Case on UTV Software Communications Ltd.

UTV Software Communications Ltd (UTV), India's first integrated global media and
entertainment company, has seen recent rapid expansion, both in existing businesses and
into new growth sectors. The entire UTV focus is on creating, aggregating and
disseminating outstanding content - we are a creatively led company which believes in
setting not following trends. UTV is in fact India's only diversified media and
entertainment company with content creation abilities across platforms and genres.

The UTV group has expanded into 5 verticals, all of which allow for synergy across in
terms of content development, communication and development of thought leadership.
This also creates exciting opportunities for employees to move across businesses in order
to broaden their experience and enrich their career.

These 5 verticals include the following:

 Broadcasting
 Games Content
 Motion Pictures
 New Media
 TV Content

Listed on India's premier stock exchange, The Bombay Stock Exchange UTV has
subsidiaries with offices across India, UK, USA and Japan. The Walt Disney Company
holds a strategic stake in UTV

Corporate structure

UTV is listed on the Mumbai Stock Exchange and the Indian National Stock Exchange,
and its motion picture division UTV Motion Pictures Plc is listed on the London Stock
Exchange's Alternative Investment Market (AIM).

In August 2006, The Walt Disney Company acquired a 14.85 percent stake in UTV.[2]
This was subsequently hiked to 32.1 percent in 2008, the same level as UTV's founders
Ronnie Screwvala and his associates. The remaining share is publicly traded.

Analyse the case by using various Financial Ratios.

Determine the Optimum Cost of Capital of the company.

Calculate Leverages of the company.

Balance Sheet
 Mar Mar
Sources Of Funds '07 '08 Mar '09
Total Share Capital 22.89 24.84 34.2
Equity Share Capital 22.89 24.84 34.2
Share Application Money 3.75 0 39.01
Pref. Share Capital 0 0 0
Reserves 141.37 177.78 983.29
Revaluation Reserve 0 0 0
1,056.5
Networth 168.01 202.62 0
Secured Loans 159.14 244.79 181.65
Unsecured Loans 0 0 165
Total Debt 159.14 244.79 346.65
1,403.1
Total Liabilities 327.15 447.41 5

Application Of Funds
Gross Block 46.5 35.16 31.3

Less: Accum. Depreciation 7.27 7.89 7.48

Net Block 39.23 27.27 23.82
Capital Work in Progress 1.3 1.8 0.02
Investments 78.52 78.05 482.67
Inventories 83.18 26.79 152.74
Sundry Debtors 45.29 100.17 55.18
Cash& Bank Balance 7.54 1.53 62.68
Total Current Assets 136.01 128.49 270.6
Loans and Advances 120.09 355.19 749.48
Fixed Deposits 1.5 0.8 1.08
1,021.1
Total CA, Loans & Advances 257.6 484.48 6
Current Liabilities 48.93 138.98 119.16
Provisions 0.56 5.22 5.37
Total CL & Provisions 49.49 144.2 124.53
Net Current Assets 208.11 340.28 896.63

Miscellaneous Expenses 0 0 0
1,403.1
Total Assets 327.16 447.4 4

Contingent Liabilities 8.17 8.19 14.32

Book Value (Rs) 71.75 81.56 297.55
Profit & Loss A/c.
Mar Mar
'07 '08 Mar '09
Income
Sales Turnover 152.45 286.29 251.19
Excise Duty 0 0 0
Net Sales 152.45 286.29 251.19
Other Income 33.03 10.23 68.34
Stock Adjustments 0 0 0
Total Income 185.48 296.52 319.53
Expenditure
Raw Materials 0 0 0
Power & Fuel Cost 0 0 0
Employee Cost 14.14 15.75 20.75
Other Manuf. Expenses 122.76 233.57 239.6
Selling and Admin Expenses 15.11 10.57 2.77
Miscellaneous Expenses 4.57 6.5 4.1
Preoperative Exp Capitalised 0 0 0
Total Expenses 156.58 266.39 267.22
Operating Profit -4.13 19.9 -16.03
PBDIT 28.9 30.13 52.31
Interest 7.21 19.02 14.29
PBDT 21.69 11.11 38.02
Depreciation 3.07 3.35 2.91
Other Written Off 0 0 0
Profit Before Tax 18.62 7.76 35.11
Extra-ordinary items 1 0.11 2
PBT (Post Extra-ord Items) 19.62 7.87 37.11
Tax -16.97 3.4 11.29
Reported Net Profit 36.59 4.48 25.82
Total Value Addition 156.58 266.38 267.21
Pref. Dividend 0 0 0
Equity Dividend 5.72 3.42 0
Corporate Dividend Tax 0.8 0.58 0
Per share data
(annualised)
Shares issue (lakhs) 228.94 248.43 341.95
EPS(Rs) 15.98 1.8 7.55
Equity Dividend (%) 25 10 0
Book Value (Rs) 71.75 81.56 297.55