board of directors;
(f) to draw, make, accept, endorse, grant, discount, acquire, subscribe or tender for, buy, sell, issue, execute, guarantee, negotiate, transfer, hold, invest or deal in, honour, retire, pay, secure or otherwise dispose of obligations, instruments including bills of exchange, promissory notes, debentures, bills of lading, warrants (whether transferable or negotiable or not) and securities of every kind;
(g) to buy, sell, and deal in bullion, specie, precious metals, foreign exchange and commodities of every kind;
(h) to receive on deposit or for safe custody or otherwise documents, cash, securities and valuables of every description;
(i) to collect, hold and transmit documents, monies, securities and other property and to act as agents for the receipt, payment or delivery thereof; and
(j) to act as agents, advisers or consultants in relation to all insurance, pensions and taxation matters, the investment of money and the management of property and generally to transact all agency, advisory or consultancy business of every kind.
(6) To enter into such commercial or other transaction in connection with any trade or business of the Company as may seem to the board of directors desirable for the purposes of the Company’s affairs.
(7) To act as executor or administrator of any deceased person and either as executor, testamentary or dative, or as the representative of such executor and for that purpose to enter into all necessary bonds in connection therewith and to act as an ordinary custodian or judicial trustee and to undertake the office of receiver, treasurer or auditor, liquidator, administrator, or assignee of the estate of any bankrupt or insolvent person or company (but without prejudice to the generality of the foregoing) to act as trustee for the holders of any securities of any company and as manager or trustee of unit trusts, investment trusts and pension, benevolent and other funds and to transact all kinds of business arising in connection with any of the foregoing offices and trusts and to establish, settle and regulate and, if thought fit by the board of directors, undertake and execute any trusts with a view to the issue of any securities, certificates or other documents based on or representing any securities or other assets appropriate for the purposes of such trust and to keep for any company Government or Authority or body any register relating to any stocks, funds, shares or securities and to undertake any duties in relation to the registration of transfers the issue of certificates or otherwise and generally to hold and perform the duties of any office of trust or confidence.
(8) To pay satisfy or compromise any claims against the Company or its subsidiaries in respect of any contracts entered into by the Company or its subsidiaries which the board of directors may deem expedient to satisfy or compromise notwithstanding that the same may not be enforceable.
(9) To purchase or otherwise acquire and undertake all or any part of the business, property, assets and liabilities of any person or company carrying on or proposing to carry on any business which the Company is authorised to carry on or possessed of property suitable for the purposes of the Company or which can be carried on in conjunction therewith or which seems to the board of directors to be capable of being conducted so as directly or indirectly to benefit the Company and to conduct, and carry on, or liquidate or wind-up any business so acquired.
(10) To amalgamate with or enter into partnership or into any arrangement for sharing profits or union of interests, co-operation, joint-venture, reciprocal concession, or otherwise with any person or company carrying on or engaged in or about to carry on or engage in any business or transaction which the Company is authorised to carry on or engage in or any business or seems to the board of directors to be a transaction capable of being conducted so as directly or indirectly to benefit the Company.
(11) To subscribe for, take or otherwise acquire shares or stock in or securities of and to subsidise or otherwise assist any person or company and with or without guarantee to sell hold, re-issue or otherwise deal with such shares, stock or securities.
(12) Generally to purchase, take options over, take on lease or in exchange, hire, construct, develop or otherwise acquire any real or personal property or any rights and privileges as the board of directors may think necessary or convenient with reference to any of these objects or capable of being profitably dealt with in connection with any of the Company's property or rights for the time being, and for any estate, interest, investment, securities or other kind of real or personal property and on such terms and for such consideration as the directors shall decide.
(13) To establish and maintain or procure the establishment and maintenance of any contributory or non-contributory pension or superannuation funds for the benefit of, and give or procure the giving of donations gratuities pensions allowances or endowments to, any persons who are or were at any time in the employment or service of the Company or of any company which is a subsidiary of the Company or is allied to or associated with the Company or with any such subsidiary company or who are or were at any time directors or officers of the Company or of any such other company as aforesaid and the wives, widows, families and dependants of any such persons and also establish and subsidise and subscribe to any institutions, associations, clubs or funds calculated to be for the benefit of or to advance the interests and well-being of the Company or of any such other company as aforesaid and make payments to or towards the insurance of any such person and do any of the matters aforesaid either alone or in conjunction with any such other company as aforesaid.
(14) To sell or dispose of all or any part of the undertaking of the Company for such consideration as the board of directors thinks fit and in particular for shares or debentures stock or other securities of any other company.
(15) To promote any company or companies for the purpose of acquiring all or any of the property rights and liabilities of the Company or for any other purpose which may seem to the board of directors to directly or indirectly benefit the Company and to place or guarantee the placing of, underwrite, subscribe for or otherwise acquire all or any part of the shares, debentures or other securities of any such other company.
