Corporate Finance (18EPG201)

Assignment 1
Dear students
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All of us have understood that corporate finance broadly encompasses Investing ,
Financing (long term) and Working Capital (short term). Under each there are many
variables and combinations.
Some aspects are highlighted below. These are getting a mention in the audited
accounts of all listed companies. You have to browse the company financials and
pick up information appearing therein on all the points noted below. If any point is
not getting mentioned , please indicate this in your assignment.

1 Managing Risk
2 Decision making
3 Research & Development
4 Minimising manufacturing cost
5 Raising Capital
6 Effective functioning
7 Growth and Diversification
8 Short term and long term goals
9 Marketing a company / product
10 Dividend and Interest
11 Foreign exchange inflow Exports and foreign exchange outflow Imports
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The answer is in three parts

 1. What is mentioned and available in the company financials (all the 100 odd
pages)
2. Your observations, to the extent possible, on all the eleven points as indicated
above.
3. Your perspectives on the industry or the company. This is very critical to
understand how you far you have researched on the company

I have gone through the financials of Himatsingka Seide Limited. I searched for the
key words coming in this assignment. I have copied and downloaded this as part of
the assignment. Wherever you don’t get a straight connection, go through the
balance sheet for two years and share your observations , for example raising
capital. You can see difference in share capital amounts and identify whether there
is an infusion of new capital, etc. Don’t worry about perfection, but show your
comprehension. Your comprehension will be highlighted when you copy the
information as above and then add your perspective.
For doing this , you have to go through the entire file including Directors Report,
Directors Forward Looking statement, etc, etc
This has to compulsorily as the first item .
1 Company Name
2 Years in existence
3 Industry details
4 Competitors
5 Sales in the last reported full year (Please
mention unit of measurement correctly Rs in
Millions, or Rs in lakhs, etc.
6 Net profit after taxes in the reported full year
7 Some important ratios (You have to calculate
and put these figures. Pick up one ratio each
from different types of ratios)
1. Profitability Ratio
2. Current Ratio
3. Debt Equity Ratio
4. Turnover ratios
5. Earning rations like EPS, etc
8 Balance Sheet size (total of either assets or
liabilities ) Mention unit of measurement like
Rupees in Million correctly

After giving the fundamental information as above, start filling up on the eleven
point matrix shared above.

1. Managing Risk:

Note 34.2 : Financial risk management:

The Company’s activities expose to financial risks: credit risk, liquidity risk and
market risk.

Risk management framework

Download
The Company’s board of directors has overall responsibility for the establishment
and oversight of the Company’s risk management framework. The Company’s risk
management policies are established to identify and analyse the risks faced by the
Company, to set appropriate risk limits and controls and to monitor risks and
adherence to limits. Risk management policies and systems are reviewed regularly to
reflect changes in market conditions and the Company’s activities. The Company,
through its training and management standards and procedures, aims to maintain a
disciplined and constructive control environment in which all employees understand
their roles and obligations.
My observation
1. Responsibility on the top management.
2. Setting up threshold limits for various kinds of risks envisaged.
3. Clear definition of roles and responsibilities.
Download
The Company’s Audit Committee oversees how management monitors compliance
with the Company’s risk management policies and procedures, and reviews the
adequacy of the risk management framework in relation to the risks faced by the
Company. The audit committee is assisted in its oversight role by internal auditor.
Internal Audit function includes both regular and ad hoc reviews of risk management
controls and procedures, the results of which are reported to the Audit Committee.
My observation
1. Audit committee and Internal Audit as two pillars of Control and oversight
Download
i. Credit risk:
Credit risk is the risk of financial loss arising from counterparty failure to repay or
service debt according to the contractual terms or obligations. Credit risk
encompasses of both, the direct risk of default and the risk of deterioration of
creditworthiness as well as concentration of risks. Credit risk is controlled by
analysing credit limits and creditworthiness of customers on a continuous basis to
whom the credit has been granted after obtaining necessary approvals for credit.
Financial instruments that are subject to concentrations of credit risk principally
consist of trade receivables, investments, derivative financial instruments, cash and
cash equivalents, bank deposits and other financial assets. Bank deposits includes an
amount of INR 2,895.32 lacs held with a bank having high quality credit rating
which is individually in excess of 10% or more of the Company’s total bank deposits
for the year ended 31 March 2018. None of the other financial instruments of the
Company result in material concentration of credit risk.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure.
The maximum exposure to credit risk was INR 107,998.97 lacs and INR 92,138.52
lacs as at 31 March 2018, and 31 March 2017, respectively, being the total of the
carrying amount of balances with banks, bank deposits, current investments, trade
receivables and other financial assets excluding cash in hand and equity
investments.

