SUMMER TRAINING REPORT

On

Conducted at

Submitted to:

Kurukshetra University, Kurukshetra

In the partial fulfilment of the Requirement of the Degree of MBA (Masters of Business Administration) (Session 2008-2010)

Submitted By: Lakhan Anand

ICL INSTITUTE OF MANAGEMENT & TECHNOLOGY, SOUNTLI

(Affiliated to Kurukshetra University, Kurukshetra)

DECLARATION

I student of Masters of Business Administration, ICL Institute of Management & Technology, Sountli, hereby declare that the material embodied in this dissertation/thesis project entitled RATIO ANALYSIS is an organized and original piece of work conducted by me and same has not been submitted in any other university or Institution for the award of any degree or diploma in any discipline.

LAKHAN ANAND Date: Place:

PREFACE
Practical Training is an important part of theoretical studies. It is of an immense importance in the field of management. It offers the student to explore the valuable treasure of experience and exposure to real work followed by the industries and thereby helping the students to bridge the gap between the theories explained n the book and their practical implementations. Training plays an important role in future building of an individual so that he/she can better understand the real world in which he has to work in future. The theory greatly enhances our knowledge and provides opportunities to blend theoretical with the practical knowledge where trainee gets familiar with certain aspects of Industry. I feel proud to get trained at Wipro.

I have taken up training in WIPRO and have studied analysis regarding different Ratios of Wipro.

ACKNOWLEDGEMENT
Gratitude is the hardest of emotions to express and one often does

not find adequate words to convey what one feels and trying to express it.
The present project file is an amalgamated of various thoughts and experiences .the successful completion of this project report would have not been possible without the help and guidance of number of people. I take this opportunity to thank all those who have directly and indirectly inspired, directed and helped me towards successful completion of this project report. I am also immensely indebted to my project guide, Ms. Vishu Mehndiratta, Lecturer (ICL) for her illumining observation, encouraging suggestions and constructive criticisms, which have helped me in completing this research project successfully. There are several other people who also deserve much more than a mere acknowledgement at their exemplary help. I also acknowledge with deep sense of gratitude and wholehearted help and cooperation intended to me by them.

LAKHAN ANAND Date: Place:

TABLE OF CONTENTS
THE WIPRO SYMBOL MISSION QUALITY POLICY ABOUT IT INDUSTRY Introduction Future of IT Industry

INTRODUCTION TO COMPANY Background and Business Financial Performance Timeline SWOT Analysis of the Company

OBJECTIVE OF THE STUDY RESEARCH METHODOLOGY FINANCIAL STATEMENTS FINANCIAL ANALYSIS RATIO ANALYSIS Liquidity Ratio Activity Ratio Profitability Ratio Profitability Ratio based on Investment

ADVANTAGES & LIMITATIONS OF RATIO ANALYSIS FINDINGS RECOMMENDATIONS CONSTRAINTS OF THE STUDY BIBLIOGRAPHY ANNEXURE

THE WIPRO SYMBOL

The Wipro Flower perceived as the Rainbow Flower to communicate. The Symbol is called Rainbow Flower, in which expressions are both Rational & Emotional.

RATIONAL
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Diversified expert Innovation Precision Vastness Interaction Expression of life Versatility High rising Variety Individuality Modern technology 12. Aspiration, brighter side of life 13. Ahead of time 14. Power and energy 15. Focused, yet open 16. Solid, yet flexible

EMOTIONAL

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

Nature's excellence Human Proximity Full of life Blooming Positive for every aspect of life Fresh Striking Vivacity Youthfulness Cheerfulness

12. Colour of life

Significance of Colours in the Wipro Brand Identity

Red: Blood, Life giving, Dynamic, Auspicious Green: Fields, Prosperity, Freshness, Growth, Youth Yellow: Sun, Warmth, Vitality, Aspirations Violet: Intelligence, Innovation, Shrewdness, Mystery Blue: Sky, Sea, Transparency, Natural

MISSION

"With utmost respect to Human Values, We promise to serve our customer with integrity, through a variety of Innovative, Value for Money Products and Services, by Applying Thought, day after day."

Engineering Changes through core competency for greater synergy reinforcing bonds with customers & establishing powerful symbiotic relationship with international allies, preparing global market. The company wants to make a lasting difference to its shareholders, its customers, business associates, its employee and country as a whole. Company also gives better quality and better technology to customer and treats every customer as special to build respect for, and loyalty to, WIPRO.

VISION
Having already achieved the pinnacles of process and quality credentials (through ISO 9000, SEI CMM, PCMM and Six Sigma), Wipro's Vision is focused on attaining leadership in the areas of business, customer and people. Business Leadership: Among the top 10 Information Technology Services companies globally and the No.1 Information Technology company in India. Customer Leadership: The No.1 choice of customers through innovative solutions and Six Sigma processes. People Leadership: Among the top 10 most preferred employers globally by creating an environment of empowerment, intellectual challenge and wealth sharing. Brand Leadership: Wipro to be among the 5 most admired brand in India.

QUALITY POLICY

We shall strive to continuously improve to meet the ever-rising Expectations of our customers at the lowest cost.

Each one of us must fulfill the need of our customer, both internal and external with the highest degree of commitment thereby creating a quality organization geared to ensure total customer satisfaction and the sustained health and prosperity of our business. Customer Orientation: To fulfill the requirement of our internal and external customer. Process Orientation: To optimize and harmonize interrelated process rather than individual functions. Preventive Behavior: To prevent the mistakes to happen.

INTRODUCTION
Information Technology is one of the most important industries in the Indian economy. The IT industry of India has registered huge growth in recent years. India's IT industry grew from 150 million US Dollars in 1990-1991 to a whopping 50 billion UD Dollars in 2006-2007. In the last ten years the Information Technology industry in India has grown at an average annual rate of 30%. The liberalization of the Indian economy in the early nineties has played a major role

in the growth of the IT industry of India. Deregulation policies adopted by the Government of India have led to substantial domestic investment and inflow of foreign capital to this industry. In 1970, high import duties had forced IBM to leave India. However, after the early nineties, many multi national IT companies, including IBM, have set up their operations in India. During the ten year period 1992-2002, the Indian software industry grew at double the rate as the US software industry.

Some of the major reasons for the significant growth of the IT industry of India are Abundant availability of skilled manpower Reduced telecommunication and internet costs Reduced import duties on software and hardware products Cost advantages Encouraging government policies

Some of the major companies in the IT industry of India are Tata Consultancy Services (TCS) Infosys Wipro IBM HP HCL Cognizant Technology Solutions (CTS) Patni Satyam NIIT

India's IT industry caters to both domestic and export markets. Exports contribute around 75% of the total revenue of the IT industry in India. The IT industry can be broadly divided into four segments IT services Softwares (includes both engineering and Research and Development) ITES-BPO Hardware The robust growth of India Inc. can be attributed to the meteoritic success of ' India IT Industry '. In fact no other Indian industry has performed so well against the global market.