(16) To promote, effect, negotiate, offer for sale by tender or otherwise, guarantee, underwrite, secure the subscription or placing of, subscribe or tender for or procure the subscription, whether absolutely or conditionally, of, participate in, manage or carry out, on commission or otherwise, any issue, public or private, of the securities of any company and to lend money for the purposes of any such issue.
(17) To give security or become responsible for the performance of any obligation or duties by any person or company and in particular (but without limiting the generality of the foregoing) to guarantee, support or secure, whether by personal covenant or by mortgaging or charging all or any part of the undertaking, property and assets, present or future, and uncalled capital of the Company, or by both such methods, the performance of the obligations of and the payment of monies secured by, or payable under or in respect of, the securities of any company or person, and to give and take counter guarantees and indemnities and to receive security for the implementation of any obligation.
(18) To acquire by assignment or otherwise debts owing to any person or company and to collect such debts and generally to act as traders, factors, carriers and merchants.
(19) To form, establish or promote or co-operate in the formation, establishment or promotion of any company.
(20) To sell, exchange, improve, manage, turn to account, lease, let on hire, grant licences, easements, options, or other rights over and in any other manner deal with or dispose of the undertaking, property and assets (including uncalled capital) of the Company or any part thereof for such consideration as may be thought fit and in particular for securities, whether fully or partly paid up, of any company formed or to be formed and to hold, deal with or dispose of such consideration.
(21) To procure the registration or incorporation of the Company in or under the laws of any place and to take steps in Parliament or with any government or authority (supreme, municipal or local) or otherwise for the purpose of carrying out, extending or varying the objects and powers of the Company or altering its constitution, and to oppose any proceedings or applications which may seem calculated directly or indirectly to prejudice the Company’s interests and to enter into any arrangement with any government or authority and to obtain any rights, concessions and privileges from any such government or authority and to carry out, exercise and comply with any such arrangements, rights, concessions and privileges.
(22) To provide technical, cultural, artistic, educational, entertainment or business material, facilities or services and to carry on any business involving any such provision.
(23) To carry on any business involving the ownership or possession of land or other immovable property or buildings or structures thereon and to construct, erect, install, enlarge, alter, maintain buildings, plant and machinery.
(24) To contract with property holders, borrowers, lenders, annuitants and others for the establishment, accumulation, provision and payment of sinking funds, redemption funds, depreciation funds, renewal funds, endowment funds, and any other special funds, and either in consideration of a single payment or of annual or other periodical payments or otherwise and generally on such terms and conditions as may be arranged.
(25) To purchase and deal in and lend on reversionary or expectant interests absolute or contingent and estates for life whether determinable or not and to acquire, lend money on, redeem, cancel or extinguish by purchase, surrender, or otherwise, any security or grant or contract issued by or binding on the Company or on any fund or other property under the administration of the Company.
(26) To apply for, register, purchase, or by other means acquire and protect, prolong and renew, whether in the United Kingdom or elsewhere, any trade marks, patents, copyrights, trade secrets, or other intellectual property rights, licences, secret processes, designs, protections and concessions and to disclaim, alter, modify, use and turn to account and to manufacture under or grant licences or privileges in respect of the same, and to expend money in experimenting upon, testing and improving any patents, inventions or rights which the Company may acquire or propose to acquire.
(27) To subscribe to, contribute to, promote, support or guarantee money for any purpose which it seems to the board of directors to be in the interests of the Company or its members or for any charitable, national, political, benevolent, public, general or useful object.
(28) To sell, improve, manage, develop, exchange, enfranchise, lease, mortgage, dispose of turn to account or otherwise deal with all or any part of the property or rights of the Company.
(29) To carry on any other business or activity whatsoever which may seem to the board of the Company capable of being advantageously carried on in connection or conjunction with or as ancillary to any of the foregoing businesses or activities or which the board of the Company may consider expedient with a view to rendering profitable or enhancing directly or indirectly the value of the Company’s undertaking or any of its property or assets.
(30) To do all or any of the above mentioned things in any part of the world and either as principals agents trustees or otherwise and either alone or in conjunction with others and either directly or by or through agents subcontractors or trustees.
(31) To do all such other things as are incidental or conducive to the attainment of the above mentioned objects.
ARTICLES OF ASSOCIATION
Of
DEEP VALUE TECHNOLOGY INDUSTRY
(adopted by special resolution passed on 9 May 2008 and amended by special resolutions passed on 8 May 2009 and 6 May 2009 and further amended by special resolution passed on 5 May 2009)
Preliminary
1. The regulations in Table A as in force at the date of the incorporation of the Company shall not apply to the Company.