Geographic concentration of credit risk

Geographic concentration of trade receivables (gross and net of allowances) is as
follows:
Geographical concentration of trade receivables is allocated based on the location of
the customers.

My observation on credit risk

Credit risk can also be called counterparty risk. This risk depends on the exposure
of the company to this. The figure given is Rs 1080 Crores as on 31 st March, 2018. I
verified this amount with the balance sheet and find that the following balances
comprises the amount subject to credit risk
Balance Sheet Item Amount

If the risk probability was higher, then it has to be reflect in the accounts as a
provision for doubtdebt

ii. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial
obligations as they become due. The Company manages its liquidity risk by
ensuring, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risk to the Company’s reputation.The Company believes that
the working capital and its cash and cash equivalent are sufficient to meet its short
and medium term requirements.”
Management monitors rolling forecast of the Company’s liquidity position and cash
and cash equivalents on the basis of expected cash flows. This is generally carried
out by the Management of the Company in accordance with practice and limits set
by the Company. In addition, the Company’s liquidity management policy involves
projecting cash flows and considering the level of liquid assets necessary to meet
these, monitoring balance sheet liquidity ratios against internal and external
regulatory requirements and maintaining debt financing plans.

My observation

There are well defined practices followed. In terms of analytics both predictive and
prescriptive.

2. Decision Making: I could not trace this.

3. Research & Development:

Research and development continues to provide valuable support to our business
and has helped us to keep pace with dynamic market conditions. We continue to
give in-house research and innovation the highest priority.
4. Minimizing Manufacturing Cost:
The Audit Committee of the Board, inter alia, provides reassurance to the Board on
the existence of an effective internal control environment that ensures:
􀁺 efficiency and effectiveness of operations;
􀁺 safeguarding of assets and adequacy of provisions for all liabilities;
􀁺 reliability of financial and other management information and adequacy of
disclosures;
􀁺 compliance with all relevant statutes.

5. Raising Capital:
6. Effective Functioning:
7. Growth and Diversification:
8. Short-Term and Long-Term Goals:
9. Marketing a Company / Product:
10. Dividend and Interest:

I am enclosing listed companies with their market capitalisation. These are mid
cap companies

Assignment: Each student will pick up the company allotted to her / him. In
the respective companies Investor page all information is available .
Download the required files and go through the same like I have done above.
In addition you can give your review / comments on the performance of the
companies. ( Turonover, profitability, ratios, etc. You can get parallel
information from Moneycontrol.com which gives Intra company (ie same
company for five years) and inter company (competitor company
comparison) information.