The master control of 'Indian IT Industry' is in the hands of Department of Information Technology (DOT) which aims to make ' India IT Industry ', a Global IT Super Power by 2008 - a front-runner and bring the benefits of electronics to every walk of life. Further, it is focused on Creation of Wealth, Employment Generation and IT led Economic Growth. According to sources, annual revenue projections for ' India IT Industry ' in 2008 are US $ 87 billion and market openings are emerging across four broad sectors, IT services, software products, IT enabled services, and ebusinesses thus creating a number of opportunities for Indian companies. All of these segments have opportunities in foreign and as well as in domestic markets With the formation of a new ministry for IT, Government of India (GOI) has taken major steps towards promoting ' India IT Industry '. It has taken steps to promote angel investors, venture creators and incubation to promote

Electronics and hardware manufacturing. R&D. Increase PC penetration. Increase utilization of Internet. Domestic software market. Development of local language softwares. Use of IT to increase productivity. Use of IT as a means of generating employment. Availability of technical work force. Number and quality of training facilities.

Future of IT Industries

IT will continue to gain momentum; telecom and wireless will follow the trend. The immense expansion in networking technologies is expected to continue into the next decade also. IT will bring about a drastic improvement in the quality of life as it impacts application domains and global competitiveness. Technologies that are emerging are Data Warehousing and Data Mining. They involve collecting data to find patterns and testing hypothesis in normal research. Software services that are being used in outsourcing will go a long way.

Future Estimates (For 2009):

Annual revenue estimated for the industry is US $ 87 billion. Software and Services will contribute over 7.5% of the overall GDP growth of India. IT exports will constitute 35% of the total exports of India. There will be 2.2 million jobs in IT sector. IT industry will attract FDI of US$ 4-5 billion. Market capitalization of IT shares will be approximately US $ 225 billion.

As far as India is concerned we are best in service sector because of cheap and skilled labour. The India's share in overall world trade is 5%, but in service sector our share is 1.5%. Though it is less but India is having a bright Chance of increment. The major export of service by India is in IT (Information Technology) Sector. Last year IT exports give us $2.5 billion, this is not a small amount. The major players of IT Sector are Wipro, Infosys etc. Last quarter profit of Infosys is increased by more than 50% and of Wipro it is increased by more than 40%. This it self shows the growth of IT sector in India. Now future of IT sector in India. It is two fold. On one hand we are having benefit of => * Low labour cost * English speaking people * Good Companies like Wipro, Infosys etc. * More than 85% consumer of Software Industry Prefer Indian Software. But on the other hand * Our government policy, strict rules, Foreign Direct Investment restriction in IT sector etc. are hurdles in the growth of IT Industry.

Bur apart from all we are having advantage of being the first love of the IT Sector majors in the World like MICROSOFT, CISCO etc. Last year Software Company MICROSOFT'S CEO visited India and inaugurates their office in Hyderabad, while at the same time they are selling their business in other parts of the World. This it self sows the trust of Foreigner in Shining IT Sector/market in India. Another good indicator for IT sector is Foreign Institutional Investment Inflow. In December our Sensex rises to historic height of above 6600 and on 2nd Feb 2005 it is

around about 6555 and major sector in this growth is IT apart of other like Automobile, Banking, Pubic sector Units etc. This means foreign investment is coming to India for the growth and expansion in these sectors. So, in conclusion we can say that India is having a bright future. This is understood by our company that's why they are now engaged in producing their own software apart from doing clerical work for foreign companies. Joint Venture's are also increasing and Government is also thinking to give more freedom and benefit to the players in Information Technology.

INTRODUCTION TO COMPANY
Business & Background Wipro started as a vegetable oil trading company in 1947 from an old mill founded by Azim Premji's father Mr. Hasham Premji in Amalner, Maharashtra. When his father died in 1966, Azim, a graduate in Electrical Engineering from Stanford University, took on the leadership of the company at the age 21. He repositioned it and transformed Wipro (Western India Vegetable Products Ltd) into a consumer goods company that produced hydrogenated cooking oils/fat company, laundry soap, wax

and tin containers and later set up Wipro Fluid Power to manufacture hydraulic and pneumatic cylinders in 1975. At that time, it was valued at $2 million. In 1977, when IBM was asked to leave India, Wipro entered the information technology sector. In 1979, Wipro began developing its own computers and in 1981, started selling the finished product. This was the first in a string of products that would make Wipro one of India's first computer makers. The company licensed technology from Sentinel Computers in the United States and began building India's first mini-computers. Wipro hired managers who were computer savvy, and strong on business experience. In 1980 Wipro moved in software development and started developing customized software packages for their hardware customers. This expanded their IT business and subsequently developed the first Indian 8086 chip. Since 1992 Wipro began to grow its roots off shore in United States and by 2000 Wipro Ltd ADRs were listed on the New York Stock Exchange. Wipro is a diversified corporation into Services, Consumer Products, Fluid Power, Bio-Med and Information Technology. Wipro Corporations sales in the year ended March 31, 2000 were 23.129 million. Over the last 10 years sales have grown at an average annual growth rate of 23% and profit after tax at 43%. In the same year 2000, the company was also listed on the New York Stock Exchange. Wipro seeks leadership in all businesses. They are the No. 2 in Information Technology in Sales and No. 1 in Market Reputation. They are No. 1 in other areas like Network Integration, Support, and Healthcare Technology in South Asia, Hydraulic Cylinders, Export of Healthcare Systems, Hair Care Soaps, Circular Florescent Lights and No. 2 in Software Exports, Fluid Power Consumption, Baby Toiletries and Bakery Fats. The company's revenue grew by 450% from 2002 to 2007. This success has led to higher salaries (wages have been growing by more than 14% per year since 2005), which puts pressure on the company's margins.

Wipro Technologies deals in following businesses

IT Services: Wipro provides complete range of IT Services to the organization. The range of services extends from Enterprise Application Services (CRM, ERP, e-Procurement and SCM) to e-Business solutions. Wipro's enterprise solutions serve a host of industries such as Energy and Utilities, Finance, Telecom, and Media and Entertainment.

Product Engineering Solutions: Wipro is the largest independent provider of R&D services in the world. Using "Extended Engineering" model for leveraging R&D investment and accessing new knowledge and experience across the globe, people and technical infrastructure, Wipro enables firms to introduce new products rapidly.

Technology Infrastructure Service: Wipro's Technology Infrastructure Services (TIS) is the largest Indian IT infrastructure service provider in terms of revenue, people and customers with more than 200 customers in US, Europe, Japan and over 650 customers in India.

Business Process Outsourcing: Wipro provides business process outsourcing services in areas Finance & Accounting, Procurement, HR Services, Loyalty Services and Knowledge Services. In 2002, Wipro acquiring Spectramind and became one of the largest BPO service players.

Consulting Services: Wipro offers services in Business Consulting, Process Consulting, Quality Consulting, and Technology Consulting.

Wipro's Sister Concerns (Business Units)

Wipro Infrastructure Engineering: It has emerged as the leader in the hydraulic cylinders and truck tipping systems market in India. Wipro Infotech: It is one of the leading manufacturers of computer hardware and a provider of systems integration and infrastructure services in India. Wipro Infotech is more focused on the manpower services and is not at the cutting edge of technology.

Wipro Lighting: It manufactures and markets the Wipro brand of luminaries. Wipro Lighting offers lighting solutions across various application areas such

as commercial lighting for modern work spaces, manufacturing and pharmaceutical companies, designer petrol pumps and outdoor architecture.

Achievements

1993 - Business innovation award for offshore development. 1995 - Wipro gets ISO 9001 quality certification, re-certified twice for mature processes 1997 - Wipro gets SEI CMM level 3 certification, enterprise wide processes defined.

