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Share Holders Wealth Maximization at Dynamatic Technologies Ltd.

, Bengaluru

CHAPTER – 1
INTRODUCTION
1.1 INTRODUCTION

Internship is an essential part of the educational set of courses of VTU MBA.


Internship is an initiative to bridge the gap between knowledge and its application
through a series of involvement that will enable VTU MBA student a program to
provide insights and experience to the operations of a company. The ten week
internship has been positioned during after completion of third semester and before
the commencement of fourth semester of the MBA program it serves the twin
purposes of providing critical business insights to students as well providing exposure
to industry and enables the students to have a practical exposure to the concepts learnt
during classroom teaching. This internship provides a platform to the students to put
into practice the theoretical concepts learnt.
Internship is very necessary to gain confidence and become aware of mechanism. The
primary purpose of this study is to fulfill the requirement for the post graduation
degree of MBA as per the required VTU curriculum. With this intention an internship
has been undertaken by me at MYMUL for the period of 10 weeks. Dynamatic
Technologies Ltd., Bengaluru

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

1.2 INDUSTRY PROFILE


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

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

COMPANY PROFILE
1.3 INTRODUCTION

Dynamatic Technologies Limited outlines and assembles profoundly designed items


for Automotive, Aeronautic, Hydraulic and Security applications. With cutting edge
configuration, designing and assembling offices in Europe and India, the organization
can meet clients' demanding prerequisites on 6 mainlands. LEAN. GREEN. CLEAN.
Dynamatic Technologies is vertically-incorporated, with its own combination making
and giving capacities a role as well as its own hostage environmentally friendly power
vitality sources. The organization's offices are intended to help neighboring groups
and the earth. Dynamatic Technologies is vertically coordinated, with its own
particular composite making and giving abilities a role as well as its own hostage
efficient power vitality sources.

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

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Malavika Jayaram Non-Executive Independent Director

1.5 VISION & MISSION STATEMENT

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.

1.6 NATURE OF BUSINESS CARRIED

Dynamatic Technologies Limited is an India-based maker of built items for the


aviation, car and pressure driven ventures. The Company works through three
business portions: Automotive and Metallurgy, Hydraulics, and Aerospace and
Defense. The Automotive and Metallurgy fragment supplies motor, transmission,
turbocharger and suspension parts. It additionally produces high accuracy, complex
metallurgical ferrous castings for car motors and turbochargers. The Hydraulics

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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.

1.7 PRODUCT PROFILE

Hydraulics

Dynamatic Hydraulics™ is one of the world’s largest producers of Hydraulic Gear


Pumps and is focused on being number one. It has two state-of-the-art manufacturing
facilities, located in Bengaluru, India, and Swindon, UK
Automotive & Metallurgy

Dynamatic Technologies produces high quality Ferrous and Non-Ferrous Automotive


Components for Highway, Off-Highway and Technology oriented applications for
leading Global Automotive OEMs.
Aerospace

Dynamatic-Oldland Aerospace™ is a demonstrated leader for the development of


exacting Airframe Structures and Precision Aerospace Components. The Company’s
modern Aerospace Manufacturing Complexes in India and UK deliver high value to

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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.

 Monitoring & Surveillance Systems


 Mobile Surveillance Vehicles (Msvs) – Dynamatic Technologies
Rakshak (Product Information / Download Pdf 824 Kb)
 Restricted Entry Systems
 Perimeter Security Solutions

1.8 AREAS OF OPERATION


The main manufacturing plant as well as the head office is situated at Dynamatic
Park, Peenya Bengaluru. There are two plants in Chennai and one plant in Sweden,
United Kingdom. The company is planning to acquire more companies in next five
years. Its among the top strategies of the management too, as well learnt it by the HR
Manager
Local

 Bengaluru

In India

 Chennai
 Coimbatore
 Nasik

Global
United Kingdom (Swindon, Bristol) & Germany (Schwarzenberg),

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

1.9 INFRASTRUCTURE FACILITIES

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

 Easy Access to the company


 A Canteen with hygienic atmosphere
 A Medical Inspection room
 First Aid Kits in all floors
 Dustbin at a regular distance
 Beautiful Gardens all around

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

1.11 SWOT ANALYSIS

Strength

• The organization is Asia's biggest maker of Hydraulic Gear Pumps and


one of the best five is around the world
• Company is presently providing Hydraulic Gear Pumps to every one of the
14 Tractor Manufacturers in India

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

• Over 85% of every single agrarian tractor and development hardware


created in India are controlled by pumps proceeded by Dynamatic
Hydraulics
• The organization has determined drive to dispose of operational wasteful
aspects, introduction of more esteem included products the organization's
net benefit has developed by 52%
• The enhanced general execution has been utilized by the organization to
arrange significant diminishment in money related expenses
• The organization imparts preparing to laborers for taking a shot at
numerous machines alongside blend of reengineering of procedures which
has continually expanded the productivity levels

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

• The programmed parts industry is ready to witness critical change


throughout the following decade
• The outsourcing blast in auto part industry offers extraordinary
opportunities for development
• Company by and by works predominately in the roadway vehicle fragment
which is described by high volumes and thin edges
• However, development opportunities availed in this portion make its
option for any business

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

• Company is proceeding to build up various variations of pumps utilized as


a part of the industrial segment, with a point of expanding entrance in this
lucrative and developing business sector.

