Professional Documents
Culture Documents
CP Final
CP Final
4.2 Budgeting
Budget of a company is often compiled annually, but may not be a finished budget, usually
requiring considerable effort, is a plan for the short-term future, typically allows hundreds or
even thousands of people in various departments (operations, human resources, IT, etc.) to list
their expected revenues and expenses in the final budget.
If the actual figures delivered through the budget period come close to the budget, this suggests
that the managers understand their business and have been successfully driving it in the intended
direction. On the other hand, if the figures diverge wildly from the budget, this sends an 'out of
control' signal, and the share price could suffer.
Budget of the ENIL company is mainly on advertising, radio show, other event and assets of
radio station.
Period
Instrument
Authorized
Capital
(Rs. cr)
Issued Capital
-PAIDUP-
Face
Value
Capital
(Rs. Cr)
From
To
2012
2013
Equity Share
120.0
47.7
47670415
10.0
47.7
2011
2012
Equity Share
120.0
47.7
47670415
10.0
47.7
2010
2011
Equity Share
120.0
47.7
47670415
10.0
47.7
2009
2010
Equity Share
120.0
47.7
47670415
10.0
47.7
2008
2009
Equity Share
120.0
47.7
47670415
10.0
47.7
2007
2008
Equity Share
120.0
47.7
47656060
10.0
47.7
2006
2007
Equity Share
120.0
47.6
47584575
10.0
47.6
2005
2006
Equity Share
120.0
47.6
47563665
10.0
47.6
2004
2005
Equity Share
120.0
117.0
116960000
10.0
117.0
4.4.4 Opinion
In our opinion, and to the best of our information and according to the explanations given to us,
the accompanying financial statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the accounting principles generally
accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;
(b) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date;
and
(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies
(Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in
terms of sub-section (4A) of section 227 of the Act (hereinafter referred to as the Order), and
on the basis of such checks of the books and records of the Company as we considered
appropriate and according to the information and explanations given to us, we give in the
Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.
provisions of Clause 4(iii) [(b), (c) and (d) / (f) and (g)] of the said Order are not applicable to
the Company.
iv. In our opinion, and according to the information and explanations given to us, there is an
adequate internal control system commensurate with the size of the Company and the nature of
its business for the purchase of fixed assets and for the sale of services. Further, on the basis of
our examination of the books and records ofthe Company, and according to the information and
explanations given to us, we have neither come across, nor have been informed of, any
continuing failure to correct major weaknesses in the aforesaid internal controlsystem.
v. (a) According to the information and explanations given to us, we are of the opinion that the
particulars of all contracts or arrangements that need to be entered into the register maintained
under section 301 of the Companies Act, 1956 have been so entered.
(b) In our opinion, and according to the information and explanations given to us, the
transactions made in pursuance of such contracts or arrangements and exceeding the value of
Rupees Five Lakhs in respect of any party during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the relevant time.
vi. The Company has not accepted any deposits from the public within the meaning of Sections
58A and 58AA of the Act and the rules framed there under.
vii. In our opinion, the Company has an internal audit system commensurate with its size and the
nature of its business.
viii. We have broadly reviewed the books of account maintained by the Company in respect of
products where, pursuant to the rules made by the Central Government of India, the maintenance
of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act,
and are of the opinion that, prima facie, the prescribed accounts and records have been made and
maintained. We have not, however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
ix. (a) According to the information and explanations given to us and the records of the
Company examined by us, in our opinion, the Company is regular in depositing undisputed
statutory dues, including providentfund, investor education and protection fund, employees state
insurance, income tax, wealth tax, service tax, customs duty, excise duty and other material
statutory dues, as applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the records of the Company
examined by us, there are no dues of income-tax, sales-tax, wealth-tax, service-tax, customs
duty, and excise duty which have not been deposited on account of any dispute.
x. The Company has no accumulated losses as at the end of the financial year and it has not
incurred any cash losses in the financial year ended on that date or in the immediately preceding
financial year.
xi. As the Company does not have any borrowings from any financial institution or bank nor has
it issued any debentures as at the balance sheet date, the provisions of Clause 4(xi) of the Order
are not applicable to theCompany.
xii. The Company has not granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities. Therefore, the provisions of Clause 4(xii) of
the Order are not applicable to the Company.
xiii. As the provisions of any special statute applicable to chit fund/ nidhi/ mutual benefit fund/
societies are not applicable to the Company, the provisions of Clause 4(xiii) of the Order are not
applicable to the Company.
xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and
other investments.