Start of the Six Sigma initiative, defects prevention practices initiated at project level.

1998 - Wipro first software services company in the world to get SEI CMM level 5 1999 - Wipro's market capitalization is the highest in India. 2000 - Start of the Six Sigma initiative, defects prevention practices initiated at project level. Wipro listed on New York Stock Exchange. 2001 - First Indian company to achieve the "TL9000 certification" for industry specific quality standards.
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Wipro acquires American Management Systems global energy practice. Becomes world's first PCMM Level 5 company. Premji established Azim Premji Foundation, a not-for-profit organization for elementary education. Wipro becomes only Indian company featured in Business Weeks 100 best-performing technology companies.

o o

2002
o o o

Worlds first CMMi ver 1.1 Level 5 company. Wipro acquires Spectramind. Ranked the 7th software services company in the world by Business Week (Infotech 100, November 2002).

2003
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Wipro acquires Nervewire. Wipro Technologies Wins Prestigious IEEE Award for Software Process Excellence. Wipro Technologies awarded prestigious ITSMA award for services marketing excellence. Wipro wins the 2003 Asian Most Admired Knowledge Enterprise Award.

2004
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Crossed the $1 Billion mark in annualized revenues. Wipro launches Indias first RFID enabled apparel store.

Wipro Technologies named Asian Most Admired Knowledge Enterprise second year in a row. IDC rates Wipro as the leader among worldwide offshore service providers.

Wipro Client List

Embedded and Product Engineering

NCR Toshiba Symantec Corporati on Energy and Utilities National Grid Case Studies PacifiCorp Thames Water News Story NPower Vectren Source Microsoft Cisco

Manufacturing
Akzo Nobel News Story Honeywell Sanyo Schneider Electric Nike TNT Media & Entertainm ent Easy Cinema.com

Retail
Exel Weyerhaeuser Scotts Telecom Service Provide r NTL TeliaSonera

Telecommunicat ion and Internetworking

Avaya Inc. Nokia Siemens Networks Cisco Systems Nortel Networks Alcatel Lucent Ciena Broadcom Cable & Wireless Aircel Unitech

Travel and Transportati on

Thomas Cook TUI AG

Education
University of Canberra Tulasi Vivek Hr. Sec. School (English Medium)

FINANCIAL PERFORMANCE Services:

Wipro provides the following services:

Development and Maintenance: The company develops information technology products and offers maintenance support in case of a breakdown. Consulting: Companies hire Wipro for consulting services pertaining to information technology. Testing: Wipro tests IT systems for efficiency and effectiveness. Package Implementation: Wipro gives information on making decisions about choosing the right package to run applications. Business Process Outsourcing (BPO): Companies contract Wipro to complete specific business tasks. R&D services: Wipro designs software and hardware (including chips). Infrastructure outsourcing: Wipro sets up IT infrastructures for companies.

R&D services is the largest segment for Wipro generating 35% of total sales in 2006. This is followed by development and maintenance which accounted for 23%.

PRICING STRATEGIES ADOPTED BY WIPRO

Though the sector seems to be growing at a reasonable rate, margins of players are coming under tremendous pressure. Low international prices, intense competition from the local assemblers and falling customs duties have led to wafer thin margins for the players. The pricing strategy followed is mark-up pricing. The mark up varies from tender to tender depending on the special price quoted.

The components of the quoted price in a tender includes:

Base price + Excise duty (currently @16%) = ex works price + Freight and handling charges + Transit insurance + Entry tax (2% for Orissa) + Sales tax (OST @4%)= final delivered price This is a price structure followed by the company for direct sales to the major account. In case of supplies by the dealer, dealer margin is added after the entry tax. The price at which the dealer receives the goods is known as dealer transfer price. The FOR price in case of supplies through dealer the price is calculated as below: DTP (special discount adjusted) + dealer margin + OST + freight to the site However dealers can further reduce their margins to bag the order.

MILESTONES

2008: Launch of Wipro Egypt Development Center 2008: Launch of Wipro GSMC in Kuala Laumpur 2007: Wipro Arabia Joint Venture found 2006: Acquisition of 3D networks 2006: Launch of GSMC- Global Service Management Centre for remote service delivery 2004: Start of Total Outsourcing business 2002: Start of Consulting business unit 2001: Launch of Wipro Infotech Middle East & Asia-Pacific operations 2000: Wipro Listed on NYSE 1998: Mission Quality journey started with focus on Six Sigma 1998: Re-launch of Wipro branded PC 1995: Wipro-BT joint venture started 1995: Joint Venture with Acer started 1995: Partnership with Cisco announced 1995: Offshoring services started 1992: Launch of global R&D services 1990: Launch of global software services business 1988: Partnership with Sun Microsystems announced 1986: Manufacturing tie-up with Epson for printers 1986: Start of Wipro PC manufacturing (with India's first surface mounted technology) 1984: Start of Wipro Systems - focus on software products (Wipro branded as well as distribution business) 1981: Manufacture of mini computers started at the Mysore factory 1980: Birth of IT business under banner of Wipro Information Technology Ltd. focused on hardware manufacturing and R&D 1945: Manufacturing of edible oils

BOARD OF DIRECTORS OF WIPRO Ltd. Azim H. Premji

(Chairman & Managing Director)

Dr. Ashok Ganguly (Director)

(Chairman ICI India Ltd., former Director of Unilever Plc.) Dr. Nachiket Mor (Director) (Head of Treasury at ICICI Ltd.)

P S Pai
(Vice Chairman & Executive Officer)

Vivek Paul
(Vice Chairman & Executive Officer) B C Prabhakar (Director) (Senior Counsel) Dr. Jagdish N. Sheth (Director) (Professor in Marketing at Emory University, USA)

Arun K Thiagarajan
(Vice Chairman & Executive Officer) N Vaghul (Director) (Chairman of ICICI Ltd.) Hamir K Vissanji (Director) (Industrialist)

COMMITTEES OF THE BOARD COMPENSATION & BENEFITS COMMITTEE

N Vaghul (Chairman) Hamir K Vissanji B C Prabhakar

AUDIT COMMITTEE
Hamir K Vissanji (Chairman) N Vaghul Dr. Nachiket Mor

ADMINISTRATIVE COMMITTEE
Azim H Premji (Chairman) B C Prabhakar

SWOT ANALYSIS OF WIPRO

STRENGTHS

 Global R&D facility. Retention of the man-power is the best in the industry. Impressive list of clientele. Relatively lower receivable compared to the industry average.

WEAKNESSES

Low operating margin of the other group companies. Free floating stock is very less.

OPPORTUNITIES
In the branded product category. In the consultancy area. In the emerging technology areas like Blue Tooth, WAP etc.

THREATS
Increasing cost of human capital. Slowdown in the US economy. Will face fierce competition in the areas of e-business and ASP services.

OBJECTIVE OF STUDY

For a fresher like me, in a big organization like Wipro Ltd. gave me a feel of the real working atmosphere. It enhanced my horizons about how the members of the organization work as a team, co-ordinating with each other, their interdependence on each other. I became aware of the synergy effect i.e., how different members in different profiles produce greater results with co-ordination.