Threats

• Enormous evaluating weights from clients can genuinely pressurize


margine which have all the earmarks of being the greatest danger to this
industry
• With clients obligation levels proceeding to drop (and anticipated to
achieve WTO level by 2008-09), the evaluating structure may must be
reasonably altered to counter expected imports. Cost – push swelling
regarding spiraling aluminum cost increments is a reason for concern

1.12 FUTURE PROSPECTS

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.

• Estimated turnover is around 3000 Lakhs


• Planned for expanding size of activities and extension.
• The organization intends to build its endeavors in growing new and more
efficient applications in automated agribusiness, earth moving, material
dealing with machine apparatuses through persistent advancement.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

1.13 FINANCIAL STATEMENT

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(%)

2012 - 13 135.48 220.54 0.61


2013 - 14 142.98 218.97 0.65
2014 - 15 181.51 207.85 0.87
2015 - 16 219.58 175.62 1.25
2016 - 17 272.74 126.61 2.15
Graph No: 2.1

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

Source: Table 1.1


Interpretation:
The above table and graph state that, The highest Current ratio was recorded in the
year 2016-17 is 2.15%, In the year 2012-13 current ratio was 0.61%, in the year
2013-14 current ratio was 0.65%, in the year 2014-15 current ratio was 0.87% and in
the year 2016-17 current ratio was 1.25%.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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(%)

2012 - 13 74.85 220.54 0.34


2013 - 14 81.84 218.97 0.37
2014 - 15 98.95 207.85 0.48
2015 - 16 104.78 175.62 0.60
2016 - 17 144.48 126.61 1.14
Graph No: 1.2

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

Source: Table 1.2


Interpretation :
From the above table shows the quick ratio of the company. The highest Quick ratio
was recorded in the year 2016-17 is 1.14%, In the year 2012-13 Quick ratio was
0.34%, in the year 2013-14 Quick ratio was 0.37%, in the year 2014-15 Quick ratio
was 0.48% and in the year 2016-17 Quick ratio was 0.60%.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Debt equity Ratio:


Long term debt
Debt equity ratio = Share holder fund

Table No: 1.3: 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: 1.3

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

Source: Table 1.3


Interpretation:
From the above table shows the Debt equity Ratio of the company. The highest Debt
Equity ratio was recorded in the year 2014-15 is 18.95%, In the year 2012-13 Debt
Equity ratio was 17.95%, in the year 2013-14 Debt Equity ratio was 17.98%, in the
year 2015-16 Debt Equity ratio was 13.32% and in the year 2016-17 Debt Equity
ratio was 11.64%.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Equity Multiplier Ratio

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

Source: Table 1.4


Interpretation:
The above table and graph state that Equity Multiplier Ratio. The highest Equity
Multiplier ratio was recorded in the year 2016-17 is 126.03%, In the year 2012-13
Equity Multiplier ratio was 78.70%, in the year 2013-14 Equity Multiplier ratio was
73.28%, in the year 2014-15 Equity Multiplier ratio was 82.18% and in the year 2015-
16 Equity Multiplier ratio was 90.68%.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

CHAPTER – 2
CONCEPUTAL FRAME WORK AND LITERATURE
REVIEW
2.1 THEORETICAL BACKGROUND
INTRODUCTION

Shareholder wealth is the appropriate goal of a business firm in a capitalist society. In


a capitalist society, there is private ownership of goods and services by individuals.
Those individuals own the means of production to make money. The profits from the
businesses in the economy accrue to the individuals.
Wealth maximization is a modern approach to financial management. Maximization
of profit is used to be the main aim of a business and financial management till the
concept of wealth maximization came into being. It is a superior goal compared to
profit maximization as it takes broader arena into consideration.
Definition

Wealth maximization is a modern approach to financial management. Maximization


of profit used to be the main aim of a business and financial management till the
concept of wealth maximization came into being. It is a superior goal compared to
profit maximization as it takes broader arena into consideration. Wealth or Value of a
business is defined as the market price of the capital invested by shareholders.
THE CONCEPT OF WEALTH MAXIMIZATION DEFINED AS
FOLLOWS

It simply means maximization of shareholder’s wealth. It is a combination of two


words viz. wealth and maximization. A wealth of a shareholder maximizes when the
net worth of a company maximizes. To be even more meticulous, a shareholder holds
share in the company/business and his wealth will improve if the share price in the
market increases which in turn is a function of net worth. This is because wealth
maximization is also known as net worth maximization.

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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.

ADVANTAGES OF SHARE HOLDERS WEALTH


MAXIMIZATION

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.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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.

2.2 LITERATURE REVIEW

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.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Fernando Gómez-Bezares Etc at all (2016) in their article, “Corporate