Accordingly, the provisions of Clause 4(xiv) of the Order are not applicable to the Company.
xv. In our opinion, and according to the information and explanations given to us, the Company
has not givenany guarantee for loans taken by others from banks or financial institutions during
the year. Accordingly, the provisions of Clause 4(xv) of the Order are not applicable to the
Company.
xvi. The Company has not raised any term loans. Accordingly, the provisions of Clause 4(xvi) of
the Order are not applicable to the Company.
xvii. The Company has not raised any loans on short term basis. Accordingly, the provisions of
Clause 4(xvii) of the Order are not applicable to the Company.
xviii. The Company has not made any preferential allotment of shares to parties and companies
covered in the register maintained under Section 301 of the Act during the year. Accordingly, the
provisions of Clause 4(xviii) of the Order are not applicable to the Company.
xix. The Company has not issued any debentures during the year and does not have any
debentures outstanding as at the beginning of the year and at the year end. Accordingly, the
provisions of Clause 4(xix) of the Order are not applicable to the Company.
xx. The Company has not raised any money by public issues during the year. Accordingly, the
provisions of Clause 4(xx) of the Order are not applicable to the Company.
xxi. During the course of our examination of the books and records of the Company, carried out
in accordance withthe generally accepted auditing practices in India, and according to the
information and explanations given to us, we have neither come across any instance of material
fraud on or by the Company, noticed or reported during the year, nor have we been informed of
any such case by the Management.
Borrowing cost directly attributable to fixed assets which take substantial period of time to get
ready forits intended use are capitalized to the extent they relate to the period till such assets are
ready to be put to use. Cost incurred on assets not ready for their intended use is disclosed as
Capital Work-in-Progress.
a) Tangible assets:
Tangible fixed assets are stated at cost less accumulated depreciation and impairment losses, if
any. Depreciation on tangible fixed assets is provided on written down value method at the rates
and in the manner specified in Schedule XIV to the Act. The cost of leasehold improvements are
amortised over the primary period of lease of the property. Leasehold land is not amortised since
the term of lease is perpetual in nature. Tangible assets individually costing less than ` 5,000 are
depreciated fully in the year of purchase.
The portion of Long term investments which is expected to be realized within twelve months
from the Balance Sheet date are classified as current investments.
Investment in buildings that is not intended to be occupied substantially for use by, or in the
operations of the Company, have been classified as investment property. The same has been
classified as long term investments. Investment property is carried at cost less accumulated
depreciation.
Current investments are carried at cost or fair value, whichever is lower. Long term investments
are stated at cost. However, provision for diminution in value is made to recognize a decline
other than temporary in the value of the long term investments.
Operating Leases:
Leases in which a significant portion of the risks and rewards of ownership are retained by the
lesser are classified as operating leases. Payments made under operating leases are charged to the
Statement of Profit and Loss on a straight-line basis over the period of the lease.
unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to
its recoverable amount.
The reduction is treated as an impairment loss and is recognised in the Statement of Profit and
Loss. If at the Balance Sheet date there is an indication that a previously assessed impairment
loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the
recoverable amount.
2004
2.22
2005
1.11
2006
1.78
2007
1.42
2008
1.16
2009
2.03
2010
1.97
2011
2.29
2012
2.41
2013
1.73
Current Ratio
3
I
n
T
i
m
e
s
2.5
2
1.5
1
0.5
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Year
The current ratio represents a margin of safety for creditor. The higher the current ratio, the
greater the margin of safety; the larger amount of current assets in relation to current liabilities,
the more firms ability to meet its current obligations. The current ratio of the ENIL reflects the
satisfactory current position of the firm. Current ratio of ENIL is decreased continuously after
2004 but after 2004 it is increased. It may be interpreted to be sufficiently liquidity in ENIL.
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Quick Ratio
2.22
1.11
1.78
3.28
3.35
3.06
2.12
2.16
2.41
1.73
I
n
T
i
m
e
s
Quick Ratio
4
3
2
1
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Year
Quick Ratio is an indicator of company's short-term liquidity. It measures the ability to use its
quick assets (cash and cash equivalents, marketable securities and accounts receivable) to pay its
current liabilities.
If quick ratio is higher, company may keep too much cash on hand or have a problem collecting
its accounts receivable. Higher quick ratio is needed when the company has difficulty borrowing
on short-term notes. A quick ratio higher than 1:1 indicates that the business can meet its current
financial obligations with the available quick funds on hand.
Quick ratio of ENIL is continually decreased after 2008 but it is also sufficient liquidity in the ENIL.
