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CHAPTER – 1
INTRODUCTION
1.1 INTRODUCTION
The Indian hydraulics engineering industry has been the key player in the country’s
rapid economic development, in both the arenas of infrastructure and production. In
particular, the segment of earthmoving and construction equipment (ECE) such as
hydraulic excavators, wheel loaders, backhoe loaders, motor graders, vibratory
compactors, cranes, dumpers, tippers, forklifts trucks, dozers, pavers, batching plants,
etc. is based on applications of hydraulics technology. Over the past two decades, the
ECE has made enormous progress and grown both in size and diversity.
The driving force in a hydraulic system is the electromechanical actuator, a tiny
component that is capable of performing Titanic feats. It is similar to mechanical
actuators except that the control knob or handle is replaced with an electric motor.
Rotary motion of the motor is converted to linear displacement.
As for electromechanical actuators manufacturers India has several reputed
companies like the Delhi NCR based Dantal Hydraulics that also has another unit in
Bengaluru. In this type of actuator, the lead screw does not rotate. Although it prone
to wear and tear due to numerous parts, it is cheap and has several advantages such as
–
Repeatable
Automated Operation
Self-contained techniques
Identical function in extending or retracting
Provision in design for position feedback
Energised by DC motors
Reportedly, there are many designs of modern linear actuators and company like
Dantal also happens to be one among leading D.C. power unit manufacturers in the
country.
All said and done, hydraulics engineering industry will be the decisive factor in the
nation’s growth. The Planning Commission has confirmed that India’s infrastructure
spending is in the range of one trillion US dollars during the 12thFive-Year Plan
(2012-17). On this scorer, the government has extended sops, including a large
number of special economic zones (SEZs), to the capital goods industry of which
construction equipment is a part.
Meanwhile, preparations are in full swing to host the eighth edition of Excon 2015 (an
expo on ECE) at Bengaluru in November. This has been organised by Confederation
of India Industry (CII).
UPCOMING TRENDS
Like all other components and ingredients of the mobile equipment industry, this
industry too is witnessing technology leapfrog in terms of design, raw material,
weight, compatibility, ruggedness, etc. In the coming years, the development of
hydraulics would shift to usage of electronics for better control and monitoring along
with environment-friendly products. Furthermore, usage of special cylinders with
special features like enhanced plating life and enhanced overall life are emerging
trends. Customers now prefer to use various valves, manifolds, sensors etc inbuilt on
to the hydraulic cylinder itself in place of using them inline previously. In view of
increased cost pressures, optimisation of cylinder sizes are also being done by various
OEMs. As a result, cylinder players are conducting various calculations and
suggesting them optimal solution for this activity.
Ananthagopal affirms, ¨The emerging technology breakthroughs would be in the area
of affordable high strength alloys for cylinder tubes, sealing system which can operate
at higher pressure and temperatures along with environment-friendly coating
developments. Cylinder tubes used for high pressure applications are currently being
imported along with few of the sealing elements.¨
Likewise, Jain states, ¨Higher weight haulage vehicle and more volumetric capacity of
the equipment have been the trend all over the world. Indian hydraulics industry has
to cater to such needs. Indian equipment designers and manufacturers must
concentrate on such requirements of the customer. Normally high tensile seamless
steel tubes and high performance hydraulic seals are still imported as not being
available in the country.¨
Kamal Sharma, Vice President - Sales, Dantal Hydraulics Pvt Ltd, highlights,
¨Usage of various sensors, cushioning at the end of cylinder stroke, and high pressure
hydraulics are emerging trends in hydraulic cylinders.¨ Position sensors sense the rod
position in a hydraulic cylinder and generates the output to tell the position of
cylinder. It optimises the operation of cylinder and machine. Machine can be
programmed or controlled to give accurate instructions to the cylinders on when to
move and how much to move etc. Cushioning in hydraulic cylinders ensures slowing
down of cylinders at the end of stroke to minimise the banging effect. This not only
saves structures from damage which happens due to continuous banging of structures
at the end of stroke, but also provides comfort to the operator. Usage of high pressure
hydraulics is also an upcoming trend. High-pressure hydraulics reduces the size of
cylinders, tank, pump, valves etc. If optimally designed, it reduces the overall cost of
machine.¨ Dantal is one of the leading manufacturers of customised hydraulic
cylinders and hydraulic systems, aircraft hydraulic service, trolleys and car parking
solutions in India. The company was established in 1990 and offers complete
hydraulic solution to sectors like agriculture, earthmoving equipment, waste
management, material handling, mining, industrial applications, heavy equipment,
renewable energy sector and defence. Some of the marquee clients it caters to include
Action Construction, Caterpillar, Claas, CNH, Escorts, Godrej, JCB, KION, Mahindra
& Mahindra, Tafe, Terex etc.