The usefulness of Study:

In-depth knowledge of Companys workings. Awareness of difference between the bookish knowledge and the practical workings of the company. Knowledge of Companys policies. Motivates to work as a team member. To get aware of Current Position of the Company. The various designations in an organization, the respective work profiles and the interdependence among them. It helps to understand how to tackle work pressure and meet dead lines. Time utilization. Data analysis and interpretation helps to increase capability of mind. Knowledge of Companys decisions to solve the problems.

RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. In it step by step methods are followed to solve a particular problem. It refers to a search for knowledge. It can also be defined as a scientific search for pertinent information on a specific topic. In fact, research is an art of scientific investment. Redman & Mory defines research systematized effort to gain new knowledge.

RESEARCH DESIGN
Research Designs the way in which the research is carried out. It works as a blue print. Research Design is the arrangement of the conditions for the collections and analysis of data in a manner that to combine relevance to the research purpose with economy in procedure.

TYPES OF RESEARCH DESIGN

Exploratory Research Design Descriptive & Diagnostic Research Design Experimental Research Design

Exploratory Research Design In it, a problem is formulated for precise investigation and working and hypothesis are developed. Descriptive & Diagnostic Research Design In descriptive research design: those studies are taken which are concerned with describing the characteristics of a particular individual or a group.

 Experimental Research Design In it casual relationships between the variables are tested. It is also known as Hypothesis Testing Research Design The present project is descriptive in nature. The major purpose of descriptive research is the description of the state of affairs, as it exists in present. The main characteristic of this method is that the researcher has no control over the variables. He can only report what has happened or what is happening.

SAMPLE DESIGN
It is not possible for any researcher to include each and every member of the universe in his research process. So, he selects small portion of the universe, which is its true representative. This group is known as sample and this process is called sampling. Sampling Techniques can be categorized into two broad categories namely: Non-probability Sample Probability Sampling Non-probability Sampling In it, researcher selects sample deliberately, by using his own judgment, in it every item of the universe does not have equal chances of inclusion in the sample. It can be of following type: Convenience Sampling Judgment Sampling Quota Sampling

 Probability Sampling It is known as Random Sampling or Chance Sampling. In it, each population element has equal chance of selection. It can be of following types: Simple Random Sampling Stratified Sampling Cluster Sampling In the present project, non-probability sampling has been used because sample is selected by researchers own view and every item of the universe has not equal chances of being selected. Under non-probability sampling, convenient sampling has been used because sample has been selected according to own convenience

DATA COLLECTION
The data can be of two types: Primary Data Secondary Data Primary Data Primary data are those data, which is originally collected afresh. Secondary Data Secondary data are those data which are already collected and stored and which has been passed through statistical research. In this project, Secondary data has been collected from following sources: Annual report Books M.I.S

Other material and report published by company

FINANCIAL STATEMENTS INTRODUCTION

Accounting is the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of the information .it involves recording classifying and summarizing various business transactions. The end products of business transactions are the financial statements comprising primarily the position statement or the balance sheet and the income statement or the profit and loss account. Financial Statements are the basis for decision making by the management as well as all other outsiders who are interested in the affairs of the firm such as investors, creditors, customers, suppliers, financial institutions, and employees, potential investors, Government and the general public.

MEANING OF FINANCIAL STATEMENTS

A Financial statement is a collection of data organized according to logical and consistent accounting procedures. The term Financial Statement generally refers to the two statements: (i) The position statement or the balance sheet; and (ii) The Income statement or the profit and loss account. In the words of John N. Myer , The Financial Statements provide a summary of the accounts of the business enterprise, the balance sheet reflecting the assets, liabilities and capital as on a certain date and the income statement showing the results of operations during a certain period In the words of Anthony, Financial Statements essentially, are interim reports, presented annually and reflect a division of the life of an enterprise into more or less arbitrary accounting period more frequently a year.

FINANCIAL ANALYSIS
The term Financial Analysis, also known as analysis and interpretation of financial statements, refers to the process of determining financial strengths and weaknesses of the firm by establishing strategic relationship between the items of the balance sheet .profit and loss and other operative data. Analyzing financial statements, according to Metcalf and Titard , is a process of evaluating the relationship between component parts of a financial statement to obtain a better understanding of a firms position and performance. The analysis of financial statements is to bring out the mystery behind the figures in financial statements.

METHODS OR DEVICES OF FINANCIAL ANALYSIS

A number of methods or devices are used to study the relationship between different statements. An effort is made to use those devices which clearly analyse the position of the enterprise. The following methods of analysis are generally used: (1) Comparative Statements; (2) Trend Analysis; (3) Common size statements; (4) Funds Flow Analysis; (5) Cash Flow Analysis; (6) Ratio Analysis; (7) Cost Volume-Profit Analysis.

RATIO ANALYSIS INTRODUCTION

The ratio analysis is one of the most powerful tools of financial analysis. It is the process of establishing and interpreting various ratios. It is with the help of ratios that the financial statements can be analyzed more clearly and decision made from such analysis.

MEANING OF RATIO
A ratio is simply an arithmetical expression of the relationship of one number to other. It may be defined as the indicated quotient of two mathematical expressions. According to Accountants Handbook by Wixon,Kell and Bedford ,a ratio is an expression of the quantitative relationship between two numbers According to Kohler , a ratio is the relation ,of the amount, a , to another ,b, expressed as the ratio of a to b ; a:b or as a simple fraction ,integer ,decimal, fraction or percentage.

HOW RATIOS CAN BE EXPRESSED?

Ratios can be expressed in 3 ways:

1.

PURE RATIO:
For example if the current assets of the firm on a given date are 5,00,000 and

the current liabilities are Rs 2,50,000 ,then the ratio of current assets to current liabilities will work out to be 5,00,000/2,50,000 or 2 .Such type of ratios are called simple or pure ratios. A financial ratio is the relationship between two accounting figures expressed mathematically.

2.

PERCENTAGE (%):
A ratio can also be expressed as percentage by simply multiplying the ratio by 100. As in the above example the ratios is 2 * 100 or 200% or say current assets are 200% of current liabilities.

3.

QUOTIENT RATIO / TIME RATIO:

It is also expressed as a proportion for example ,ratio of current assets to current liabilities is,say,5,00,000 : 2,50,000 or 2:1.Some analysts also express ratio as a rate or time. For example, the ratio of stock turnover is, say 50,000/10,000 or 5 times which simply conveys that stock has been turned over 5 times. In the example given above we can say that the ratio is two times.