I
n
T
i
m
e
s
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
0
0 0.13 0.36 0.62 0.35
0.1
0
0
0
2005
2006
2007
2008
Year
2009
2010
2011
2012
2013
The debt-to-equity ratio is a measure of the relationship between the capital contributed by
creditors and the capital contributed by shareholders. It also shows the extent to which
shareholders' equity can fulfil a company's obligations to creditors in the event of liquidation.
Debt-Equity ratio of ENIL is decreased continuously after 2008. Low debt-equity ratio implies a
greater claim of owners than creditor.Low debt-to-equity ratios may also indicate that a company
is not taking advantage of the increased profits that financial leverage may bring.
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
0
0.13
0.26
0.4
0.29
0.07
2012
2013
0.5
0.4
T
i
m
e
s
0.3
0.2
0.1
0
2004
2005
2006
2007
2008
2009
2010
2011
Year
In risk analysis a way to determine a company's leverage. The ratio is calculated by taking the
company's long-term debt and dividing it by the total value of its preferred and common stock.
The greater a company's leverage, the higher the ratio. Generally, companies with higher ratios
are thought to be more risky because they have more liabilities and less equity.
Long Term Debt Equity Ratio of ENIL Company is reducing after 2008. It is indicated that
company do not want to take more interest rate risk.
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
4.28
4.19
4.02
3.92
3.62
3.64
3.2
3.08
3.53
I
n
T
i
m
e
s
3
2
1
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Year
Debtor turnover ratio measures company's efficiency in collecting its sales on credit and
collection policies. The lower the ratio is the longer receivables are being held and the risk to not
be collected increases.
A debtors turnover ratio implies that the company should re-assess its credit policies in order
to ensure the timely collection of credit sales that is not earning interest for the firm. A ratio that
is low by industry standards will generally indicate that your business needs to improve its credit
policies and collection procedures.
Debtor turnover ratio of ENIL is maintained between 3.2 to 4.28 times.
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
0.84 1.76 0.71 2.78
0.5 0.49 0.59 0.74 0.73 0.72
I
n
3
2.5
T
i
m
e
s
2
1.5
1
0.5
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Year
The total asset turnover ratio measures the ability of a company to use its assets to efficiently
generate sales. This ratio considers all assets, current and fixed. Those assets include fixed assets,
like plant and equipment, as well as inventory, accounts receivable, as well as any other current
assets.
The lower the total asset turnover ratio as compared to historical data for the firm and industry
data, the more sluggish the firm's sales. This may indicate a problem with one or more of the
asset categories composing total assets - inventory, receivables, or fixed assets. The small
business owner should analyse the various asset classes to determine in which current or fixed
asset the problem lies. The problem could be in more than one area of current or fixed assets.
Total asset turnover ratio of the ENIL is not good. It is indicated company is not using its assets
very well.
Year
Gross Profit Margin (%)
2004
-40.81
2005
-16.15
2006
30.49
2007
27.1
2008
10.01
2009
4.69
2010
10.01
2011
19.24
2012
22.64
40
20
2004
2005
2006
2007
2008
2009
-20
-40
-60
Year
2010
2011
2012
2013
2013
21.42
Gross profit margin measures company's manufacturing and distribution efficiency during the
production process. It is a measurement of how much from each dollar of a company's revenue is
available to cover overhead, other expenses and profits.
The ideal level of gross profit margin depends on the industries, how long the business has been
established and other factors. Although, a high gross profit margin indicates that the company
can make a reasonable profit, as long as it keeps the overhead cost in control. A low
margin indicates that the business is unable to control its production cost.
Gross profit margin of ENIL is continuously increased it is good indication for the company.
2004
-51.49
2005
-23.66
2006
24.77
2007
17.11
2008
6.83
2009
1.24
2010
7.65
2011
18.59
2012
18.05
2013
19.04
I
n
10
0
-10
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
-20
-30
-40
-50
-60
Year
Net profit margin is an indicator of how efficient a company is and how well it controls its costs.
The higher the margin is, the more effective the company is in converting revenue into actual
profit.
Net profit margin of ENIL is continuously increased after 2005 excluding the year 2009 due to
global crisis.
2004
-2.51
2005
-1.53
2006
6.2
2007
6.11
2008
3.4
2009
0.61
2010
3.75
2011
10.95
2012
11.85
2013
14.2
I
n
R
s
.
.
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Year
Earnings per share (EPS) ratio measures how many dollars of net income have been earned by
each share of common stock. It is computed by dividing net income less preferred dividend by
the number of shares of common stock outstanding during the period. It is a popular measure of
overall profitability of the company.