TECHNOLOGY TRENDS
Despite manufacturing, industrial and other sectors are still reeling under protracted
slowdown. The Indian hydraulic cylinder industry has not been deterred when it
comes to expansion. In fact, most of the players affirm that their capex and
technology enhancement plans remained unchanged and they were expanding their
capacities and diversifying into new product lines and allied industries. A well-
developed supply chain along with robust, fool-proof manufacturing practices would
assure the product quality. Training and educating the customer in terms of regular
checkups and maintenance practices will improve the quality of product through its
entire life cycle. This is because the the expectation of OEMs are increasing in line
with end customer requirements. The shift from price-driven market to reliable
product and quick service support is seen over years. All the companies were
unanimous in their views that the manufacturing process for all cylinders remains the
same but to meet specific application requirements, special manufacturing
technologies are adopted. ¨In order to meet its long term objectives, we have adopted
state-of-the-art technology which is on par with international standards. Design and
manufacturing technology is constantly upgraded by us to cater to the needs of the
future requirements of the OEMs. However, the level of technology varies from small
cylinders of high volumes vis-a-vis niche, customised flexible and small volume
manufacturing and need to be adopted and adapted
Ananthagopal states, ¨The quality of hydraulic cylinders are built right from
understanding the application till the proper maintenance of the assembly at regular
intervals. We achieve this by having a detailed discussion with the customer to
understand the usage, operations, environment etc. The design is then subjected to
latest prototyping simulation software to validate and provide the optimum solution.
Furthermore, the advancement in manufacturing technology has helped the industry to
meet all types of end applications. Manufacturing technology depends mainly on the
cylinder size and quantities. Line manufacturing concept with semi or fully automatic
handling systems is well suited for higher batch sizes to reduce the cost, whereas one
off requires a separate treatment in terms of machinery and process.¨
Similarly, Sharma also voices, ¨Our quality control system starts from design control
itself which ensures that our designs should have ease of manufacturing and meeting
all desired output performance criteria. Our SQA department ensures strict control
over all bought out parts, detailed and efficient in house process control. Our
workmen are highly skilled and ensure that defects are neither passed to next station
nor accepted if passed by mistake by previous station. Our various system controls are
ensured through SAP. Employee involvement and continual improvements make us
proud of our quality. We at Dantal have separated our production lines keeping in
mind major applications and these production lines are independent of each other and
have the requisite infrastructure which is required to make the cylinder perform
accurately. Our earthmoving equipment line is equipped with friction welding, UT
testing machines etc. Our small cylinder line has shrink fit machines, semi automated
assembly line etc. Special cylinder line has the infrastructure to handle extra long and
extra big cylinders. These special infrastructures are in addition to standard machines
which are available in all production lines like cutting machines, turning centres,
vertical machining centres, burnishing machines, ultra sonic clearing machines,
torquing and assembly machines, various test rigs etc. This entire infrastructure
ensures that geometry of our cylinders is as specified and ensures long life of our
products.¨
FORWARD OUTLOOK
Growth of infrastructure industry will be the key driver for success of hydraulic
business. Defence and aerospace will be another key segment to watch, with opening
of the industry to private players, easing of FDI norms and offset clause will drive the
growth.
COMPANY PROFILE
1.3 INTRODUCTION
1.4 PROMOTERS
Govind Mirchandani Non-Executive Independent Chairman of the Board
Udayant Malhoutra Chief Executive Officer, Managing Director,
Executive Director
Hanuman Sharma Chief Financial Officer, Executive Director
Naveen Chandra P. Compliance Officer, Company Secretary
Arvind Mishra Global COO-Hydraulics, Head - Homeland Security,
Executive Director
P. Ramesh Chief Operating Officer - Hydraulics, India,
Additional Executive Director
Rajender Singh Head - Group Human Resources
Dietmar Hahn Additional Director
Shirish Saraf Additional Director
James Tucker Additional Director
Nalini Mohanty Independent Director
Ramesh Venkataraman Independent Director
VISION
A Global Leader in the design and manufacture of highly engineered Automotive,
Aerospace and Hydraulic products. To grow as a network of innovative businesses
that will focus on serving customer needs.
