Institute of Chartered Financial Analysts of India (ICFAI) University 2006 Certification Finance Security Analysis-II - Question Paper

No.
Particulars
31/03/2006
31/03/2005

1
Net Sales/Income from Operations
1592.00
1654.91

2
Other Income
22.52
4.99

3
Total Expenditure :




(a) (Increase)/Decrease in Stock in Trade
9.82
(12.76)


(b) Consumption of Raw Materials and Finish Goods Purchased
504.70
619.87


(c) Staff Cost
135.74
123.09


(d) Power & Fuel
143.57
178.85


(e) Stores Consumption
171.09
145.44


(f) Other Expenses
219.48
218.63



1184.40
1273.12

4
Interest & Finance Cost
129.98
116.00

5
Foreign Exchange (Gain)/Loss
8.66
(7.59)

6
Depreciation
155.10
149.07

7
Profit before Tax (1+2-3-4-5-6)
136.38
129.30

8
Provision for Taxation - Current Tax
11.40
1.95


- Deferred Tax
8.27
0.00


- Fringe Benefit Tax
0.95
0.00


- MAT Credit Entitlement
(11.40)


9
Net Profit (7-8)
127.16
127.35

10
Paid-up Equity Share Capital

( Face Value Rs.10/- per share)
209.38
195.38

11
Reserves excluding revaluation reserves as per

Balance Sheet
0.00
1019.75

12
Basic & Diluted Earning Per Share ( Rs.)-

(Not Annualised)
5.98
6.28

13
Aggregate of non-promoter Shareholding




- No. of Shares
138849756
123070344


- Percentage of Shareholding
66.32%
62.99%


Additional information:

Company specific information:

The textile industry is expected to maintain high growth rate for 10 years after which the growth is expected to drop to 5%. The company is expected to follow the industry growth rate trend after 10 years. The dividend payout ratio for the company will remain at the current level for the 10 years after which it is expected to increase to 60%. The sales to book value multiple for the company is expected to be 1.2 for the next 10 years. Company is expected to maintain the current net profit margin irrespective of the growth.

Industry specific information:

The avg. net profit margin of the other firms in the industry is 5%. Industry’s avg. sales to book value multiple is two and it is expected to remain at that level for next 10 years. The industry avg. Payout ratio is 22%, industry is expected to maintain the identical payout ratio in the high growth period after which it will increase to 45%. The avg. industry beta is 1.05. The excess return on the market over T-bill rate for the industry is 5.5%.

Earning:   Approval pending.