2. In these Articles, except where the subject or context otherwise requires:
Act means the Companies Act 1985 including any modification or re-enactment of it for the time being in force;
address, in relation to electronic communications, includes any number or address used for the purposes of such communications;
Articles means these articles of association as altered from time to time by special resolution;
auditors means the auditors of the Company;
the board means the directors or any of them acting as the board of directors of the Company;
certificated share means a share in the capital of the Company that is not an uncertificated share and references in these Articles to a share being held in certificated form shall be construed accordingly;
clear days in relation to the sending of a notice means the period excluding the day on which a notice is sent or deemed to be sent and the day for which it is sent or on which it is to take effect;
Companies Acts has the meaning given by section 744 of the Act and includes any enactment passed after those Acts which may, by virtue of that or any other such enactment, be cited together with those Acts as the "Companies Acts" (with or without the addition of an indication of the date of any such enactment);
Company means DVT INDUSTRIES a public limited company;
director means a director of the Company;
electronic signature has the meaning given by section 7(2) of the Electronic Communications Act 2000;
employees' share scheme has the meaning given by section 743 of the Act;
entitled by transmission means, in relation to a share in the capital of the Company, entitled as a consequence of the death or bankruptcy of the holder or otherwise by operation of law;
holder in relation to a share in the capital of the Company means the member whose name is entered in the register as the holder of that share;
member means a member of the Company;
Memorandum means the memorandum of association of the Company as amended from time to time;
office means the registered office of the Company;
paid means paid or credited as paid;
recognised person means a recognised clearing house or a nominee of a recognised clearing house or of a recognised investment exchange, each of which terms has the meaning given to it by section 185(4D) of the Act;
register means either or both of the issuer register of members and the Operator register of members of the Company;
Regulations means the Uncertificated Securities Regulations 2001 including any modification or re-enactment of them for the time being in force;
seal means the common seal of the Company and includes any official seal kept by the Company by virtue of section 39 or 40 of the Act;
secretary means the secretary of the Company and includes a joint, assistant,deputy or temporary secretary and any other person appointed to perform the duties of the secretary;
subsidiary undertaking shall be construed in accordance with section 258 of the Act;
uncertificated share means (subject to Regulation 42(11)(a) of the Regulations) a share in the capital of the Company title to which is recorded on the Operator register of members of the Company and which may, by virtue of the Regulations, betransferred by means of a relevant system and references in these articles to a share being held in uncertificated form shall be construed accordingly; and
MADRAS means chennai that is the capital city of TAMILNADU IN INDIA
3. References to a document include, unless the context otherwise requires, references to an electronic communication. References to an electronic communication mean, unless the contrary is stated,
an electronic communication (as defined in the Act) comprising writing. References to a document being executed include references to its being executed under hand or under seal or, in the case of an electronic communication, by electronic signature. References to an instrument mean, unless the contrary is stated, a written document having tangible form and not comprised in an electronic communication
(as defined in the Act).
Where, in relation to a share, these Articles refer to a relevant system, the reference is to the relevant system in which that share is a participating security at the relevant time. References to a notice or other document being sent or given to or by a person mean such notice or other document, or a copy of such notice or other document,
being sent, given, delivered, issued or made available to or by, or served on or by, or deposited with or by that person by any method authorised by these Articles, and sending and giving shall be construed accordingly.
References to writing mean the representation or reproduction of words, symbols or other information in a visible form by any method or combination of methods, whether comprised in an electronic communication (as defined in the Act) or otherwise, and written shall be construed accordingly. Words denoting the singular number include the plural number and vice versa; words denoting the masculine gender include the feminine gender; and words denoting
persons include corporations. Words or expressions contained in these Articles which are not defined in Article 2 but are defined in the Act have the same meaning as in the Act unless inconsistent with the subject or context. Words or expressions contained in these Articles which are not defined in Article 2 but are defined in the Regulations have the same meaning as in the Regulations unless inconsistent with the subject or context. Subject to the preceding two paragraphs, references to any provision of any enactment or of any subordinate legislation (as defined by section 21(1) of the Interpretation Act 1978) include any modification or re-enactment of that provision for the time being in force. Headings and marginal notes are inserted for convenience only and do not affect the construction of these Articles.
In these Articles,
(a) powers of delegation shall not be restrictively construed but the widest interpretation shall be given to them;
(b) the word board in the context of the exercise of any power contained in these Articles includes any committee consisting of one or more directors, any director holding executive office and any local or divisional board, manager or agent of the Company to which or, as the case may be, to whom the power in question has been delegated; (c) no power of delegation shall be limited by the existence or, except where expressly provided by the terms of delegation, the exercise of that or any other power of delegation; and
(d) except where expressly provided by the terms of delegation, the delegation of a power shall not exclude the concurrent exercise of that power by any other body or person who is for the time being authorised to exercise it under these Articles or under another delegation of the power.
Share capital
4. The share capital of the Company at the date of adoption of this article is Rs 150,000,000 divided into 3,000,000 ordinary shares of Rs 50 each (“Sterling Preference Shares”) and US $20,000,000 divided into Dollar Preference Shares of Rs 0.01 each (“Dollar Preference Shares“) and Rs 20,000,000 divided into reedemable Preference Shares of Rs 0.01 each (“Euro Preference Shares” and together with the Sterling Preference Shares and the Dollar Preference Shares, the “Preference Shares”).