USE AND SIGNIFICANCE OF RATIO ANALYSIS

The ratio analysis is one of the most powerful tools of financial analysis. It is used as a device to analyse and interpret the financial health of the enterprise. The use of ratios is not confined to financial managers only .With the use of ratio analysis one can measure the financial condition of a firm and can point out whether the condition is strong ,good ,questionable or poor. The conclusions can also be drawn as to whether the performance of the firm is improving or deteriorating. Thus, the ratios have wide applications and are of immense use today. Managerial Uses of Ratio Analysis Helps in Decision-making Helps in financial forecasting Helps in communicating Helps in Cost of Goods Sold-ordination Helps in control Other uses Utility to Shareholders/Investors Utility to Creditors Utility to Employees Utility to Government Tax Audit Requirements

LIMITATIONS OF RATIO ANALYSIS

Limited use of a single ratio

Lack of adequate standards Inherent limitations of accounting Change of Accounting Procedure Window Dressing Personal Bias Incomparable Absolute Figures Distortive Price Level Changes Ratios no Substitutes

LIQUIDITY RATIOS

Liquidity refers to the ability of the concern to meet its current obligations as and when these become due. The short-term obligations are met by releasing amounts from current, floating or circulating assets. The current assets should be liquid or near liquidity. The sufficiency of current assets should be assessed by comparing them with short-term (current) liabilities. if the current assets can pay off the current liabilities, then liquidity position will be satisfactory. On the other hand, if current liabilities may not be easily met out of current assets then liquidity position will be bad. The Bankers, suppliers of goods and other short-term creditors are interested in the liquidity of the concern. They will extend credit only if they are sure that current assets are enough to payout the obligations. To measure the liquidity of a firm, the following ratios can be calculated: Current Ratio Quick or Acid Test or Liquid Ratio

1. CURRENT RATIO
Current ratio may be defined as the relationship between current assets and current liabilities. This ratio is also known as working capital ratio, is a measure of general liquidity and is most widely used to make the analysis of a short term financial position or liquidity of a firm. It is calculated by dividing the total assets by total of the current liabilities. Current ratio = Current Assets Current Liabilities

2004-05 Current Ratio 1.47

2005-06 1.42

2006-07 1.68

2007-08 2.54

2008-09 1.83

3 2.5 2 1.5 1 0.5 0 2005 2006 2007 2008 2009

CURRENT RATIO

SIGNIFICANCE

From the above table it can be interpreted that Wipro liquidity position is constant. As a conventional rule a current ratio of 2:1 or more is considered satisfactory because in a worse situation, even if the value of current assets becomes half, the firm will be able to meet its obligations. Current ratio refers to a margin of safety for creditors therefore higher the current ratio, the greater the margin of safety.

2. QUICK or ACID TEST OR LIQUID RATIO

Quick ratio establishes a relationship between quick or liquid assets and current liabilities. An asset is liquid if it can be converted into cash immediately or reasonably soon without a loss of value. Inventories are considered to be less liquid therefore calculating quick ratio they are deducted from current assets. Quick Ratio = Current Assets inventory Current liabilities

2004-05 Quick Ratio 1.45

2005-06 1.40

2006-07 1.61

2007-08 2.44

2008-09 1.76

2.5 2 1.5 1 0.5 0 2005 2006 2007 2008 2009

SIGNIFICANCE

Wipro quick ratio in the current year has decreased in comparison to previous year, yet it can be considered to be satisfactory, as it is 1:1 times of current liabilities. Although quick ratio is more penetrating test of liquidity than current ratio. Yet it should be used cautiously, as all debtors may not be liquid and cash may be immediately needed to pay operating expenses.

TURNOVER RATIOS
These ratios indicate how efficiently the working capital and stock is being used to obtain sales. Higher turnover ratios indicate the better use of capital or resources and in turn lead to higher profitability. They are also called performance ratios.

Turnover / Activity Ratios

Stock Turnover Ratio Debtors Turnover Ratio Fixed assets Turnover Ratio Creditors Turnover Ratio

1. STOCK TURNOVER RATIO This ratio is also called inventory turnover ratio. It shows the speed or velocity with which inventory moves through business.
Inventory Turnover Ratio = Cost of Goods Sold Average Inventory

COMPONENTS
COGS = Net Sales - G/P. Sales = Gross Sales - Sales Return Average Inventory = Opening Stock + Closing Stock / 2 2004-05 ITR 57.38 2005-06 69.56 2006-07 58.12 2007-08 39.41 2008-09 47.02

70 60 50 40 30 20 10 0 2005 2006 2007 2008 2009

SIGNIFICANCE

The higher this ratio, the better it is. Lower stock turnover ratio indicates that stock is blocked, poor performance, over investment in stock.

2. DEBTORS TURNOVER RATIO

It is also called receivable turnover ratio, it indicates the rate at which cash is generated by turnover by debtors. It establishes the relationship between credit sales and debtors sales during the year. Debtors Turnover Ratio = Net Credit Sales Average Debtors

COMPONENTS
Net Credit Sales = Gross Sales - Cash Sale Average Debtors = Opening Debtors + Closing Debtors / 2 2004-05 DTR 5.86 2005-06 6.06 2006-07 6.01 2007-08 5.62 2008-09 5.34

6.2 6 5.8 5.6 5.4 5.2 5 4.8 2005 2006 2007 2008 2009

SIGNIFICANCE

This ratio is an indicator of the speed the debts are being realized. The higher this ratio, the better it is. As it will show, that debts are collected quickly.

DEBT COLLECTION PERIOD

This indicates the time within which the amount is collected from debtors and bills receivable. It is calculated by dividing the months in a year by debtors turnover ratio.

Debt Collection Period =

12 Months DTR

2006-07 Debt Collection Period 2.17

2007-08 2.10

2008-09 2.70

3 2.5 2 1.5 1 0.5 0 2007 2008 2009

3. FIXED ASSETS TURNOVER RATIO This ratio indicates how efficiently the fixed assets have been utilized to increase the sales of the firm.
Fixed asset turnover Ratio = Net Sales

Net Fixed Assets

COMPONENTS
Net Sales = Total Sales - Sale Return = Assets after Dep. 2005-06 7.16 2006-07 6.29 2007-08 7.81 2008-09 6.86 Net Fixed Assets

2004-05 FATR 7.52

8 7 6 5 4 3 2 1 0 2005 2006 2007 2008 2009

SIGNIFICANCE

This ratio indicates the efficiency with which the firm is utilising its investment in fixed assets. The higher this ratio, the better it is. A high ratio indicates efficient utilization of fixed assets in generating sales.

4. CREDITOR TURNOVER RATIO

This ratio establishes relationship between net credit purchases and average creditors. Creditors Turnover Ratio = Net Credit Purchases Average Creditors

COMPONENTS
Net Credit Purchases = Gross Credit Purchases Purchase Return Average Debtors = Opening Debtors + Closing Debtors / 2

2004-05 CTR 5.70

2005-06 3.67

2006-07 3.55

2007-08 3.45

2008-09 3.32

6 5 4 3 2 1 0 2005 2006 2007 2008 2009

SIGNIFICANCE
Lower creditor turnover means that creditors have followed liberal credit policy. High ratio means that the firm has to pay the creditors in a short period. Lower ratio is beneficial to the firm as it poses fewer problems to manage working capital.

PROFITABILITY RATIO

The primary objective of a business undertaking is to earn profits. Profit earning is considered essential for the survival of the business. In the words of Lord Keynes, Profit is the engine that drives the business enterprise. A business needs profits not only for its existence but also for expansion and diversification. A business enterprise can discharge its obligations to the various segments of the society only through earning profits. Profits are, thus, a useful measure of overall efficiency of a business. Profits to the management are the test of efficiency and measurement of control; to owners, a measure of worth of their investment; to the creditors ,the margin of safety; to employees, a source of fringe benefits; to government, a measure of tax paying capacity and the basis of legislative action; to customers, a hint to demand better for quality and price cuts; to an enterprise, less cumbersome source of finance for growth and existence and finally to the country, profits are an index of economic progress. The various profitability ratios are discussed as under:

PROFITABILITY RATIOS
(i) Gross Profit Ratio (ii) Operating Profit Ratio (iii) Expenses Ratio (iv) Net Profit Ratio

1. GROSS PROFIT RATIO

Gross Profit Ratio measures the relationship of gross profit to net sales and is usually represented as a percentage .Thus; it is calculated by dividing the gross profit b y sales: Gross Profit Ratio = Gross Profit Net Sales X 100

COMPONENTS
Net Sales = Gross Sales Sales Return Gross Profit = Net Sales Cost of Goods Sold

2004-05 GP Ratio
30 25 20 15 10 5 0 2005

2005-06 25.08

2006-07 25.30

2007-08 18.63

2008-09 19.64

26.34

2006

2007

2008

2009

SIGNIFICANCE
High gross profit ratio is the sign of efficient management. Increase in prices or reduction in cost can also result in high gross profit ratio. Sometimes, lower valuation of opening stock or higher valuation of closing stock can also increase gross profit ratio.