MISSION
Enhance the safe, nurturing, learning and empowering environment for all
employees, and motivate them to act like owners by Going the Extra Mile
Exceed customer expectations by providing high-valued products and services
Enhance wealth for shareholders
QUALITY POLICY
It is our approach to give imaginative and creative answer for amuse our clients at
cost – powerful costs on a nonstop premise
By conveying better an incentive than our clients, we will fabricate a fruitful plan of
action for ourselves, equipped for returning significant returns to financial specialists
and enhancing the personal satisfaction of all workers
All procedures will be Eco – Friendly and be intended to wipe out wastage, and all
workers will endeavor to always grow the limits of information through creative
ability and ingenuity.
portion fabricates pressure driven rigging pumps with aluminum or cast press body,
engines, hand pumps, hitch control valves, shake shaft congregations, lube and water
pumps and related items, and finish water powered answers for the Indian and abroad
markets. The Aerospace and Defense portion's items incorporate wing and back
fuselages, ailerons and wing folds, fold track bars and airframe structures. It
additionally gives answers for unmanned airborne frameworks and vehicles, and
checking and reconnaissance frameworks.
Hydraulics
our customers, by combining the technical competence of our facilities in UK with the
cost & manufacturing advantages offered by our Indian plants
Homeland Security
Dynamatic Homeland Security™ offers cutting edge security solutions to enhance the
Nation’s capabilities in countering modern day security threats.
Bengaluru
In India
Chennai
Coimbatore
Nasik
Global
United Kingdom (Swindon, Bristol) & Germany (Schwarzenberg),
The company is situated in the Industrial Area of Peenya. In a vast area under its
operation. The Age old perception of the factories being very congested is being
proved wrong by such companies.
The premise has the following infrastructure facilities
1.10 COMPETITORS
DTL is a market leader in Hydraulics as learnt in the beginning it holds 70% of the
Indian market. In other industries the company in an infant, but still it is doing well.
Not much information about its competitors is given. As they are all well known co’s
like
Bosch Limited
Eaton Corporation
Yuken India Limited
Strength
Weakness
• Power serious, dependant on control and any unnatural birth cycle here
outcomes in under use of limit
• Needs refreshing with the circumstances as far as plant and apparatus
• No reserves raised on a short terms premise which have been utilized just
for long haul venture
• Variation of offer costs of the organization in securities exchange
Opportunities
Threats
The present economy supports, and is the motivation behind why numerous
organizations are spreading their breezes to incorporate more up to date advertises.
With such fast extension in the pipeline for most business, reconciliation procedures
and framework can be a bad dream
With Dynamatic Technologies Limited, through the undertaking is made less
demanding. For over 10 years DTL has made to the differing needs of business
crosswise over enterprises with its arrangement of items. DTL is the biggest maker of
Hydraulic Gear Pumps in Asia.
Current Ratio
Current Ratio = Current Assets / Current Liabilities
Table No: 1.1: Table showing analysis of Current Ratio (Rs in Cr)
Current Assets
Years Current Liabilities Ratio(%)
2.50 2.15
2.00
1.50 1.25
0.87
1.00 0.61 0.65
0.50
0.00
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17
Quick Ratio
Quick ratio = Quick Assets /Current Liabilities
Table No: 1.2 : Table showing analysis of Quick ratio
(Rs in Cr)
Years Quick Assets Current Liabilities Ratio(%)
1.14
1.20
1.00
0.80
0.60
0.60 0.48
0.34 0.37
0.40
0.20
0.00
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17
18.95
20.00 17.95 17.98
13.32
15.00 11.64
10.00
5.00
0.00
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17
Table No: 1.4: Table showing analysis of Equity Multiplier Ratio. (Rs in Cr)
Shareholder’s Equity multiplier
Year Total Assets
equity ratio %
2012 - 13 425.74 5.41 78.70
2013 - 14 398.64 5.44 73.28
2014 - 15 521.01 6.34 82.18
2015 - 16 574.89 6.34 90.68
2016 - 17 799.04 6.34 126.03
Graph No: 1.4
140.00 126.03
120.00
90.68
100.00 78.70 82.18
73.28
80.00
60.00
40.00
20.00
0.00
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17
CHAPTER – 2
CONCEPUTAL FRAME WORK AND LITERATURE
REVIEW
2.1 THEORETICAL BACKGROUND
INTRODUCTION
Finance managers are the agents of shareholders and their job is to look after the
interest of the shareholders. The objective of any shareholder or investor would be a
good return on their capital and safety of their capital.
Both these objectives are well served by wealth maximization as a decision criterion
for business.
Increased Returns
The most overt advantage of a wealth maximization goal is that company make
money for all owners of the business. Naturally, if Company start a business on their
own or with other investors, Company' had like to make as much money as Company
can. If all of their business decisions connect with this end in mind, Company could
make enough money on the company's income or upon sale of the business to become
wealthy.