Student Name Company Name

A G Shruthi Steel Authority of India (SAIL) Ltd.
Abbas Raza MOIL Ltd.
Chandra Sekhar W S Akzo Nobel India Ltd.
Jinia Bose PVR Ltd.
Kotresh K P JSW Steel Ltd.
Nagesh M Sunteck Realty Ltd.
Riju Brata Chatterjee Sudarshan Chemical Industries Ltd.
Ritika Kumari VIP Industries Ltd.
Shivam Kumar Gupta Future Consumer Ltd.
Vani Prasanna L Inox Leisure Ltd.
Abhinav Raj Eicher Motors Ltd.
Abida Mahindra & Mahindra Ltd.
Chandrashekara D G Tata Consumer Products Ltd.
K J Neena Deepak Fertilisers & Petrochemicals Corporation Ltd.
Kumar Vishnu N Phillips Carbon Black Ltd.
Naushad Ahamed M R Hathway Cable & Datacom Ltd.
Rohith S V Apollo Hospitals Enterprise Ltd.
Ruth Baby Sheela V Chalet Hotels Ltd.
Shivashankar S Uflex Ltd.
Vindya Lk Hindustan Unilever Ltd.
Aditya Mishra TVS Motor Company Ltd.
Chinmai M Venky's (India) Ltd.
Kalaivani R Bharat Petroleum Corporation Ltd.
Kusanale Vishal Shalitkumar Ambuja Cements Ltd.
Neel Bikash Deka Hawkins Cookers Ltd.
S Lakshmi Narayana JK Tyre & Industries Ltd.
Sangeetha L Bharat Heavy Electricals Ltd.
Shrivardhan N Divi's Laboratories Ltd.
Yadhunandan N Tata Coffee Ltd.
Yashaswini R Emami Ltd.
Akash Nesco Ltd.
Amrutha L Narsihma KEI Industries Ltd.
Kavitha K Astral Ltd.
Lakshman S Crompton Greaves Consumer Electricals Ltd.
Nihal Ahmed S H Kelkar & Company Ltd.
Sanath Kumar N Rajesh Exports Ltd.
Savita S H Balaji Amines Ltd.
Sourav Samanta Deepak Nitrite Ltd.
Srivatsa Av Jindal Steel & Power Ltd.
Yatish J Shipping Corporation of India Ltd.
Akshay S Apollo Tyres Ltd.
Amrutha P Pfizer Ltd.
Deepak Naidu V EIH Ltd.
Kazhindhi E Schaeffler India Ltd.
Lionel Richie V Gujarat Gas Ltd.
Nikhit B K Balkrishna Industries Ltd.
Sanath Nadig NOCIL Ltd.
Shakila Shriram Transport Finance Company Ltd.
Sridhar R Alembic Pharmaceuticals Ltd.
Yogesh N Nagarani NHPC Ltd.
Alekhya K M PI Industries Ltd.
Amulya V Rao Ipca Laboratories Ltd.
Deepak R Aditya Birla Capital Ltd.
Keerthana K Ceat Ltd.
Lohith D Aster DM Healthcare Ltd.
Nizam Pasha Rossari Biotech Ltd.
Sandeep Kumar M Mahesh Prabhu Biocon Ltd.
Sharmika Chakma Rallis India Ltd.
Srinidhi N NTPC Ltd.
Aishwarya Saseendran Kalpataru Power Transmissions Ltd.
Alok S V Sheela Foam Ltd.
Anuradha R Blue Dart Express Ltd.
Dhamodara M Bajaj Electricals Ltd.
Km Rohini Rastogi Aarti Industries Ltd.
M V Ajay Kumar Reddy Cadila Healthcare Ltd.
P Sivakumar La Opala RG Ltd.
Sanjeev Manurkar JTEKT India Ltd.
Sheeba D Nilkamal Ltd.
Amar Kumar Mehta Castrol India Ltd.
Anushree B S Britannia Industries Ltd.
Dhanush D Gillette India Ltd.
Kruthika S Adani Total Gas Ltd.
Madhupatil G T Page Industries Ltd.
Palanikumar M Aditya Birla Fashion and Retail Ltd.
Sankar D Dilip Buildcon Ltd.
Sheetal Suzanna Fernandes Mangalore Refinery And Petrochemicals Ltd.
Suhael Iftakar Navneet Education Ltd.
Amit Kumar Gupta REC Ltd.
Archana Gowri Shankar Bajaj Auto Ltd.
Dhiraj M Krishna Tata Elxsi Ltd.
Lakshitha Purushotham Hindustan Copper Ltd.
Mahesh B Prestige Estates Projects Ltd.
Parveez Ahmad Parray Hindustan Petroleum Corporation Ltd.
Santhosh Gowda S R Tata Motors Ltd.
Shilpa Patil Chambal Fertilisers & Chemicals Ltd.
Sumit Kumar Wipro Ltd.
Amitabh Kumar Raymond Ltd.
Ashwini P B Ajanta Pharma Ltd.
Drupad P Gland Pharma Ltd.
Manikandan P U Radico Khaitan Ltd.
Pavan A M India Cements Ltd.
Sathish Kumar S Amara Raja Batteries Ltd.
Shruthi R Jindal Stainless Ltd.