2. OPERATING PROFIT RATIO

Operating ratio establishes the relationship between cost of goods sold and other operating expenses on the one hand and the sales on the other. In the other words, it measures the cost of operations per rupee of sales. The ratio is calculated by dividing operating costs with the net sales and its generally represented as a percentage.

Operating Ratio

Operating Profit Net Sales

100

COMPONENTS
Operating Profit = Net Sales Operating Cost = Net Sales (Cost of Goods Sold + administrative and Office expenses + Selling and Distributive Expenses) OR Operating Profit = Net Profit + NonOperating Expenses Non-Operating Income 2004-05 Operating Ratio 25.64 2005-06 24.28 2006-07 23.78 2007-08 21.24 2008-09 22.12

30 25 20 15 10 5 0 2005 2006 2007 2008 2009

SIGNIFICANCE
The lower the operating ratio, more efficient the firm will be. This ratio can be used to compare the firm with other firms or the performance of the firm in previous years with the current years.

3. NET PROFIT RATIO

Net profit ratio establishes a relationship between net profit (after taxes) and sales, and indicates the efficiency of the management in manufacturing, selling, administrative and other activities of the firm. This ratio is also called Net Profit Margin.

(i) Net Profit Ratio

Net Profit After Tax Net Sales

100

2004-05 NP Ratio 20.45

2005-06 19.53

2006-07 20.34

2007-08 17.19

2008-09 14.14

25 20 15 10 5 0

2005

2006

2007

2008

2009

SIGNIFICANCE
The ratio is very useful as if the profit is not sufficient, the firm shall not be able to achieve a satisfactory return on its investment. This ratio also indicates the firms

capacity to face adverse economic conditions such as price competition, low demand, etc. Obviously, higher the ratio, the better is the profitability.

4. EXPENSES RATIO
Expenses ratio indicates the relationship of various expenses to net sales. The operating ratio reveals the average total variations in expenses. But some of the expenses may be increasing while some may be falling. Hence, expense ratios are calculated by dividing each item of expenses with the net sales to analyze the causes of variation of the operating ratio .The ratio can be calculated for each individual item of expenses or a group of items of a particular type of expense like cost of sales ratio, administrative expense ratio, selling expense ratio, material consumed ratio, etc.

Particulars Expense Ratio

Particular Expense Net Sales

X 100

Individual or specific expense ratio may be calculated as:

(i) Cost Of Goods Sold Ratio

= Cost of Goods Sold Net Sales

100

(ii) Administrative & Office Expenses Ratio = Administrative & Office Expenses Sales (iii) Selling & Distributive Expenses Ratio = Selling & Distributive Expenses Sales (iv) Non-Operating Expenses Ratio = Non-Operating Expenses X 100 X 100 X 100

Sales

2004-05 2005-06 2006-07 Material Consumed Ratio 16.51 13.60 14.43

2007-08 17.94

2008-09 15.63

18 16 14 12 10 8 6 4 2 0 2005 2006 2007 2008 2009

SIGNIFICANCE
The lower the ratio, the greater is the profitability and higher the ratio, lower is the profitability.

PROFITABILITY RATIOS based on INVESTMENT

The main objective of these ratios is to know whether the business is earning adequate return on capital invested or not. On the basis of these ratios, the performance of the business can be measured. Business collects funds from various sources to earn profits. Therefore, it becomes essential to make proper use of these resoures. These ratios are also known as Return on Investment or ROI.

Return on Investment
(i) (ii) Return on Total Assets Return on Net Capital Employed

(iii) Return on Shareholders Fund

1.

RETURN ON TOTAL ASSETS

With the help of this ratio, overall profitability of all resources can be evaluated. Total assets can also be called Gross Capital Employed. Total assets are equal to the sum of fixed assts and current assets. Return on Total Assets = Profit before Interest and Tax Total Assets 2004-05 Return on Total Assets 69.54 2005-06 45.03 2006-07 63.86 2007-08 79.05 2008-09 85.42 X 100

90 80 70 60 50 40 30 20 10 0 2005 2006 2007 2008 2009

SIGNIFICANCE
By comparing this ratio to the ratio of similar types of firms, it can be ascertained how effectively the Assets of business are utilized. Higher ratio indicates that assets are being utilized efficiently.

2.

RETURN ON CAPITAL EMPLOYED

For the purpose of this ratio, capital employed is concerned with long term funds. Long term funds are provided by creditors and owner of business. Return on Capital Employed = Profit before Interest and Tax Capital Employed X 100

COMPONENTS
Capital Employed = Capital Employed = Fixed Assets + Net Working Capital Or Long term Liabilities + Issued Share Capital + Reserve & Surplus 2004-05 Return on Capital Employed 35.20 2005-06 35.58 2006-07 33.30 2007-08 23.23 2008-09 21.36

40 35 30 25 20 15 10 5 0 2005 2006 2007 2008 2009

SIGNIFICANCE

Return on Capital Employed is a measure of the profitability of Long term funds. By comparing this ratio to the ratio of similar types of firms, it can be ascertained how effectively the Long term Funds of business are utilized. Higher ratio indicates that Capital Employed is being utilized efficiently.

3.

RETURN ON SHAREHOLDERS FUND

Return on capital employed highlights overall profitability of the funds invested by creditors and shareholders. Return on shareholders fund evaluates the profitability of the fund invested by owner. Dividend to preference shareholders is paid out of the earning after tax and the balance of profit is available for equity shareholders. There are various measures for return on shareholders fund:

Return on Shareholders Fund

(i) (ii) (iii) (iv) Dividend per Share Earning per Share Dividend payout ratio Debt Equity Ratio

1. Dividend per Share

All the profits after tax and preference dividend available for equity shareholders are not distributed among them as dividend. Rather, a part of it is retained in business. The balance of profit is distributed among equity shareholders. To calculate dividend per share, we divide the profit distributed as dividend among equity shareholders by number of equity shares.

Dividend per Share =

Profit Distributed to Equity Shareholders Number of Equity Shares

2004-05 Dividend per Share 5.00

2005-06 5.00

2006-07 6.00

2007-08 6.00

2008-09 4.00

6 5 4 3 2 1 0 2005 2006 2007 2008 2009

2. Earning per Share

This ratio measures the earning per share available to ordinary shareholders. Equity shareholders have the right to profits left after payment of taxes and preference dividend. This ratio is calculated by dividing the profit available for equity shareholders by the number of equity shares issued. Earning per Share = Net Profit after Tax and Preference Dividend Number of Equity Shares

2004-05 Earning per Share 21.25

2005-06 14.17

2006-07 19.48

2007-08 20.96

2008-09 20.30

25 20 15 10 5 0 2005 2006 2007 2008 2009

3. Dividend Payout Ratio or D/P Ratio

This ratio is called payout ratio. This ratio establishes relationship between the earning for ordinary shareholders and the dividend paid to them. In other words, it explains what percentage of profit after tax and preference dividend has been paid to equity shareholders as dividend. D/P Ratio = Total Dividend paid to Equity Shareholders Total Net Profit belonging to Equity Shareholders Or D/P Ratio = DPS EPS X 100 X 100

2004-05 D/P Ratio 26.83

2005-06 40.23

2006-07 35.20

2007-08 33.47

2008-09 23.05

45 40 35 30 25 20 15 10 5 0

2005

2006

2007

2008

2009

4.