Strategic Consistency
Whatever their goal, a clear focus on an overall strategic objective helps Company
create consistency in business decisions. If their company operates with the primary
purpose of maximizing wealth, their decisions likely will relate to this objective
consistently. In weighing purchases of supplies or inventory, for instance, Company
would select a provider and goods that offer Company the highest revenue with the
lowest investment cost. Any decision Company make weighs both cost and revenue-
generation factors first and foremost.
Avoids Emotion or Impulse
Unlike general goals like "becoming an industry leader" or "helping to better the
world," maximizing shareholder wealth is a very objective, unemotional business
goal. You typically make decisions after crunching numbers, weighing rewards and
risks and analyzing any available data. With more subjective or emotional objectives,
Company have greater potential to make emotional or impulsive decisions that could
lead to high costs and poor business results.
Common Concerns
While these advantages of maximizing wealth are hard to argue against, Company
have to recognize potential drawbacks and criticisms. If Company get overly wrapped
up in the financial stakes of their decisions, it can take away from any intangible or
altruistic goals Company have, such as bettering their community. Additionally,
executing decisions that only weigh bottom line results can attract criticisms from
community activists that expect Company to contribute to the community, or from
environmental watch groups that expect Company to operate with green-friendly
policies.
L Prrabha, Jayapriya R and Joslin Monica LA (2017) in their article " A study on
shareholders’ wealth maximization of muthoot finance limited" stated that,
Shareholders wealth maximization is the attempt by business managers to maximize
the wealth of the firm. In this article, we suggest necessary steps to enlarge Muthoot
Finance Company’s wealth. To make our case, we used capital structure and trend
analysis. Their problem is uncontainable expenses. For that we gave suggestions
regarding the maintenance of expenses in a proper way. Finally, the suggestions are
offered to improve the wealth of the company.
C.N. Ozuomba, A.S. Anichebe and P.V.C. Okoye (2016) in their article “The effect
of dividend policies on wealth maximization – a study of some selected places” stated
that, This research article examines how share value thus shareholders wealth is
affected by dividend policies. This study seeks to analyze the effect of firm’s dividend
policies on shareholders’ value of public companies in Nigeria, to empirically
examine the linkage of dividend payout with information asymmetry, and to analyze
the effect of various dividend policies on shareholders wealth. This study shows the
relevance of dividend and further proves that dividend policies of public limited
companies influence the wealth of shareholders in Nigeria.
and managers endorse the idea that the primary purpose of the firm is to make money
for its owners. This shareholder wealth maximization objective is justified on the
grounds that it maximizes social welfare. In this article, the first of a two-part set, we
argue that, although this shareholder primacy model may have been appropriate in an
earlier era, it no longer is, given our current state of economic and social affairs.
Bernard S. Sharfman (2013) in his article “Shareholder Wealth Maximization and
its Implementation under Corporate Law” stated that, Shareholder wealth
maximization is a norm of corporate governance that encourages a firm’s board of
directors (the board) to implement all major decisions such as compensation policy,
new investments, dividend policy, strategic direction and corporate strategy with only
the interests of shareholders in mind. There is strong support for the idea that
shareholder wealth maximization should be the primary norm underlying the
governance of for-profit corporations. Given this majority view, it should come as no
surprise that many practitioners and scholars also consider shareholder wealth
maximization to be the objective of corporate law with corporate law’s fiduciary
duties of care and loyalty being the tools of accountability to enforce this objective.
Peter O. Eriki, Eseoghene J. Idolor and Igbinovia L. Eghosa (2012) in their study,
"Financial Management Practices, Wealth Maximization Criterion And Firm Value:
An Empirical Analysis" stated that, In the field of financial management, shareholders
wealth maximization is often seen as the desirable goal not only from the shareholders
perspective but for the society at large; with the firm’s primary goal aimed mainly at
maximizing the wealth of its shareholders. This study thus aimed at determining the
impact of the core financial management decisions or functions on firm value or
shareholders wealth.
Bernard Sharfman (2012) has done a study on shareholder wealth maximization and
its implementation under corporate law. The article takes a very traditional approach
he analysed with an approval that codes have historically been very hesitant to
participate in the process of determining if a corporate decision is wealth maximizing,
the creation and application of corporate law involves an enduring struggle to find the
or disappointment as hazard, and chiefs must screen this hazard since it influences an
organizations' cost of capital, advertise esteem and at last investor riches. Utilizing
relapse investigation, this examination rethought how the efficient (advertise related)
danger of an organization's regular stock is connected to corporate conduct and money
related execution. The outcomes propose that legitimately putting overabundance
trade stream out working resources and high resource turnover may bring down
efficient hazard and, contingent upon an organization's phase of advancement,
executive turnover may increment precise hazard.