Subject to the special rights attached to the Preference Shares and to any special rights which are or may be attached to any other class of shares (i) the profits of the Company available for dividend and resolved to be distributed shall be distributed by way of dividend amongst the holders of the Ordinary Shares and (ii) on a winding up or liquidation, voluntary or otherwise, the residue, if any, of the surplus assets of the Company available for distribution amongst the members shall belong to the holders of the Ordinary Shares and be divided amongst them in proportion to the amounts paid up or credited as paid up on such shares held by them respectively. The Preference Shares may be issued in one or more series with such rights or subject to such restrictions as the board may determine and as provided below:
(A) Dividend rights of the Preference Shares
The rights to dividends conferred by each series of each class of Preference or vote on any Resolution proposed at such General Meetings shall be determined by the board prior to the date on which such shares are allotted.
(B) Capital rights of the Preference Shares
The rights to a return of capital or to share in the surplus assets of the Company available for distribution amongst the members on a winding up or liquidation conferred by each series of each class of Preference Shares shall be determined by the board prior to the date on which such shares are allotted.
(C) Rights of the Preference Shares to attend and vote at Meetings
The rights of the holders of each series of each class of Preference Shares to attend at General Meetings of the Company, to speak at such General Meetings or vote on any Resolution proposed at such General Meetings shall be determined by the board prior to the date on which such shares are allotted.
(E) Purchase
(i) Subject to the provisions of the Act and any other applicable laws, the Company may at any time and from time to time purchase any
Preference Shares upon such terms as the board shall determine
(ii) Upon the purchase of any Preference Share the nominal amount of such
share comprised in the capital of the Company shall thereafter be re classified as a Preference Share (of the same class as the Preference Share so purchased) without any further resolution or consent being
required.
(F) Restriction on capitalisation
If so determined by the board prior to the Date of Allotment of any series of Preference Shares, save with the written consent of the holders of three-quarters in nominal value of, or with the sanction of an Extraordinary Resolution passed at a separate General Meeting of the holders of such series of Preference Shares, the board shall not, pursuant to Article 189, capitalise any part of the amounts available for distribution and referred to therein if after such capitalisation the aggregate of such amounts would be less than such multiple, if any, as may be determined by the board prior to the Date of Allotment of such series of Preference Shares, of the aggregate amount of the dividends (exclusive of any associated tax credit) payable in the twelve month period following such capitalisation on the Preference Shares of such series then in issue and any other New Preference Shares then in issue expressed to rank pari passu therewith as regards participation in profits.
(G) Priority
(a) Except as may be determined otherwise by the board prior to the Date of Allotment of any series of any class of Preference Shares, save with the written consent of the holders of three-quarters in nominal value of, or with the sanction of an Extraordinary Resolution passed at a separate General Meeting of the holders of, such series of such class of Preference Shares, the board shall not authorise or create, or increase the amount of, any shares of any class or any security convertible into shares of any class ranking as regards rights to participate in the profits or assets of the Company (other than on a
redemption or purchase by the Company of any such shares) in priority to such series of such class of Preference Shares;
(b) The special rights attached to any series of any class of Preference Shares allotted or in issue shall not (unless otherwise provided by their terms of issue) be deemed to be varied by the creation or issue of any New Shares ranking as regards participation in the profits or assets of the Company in some or all respects pari passu with or after such Preference Shares. Any New Shares ranking pari passu with such Preference Shares in some or all respects may without their creation or issue being deemed to vary the special rights attached to any Preference Share then in issue either carrying rights identical in all respects with such Preference Shares or any of them or rights differing therefrom in any respect, including, but without prejudice to the generality of the foregoing, in that:
(i) the rate of or means of calculating the dividend may differ and the dividend may be cumulative or non-cumulative;
(ii) the New Shares or any series thereof may rank for dividend as from such date as may be provided by the terms of issue thereof and the dates for payment of dividend may differ;
(iii) the New Shares may be denominated in Sterling or in any Foreign Currency;
(iv) a premium may be payable on return of capital or there may be no such premium;
(v) the New Shares may be redeemable at the option of the holder or of the Company, or may be non-redeemable and if redeemable at the option of the Company, they may be redeemable at different dates and on different terms from those applying to the Preference Shares; and
(vi) the New Shares may be convertible into Ordinary Shares or any other class of shares ranking as regards participation in the profits and assets of the Company pari passu with or after such Preference Shares in each case on such terms and conditions as may be prescribed by the terms of issue thereof.
5. Subject to the provisions of the Companies Acts and without prejudice to any rights attached to any existing shares or class of shares, any share may be issued with such rights or restrictions whether with regard to dividend, voting, return of capital or otherwise, as the Company may by ordinary resolution determine or, subject to and in default of such determination, as the board shall determine.