Suraj Udayan Honeywell Automation India Ltd.
Vivek D N Route Mobile Ltd.
Amith M S Indraprastha Gas Ltd.
Bobita Debnath Indian Oil Corporation Ltd.
Emberu Mannar Degala Granules India Ltd.
Manjit Maharashtra Seamless Ltd.
Manvitha K PNC Infratech Ltd.
Pavan Kumar I R Jindal Stainless (Hisar) Ltd.
Satyabrata Rout Spicejet Ltd.
Shruti Priya Force Motors Ltd.
Sushanth S Motherson Sumi Systems Ltd.
Anand Kulkarni N Mahindra CIE Automotive Ltd.
Chandana B Voltas Ltd.
Ganesh P S Gujarat State Fertilizer & Chemicals Ltd.
Manjunath B V Sundram Fasteners Ltd.
Mary Spoorthy K Container Corporation of India Ltd.
Pavan Kumar M J InterGlobe Aviation Ltd.
Satyajit Kumar Das Siemens Ltd.
Shubratha P Zee Entertainment Enterprises Ltd.
Tati Reddy Sai Kumar Reddy Adani Transmission Ltd.
Ananth H V Intellect Design Arena Ltd.
Deepika R VST Industries Ltd.
Goutham S Jamna Auto Industries Ltd.
Manjunath K N Responsive Industries Ltd.
Natasha Kakran KNR Constructions Ltd.
Prasanth V Vinati Organics Ltd.
Satyam Shah Hindustan Zinc Ltd.
Sindhu K Affle (India) Ltd.
Tilak P United Breweries Ltd.
Ananthu Unnithan UltraTech Cement Ltd.
Divya M Delta Corp Ltd.
Harish M R Godfrey Phillips India Ltd.
Manu Anand Graphite India Ltd.
Nisha Soman Future Retail Ltd.
Prashanjeet Pal GAIL (India) Ltd.
Shaikh Mohiuddin Sharief HFCL Ltd.
Singh Jayshree Ashok Bliss GVS Pharma Ltd.
Ullas M R Indian Railway Catering & Tourism Corporation Ltd.
Anil Kumar M NLC India Ltd.
Fouziya Balrampur Chini Mills Ltd.
Harsh Kant Tiwari Adani Enterprises Ltd.
Meka S V Srikanth EPL Ltd.
Parvathi A E Galaxy Surfactants Ltd.
R S Ravi Cera Sanitaryware Ltd.
Shamim Nauroz SRF Ltd.
Soundarya Y V Jubilant Foodworks Ltd.
Vivek R Rao Gujarat Alkalies & Chemicals Ltd.
Anirudh Bengeri Jai Corp Ltd.
Gauthami M Bharat Electronics Ltd.
Hemanth Kumar B L Fortis Healthcare Ltd.
Mohammad Yusuf Sanofi India Ltd.
Puja Kumari J B Chemicals & Pharmaceuticals Ltd.
Rahul Deshpande Gujarat Mineral Development Corporation Ltd.
Sharath Kumar B Sterling and Wilson Solar Ltd.
Sushmita Maruti Achari NMDC Ltd.
Vijaykrishna J R Tanla Platforms Ltd.
Ankit Walia Welspun India Ltd.
Geetha R India Tourism Development Corporation Ltd.
Jayachandiran S KPR Mill Ltd.
Mohammed Afsar Zydus Wellness Ltd.
Radhika Ratnam Pandey ACC Ltd.
Rajesh K Oberoi Realty Ltd.
Shashank B V Indian Energy Exchange Ltd.
Swapna S Greaves Cotton Ltd.
Vikas Singh Century Textiles & Industries Ltd.
Anoop Naik Lux Industries Ltd.
Gouthami S Rashtriya Chemicals & Fertilizers Ltd.
Jeshwanth G S Coal India Ltd.
Mohammed Umar Farook M Coromandel International Ltd.
Rakeshnayaka M Birla Corporation Ltd.
Rakshitha B S Ashoka Buildcon Ltd.
Shashank C H DLF Ltd.
Tanya Beth Cotter Shoppers Stop Ltd.
Vinay A Strides Pharma Science Ltd.
Basavaraj S Dongargavi Swan Energy Ltd.
Harshdeep Kaur Bhatia Tata Power Company Ltd.
K P Varun Sai Abbott India Ltd.
Mohan R SIS Ltd.
Ramendra Singh Aegis Logistics Ltd.
Rashmi Mishra R NBCC (India) Ltd.
Shashidhara D Rain Industries Ltd.
Tejaswini L Escorts Ltd.
Vinay Reddy M JK Paper Ltd.
Bharata V Welspun Corp Ltd.
Jincy Sebastian Larsen & Toubro Ltd.
Karpaga Vinayagam B Minda Industries Ltd.
Mohideen P Piramal Enterprises Ltd.
Ravi Kumar M V-Guard Industries Ltd.
Reshma A Nestle India Ltd.
Shiva H A Aurobindo Pharma Ltd.
Vadaga Deepika Titan Company Ltd.
Vinayak Pendlikal Oil India Ltd.