Petra Jörg, Claudio Loderer, and Lukas Roth (2003) in their investigation,
"Investor esteem expansion: What directors say and what they do" expressed that,
This paper looks at whether Swiss firms amplify investor esteem. To discover, we
review the objectives of 313 recorded and unlisted firms. We at that point look at
whether administrators' choices are predictable with their objectives and examine
whether execution relates to expectations. Our outcomes demonstrate that most chiefs
seek after clashing targets. Numerous additionally announce that they don't augment
investor esteem. Also, the individuals who guarantee they do some of the time depend
on venture criteria that are conflicting with that objective. At long last, we find that
offer value execution is insignificantly better when supervisors claim to amplify
investor esteem, especially when stock costs have fallen.
Bread cook et al. (2002) characterizes profit arrangement under the pertinence
hypothesis as takes after; the profit strategy is a down to earth approach which regards
profits as a dynamic choice variable and held income as the leftover profits are
something other than a methods for dispersing net benefit, and that any variety in
profit payout proportion could influence investors riches, a firm ought to in this way,
attempt to set up an ideal approach that will augment investors riches.
Michael C. Jensen (2002) in their examination, "Esteem Maximization, Stakeholder
Theory, and the Corporate Objective" expressed that, In this article, I offer a
proposition to clear up what I accept is the correct connection between esteem
augmentation and partner hypothesis, which I call illuminated esteem amplification.
Illuminated esteem amplification uses a significant part of the structure of partner
CHAPTER – 3
RESEARCH DESIGN
3.1 STATEMENT OF THE PROBLEM
Shareholders are the anonymous title holder of the company. They have an influential
part in company’s wealth. Shareholders tend to show interest only when the wealth of
the company is at its maximum. Eventually, the shareholders wealth increases
proportionate to the increase in the wealth of the company. When the company’s
wealth is maximized, it is benefited for the shareholders. Dynamatic Technologies Ltd
is one of the trusted Casting Industry in Karnataka. They are specially designed for
the working for the wealth of the shareholder. On those crucial grounds we make
choice to designate a project on this company.
This study mainly attempts to analyse the financial performance of the company. The
present study develops a financial analysis for owner’s equity and its development.
The study forecast to evaluate how to increase the company profit.
The present study is based on Descriptive Research Method. This study is based on
Secondary Data
Secondary Data
Secondary data has been collected from Company Annual Report, Literature Review
Comparative Statement
Trend analysis
First Chapter deals with Industry Profile and Company Profile, Promoters, Vision,
Mission & Quality Policy, Products/ service profile, Area of the operation,
Infrastructure facilities, Competitors Information, SWOT Analysis, Future Growth
and Prospects and Financial Statement
Second Chapter deals with Theoretical Background of the study, Literature Review
with Research Gap
Third chapter deals with Statement of the problem, Need for the study, Objectives of
the study, Scope of the study, Research Methodology, Hypotheses, Limitations,
Chapter Scheme
Fourth chapter deals with Analysis and interpretation of the data collected with
relevant tables and graphs.
Fifth chapter deals with Summary of Findings, Conclusion and Suggestions /
Recommendations
CHAPTER – 4
DATA ANLAYSIS AND INTERPRETATIONS
Table No: 4.1
Trend of Equity Share Capital
Equity Share Capital
Years (Rs in Cr) Trend (%)
2012 - 13 5.41 100.00
2013 - 14 5.44 100.55
2014 - 15 6.34 117.19
2015 - 16 6.34 117.19
2016 - 17 6.34 117.19
Graph No: 4.1
115
110
105
100 101
100
95
90
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17
Trend (%)
140
120.92
120 109.90