6. The board may issue share warrants to bearer in respect of any fully paid shares under a seal of the Company or in any other manner authorised by the board. Any share while represented by such a warrant shall be transferable by delivery of the warrant relating to it. In any case in which a warrant is so issued, the board may provide for the payment of dividends or other moneys on the shares represented by the warrant by coupons or otherwise. The board may decide, either generally or in any particular case or cases, that any signature on a warrant may be applied by electronic or mechanical means or printed on it or that the warrant need not be signed by any person.
7. The board may determine, and from time to time vary, the conditions on which share warrants to bearer shall be issued and, in particular, the conditions on which:
(a) a new warrant or coupon shall be issued in place of one worn-out, defaced, lost or destroyed (but no new warrant shall be issued unless the Company is satisfied beyond reasonable doubt that the original has been destroyed); or
(b) the bearer shall be entitled to attend and vote at general meetings; or
(c) a warrant may be surrendered and the name of the bearer entered in the register in respect of the shares specified in the warrant. The bearer of such a warrant shall be subject to the conditions for the time being in force in relation to the warrant, whether made before or after the issue of the warrant. Subject to those conditions and to the provisions of the Companies Acts, the bearer shall be deemed to be a member of the Company and shall have the same rights and privileges as he would have if his name had been included in the register as the holder of the shares comprised in the warrant.
8. The Company shall not be bound by or be compelled in any way to
recognise any right in respect of the share represented by a share warrant other than the bearer's absolute right to the warrant.
9. Subject to the provisions of the Regulations, the board may permit the holding of shares in any class of shares in uncertificated form and the transfer of title to shares in that class by means of a relevant system and may determine that any class of shares shall cease to be a participating security.
10. Shares in the capital of the Company that fall within a certain class shall not form a separate class of shares from other shares in that class because any share in that class:
(a) is held in uncertificated form; or
(b) is permitted in accordance with the Regulations to become a participating security.
11. Where any class of shares is a participating security and the Company is entitled under any provision of the Companies Acts, the Regulations or these Articles to sell, transfer or otherwise dispose of, forfeit, re-allot, accept the surrender of or otherwise enforce a lien over a share held in uncertificated form, the Company shall be entitled, subject to the provisions of the Companies Acts, the Regulations, these Articles and the facilities and requirements of the relevant system:
(a) to require the holder of that uncertificated share by notice to change that
share into certificated form within the period specified in the notice and to hold that share in certificated form so long as required by the Company;
(b) to require the holder of that uncertificated share by notice to give any instructions necessary to transfer title to that share by means of the relevant system within the period specified in the notice;
(c) to require the holder of that uncertificated share by notice to appoint any person to take any step, including without limitation the giving of any instructions by means of the relevant system, necessary to transfer that share within the period specified in the notice;
(d) to require the Operator to convert that uncertificated share into certificated form in accordance with Regulation 32(2)(c) of the Regulations; and
(e) to take any action that the board considers appropriate to achieve the sale, transfer, disposal, forfeiture, re-allotment or surrender of that share or otherwise to enforce a lien in respect of that share.
12. The board has general and unconditional authority to exercise all the powers of the Company to allot relevant securities up to an aggregate nominal amount equal to the section 80 amount, for each prescribed period.
13. The board is empowered for each prescribed period to allot equity securities for cash pursuant to the authority conferred by Article 12 and/or to sell relevant shares where such sale is to be treated as an allotment of equity securities by virtue of section 94(3A) of the Act (a “deemed allotment”) as if section 89(1) of the Act did not apply to any such allotment, provided that its power shall be limited to:
(a) the allotment of equity securities in connection with a pre-emptive issue; and
(b) the allotment (otherwise than pursuant to Article 13(a)) or deemed allotment of equity securities up to an aggregate nominal amount equal to the section 89 amount.
14. Before the expiry of a prescribed period the Company may make an offer or agreement which would or might require equity securities or other relevant securities to be allotted after such expiry. The board may allot equity securities or other relevant securities in pursuance of that offer or agreement as if the prescribed period during which that offer or agreement was made had not expired.