Earnings per Share of ENIL are increased after 2005 excluding the year 2009 due to global crisis
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
-56.64
-51.39
8.88
7.52
6.39
3.69
7.07
15.15
18.12
17.81
I
N
10
0
-10
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
-20
-30
-40
-50
-60
-70
Year
A higher value of return on capital employed is favourable indicating that the company generates
more earnings per dollar of capital employed. A lower value of ROCE indicates lower
profitability. A company having less assets but same profit as its competitors will have higher
value of return on capital employed and thus higher profitability.
ROCE OF the ENIL is increased up to 18.12% in 2012. ROCE of the ENIL is continually
increased after 2005 it is good indication for the company.
2004
-56.85
2005
2006
2007
2008
2009
2010
2011
2012
2013
-53.2 11.17
9.9
5.21
0.92
5.38
I
n
-10
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
-20
-30
-40
-50
-60
-70
Year
ROE indicates how well the firm has used the resources. In fact, this ratio is one of the most
important relationships in financial analysis. The earning of a satisfactory return is most
desirable objective of the business.
Company is using its assets to generate revenues it is unable to capitalize its advantage into
higher return on equity due to its lower financial leverage. Company can improve by using its
total assets more effectively in generating sales and company can improve by raising some debt.
ROE of ENIL Company is highest 13.47 % in 2013. It is continuously increased after 2009. It
knows that ENIL is slowly and gradually using its assets good
Mar
13
Mar
12
Total Assets
Mar
10
Mar
09
Mar
08
Mar
07
Mar
06
Mar
05
Mar
04
47.67
454.63
0
0
47.67
392.54
0
0
47.67
336.03
0
0
47.67
283.82
0
0
47.67
265.95
0
0
47.66
262.92
0
0
47.58
246.07
0
0
47.56
216.18
0
0
116.96
-83.26
0
0
116.96
-65.34
0
0
502.3
440.21
383.7
331.49
313.62
310.58
293.65
263.74
33.7
51.62
0
0
0
0
0
0
10
23.43
20
90.07
115.25
78
31.8
75
0
35
0
0
0
0.09
33.43
110.07
193.25
106.8
35
0.09
4.69
3.82
2.91
506.99
444.03
386.61
364.92
423.69
503.83
400.45
298.74
33.7
51.71
367.34
246.99
0
120.35
0
0
317.83
367
217.27
0
149.73
0
0.09
185.03
367.55
187.53
0
180.02
0
0.05
93.1
365.95
154.16
0
211.79
0
1.11
40.03
366.45
117.57
0
248.88
0
2.05
39.03
361.62
77.99
0
283.63
0
4.55
42.03
275.33
45.91
0
229.42
0
56.77
6.52
254.88
27.97
0
226.91
0
9.85
34.25
39.91
15.64
0
24.27
0
0
6.3
40.05
10.3
0
29.75
0
0
1.74
0
99.41
12.24
21.43
0
92.24
44.33
23.33
0
103.8
15.61
35.86
0
68.2
24.25
65.63
0
58.57
11.65
85.12
0
68.05
12.09
135.21
0
48.01
10.55
87.24
0
35.27
3.94
27.64
0
20.83
1.67
10.33
0
16.69
2.05
17.82
133.08
159.9
155.27
158.08
155.34
215.35
145.8
66.85
32.83
36.56
52.22
8.95
61.17
98.73
50.4
11.52
61.92
93.35
50.15
2.84
52.99
105.09
26.22
2.8
29.02
126.32
43.65
2.52
46.17
169.18
29.41
11.02
40.43
105.37
34.6
4.52
39.12
27.73
28.75
0.95
29.7
3.13
15.5
0.87
16.37
20.19
0
6.53
16.32
-9.79
20.24
0
10.97
19.82
-8.85
28.94
0
28.52
21.62
6.9
0
0
29.14
21.73
7.41
0
0
22.49
18.05
4.44
0
0
12.83
10.46
2.37
0
0
0
0
0
0
0
0
0
0
0
0.03
0
0
0
0
506.99
444.03
386.61
364.92
423.69
503.83
400.45
298.74
33.7
51.71
1.53
70.6
26
52.04
47.64
55.94
44.48
44.48
Mar
11
13-Mar
12-Mar
11-Mar
10-Mar
9-Mar
8-Mar
7-Mar
6-Mar
5-Mar
4-Mar
97.39
0
0
0.87
0.78
0
86.25
0
0
0.91
0.51
0
85.58
0
0
0
0
0
54.46
0
0
0
1.44
0
42.49