100 101.18
95.45
100
80
60
40
20
0
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17
250 212
200
150 125
100 91 98
100
50
0
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17
188
200
180
160
140
109
120 100
89 91
100
80
60
40
20
0
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17
189
200
135
150 122
100 94
100
50
0
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17
444
450
400
350
300 263
235
250
200
150 100 100
100
50
0
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17
250
201
200 162
134
150
100 106
100
50
0
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17
250
211.5
189.3
200
136.2
150
100 100.8
100
50
0
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17
140 123.69
120 100 100.73
100 86.96
75.96
80
60
40
20
0
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17
120
100
100
80
60.56 63.96
60 48.74
46.41
40
20
0
2011 - 12 2012 - 13 2013 - 14 2014 - 15 2015 - 16
Current Ratio
Current Ratio = Current Assets / Current Liabilities
Table No: 4.11: Table showing analysis of Current Ratio (Rs in Cr)
Current Assets
Years Current Liabilities Ratio(%)
2.50 2.15
2.00
1.50 1.25
0.87
1.00 0.61 0.65
0.50
0.00
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17
Quick Ratio
Quick ratio = Quick Assets /Current Liabilities
Table No: 4.12 : Table showing analysis of Quick ratio (Rs in Cr)
Years Quick Assets Current Liabilities Ratio(%)
1.14
1.20
1.00
0.80
0.60
0.60 0.48
0.34 0.37
0.40
0.20
0.00
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17
Table No: 4.13: Table showing analysis of Debt Equity Ratio (Rs in Cr)
Debt equity ratio
Year Long term debt Shareholders fund
%
2012 - 13 97.12 5.41 17.95
2013 - 14 97.83 5.44 17.98
2014 - 15 120.13 6.34 18.95
2015 - 16 84.46 6.34 13.32
2016 - 17 73.77 6.34 11.64
Graph No: 4.13
18.95
20.00 17.95 17.98
15.00 13.32
11.64
10.00
5.00
0.00
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17
Table No: 4.14: Table showing analysis of Equity Multiplier Ratio. (Rs in Cr)
Shareholder’s Equity multiplier
Year Total Assets
equity ratio %
2012 - 13 425.74 5.41 78.70
2013 - 14 398.64 5.44 73.28
2014 - 15 521.01 6.34 82.18
2015 - 16 574.89 6.34 90.68
2016 - 17 799.04 6.34 126.03
Graph No: 4.14
140.00 126.03
120.00
90.68
100.00 78.70 82.18
73.28
80.00
60.00
40.00
20.00
0.00
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17
Return on Equity
Table No: 4.15: Table showing analysis of Return on Equity (Rs in Cr)
Return on Equity
Year Net Income Share holder’s equity
Ratio%
3.00 2.71
2.50
1.91 1.89
2.00
1.50 1.23
1.00 0.63
0.50
0.00
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17
Sources Of Funds
Total Share Capital 5.41 5.44 0.03 0.55
Equity Share Capital 5.41 5.44 0.03 0.55
Share Application Money 12.5 10 -2.5 -20.00
Reserves 130.67 137.45 6.78 5.19
Net worth 148.58 152.89 4.31 2.90
Secured Loans 241.17 220.23 -20.94 -8.68
Unsecured Loans 35.99 25.52 -10.47 -29.09
Total Debt 277.16 245.75 -31.41 -11.33
Total Liabilities 425.74 398.64 -27.1 -6.37
Mar 2013 Mar 2014
Application Of Funds
Gross Block 456.57 501.1 44.53 9.75
Less: Revaluation Reserves 20.13 6.26 -13.87 -68.90
Less: Accum. Depreciation 165.01 184.64 19.63 11.90
Net Block 271.43 310.2 38.77 14.28
Capital Work in Progress 74.16 0.56 -73.6 -99.24
Investments 70.4 70.4 0 0.00
Inventories 60.63 61.14 0.51 0.84
Sundry Debtors 68.57 68.96 0.39 0.57
Cash and Bank Balance 6.28 12.88 6.6 105.10
Total Current Assets 135.48 142.98 7.5 5.54
Loans and Advances 97.12 97.83 0.71 0.73
Total CA, Loans & Advances 232.6 240.81 8.21 3.53
Current Liabilities 220.54 218.97 -1.57 -0.71
Interpretation
According to comparison of 2013 – 14 Total Share capital as growing 0.03 Crores,
reserves and surplus is growing up to 6.78 Crores, Total Liabilities is decreasing up to
-27.1, Inventories increased up to 0.51 Crores and Total Currents has increased up to
7.5 Crores. But Revenue From Operations [Gross] has decreased and showing
negative figure as -0.83, Total revenue of the company has increased up to 16.1 crores
and total expenses of the company is also increased up to 15.72 Crores.