15. In this Article and Articles 12, 13 and 14:
prescribed period means any period for which the authority conferred by Article 12 is given by ordinary or special resolution stating the section 80 amount and/or the power conferred by Article 13 is given by special resolution stating the section 89 amount;
pre-emptive issue means an offer of equity securities to ordinary shareholders (excluding any shareholder holding shares as treasury shares) or an invitation to ordinary shareholders (excluding any shareholder holding shares as treasury shares) to apply to subscribe for equity securities and, if in accordance with their rights the board so determines, holders of other equity securities of any class (excluding any shareholder holding shares as treasury shares) (whether by way of rights issue, open offer or otherwise) where the equity securities respectively attributable to the interests of ordinary shareholders (excluding any shareholder holding shares as treasury shares) or holders of other equity securities (excluding any shareholder holding shares as treasury shares), if applicable are proportionate (as nearly as practicable) to the respective numbers of ordinary shares or other equity securities,
as the case may be held by them, but subject to such exclusions or other arrangements as the board may deem necessary or expedient in relation to fractional entitlements or any legal, regulatory or practical problems under the laws or regulations of any overseas territory or the requirements of any regulatory body or stock exchange;
section 80 amount means, for any prescribed period, the amount stated in the
relevant ordinary or special resolution;
Alteration of share capital
54. The Company may by ordinary resolution:
(a) increase its share capital by such sum to be divided into shares of such amount as the resolution prescribes;
(b) consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;
(c) subject to the provisions of the Companies Acts, sub-divide its shares, or any of them, into shares of smaller amount than is fixed by the Memorandum and the resolution may determine that, as between the shares resulting from the sub-division, any of them may have any preference or advantage as compared with the others; and
(d) cancel shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the shares so cancelled.
55. All shares created by ordinary resolution pursuant to Article 54 shall be:
(a) subject to all the provisions of these Articles, including without limitation provisions relating to payment of calls, lien, forfeiture, transfer and transmission; and
(b) unclassified, unless otherwise provided by these Articles, by the resolution creating the shares or by the terms of allotment of the shares.
56. Whenever any fractions arise as a result of a consolidation or sub-division of shares, the board may on behalf of the members deal with the fractions as it thinks fit. In particular, without limitation, the board may sell shares representing fractions to which any members would otherwise become entitled to any person (including, subject to the provisions of the Companies Acts, the Company) and distribute the net proceeds of sale in due proportion among those members. Where the shares to be sold are held in certificated form the board may authorise some person to execute an instrument of transfer of the shares to, or in accordance with the directions of, the buyer. Where the shares to be sold are held in uncertificated form, the board may do all acts and things it considers necessary or expedient to effect the transfer of the shares to, or in accordance with the directions of, the buyer. The buyer shall not be bound to see to the application of the purchase moneys and his title to the shares shall not be affected by any irregularity in, or invalidity of, the proceedings in relation to the sale.
57. Subject to the provisions of the Companies Acts, the Company may by special resolution reduce its share capital, capital redemption reserve and share premium account in any way.
Management Reports
Flash Reports - Daily Sales Figures Update. It gives a
detailed report of Sales affected through the various
channels like Tied Agency, Bancassurance, Corporate
Agents, Brokers etc with primary focus being on Tied
Agency Business.
B&A Reports – Daily Sales Figures Update for the
Bancassurance & Alliances Channel covering all sub
channels in detail.
Business Reviews & Summary – Snapshot of
performance against various organizational KPIs (KEY PERFORMANCE INDICES) on
Monthly Basis. MOS, BEAM, KPI Summary, Performance
Snapshot etc forming the Monthly Business Review Pack.
Life Industry Statistics – Month on month update of
Market Share Statistics.
Linked Funds Performance – Daily NAV Update and
comparison of performance of our funds with that of others
in the market.
Relationship MIS – Major Bancassurance & Corporate
Agency Relationships’ Business Track Reports.
Agency Recruitment & Training – FOS Recruitment
MIS, Training & Performance Tracker of New Joinees.
Risk Reports – Channel-wise performance of identified
risk areas.
KPI – Performance snapshot up to SM-level on key business KPIs.
Pending Cases Summary – Location-wise & stage-
wise Branch & COPS Pending Reports.
Investor / Board Presentations – Latest Board
Presentation & Other Pivotal Business Presentations.
Business Definitions & FAQs – Key Business
Definitions & FAQs on MIS.
Industry Profile
The Plastics Industry in India has made significant achievements ever since it made a modest but promising beginning by commencing production of Polystyrene in 1957. The chronology of manufacture of polymers in India is summarized as under:- - 1957-Polystyrene - 1959-LDPE - 1961-PVC - 1968- HDPE - 1978-Polypropylene The potential Indian market has motivated Indian entrepreneurs to acquire technical expertise, achieve high quality standards and build capacities in various facets of the booming plastic industry. Phenomenal developments in the plastic machinery sector coupled with matching developments in the petrochemical sector, both of which support the plastic processing sector, have facilitated the plastic processors to build capacities to service both the domestic market and the markets in the overseas.The plastic processing sector comprises of over 30,000 units involved in producing a variety of items through injection moulding, blow moulding, extrusion and calendaring. The capacities built in most segments of this industry coupled with inherent capabilities have made us capable of servicing the overseas markets.The economic reforms launched in India since 1991, have added further fillip to the Indian plastic industry. Joint ventures, foreign investments, easier access to technology from developed countries etc have opened up new vistas to further facilitate the growth of this industry.