Debt-Equity Ratio

The necessary funds for the assets of business are provided by ordinary shareholders, preferential shareholders and creditors. In any business, there should be equitable balance between owned capital and debt capital because it affects the long term solvency of the business. If a business procures more funds from the owners business, it will secure the interest of the creditors. On the other hand, if more funds are borrowed instead of employing owned capital, it will increase risk for creditors as well as shareholders and management may face difficulty in future to pay the debts. Debt Equity Ratio = External Equities Internal Equities

COMPONENTS
External Equities = Debentures + Long term Loans + short term creditors Internal Equities = Equity Share Capital + Preference share capital + Capital Reserve + Revenue Reserves. 2004-05 Debt Equity Ratio 0.01 2005-06 0.01 2006-07 0.03 2007-08 0.33 2008-09 0.40

0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 2005 2006 2007 2008 2009

SIGNIFICANCE

If the debt equity ratio is 1:2, it means that for every one rupee of external liability, there are two rupees of shareholders fund.

ADVANTAGES / MERITS OF RATIO ANALYSIS

1) SIMPLIFICATION OF ACCOUNTING DATA Ratio Analysis summarizes and simplifies a long array of accounting figures to make them more clear and understandable. USEFUL IN FINANCIAL STATEMENT ANALYSIS Ratio Analysis is extremely useful device for analyzing the financial statements. USEFUL IN DETERMFINATION OF TRENDS Ratio analysis helps in determination of trends in profit, cost etc. MEASUREMENT OF OVERALL PROFITABILITY Ratio analysis helps in measuring the overall profitability of enterprise. HELPFUL IN CONTROLLING Ratio analysis compares the ratio regarding efficiency and financial position with standard ratio. It discloses solvency, liquidity and profitability of a enterprises and any unfavourable result can be controlled. RATIOS ANALYSIS HELPS THE MANAGEMENT TO DIAGNOSE THE VARIOUS SITUATIONS

2)

3) 4) 5)

6)

LIMITATION OF RATIO ANALYSIS

1) WRONG DATA GIVES FALSE RATIO Ratio are based on data given in the Profit and Loss Account, Balance Sheet. Therefore, they will be only as correct as accounting data on which they are based. LIMITED USE OF SINGLE RATIO There is limited use of single ratio, because single ratio is not very significant to explain the situation. RESULTS MAY BE MISLEADING IN THE ABSENCE OF ABSOLUTE DATA Some time ratio gives misleading result in the absence of absolute data from which such ratio are derived. CHANGES IN MANY RATIO ARE CLOSELY ASSOCIATED AND CONNECTS WITH ONE ANOTHER.

2)

3)

4)

FINDINGS

The business is running 10% on domestic basis 90% of export basis There are no creditors Weekly requirement are given through cash flow statements The sources of fund are from the corporate office. Head office allots funds to the Wipro InfoTech. Apart from it the financial department of Wipro InfoTech keeps accounts for expenses as per the accounting practices. It deals in insurance, sales tax, excise matters, costing, budgeting and MIS. The advertising pattern is updated n regular Discipline is very good

RECOMMENDATIONS
Debtors Turnover Ratio is decreasing because increase in debtors is more than increase in Revenue. In 2008 debtors represent 40% of total Current Assets that is quiet high. So Firstly Company should make changes in its credit policy and secondly company should try to make more efforts to collect the funds from its debtors. Operating Expenses are high which 95% of total expenses are in 2008. In Operating Expenses employee costs are high which 42% of total operating expenses are. So the company must have to make some efforts to reduce its expenses, and profit can increase. Cash and Bank Balance is 42% in 2008 of total current Assets which is high. Therefore company must think it to invest in any profitable project. Return on Shareholders funds are decreased because increase is net profit is less than increase in shareholders funds.

CONSTRAINTS OF THE STUDY

Although every effort has been in to collect the relevant information through the sources available, still some relevant information could not be gathered, due to:

Busy Schedule of Concerned Executives: The concerned executives were having very busy schedule because of which they were reluctant to give appointment.

Time: The time duration could not provide ample opportunity to study every detail of working capital management of the company.

Unawareness: Executives were unaware of many terms related to working capital study while asking to them.

Confidential Information: As the company on account of confidential report has not disclosed some figures. Moreover, in some cases separate accounts of division are not separately maintained thereby, leading to restrictions in study.

BIBLIOGRAPHY
Books Financial Management - S.K Gupta Management Accountancy - D k Goel Cost and Management Accountancy - S.N.Maheshwari Financial Management and Policy - James C.Van Horne

World Wide Web Search Engines: Google, Yahoo, etc. www.wipro.co.in www.moneycontrol.com Wikipedia

Other than Web M.I.S of the company Annual Reports

ANNEXURE & GLOSSARY ANNEXURE-1

1. General Information Name of the Company: Wipro Ltd. Registered Office: Doddakannelli, Sarjapur Road, Bangalore -560 035. Tel: 91-80-8440011 Fax: 91-80-8440056 Website: www.wipro.co.in Chairman: Mr. Azim H. Premji 2. History & Current Profile

Promoter: Mr. Azim H. Premji Total No. of Employees: Approx. 41500 Competitors: Tata Consultancy Service, Infosys, IBM, HP, etc.
3. Financial Data Provider

Financial Concern: Mr. Pyuesh Sharma Job Profile: Finance Department

ANNEXURE-2 Table 1 PROFIT & LOSS ACCOUNT

in Rs. Cr.

Mar '05 Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses 7,276.18 43.02 7,233.16 93.32 9.29 7,335.77 1,194.77 46.54 2,878.53 511.53 657.32 135.64 -37.12 5,387.21 Mar '05 Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) 1,855.24 1,948.56 5.57 1,942.99 185.97 0.00 1,757.02 -7.06 1,749.96 255.15 1,494.82 4,192.44 0.00 351.79 49.34 7,035.71 21.25 250.00 69.54

Mar '06 10,264.09 36.97 10,227.12 151.92 24.21 10,403.25 1,391.88 86.46 4,279.03 934.24 801.07 274.76 0.00 7,767.44 Mar '06 2,483.89 2,635.81 3.13 2,632.68 292.26 0.00 2,340.42 -33.85 2,306.57 286.10 2,020.48 6,375.55 0.00 712.88 99.98 14,257.54 14.17 250.00 45.03

Mar '07 13,758.50 74.60 13,683.90 288.70 86.30 14,058.90 1,975.30 0.00 5,768.20 120.50 27.60 2,624.10 0.00 10,515.70 Mar '07 3,254.50 3,543.20 7.20 3,536.00 359.80 0.00 3,176.20 0.00 3,176.20 334.10 2,842.10 8,540.40 0.00 873.70 126.80 14,590.00 19.48 300.00 63.86

Mar '08 17,658.10 165.50 17,492.60 326.90 187.00 18,006.50 3,139.30 0.00 7,409.10 299.80 557.80 2,558.00 0.00 13,964.00 Mar '08 3,715.60 4,042.50 116.80 3,925.70 456.00 0.00 3,469.70 0.00 3,469.70 406.40 3,063.30 10,824.70 0.00 876.50 148.90 14,615.00 20.96 300.00 79.05

Mar '09 21,612.80 105.50 21,507.30 -480.40 -13.90 21,013.00 3,362.80 0.00 9,242.20 0.00 0.00 4,129.60 0.00 16,734.60 Mar '09 4,758.80 4,278.40 196.80 4,081.60 533.70 0.00 3,547.90 0.00 3,547.90 574.10 2,973.80 13,371.80 0.00 586.00 99.60 14,650.00 20.30 200.00 85.42

ANNEXURE-3 TABLE 1
CASH FLOW STATEMENT

In Rs. Cr.