Sources Of Funds
Total Share Capital 5.44 6.34 0.9 16.54
Equity Share Capital 5.44 6.34 0.9 16.54
Share Application Money 10 0 -10 -100.00
Reserves 137.45 263.8 126.35 91.92
Networth 152.89 270.14 117.25 76.69
Secured Loans 220.23 237.2 16.97 7.71
Unsecured Loans 25.52 13.67 -11.85 -46.43
Total Debt 245.75 250.87 5.12 2.08
Total Liabilities 398.64 521.01 122.37 30.70
Application Of Funds
Gross Block 501.1 486.07 -15.03 -3.00
Less: Revaluation Reserves 6.26 4.72 -1.54 -24.60
Less: Accum. Depreciation 184.64 199.71 15.07 8.16
Net Block 310.2 281.64 -28.56 -9.21
Capital Work in Progress 0.56 0.08 -0.48 -85.71
Investments 70.4 165.4 95 134.94
Inventories 61.14 82.56 21.42 35.03
Sundry Debtors 68.96 90.12 21.16 30.68
Cash and Bank Balance 12.88 8.83 -4.05 -31.44
Total Current Assets 142.98 181.51 38.53 26.95
Loans and Advances 97.83 120.13 22.3 22.79
Total CA, Loans & Advances 240.81 301.64 60.83 25.26
Current Liabilities 218.97 207.85 -11.12 -5.08
Interpretation
According to comparison of 2014-15 Total Share capital as growing 0.9 Crores,
reserves and surplus is growing up to 126.35 Crores, Current Liabilities decreased up
to -11.12 and Total Liabilities is increased up to 122.37, Inventories increased up to
95 Crores and Total Currents has increased up to 38.53 Crores. But Revenue From
Operations [Gross] has increased and showing figure as 16.6 , Total revenue of the
company has increased up to 20.69 crores and total expenses of the company is also
increased up to 29.91 Crores.
Sources Of Funds
Total Share Capital 6.34 6.34 0 0.00
Equity Share Capital 6.34 6.34 0 0.00
Share Application Money 0 0 0
Reserves 263.8 268.16 4.36 1.65
Net worth 270.14 274.5 4.36 1.61
Secured Loans 237.2 300.63 63.43 26.74
Unsecured Loans 13.67 0.19 -13.48 -98.61
Total Debt 250.87 300.82 49.95 19.91
Total Liabilities 521.01 575.32 54.31 10.42
Application Of Funds
Gross Block 486.07 499.69 13.62 2.80
Less: Revaluation Reserves 4.72 4.69 -0.03 -0.64
Less: Accum. Depreciation 199.71 222.73 23.02 11.53
Net Block 281.64 272.27 -9.37 -3.33
Capital Work in Progress 0.08 0 -0.08 -100.00
Investments 165.4 185.39 19.99 12.09
Inventories 82.56 114.8 32.24 39.05
Sundry Debtors 90.12 98.5 8.38 9.30
Cash and Bank Balance 8.83 6.28 -2.55 -28.88
Total Current Assets 181.51 219.58 38.07 20.97
Loans and Advances 120.13 84.46 -35.67 -29.69
Total CA, Loans & Advances 301.64 304.04 2.4 0.80
Current Liabilities 207.85 175.62 -32.23 -15.51
Provisions 19.9 11.19 -8.71 -43.77
Interpretation
According to comparison of 2015-16 Total Share capital as constant no changes in
that, reserves and surplus is growing up to 4.36 Crores, Current Liabilities decreased
up to -32.23 and Total Liabilities is increased up to 54.31, Inventories increased up to
32.24 Crores and Total Currents has increased up to 38.07 Crores. But Revenue From
Operations [Gross] has decreased and showing figure as -25.59, Total revenue of the
company has decreased up to -28.96 crores and total expenses of the company is also
decreased up to -33.94 Crores.