REVIEW OF LITERATURE
This paper examines the purpose and users of financial statements which can include present and future shareholders, creditors, employees, the government and the public at large. It looks at how the statement of principles focuses the attention of both regulatory authorities and the reporting entities on what it considers to be the main users of financial statements and current and future investors. It also discusses how there is clearly a limit to the amount of information that can be disclosed in a set of financial statements, as too much information would overwhelm users, who would not then be able to find the information relevant to them.
Source:
Financial analysis for bank lending in liberalized economy
Name: S.P Singh and Singh
Performance measurement using data envelopment analysis and financial statement analysis.
This paper is an analysis of performance measurement in some of Taiwan’s electronic companies. Most previous studies concerning company performance measurement focus merely on operational efficiency. Operational effectiveness,
However, which might directly influence the survival of a company, is usually ignored. This paper constructs a conceptual framework, based on the financial statement analysis (FSA) , to define the meaning of performance. Also the paper
Performance of 59 listed corporations of the electronic industry in Taiwan,. The empirical results indicate that a company with better efficiency does not always
Have better effectiveness. There is no apparent correlation between these two indicators.
Source:
Institute of electronic commerce
National Chung Hsing university,
Purpose of financial statements:
“The objective of financial statement is to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions.’ Financial statements should be understandable, relevant, reliable and comparable. Reported assets, liabilities and equity are directly related to an organization’s financial position. Reported income and expenses are directly related to an organization’s financial performance.
Financial statements are intended to be understandable by readers who have a reasonable knowledge of business and economic activities and accounting and who are willing to study the information diligently”.
1 Owners and managers require financial statements to make important business decisions that affect its continued operations. Financial analyses are then performed on these statements to provide management with a more detailed understanding of the figures.
2. External users: are potential investors, banks, government agencies and other parties who are outside the business but need financial information about the business for a diverse number of reasons.
2 Prospective investors make use of financial statements to assess the viability of investing in a business. Financial analyses are often used by investors and Is prepared by professionals (financial analysts), thus providing them with the basis in making investment decisions.
Financial Management systems:
Financial management systems are to be reviewed during project preparation
And reported to the management review meeting (MRM). Based on further examination after MRM, or as required, the RRP should clearly describe the financial management system for the project, and the executing agency.
According to R.P.Rustori “The financial statements are the end product of the financial accounting process. The financial statements are nothing but the financial information presented in concise”.
In the words of john Number “The financial statements are providing a summary of the accounts of a business enterprise, the balance sheet reflecting the assets liabilities and capital on a certain data and the income statements showing the results of operations during a certain period”.
Application of financial performance model(JOURNAL)
To private higher education institution in Kuwait
Five higher education institutions were granted licenses to provide degree program educational services in Kuwait in accordance with the law of private university (law 34/2000-kuwait):
Financial statements provide information of value to company officials as well as to various outsiders, such as investors and lenders of funds. Publicly owned companies are required to periodically publish general-purpose financial statements that include a balance sheet, an income statement, and a statement of cash flows. Some
Companies also issue a statement of stockholders’ equity and a statement of comprehensive income, which provide additional detail on changes in the equity section of the balance sheet.
Financial statements issued for external distribution are prepared according to generally accepted accounting principles (GAAP), which are the guidelines for the content and format of the statements. In the united states the securities and exchange commission (SEC) has the legal responsibility for establishing the content of financial statements, but it generally defers to an independent body, the financial accounting standards Board (FASB) , to determine and promote accepted principles.
Firms frequently issue a separate statement of stockholders’ equity to present certain changes in equity, rather than showing them on the face of the balance sheet. The statement of stockholders’ equity itemizes the changes in equity over the period covered, including investments by owners and other capital contributions, earnings for the period, and distributions to owners of earning (dividends) or other capital. The financial statements of publicly owned companies also include an auditor’s report, indicating that the statements have been audited by independent auditors. The auditor’s opinion is related to fair presentation in conformity with GAAP.
The statement of cash flows replaced the statement of changes in financial position in 1987 as a required financial statement for all business enterprises. The Statement of cash flows presents cash receipts and payments classified by whether they stem from operating. Investing or financing activities and provides definitions of each category. Because GAAP requires accrual accounting methods in preparing financial statements, there may be a significant difference between net income and cash generated by operations. The cash-flow statement is used by creditor’s investors to determine whether cash will be available to meet debt and dividend payments.
-Business encyclopedia
Financial statement analysis is largely a study of the relationship among the various financial factors in a business. Analysis and interpretation of financial statement refers to such a treatment of the information contained in the income statement and balance sheet so as to find the profitability and financial soundness of the business. The term “Analysis means classifications of a data given in the financial statement”
“Financial analysis means interpretation of the financial statement of the financial statement of the company’. In other words “Financial analysis is an intelligent study of the balance sheet and profit and loss account of a concern with a view of judging its financial position.