0.01
0.12
0
0
3
48.27
0.08
0.66
86.45
0
0
47.02
0.02
0.81
71.8
0
27.73
41.8
0
269.97
35
0
0
0
0
0.01
0
0.14
0
0
0
0
0
0
22.5
40.37
0
4.26
0
0
0
21.74
0
39.89
0
0
0
0
0
0
0
17.06
0.03
4.29
0.03
139.41
91.93
85.58
77.64
85.51
135.46
147.38
346.77
17.24
26.82
0
0.81
0
0
132.8
0
0
0
0
91.93
0
0
30.52
0.54
53.07
0
0
76.64
0
1
0
0
83.18
2.33
0
0
0
0
34.07
35.51
0
0
0
67.37
0
0
69.4
0
224.82
27.95
12.59
0
0.09
0
4.56
23.31
0
0.83
2.68
0
0
4.77
1.03
0
0
0
1.45
0
0
0
0
0
0
0
0
65.88
0
0
80.01
0
0
24.6
0
0
0
0
0
0
0
0
139.41
91.93
85.58
77.64
85.51
135.46
147.38
346.77
17.24
26.82
Sources of funds
Cash profit
Increase in equity
Increase in other networth
Increase in loan funds
Decrease in gross block
Decrease in investments
Decrease in working
capital
Others
Total Inflow
Application of funds
Cash loss
Decrease in networth
Decrease in loan funds
Increase in gross block
Increase in investments
Increase in working
capital
Dividend
Others
Total Outflow
13-Mar
12-Mar
11-Mar
10-Mar
9-Mar
8-Mar
7-Mar
6-Mar
5-Mar
44.33
15.61
16.5
11.65
12.09
8.45
1.49
1.67
2.05
86.16
112.91
51.41
94.89
109.92
-53.77
15.22
22.84
4.03
-118.23
-84.19
-17.75
1.57
-12.9
-21.58
-81.68
-255.68
-4.12
-0.02
-34.55
-83.86
-97.46
78.99
73.42
232.66
-0.29
-32.09
28.72
-0.89
12.6
-0.44
3.64
6.96
-0.18
-0.38
12.24
44.33
15.61
24.25
11.65
12.09
8.45
1.49
1.67
Mar
13(12)
Mar
12(12)
Mar
11(12)
Mar
10(12)
Mar
09(12)
INCOME :
Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income
338.39
301.43
279.96
230.13
228.28
338.39
301.43
279.96
230.13
228.28
16.97
11.52
17.41
3.6
6.54
355.36
312.95
297.37
233.73
234.82
EXPENDITURE :
Raw Materials
10.57
9.08
8.17
8.26
9.06
Employee Cost
73.55
62.86
56.44
47.22
51.79
9.92
8.2
7.41
7.3
6.7
134.98
120.99
94.71
86.23
99.57
5.16
-0.39
22.26
22.24
11.25
Total Expenditure
234.18
200.74
188.99
171.25
178.37
Operating Profit
121.18
112.21
108.38
62.48
56.45
0.02
1.12
7.23
14.4
Gross Profit
121.16
112.21
107.26
55.25
42.05
Depreciation
31.72
32.46
33.6
36.98
40.09
89.44
79.75
73.66
18.27
1.96
27.9
22.3
5.69
-0.1
2.02
Deferred Tax
-6.13
0.94
15.76
0.5
-2.97
67.67
56.51
52.21
17.87
2.91
Extraordinary Items
2.35
0.63
7.84
0.17
1.08
65.32
55.88
44.37
17.7
1.83
Interest
Tax
Fringe Benefit tax
204.02
147.51
95.3
77.43
74.52
5.58
266.11
204.02
147.51
95.3
77.43
4.77
10
14.03
11.85
10.95
3.75
0.61
105.37
92.35
80.49
69.54
65.79
Phase-III auctions will drive growth beyond 2016: Phase-III auctions are expected to be
completed in 2014. Phase 3 will allow expansion to 100 stations. Given the cash on books and
strong cashflow generation, ENIL will be able to easily fund the capex for Phase-III. Phase-III
will allow strong growth beyond 2016, but will entail a one time large investment for the license,
migration fee and capex.
Valuations & View: ENIL will grow its revenues and PAT at 12% and 19% CAGR over FY13FY15E. Growth beyond FY15E will depend upon Phase-III auctions which will be a key trigger
in FY15E.
52 W H/L(Rs)
Lat. P/E
Lat.Eqty (Rs Cr)
Div. Yield (%)
442 / 198.1
21.17
47.67
0.26
We can see here share price of the ENIL is 390.1 as on Thursday, April 03, 2014. It is almost
nearer to 52 week. It can be said that ENIL is given good return in share market. It is also
increased P/E ratio and Divend yield of the company.
We can see here graph of the ENIL and SENSEX and can be given conclusion that ENIL is
given more retun than SENSEX.