Sources Of Funds
Total Share Capital 6.34 6.34 0 0.00
Equity Share Capital 6.34 6.34 0 0.00
Share Application Money 0 0 0
Reserves 268.16 276.85 8.69 3.24
Net worth 274.5 283.19 8.69 3.17
Secured Loans 300.63 512.28 211.65 70.40
Unsecured Loans 0.19 9.48 9.29 4889.47
Total Debt 300.82 521.76 220.94 73.45
Total Liabilities 575.32 804.95 229.63 39.91
Application Of Funds
Gross Block 499.69 535.95 36.26 7.26
Less: Revaluation Reserves 4.69 4.69 0 0.00
Less: Accum. Depreciation 222.73 249.87 27.14 12.19
Net Block 272.27 281.39 9.12 3.35
Capital Work in Progress 0 0 0
Investments 185.39 312.87 127.48 68.76
Inventories 114.8 128.26 13.46 11.72
Sundry Debtors 98.5 121.65 23.15 23.50
Cash and Bank Balance 6.28 22.83 16.55 263.54
Total Current Assets 219.58 272.74 53.16 24.21
Loans and Advances 84.46 73.77 -10.69 -12.66
Total CA, Loans & Advances 304.04 346.51 42.47 13.97
Current Liabilities 175.62 126.61 -49.01 -27.91
Provisions 11.19 15.12 3.93 35.12
Interpretation
According to comparison of 2016-17 Total Share capital as constant no changes in
that, reserves and surplus is growing up to 8.69 Crores, Current Liabilities decreased
up to -49.01 and Total Liabilities is increased up to 229.63, Inventories increased up
to 13.46 Crores and Total Currents has increased up to 53.16 Crores. But Revenue
From Operations [Gross] has increased and showing figure as 74.49, Total revenue of
the company has increased up to 81.98 crores
CHAPTER - 5
FINDINGS, SUGGESTIONS AND CONCLUSION
5.1 FINDINGS
Highest Trend percent in Equity Share Capital has found in the year 2014-15
as 117%
Highest Trend percent in Reserve has found in the year 2016-17 as 362%
Highest Trend percent in secured loan has found in the year 2016-17 as 212%
Highest Trend percent in Total Debt has found in the year 2016 – 17 as 188%
Highest Trend percent in Total Liabilities has found in the year 2016-17 as
189%
Highest Trend percent in Investment has found in the year 2016-17 as 444%
Highest Trend percent in Current Assets has found in the year 2016-17 as
201%
Highest Trend percent in Inventories has found in the year 2016-17 as 211.5%
Highest Trend percent in Loans and Advances has found in the year 2014-15
as 123.69%
Highest Trend percent in Current Liabilities has found in the year 2012-13 as
100%
The highest Current ratio was recorded in the year 2016-17 is 2.15%
The highest Quick ratio was recorded in the year 2016-17 is 1.14%,
The highest Debt Equity ratio was recorded in the year 2014-15 is 18.95%
The highest Equity Multiplier ratio was recorded in the year 2016-17 is
126.03%,
The highest Return on Equity ratio was recorded in the year 2013-14 is 2.71%
5.2 SUGGESTIONS
The acquirers need to identify appropriate target that has complimentary fit
within the acquirers own organizational structure, product portfolio and work
culture
Acquirers need to find out if they are overpaying for their acquisitions as it is
one of the most important reasons for failure of mergers and acquisitions in
creating shareholder value
It is suggested that the valuations for a target firms be carefully decided based
on rational judgments and not because the acquirer can afford paying extra
premiums
It becomes imperative for acquirers to evaluate the inorganic growth strategy
against the organic growth options available.
Investors need to study the fundamentals of acquirer firm before investing in
its shares for long term. The mismatch between market valuation and fair
valuation of firm once discovered can result in substantial losses to investors
thereby eroding their wealth from holdings in acquirer firm.
5.3 CONCLUSION
Mergers and acquisitions have increased significantly in India in recent times. The
inorganic growth option has occupied a significant place in strategy formulation
process of Indian corporate sector. While mergers have occurred in India in 1970s and
1980s, the focus then was on revival of sick units, social good and managing the
forces of strict regulations including licensing raj and permits. The focus of corporate
restructuring through mergers and acquisitions has since then changed. Particularly,
with implementation of economic reforms in 1991 and opening up of Indian
economy, the Indian corporate firms have started looking at mergers and acquisitions
from a very different perspective - that of being competitive, increasing market share,
cost reduction and control, product portfolio diversification, supply chain
management and exploiting core competence. The objective of mergers and
acquisitions today is not only building a strong business empire and improving
profitability, but passing on the benefits of mergers to shareholders in terms of
increased wealth.
In conclusion, there have been a number of debates on which objective a firm should
give first priority. In finance perspective, modern finance experts assert that
maximizing shareholder wealth is superior to other goals of the firm such as
stakeholder interest, profit maximization, survival, etc. However, the firm must
parallel this goal with satisfying other important constituencies in order to achieve a
sustainable development. These imply that the firm should have good corporate
governance to bring in not only the benefits for shareholders but also other
stakeholders.
ANNEXURE
FINANCIAL STATEMENT
Dynamatic Technologies
Rs. in Cr
Mar 17 Mar 16 Mar 15 Mar 14 Mar 13
INCOME
EXPENSES
Changes In Inventories Of
-9.20 -29.57 -7.74 0.80 -3.43
FG,WIP And Stock-In Trade
SHAREHOLDER'S FUNDS
NON-CURRENT LIABILITIES
CURRENT LIABILITIES
ASSETS
NON-CURRENT ASSETS
Development
Long Term Loans And Advances 16.00 16.02 14.47 12.94 29.58
CURRENT ASSETS
Short Term Loans And Advances 38.26 45.14 76.54 58.38 47.30
BIBLIGORAPHY
JOURNALS AND ARTICLES
WEBSITES
https://www.dynamatics.com/about.shtml