Sustainability and Shareholder Wealth—Evidence from British Companies and
Lessons from the Crisis” stated that, This study examines the impact of corporate
sustainability (CS) on stock market returns for FTSE 350 companies over the period
2006–2012. In addition, we find that CS is negatively correlated with stock return
volatility, and investing in companies with CS not only generates higher returns
during peak phases, but also diminishes shareholders’ losses during bear phases. We
have also carried.
Merugu Venugopal and Dr. M Ravindar Reddy (2016) in their study, "Impact of
capital structure on firm’s profitability and shareholder wealth maximization: A study
of listed Indian cement companies" stated that, The capital structure decision is the
imperative one since the profitability of the firm is specifically influenced by such
decision. It is redundant that benefit ought to be the main target for a business. Profit
maximization is part of the wealth creation process. Where, wealth maximization is a
long haul process. It alludes to the value of the firm and it is expressed in the value of
stock. This study is significant in that it will add to the already existing literature on
the impact of capital structure on the firm’s profitability and shareholder wealth.
Kwadwo Boateng Premepeh and Eugene Odartei-Mills (2015) in their study,
"Corporate governance structure and shareholder wealth maximization" stated that,
Over the past two decades the ideology of shareholder value has become entrenched
as a principle of corporate governance among companies. A well-established
corporate governance system suggests effective control and accounting systems,
stringent monitoring, effective regulatory mechanism and efficient utilization of
firms’ resources resulting in improved performance. The object of the research
presented in this paper is to provide empirical evidence on the effects of corporate
governance on shareholder value maximization of the listed companies in Ghana.
Kouki Marouan1 and Dabboussi Moez (2015) in their study, "Impact of Corporate
Governance on Shareholder Value Creation: Evidence from Tunisian Context" stated
that, The aim of this study is to examine the impact of corporate governance on
shareholder wealth. The emphasis here is placed on the hypothesis that separating

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

ownership from management has a significant effect on shareholder value creation.


The empirical analysis is based on a data set of Tunisian listed companies for the
period 1997-2006. As predicted by theory, the results show that the presence of
institutional investors in ownership structure seems to exercise effective control over
the external manager. Capital concentration appears to have a negative effect
respectively on performance and value creation. The presence of outside directors has
a significant negative impact on value creation and performance of Tunisian firms.
Thomas Clarke (2014) in his article, “The impact of financialisation on international
corporate governance: the role of agency theory and maximizing shareholder value”
stated that, The phenomena of financialisation has had a universal and pervasive
impact upon economies and societies in recent decades. Global finance is now
typified by a more international, integrated and intensive mode of accumulation; a
new business imperative of the maximization of shareholder value; and a remarkable
capacity to become an intermediary in every aspect of daily life. These financial
pressures are translated into the operations of corporations through the enveloping
regime of maximizing shareholder value as the primary objective
Madan Lal Bhasin (2013) in their article, "Economic Value Added and
Shareholders’ Wealth Creation: Evidence from a Developing Country" stated that, It
is universally accepted that the goal of financial management is to maximise the
shareholder‘s value. In recent years, Economic Value Added (EVA) framework is
gradually replacing the traditional measures of financial performance on account of its
robustness and its immunity from creative accounting. Following this global trend,
several companies in India are focusing on shareholders' value creation. The main
objectives of this study were: to examine whether the sample companies has been able
to generate value for its shareholders; to analyze the effectiveness of EVA over the
conventional measures of corporate performance, and to indicate whether the
significant differences exists between the actual values of EVACE and time factor of
the sampled companies.
Thomas M. Jones and Will Felps (2013) in their article "Shareholder Wealth
Maximization and Social Welfare: A Utilitarian Critique" stated that, Many scholars

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 22


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

optimal amount of decision making in the context of a maximizing share holder


wealth.
R. Muruga ganesh, Dr. A. Somu and V. Mathivathani (2012) has done a research
on a comparative study on wealth maximization in selected automobile industries.
The problem taken for this research is that due to the fluctuations in the market price
of shares. It is essential to measure the wealth created by the organisation. In this
research six financial tools have been used to analyse the data. Finally, based on the
analysis the researcher has compared wealth creations on selected organisations and
suitable suggestion have been given to the selected organization and also for the
investors.
Ben Amor Atiyet (2012) in his investigation, "The Impact of Financing Decision on
the Shareholder Value Creation" expressed that, The reason for this paper is to
investigate an ideal capital structure to expand the investor riches, likewise we
attempt to decide the most critical determinants for investor esteem creation. We use
in the paper a board information. It gives the scientist countless focuses, expanding
the degrees of opportunity and lessening the colinearity among informative factors,
subsequently enhancing the proficiency of econometric assessments. Our outcome
demonstrates that the estimation of both exact models clarifying the investor esteem,
we see that the self-financing clarifies emphatically and fundamentally the investor
esteem creation for both measure (EVA and MVA). The value issue supply's to clarify
adversely and altogether the investor esteem for both measure.
Judy Laux (2010) in his article "Presentation And Stockholder Wealth
Maximization" expressed that, The accompanying article speaks to the first in an
arrangement committed to exhibiting understudies the chance to better comprehend
the key hypothetical develops in the initial money related administration course. The
present paper offers a prologue to the arrangement and spreads the points of investor
riches boost and its nearby cousin, office hypothesis.
Nelson Barber, Richard Ghiselli and Woody G. Kim (2010) in their examination. "
Maximizing Shareholder Wealth: Understanding Systematic Risk in the Restaurant
Industry" expressed that, Investors portray the vulnerability of a business' prosperity

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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

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hypothesis however acknowledges expansion of the long-run estimation of the firm as


the standard for making the imperative tradeoffs among its partner, and determines
long haul esteem boost or esteem looking for as the association's goal.
Stamp J. Roe (2001) in his examination, "The Shareholder Wealth Maximization
Norm And Industrial Organization" expressed that, Industrial association influences
the relative adequacy of the investor riches expansion standard in augmenting
complete social riches. In countries where item advertises are not unequivocally
aggressive, a solid investor supremacy standard fits less easily with social riches
expansion than somewhere else in light of the fact that, where rivalry is frail, investor
power prompts chiefs to cut creation and raise value more than they generally would.
Where rivalry is savage, chiefs don't have that choice.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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.