Mar '05 Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents 1757.02 1666.42 -874.58 -550.61 246.80 290.09 536.90

Mar '06 2340.43 1912.25 -1694.42 59.80 277.63 545.38 823.00

Mar '07 3176.20 2674.60 -1881.90 238.50 1031.20 818.00 1849.20

Mar '08 3469.70 715.90 -1127.50 2290.90 1879.30 1852.80 3732.10

Mar '09 3547.90 4344.50 -3662.70 -70.70 611.10 3798.10 4409.20

ANNEXURE-4 TABLE 1 BALANCE SHEET

In Rs. Cr.

Mar '05 Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net worth Secured Loans Unsecured Loans Total Debt Total Liabilities Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs) 140.71 140.71 1.21 0.00 4,751.73 0.00 4,893.65 21.59 40.50 62.09 4,955.74 Mar '05 1,763.49 855.53 907.96 250.24 2,859.51 127.37 1,406.51 536.89 2,070.77 602.08 0.01 2,672.86 0.00 1,211.14 523.70 1,734.84 938.02 0.00 4,955.73 676.65 69.54

Mar '06 285.15 285.15 7.49 0.00 6,135.30 0.00 6,427.94 45.06 5.10 50.16 6,478.10 Mar '06 2,364.53 1,246.27 1,118.26 612.36 3,459.20 148.65 1,968.07 822.42 2,939.14 1,136.96 0.58 4,076.68 0.00 1,776.83 1,011.56 2,788.39 1,288.29 0.00 6,478.11 509.18 45.03

Mar '07 291.80 291.80 3.50 0.00 9,025.10 0.00 9,320.40 23.20 214.80 238.00 9,558.40 Mar '07 1,645.90 0.00 1,645.90 989.50 4,348.70 240.40 2,582.30 1,849.20 4,671.90 1,666.50 0.00 6,338.40 0.00 2,998.90 765.20 3,764.10 2,574.30 0.00 9,558.40 661.60 63.86

Mar '08 292.30 292.30 58.00 0.00 11,260.40 0.00 11,610.70 4.00 3,818.40 3,822.40 15,433.10 Mar '08 2,282.20 0.00 2,282.20 1,335.00 4,500.10 448.10 3,646.60 3,732.10 7,826.80 4,231.30 0.00 12,058.10 0.00 3,361.60 1,380.70 4,742.30 7,315.80 0.00 15,433.10 749.90 79.05

Mar '09 293.00 293.00 1.50 0.00 12,220.50 0.00 12,515.00 0.00 5,013.90 5,013.90 17,528.90 Mar '09 3,179.60 0.00 3,179.60 1,311.80 6,884.50 459.70 4,409.20 4,299.20 9,168.10 4,408.00 0.00 13,576.10 0.00 5,716.40 1,706.70 7,423.10 6,153.00 0.00 17,528.90 596.10 85.42

ANNEXURE-5 TABLE 1 Financial Ratios

Mar '05 Investment Valuation Ratios Face Value Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Free Reserves Per Share (Rs) Bonus in Equity Capital Profitability Ratios Operating Profit Margin(%) Profit Before Interest And Tax Margin(%) Gross Profit Margin(%) Cash Profit Margin(%) Adjusted Cash Margin(%) Net Profit Margin(%) Adjusted Net Profit Margin(%) Return On Capital Employed(%) Return On Net Worth(%) Adjusted Return on Net Worth(%) Return on Assets Excluding Revaluations Return on Assets Including Revaluations Return on Long Term Funds(%) Liquidity And Solvency Ratios Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio Debt Coverage Ratios Interest Cover Total Debt to Owners Fund Financial Charges Coverage Ratio Financial Charges Coverage Ratio Post Tax 2.00 5.00 26.37 102.81 66.69 98.43 25.64 22.83 26.34 22.99 22.84 20.45 20.30 35.20 30.55 30.33 69.54 69.54 35.61

Mar '06 2.00 5.00 17.42 71.73 42.65 98.08 24.28 21.19 25.08 22.36 22.32 19.53 19.49 35.58 31.43 31.39 45.03 45.03 35.87

Mar '07 2.00 6.00 22.31 93.79 -95.84 23.78 20.71 25.30 22.91 22.91 20.34 20.34 33.30 30.49 30.50 63.86 63.86 33.31

Mar '08 2.00 6.00 25.42 119.69 -95.68 21.24 18.29 18.63 19.74 19.74 17.19 17.19 23.23 26.51 26.51 79.05 79.05 23.32

Mar '09 2.00 4.00 32.48 146.81 -95.45 22.12 20.09 19.64 16.68 16.68 14.14 14.14 21.36 23.76 23.76 85.42 85.42 21.36

1.47 1.45 0.01 -313.35 0.01 346.75 302.87

1.42 1.40 0.01 -735.79 0.01 829.08 739.19

1.68 1.61 0.03 0.03 442.14 0.03 492.11 445.71

2.54 2.44 0.33 0.33 30.71 0.33 34.61 31.13

1.83 1.76 0.40 0.40 19.03 0.40 21.74 18.82

Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio Asset Turnover Ratio Average Raw Material Holding Average Finished Goods Held Number of Days In Working Capital Profit & Loss Account Ratios Material Cost Composition Imported Composition of Raw Materials Consumed Selling Distribution Cost Composition Expenses as Composition of Total Sales Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio AdjustedCash Flow Times

57.38 5.86 58.05 7.52 1.46 4.14 37.32 3.99 46.69

69.56 6.06 78.23 7.16 1.58 4.35 28.45 3.78 45.35

58.12 6.01 57.23 6.29 1.43 8.31 --67.73

39.41 5.62 39.41 7.81 1.14 7.81 --150.56

47.02 5.34 47.02 6.86 1.23 6.86 --102.99

16.51 51.39 1.48 74.29

13.60 62.12 1.67 69.25

14.43 ----

17.94 -3.04 --

15.63 ----

26.83 23.86 72.98 75.99 0.04 Mar '05

40.23 35.14 59.68 64.79 0.02 Mar '06 14.17 45.03

35.20 31.24 64.80 68.76 0.07 Mar '07 19.48 63.86

33.47 29.13 66.53 70.87 1.09 Mar '08 20.96 79.05

23.05 19.54 76.95 80.46 1.43 Mar '09 20.30 85.42

Earnings Per Share Book Value

21.25 69.54