According to Metcalf and triad: “Financial statement analysis is a process of evaluating the relationship between the component part of a financial statement to obtain a better understanding of a firm’s position and performance.
The profit and loss account presents the summary of revenue expenses and net income or net loss of a firm of a specific period of time. NET INCOME is an indicator of the firm’s profitable operation where the period exceeds the expenses of that period.
TYPE OF RESEARCH
Descriptive research:
This includes surveys and fact-finding enquires of different kinds. The main purpose of it is description of the state of affairs, as it exists at present. The researcher has control over the variables. We can only report what has happened or happening.
SOURCES OF INFORMATION
1 Primary data
2 Secondary data
PRIMARY DATA
Primary data is gathered through discussion with the individuals of the company.
SECONDARY DATA
Secondary data was the important source of information for this study that includes annual reports, journals and contents gathered from the internet
RESEARCH METHODOLOGY
2.1 METHODOLOGY
Research methodology is a new way to systematically solve the research problem. It is a science of studying how research is done. In research methodology we study the various steps that are generally adopted by a researcher in studying his research problem along with logic behind in using a particular method technique for the purpose of evaluation.
Primary objective:
1 To study the financial performance of DVT PLASTIC INDUSTRIES for the period of 2004-2008.
Secondary objectives:
2 To find out the operational efficiency of DVT PLASTIC INDUSTRIES
3 To determine the financial strength of DVT PLASTIC INDUSTRIES
4 To analyze the current asset and current liabilities for past five years.
Need for study:
In any company proper management of funds leads to further increase in share holder’s wealth. It also helps in studying the composition of current assets and current liabilities. This helps in framing control measures of items of current asset & current liabilities. It is necessary to look at its financial with its own figures during the previous year and compare them to analyze for its success .
Scope of the study:
The scope of the study is to identify the company’s position in the industry by conduction a detailed study to find out the earning capacity of the organization and also to suggest means of improvement in the existing system if necessary. The present study lovers the financial analyze of DVT INDUSTRIES of Chennai for five financial year. The years taken for study are form 2004-2008
2.5 PERIOD OF STUDY
A study on overall financial performance was done in DVT INDUSTRIES as per the period of time from February 1st to March 31st 2008. The analysis was made with the help of balance sheet for a period of 5 years i.e. 2004-2008.
2.6 TOOLS APPLIED IN THIS STUDY
To have meaningful analysis and interpretation of various data’s collected the following tools were use for this study.
1 Ratio analysis
2 Comparative balance sheet analysis
3 Common size balance sheet analysis
4 Trend analysis
5 Analysis of current asset and current liabilities
Limitations of the study:
Any research study will be restricted in scope by certain interest limitations
1 The analysis was made with the help of secondary data.
2 The length and breath of the company.
3 Certain information is confidential and access limited.
Summary of findings
1 The comparative and common size statement is healthy condition during all over the year.
2 The trend analysis of fixed asset is increasing trend as compared to all over the period.
3 The analysis of current asset and current liabilities has been good position as compared to the all other year. The sundry debtors was
Rs.63.3% and current liabilities was Rs.61.1%
1 Current ratio has been increasing trend for the period 2007 (ie) 5.32 times.
2 Liquidity ratio is healthy position for the year 2005
3 The fixed asset ratio has been increased in the year 2004-05 by Rs.0.38 times.
4 Asset turnover ratio is increasing year by year.
5 Capital turnover ratio is decreasing year by year as compared to all over the year.
6 Cash to current ratio is increased for the year 2005 (ie) 0.24 times
Suggestion & recommendation
1 The current asset position is good in the company but the percentage of current asset is decreasing. The company has to look over to control this situation.
2 The utilization of the cash should be done in proper planning.
3 Current liabilities is increasing gradually in all years, it should be avoided.
4 Proper utilization of cash and cash equivalent has to be made for further
Improvement of the company.
5 Company has to maintain consistency in deriving income on capital employed. Income on capital employed to the company has been increasing which indicates the best in performance levels of the company.
6 Financial position is good but company should try to reduce liabilities
CONCLUSION
The success of any organization depends to a greater on its financial performance. This calls for brilliant financial planning and efficient management.
The study undertaken in this project has made sincere attempt to find out the causes for the company. The findings that resulted out of an in depth analysis have been discussed elaborately and suggestion have been given.
It is my fervent hope that the suggestions made in this report should give a helping had to the company in order to implement its goals.
REFERENCES
Ø Financial management “s.n. maheswari” “thirteenth revised & enlarged edition, 2007” “published by sultan Chand & sons”
Ø Cost and Management Accounting “T.S. Reddy& Y.Hari Prasad Reddy” “third edition 2005” “margham publications”
Ø Financial accounting “T.S. Reddy & A. Murthy” “fourth edition 2006” “margham publications”
Ø Accounting for management “N.P Srinivasan & M. Sakthivel murugan” “fourth edition 2006” “S. Chand publications”
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