3.2 OBJECTIVES OF THE STUDY

To Analyze the Financial Performance of Dynamitic Technologies Ltd


through Trend Analysis

To understand the concept of Shareholders Wealth Maximization

To study the financial position of the business using comparative statement


and trend Analysis

3.3 SCOPE OF THE STUDY

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.

3.4 RESEARCH METHODOLOGY

The present study is based on Descriptive Research Method. This study is based on
Secondary Data
Secondary Data

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Secondary data has been collected from Company Annual Report, Literature Review

3.5 TOOLS AND TECHNIQUES USED FOR THE STUDY

Comparative Statement

Trend analysis

3.6 LIMITATIONS OF THE STUDY

This study is based on secondary sources

The study is restricted Dynamatic Technologies Ltd., Bengaluru

The period of the study is limited to 10 weeks

3.7 CHAPTER SCHEME

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

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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

120 117 117 117

115

110

105
100 101
100

95

90
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17

Source: Table 4.1


Interpretation:
The above table and graph represents trend of Equity Share Capital during the year
2012-13 to 2016-17. In which the highest trend (117%) recorded for the year 2014-13
to 2016-17 and lowest trend (100%) for the year 2012-13. It is interpreted that the
trend of Equity Share Capital is constant in recent 3 years.

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Table No: 4.2


Trend of Reserve

Years Reserve (Rs in Cr) Trend (%)

2012 - 13 130.67 100.00


2013 - 14 137.45 95.45
2014 - 15 263.8 101.18
2015 - 16 268.16 109.90
2016 - 17 276.85 120.92

Graph No: 4.2

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

Source: Table 4.2


Interpretation:
The above table and graph represents trend of Reserves during the year 2012-13 to
2016-17. In which highest trend recorded in the year 2016-17 is 120.92, Trend
percentage decreased in the year 2013-14 to 95.45% and increased in next two year
and recorded 101.18 % in the year 2014-15 and 109.90% in the year 2015-16. It can
be interpreted that Reserve trend increasing year by year.

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Table No: 4.3


Trend of Secured Loans

Years Secured Loans (Rs in Cr) Trend (%)

2012 - 13 241.17 100


2013 - 14 220.23 91
2014 - 15 237.2 98
2015 - 16 300.63 125
2016 - 17 512.28 212

Graph No: 4.3

250 212

200

150 125
100 91 98
100

50

0
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17

Source: Table 4.3


Interpretation:
The above table and graph represents trend of Secured Loan during the year 2012-13
to 2016-17. The highest secured trend is recorded in the year 2016-17 is 212%. In the
initial year 201-13 trend was 100% and decreased to 91% in the year 2013-14 and
98% in the year 2014-15, and increased in 2015-16 in trend percentage to 125%.
It is interpreted that highest Secured Loan trend is recorded in the year 2016-17.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Table No: 4.4


Trend of Total Debt

Years Total Debt (Rs in Cr) Trend (%)

2012 - 13 277.16 100


2013 - 14 245.75 96.54
2014 - 15 250.87 109.62
2015 - 16 300.82 156.3
2016 - 17 521.76 170.13
Graph No: 4.4

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

Source: Table 4.4


Interpretation:
The above table and graph represents trend of Total Debt during the year 2012-13 to
2016-17. Highest Trend percent in Total Debt has found in the year 2016 – 17 is
188% and in the year 2015-16 is 109%. In the year 2013-14 low percent of trend
recorded is 89% slight increase in 2014-15 to 91% and Increased to 109% in the year
2015-16.
It can be interpreted that Total debt trend has a variation and recorded high in recent
year.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Table No: 4.5


Trend of Total Liabilities
Total Liabilities
Years Trend (%)
(Rs in Cr)

2012 - 13 425.74 100


2013 - 14 398.64 93.63
2014 - 15 521.01 122.38
2015 - 16 575.32 135.13
2016 - 17 804.95 189.07

Graph No: 4.5

189
200

135
150 122
100 94
100

50

0
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17

Source: Table 4.5


Interpretation:
The above table and graph represents trend of Total Liabilities during the year 2012-
13 to 2016-17. Highest Trend percent in Total Liabilities has found in the year 2016-
17 as 189% . In the in base year trend was 100% and decreased in 2013-14 to 94%
and increased in 2014-15, 2015-16 and 2016-17 to 122%, 135% and 189%.
It is interpreted that trend percentage of Total Liability is increasing in recent year.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Table No: 4.6


Trend of Investments

Years Investments (Rs in Cr) Trend (%)

2012 - 13 70.4 100


2013 - 14 70.4 100.00
2014 - 15 165.4 234.94
2015 - 16 185.39 263.34
2016 - 17 312.87 444.42
Graph No: 4.6

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

Source: Table 4.6


Interpretation:
The above table and graph represents trend of Investment during the year 2012-13 to
2016-17, Highest Trend percent in Investment has found in the year 2016-17 as
444% , Trend percent is same in the year 2012-13 and 2013-14, and increasing in the
year 2014-15 to 235%, 2015-16 trend was 263% and in the year 2016-17 trend was
recorded 444%.\
It is interpreted that trend percentage of Investment is increasing year by year.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Table No: 4.7


Trend of Current Assets
Current Assets
Years Trend (%)
(Rs in Cr)

2012 - 13 135.48 100


2013 - 14 142.98 105.54
2014 - 15 181.51 133.98
2015 - 16 219.58 162.08
2016 - 17 272.74 201.31
Graph No: 4.7

250
201
200 162
134
150
100 106
100

50

0
2012 - 13 2013 - 14 2014 - 15 2015 - 16 2016 - 17

Source: Table 4.7


Interpretation:
The above table and graph represents trend of Current Assets during the year 2012-13
to 2016-17, Highest Trend percent in Current Assets has found in the year 2016-17 as
201% and lowest Trend percent in Current Assets has found in the year 2012-13 as
100%. In the year 2013-14 trend was recorded 106%, in the year 2014-15 trend was
recorded 134% and in the year 2015-16 trend was recorded 162%.
It is interpreted that trend percentage of Current asset is increasing year by year which
shows a good position of current assets of company.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Table No: 4.8


Trend of Inventories

Years Inventories (Rs in Cr) Trend (%)

2012 - 13 60.63 100


2013 - 14 61.14 100.8
2014 - 15 82.56 136.2
2015 - 16 114.8 189.3
2016 - 17 128.26 211.5
Graph No: 4.8

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

Source: Table 4.8


Interpretation:
The above table and graph represents trend of Inventories during the year 2012-13 to
2016-17, Highest Trend percent in Inventories has found in the year 2016-17 as
211.5% , in the year 2012-13 and 2013-14 trend of Inventories is same 100%, and
increasing in the year 2014-15 to 136.2%, in the year 2015-16 increased to 189.3%.
It is interpreted that trend percentage of Inventories are increasing year by year.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Table No: 4.9


Trend of Loans and Advances
Loans and Advances
(Rs in Cr)
Years Trend (%)
2012 - 13 97.12 100
2013 - 14 97.83 100.73
2014 - 15 120.13 123.69
2015 - 16 84.46 86.96
2016 - 17 73.77 75.96

Graph No: 4.9

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

Source: Table 4.9


Interpretation:
The above table and graph represents trend of Loans and Advances during the year
2012-13 to 2016-17, Highest Trend percent in Loans and Advances has found in the
year 2014-15 as 123.69% and lowest Trend percent in Loans and Advances has found
in the year 2016-17 as 75.96%, in the year 2012-13 trend was recorded 100%, in the
year 2013-14 trend was recorded 100.73%, in the year 2015-16 trend was recorded
86.96%. It is interpreted that trend percentage of Loans and advances was recorded
high in the year 2014-15.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Table No: 4.10


Trend of Current Liabilities
Current Liabilities
(Rs in Cr)
Years Trend (%)
2012 - 13 821.32 100
2013 - 14 381.18 46.41
2014 - 15 400.35 48.74
2015 - 16 497.43 60.56
2016 - 17 525.32 63.96
Graph No: 4.10

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

Source: Table 4.10


Interpretation:
The above table and graph represents trend of Current Liabilities during the year
2012-13 to 2016-17, Highest Trend percent in Current Liabilities was recorded in the
year 2012-13 as 100% and lowest Trend percent in Current Liabilities recorded in the
year 2013-14 as 46.41%, in the year 2013-14 trend was recorded 48.74%, in the year
2014-15 trend was recorded 60.56%, in the year 2015-16 trend was recorded 63.96%.
It is interpreted that trend percentage of Current Liability is high in the base year and
decreased in continuing years.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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(%)

2012 - 13 135.48 220.54 0.61


2013 - 14 142.98 218.97 0.65
2014 - 15 181.51 207.85 0.87
2015 - 16 219.58 175.62 1.25
2016 - 17 272.74 126.61 2.15

Graph No: 4.11

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

Source: Table 4.11


Interpretation:
The above table and graph state that, The highest Current ratio was recorded in the
year 2016-17 is 2.15%, In the year 2012-13 current ratio was 0.61%, in the year
2013-14 current ratio was 0.65%, in the year 2014-15 current ratio was 0.87% and in
the year 2016-17 current ratio was 1.25%.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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(%)

2012 - 13 74.85 220.54 0.34


2013 - 14 81.84 218.97 0.37
2014 - 15 98.95 207.85 0.48
2015 - 16 104.78 175.62 0.60
2016 - 17 144.48 126.61 1.14

Graph No: 4.12

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

Source: Table 4.12


Interpretation :
From the above table shows the quick ratio of the company. The highest Quick ratio
was recorded in the year 2016-17 is 1.14%, In the year 2012-13 Quick ratio was
0.34%, in the year 2013-14 Quick ratio was 0.37%, in the year 2014-15 Quick ratio
was 0.48% and in the year 2016-17 Quick ratio was 0.60%.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Debt equity Ratio:


Long term debt
Debt equity ratio = Share holder fund

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

Source: Table 4.13


Interpretation:
From the above table shows the Debt equity Ratio of the company. The highest Debt
Equity ratio was recorded in the year 2014-15 is 18.95%, In the year 2012-13 Debt
Equity ratio was 17.95%, in the year 2013-14 Debt Equity ratio was 17.98%, in the
year 2015-16 Debt Equity ratio was 13.32% and in the year 2016-17 Debt Equity
ratio was 11.64%.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Equity Multiplier Ratio

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

Source: Table 4.14


Interpretation:
The above table and graph state that Equity Multiplier Ratio. The highest Equity
Multiplier ratio was recorded in the year 2016-17 is 126.03%, In the year 2012-13
Equity Multiplier ratio was 78.70%, in the year 2013-14 Equity Multiplier ratio was
73.28%, in the year 2014-15 Equity Multiplier ratio was 82.18% and in the year 2015-
16 Equity Multiplier ratio was 90.68%.

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 42


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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%

2012 - 13 10.33 5.41 1.91


2013 - 14 14.73 5.44 2.71
2014 - 15 7.81 6.34 1.23
2015 - 16 4.01 6.34 0.63
2016 - 17 11.96 6.34 1.89
Graph No: 4.15

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

Source: Table 4.15


Interpretation:
The above table and graph state that Return on Equity Ratio. The highest Return on
Equity ratio was recorded in the year 2013-14 is 2.71%, In the year 2012-13 Return
on Equity ratio was 1.91%, in the year 204-15 Return on Equity ratio was 1.23%, in
the year 2015-16 Return on Equity ratio was 0.63% and in the year 2016-17 Return on
Equity was 1.89%.

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 43


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

COMPARTIVE ANALYSIS FOR THE YEAR 2013 & 2014


Changes in
Mar 2013 Mar 2014 Variance
%

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

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 44


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Provisions 2.31 4.36 2.05 88.74


Total CL & Provisions 222.85 223.33 0.48 0.22
Net Current Assets 9.75 17.48 7.73 79.28
Total Assets 425.74 398.64 -27.1 -6.37

Mar Mar Changes in


Variance
2013 2014 %
INCOME
Revenue From Operations [Gross] 449.44 448.61 -0.83 -0.18
Less: Excise/Service Tax/Other Levies 43.22 43.02 -0.2 -0.46
Revenue From Operations [Net] 406.22 405.59 -0.63 -0.16
Other Operating Revenues 11 23.33 12.33 112.09
Total Operating Revenues 417.22 428.92 11.7 2.80
Other Income 10.33 14.73 4.4 42.59
Total Revenue 427.55 443.65 16.1 3.77
EXPENSES
Cost Of Materials Consumed 208.99 208.61 -0.38 -0.18
Changes In Inventories Of FG,WIP And
-3.43 0.8 4.23 -123.32
Stock-In Trade
Employee Benefit Expenses 46.92 48.38 1.46 3.11
Finance Costs 46.25 59.57 13.32 28.80
Depreciation And Amortization Expenses 26.29 28.16 1.87 7.11
Other Expenses 101.1 96.32 -4.78 -4.73

426.12 441.84 15.72 3.69


Total Expenses
Profit/Loss Before Exceptional,
1.43 1.81 0.38 26.57
Extraordinary Items And Tax
Exceptional Items 0 -1.5 -1.5 #DIV/0!

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 45


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Profit/Loss Before Tax 1.43 0.31 -1.12 -78.32


Tax Expenses-Continued Operations
Current Tax 0 0 0
Deferred Tax 1.13 0 -1.13 -100.00
Total Tax Expenses 1.13 0 -1.13 -100.00
Profit/Loss After Tax And Before
0.3 0.31 0.01 3.33
Extraordinary Items
Profit/Loss From Continuing Operations 0.3 0.31 0.01 3.33
Profit/Loss For The Period 0.3 0.31 0.01 3.33

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.

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 46


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

COMPARTIVE ANALYSIS FOR THE YEAR 2014 & 2015


Mar Mar Changes
Variance
'14 '15 in %

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

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 47


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Provisions 4.36 19.9 15.54 356.42


Total CL & Provisions 223.33 227.75 4.42 1.98
Net Current Assets 17.48 73.89 56.41 322.71
Total Assets 398.64 521.01 122.37 30.70

Mar Mar Changes


Variance
'14 '15 in %
INCOME
Revenue From Operations [Gross] 448.61 465.21 16.6 3.70
Less: Excise/Sevice Tax/Other Levies 43.02 30.74 -12.28 -28.54
Revenue From Operations [Net] 405.59 434.47 28.88 7.12
Other Operating Revenues 23.33 22.06 -1.27 -5.44
Total Operating Revenues 428.92 456.53 27.61 6.44
Other Income 14.73 7.81 -6.92 -46.98
Total Revenue 443.65 464.34 20.69 4.66
EXPENSES
Cost Of Materials Consumed 208.61 224.91 16.3 7.81
Changes In Inventories Of FG,WIP And
0.8 -7.74 -8.54 -1067.50
Stock-In Trade
Employee Benefit Expenses 48.38 65.15 16.77 34.66
Finance Costs 59.57 53.73 -5.84 -9.80
Depreciation And Amortisation Expenses 28.16 28.5 0.34 1.21
Other Expenses 96.32 107.2 10.88 11.30

441.84 471.75 29.91 6.77


Total Expenses
Profit/Loss Before Exceptional,
1.81 -7.41 -9.22 -509.39
ExtraOrdinary Items And Tax
Exceptional Items -1.5 37.19 38.69 -2579.33
Profit/Loss Before Tax 0.31 29.78 29.47 9506.45

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 48


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Tax Expenses-Continued Operations


Current Tax 0 14.51 14.51
Deferred Tax 0 -5.78 -5.78
Total Tax Expenses 0 8.73 8.73
Profit/Loss After Tax And Before
0.31 21.05 20.74 6690.32
ExtraOrdinary Items
Profit/Loss From Continuing Operations 0.31 21.05 20.74 6690.32
Profit/Loss For The Period 0.31 21.05 20.74 6690.32

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.

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 49


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

COMPARTIVE ANALYSIS FOR THE YEAR 2015 & 2016

Mar Mar Changes


2015 2016 Variance in %

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

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 50


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Total CL & Provisions 227.75 186.81 -40.94 -17.98


Net Current Assets 73.89 117.23 43.34 58.65
Total Assets 521.01 574.89 53.88 10.34

Mar Mar Changes


2015 2016 Variance in %
INCOME
Revenue From Operations [Gross] 465.21 439.62 -25.59 -5.50
Less: Excise/Service Tax/Other Levies 30.74 27.46 -3.28 -10.67
Revenue From Operations [Net] 434.47 412.16 -22.31 -5.13
Other Operating Revenues 22.06 19.21 -2.85 -12.92
Total Operating Revenues 456.53 431.37 -25.16 -5.51
Other Income 7.81 4.01 -3.8 -48.66
Total Revenue 464.34 435.38 -28.96 -6.24
EXPENSES
Cost Of Materials Consumed 224.91 215.56 -9.35 -4.16
Changes In Inventories Of FG,WIP And
Stock-In Trade -7.74 -29.57 -21.83 282.04
Employee Benefit Expenses 65.15 60.2 -4.95 -7.60
Finance Costs 53.73 51.63 -2.1 -3.91
Depreciation And Amortization Expenses 28.5 29.11 0.61 2.14
Other Expenses 107.2 110.88 3.68 3.43

Total Expenses 471.75 437.81 -33.94 -7.19

Profit/Loss Before Exceptional,


Extraordinary Items And Tax -7.41 -2.43 4.98 -67.21
Exceptional Items 37.19 0 -37.19 -100.00
Profit/Loss Before Tax 29.78 -2.43 -32.21 -108.16

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 51


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Tax Expenses-Continued Operations


Current Tax 14.51 -1.04 -15.55 -107.17
Deferred Tax -5.78 -2.68 3.1 -53.63
Total Tax Expenses 8.73 -3.72 -12.45 -142.61
Profit/Loss After Tax And Before
Extraordinary Items 21.05 1.29 -19.76 -93.87
Profit/Loss From Continuing Operations 21.05 1.29 -19.76 -93.87
Profit/Loss For The Period 21.05 1.29 -19.76 -93.87

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.

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 52


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

COMPARTIVE ANALYSIS FOR THE YEAR 2016 & 2017

Mar Mar Changes


2016 2017 Variance in %

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

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 53


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Total CL & Provisions 186.81 141.73 -45.08 -24.13


Net Current Assets 117.23 204.78 87.55 74.68
Total Assets 574.89 799.04 224.15 38.99

Mar Mar Changes


2016 2017 Variance in %
INCOME
Revenue From Operations [Gross] 439.62 514.11 74.49 16.94
Less: Excise/Service Tax/Other Levies 27.46 26.4 -1.06 -3.86
Revenue From Operations [Net] 412.16 487.71 75.55 18.33
Other Operating Revenues 19.21 17.69 -1.52 -7.91
Total Operating Revenues 431.37 505.4 74.03 17.16
Other Income 4.01 11.96 7.95 198.25
Total Revenue 435.38 517.36 81.98 18.83
EXPENSES
Cost Of Materials Consumed 215.56 238.57 23.01 10.67
Changes In Inventories Of FG,WIP And
Stock-In Trade -29.57 -9.2 20.37 -68.89
Employee Benefit Expenses 60.2 67.48 7.28 12.09
Finance Costs 51.63 57.09 5.46 10.58
Depreciation And Amortization Expenses 29.11 31.14 2.03 6.97
Other Expenses 110.88 110.95 0.07 0.06

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 54


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 55


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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%

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 56


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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.

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Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

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.

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 58


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

ANNEXURE
FINANCIAL STATEMENT

Dynamatic Technologies

Rs. in Cr
Mar 17 Mar 16 Mar 15 Mar 14 Mar 13

INCOME

Revenue From Operations


514.11 439.62 465.21 448.61 449.44
[Gross]

Less: Excise/Sevice Tax/Other


26.40 27.46 30.74 43.02 43.22
Levies

Revenue From Operations


487.71 412.16 434.47 405.59 406.22
[Net]

Other Operating Revenues 17.69 19.21 22.06 23.33 11.00

Total Operating Revenues 505.40 431.37 456.53 428.92 417.22

Other Income 11.96 4.01 7.81 14.73 10.33

Total Revenue 517.36 435.38 464.34 443.65 427.55

EXPENSES

Cost Of Materials Consumed 238.57 215.56 224.91 208.61 208.99

Changes In Inventories Of
-9.20 -29.57 -7.74 0.80 -3.43
FG,WIP And Stock-In Trade

Employee Benefit Expenses 67.48 60.20 65.15 48.38 46.92

Finance Costs 57.09 51.63 53.73 59.57 46.25

Depreciation And Amortisation


31.14 29.11 28.50 28.16 26.29
Expenses

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 59


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Other Expenses 110.95 110.88 107.20 96.32 101.10

Total Expenses 496.03 437.81 471.75 441.84 426.12

Mar 17 Mar 16 Mar 15 Mar 14 Mar 13

Profit/Loss Before Exceptional,


21.33 -2.43 -7.41 1.81 1.43
Extra Ordinary Items And Tax

Exceptional Items -7.88 0.00 37.19 -1.50 0.00

Profit/Loss Before Tax 13.45 -2.43 29.78 0.31 1.43

Tax Expenses-Continued Operations

Current Tax 7.39 -1.04 14.51 0.00 0.00

Deferred Tax -1.53 -2.68 -5.78 0.00 1.13

Total Tax Expenses 5.86 -3.72 8.73 0.00 1.13

Profit/Loss After Tax And


7.59 1.29 21.05 0.31 0.30
Before ExtraOrdinary Items

Profit/Loss From Continuing


7.59 1.29 21.05 0.31 0.30
Operations

Profit/Loss For The Period 7.59 1.29 21.05 0.31 0.30

Standalone Balance Sheet ------------------- in Rs. Cr. -------------------

Mar 17 Mar 16 Mar 15 Mar 14 Mar 13

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 6.34 6.34 6.34 5.44 5.41

Total Share Capital 6.34 6.34 6.34 5.44 5.41

Revaluation Reserves 4.69 4.69 4.72 6.26 20.13

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 60


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Reserves and Surplus 276.85 268.16 263.80 137.45 130.67

Total Reserves and Surplus 281.54 272.85 268.52 143.71 150.80

Money Received Against Share


0.00 0.00 0.00 10.00 12.50
Warrants

Total Shareholders Funds 287.88 279.19 274.86 159.15 168.71

NON-CURRENT LIABILITIES

Long Term Borrowings 369.00 211.58 115.40 149.19 145.39

Deferred Tax Liabilities [Net] 18.02 19.55 22.23 28.01 28.01

Other Long Term Liabilities 0.82 0.68 1.15 6.61 10.40

Long Term Provisions 9.48 7.78 6.79 2.53 1.56

Total Non-Current Liabilities 397.32 239.59 145.57 186.34 185.36

CURRENT LIABILITIES

Short Term Borrowings 152.76 89.24 135.47 96.56 131.77

Trade Payables 88.20 88.80 100.98 87.57 87.58

Other Current Liabilities 19.57 66.59 83.49 96.78 94.55

Short Term Provisions 5.64 3.41 13.11 1.83 0.75

Total Current Liabilities 266.17 248.04 333.05 282.74 314.65

Total Capital And Liabilities 951.37 766.82 753.48 628.23 668.72

ASSETS

NON-CURRENT ASSETS

Tangible Assets 273.68 261.28 267.16 294.67 266.91

Intangible Assets 12.40 15.68 19.20 21.79 24.65

Capital Work-In-Progress 5.91 0.43 0.08 0.56 72.28

Intangible Assets Under 0.00 0.00 0.00 0.00 1.88

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 61


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

Development

Fixed Assets 291.99 277.39 286.44 317.02 365.72

Non-Current Investments 312.87 185.39 165.40 70.40 70.40

Long Term Loans And Advances 16.00 16.02 14.47 12.94 29.58

Other Non-Current Assets 4.96 9.14 13.06 5.65 3.83

Total Non-Current Assets 625.82 487.94 479.37 406.01 469.53

CURRENT ASSETS

Inventories 128.26 114.80 82.56 61.14 60.63

Trade Receivables 121.65 98.50 90.12 68.96 68.57

Cash And Cash Equivalents 22.83 6.28 8.83 12.88 6.28

Short Term Loans And Advances 38.26 45.14 76.54 58.38 47.30

Other Current Assets 14.55 14.16 16.06 20.86 16.41

Total Current Assets 325.55 278.88 274.11 222.22 199.19

Total Assets 951.37 766.82 753.48 628.23 668.72

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 62


Share Holders Wealth Maximization at Dynamatic Technologies Ltd., Bengaluru

BIBLIGORAPHY
JOURNALS AND ARTICLES

L Prrabha, Jayapriya R and Joslin Monica LA (2017) " A study on shareholders’


wealth maximization of muthoot finance limited" , International Journal of Applied
Research 2017; 3(3): 501-503
Merugu Venugopal and Dr. M Ravindar Reddy (2016), "Impact of capital
structure on firm’s profitability and shareholder wealth maximization: A study of
listed Indian cement companies", IOSR Journal of Business and Management (IOSR-
JBM), Volume 18, Issue 4 .Ver. III (Apr. 2016)
Fernando Gómez-Bezares , Wojciech Przychodzen and Justyna Przychodzen
(2016), “Corporate Sustainability and Shareholder Wealth—Evidence from British
Companies and Lessons from the Crisis”, www.mdpi.com/journal/sustainability,
Sustainability 2016
C.N. Ozuomba, A.S. Anichebe and P.V.C. Okoye (2016) “The effect of dividend
policies on wealth maximization – a study of some selected places”, Ozuomba et al.,
Cogent Business & Management (2016)
kwadwo Boateng Premepeh and Eugene Odartei-Mills (2015), "Corporate
governance structure and shareholder wealth maximization", MPRA Paper No.
68087, posted 27. November 2015 15:28 UTC
Kouki Marouan1 and Dabboussi Moez (2015), "Impact of Corporate Governance
on Shareholder Value Creation: Evidence from Tunisian Context" , International
Business Research; Vol. 8, No. 5; 2015

WEBSITES

https://www.dynamatics.com/about.shtml

PG Dept. of Management Studies and Research Centre, PESITM, Shivamogga Page 63