Page | 1

Srei Infrastructure Finance Limited

A Project Report on
Assessing potential for Indo-European trade and
developing tailor-made strategies to ensure bank
achieves highest mindshare and wallet-share
Submitted in partial fulfillment of the requirements for the
award of MASTERS OF MANAGEMENT STUDIES
(M.M.S)
AT


SUBMITTED BY
Name: Ratul Ghosh
Roll No: M-13-12
Batch: MMS 20132015


IES Management College and Research Centre
Bandra (W), Mumbai
Page | 2
Srei Infrastructure Finance Limited
Students Declaration

I hereby declare that this report, submitted in partial fulfillment of the requirement for the award
for the Master of Management Studies, to IES Management College and Research Centre is
my original work and not used anywhere for award of any degree or diploma or fellowship or for
similar titles or prizes.

I further certify that without any objection or condition subject to the permission of the company
where I did my summer project, I grant the rights to IES Management College and Research
Centre to publish any part of the project if they deem fit in journals/Magazines and newspapers
etc without my permission.



Place : Mumbai

Date : ---------------------------------
Signature


Name : Ratul Ghosh

Class : MMS, Sem- III

Roll No: M-13-12



Page | 3
Srei Infrastructure Finance Limited
Certificate from the company


This is to certify that the dissertation submitted in partial fulfillment for the award of
Master of Management Studies of IES Management College and Research Centre is a
result of the bonafide research work carried out by Mr. Ratul Ghosh under my
supervision and guidance. No part of this report has been submitted for award of any
other degree, diploma, fellowship or other similar titles or prizes. The work has also not
been published in any journals/Magazines.




Date: Industry guide
Signature of the Industry Guide: ______________
Name of Industry Guide: ____________________
Company : _______________________
Place: Mumbai Designation : _______________________












Page | 4
Srei Infrastructure Finance Limited
Certificate from the Faculty Guide


This is to certify that the dissertation submitted in partial fulfillment for the award of
Master of Management Studies of IES Management College and Research Centre is a
result of the bonafide research work carried out by Mr. Ratul Ghosh under my
supervision and guidance. No part of this report has been submitted for award of any
other degree, diploma, fellowship or other similar titles or prizes. The work has also not
been published in any journals/Magazines.




Date: Faculty guide
Signature of the Faculty Guide: ______________

Name of Faculty Guide: ____________________
Place: Mumbai
IES Management College and Research Centre










Page | 5
Srei Infrastructure Finance Limited
Acknowledgements

It is with a sage sense of gratitude that I acknowledge the efforts of all well-wishers who have in
some way or another contributed towards the success and completion of this summer internship
project.

This report documents the work done during the summer internship at SREI Infrastructure
Finance Limited under the supervision of my mentor, Mr. Nalin Kumar, President,
International Strategies and Alliances, who was kind enough to give me an opportunity to
learn how to set up a bank in India. I sincerely thank him for his valuable suggestions,
motivation and encouragement.

I express my sage sense of gratitude and indebtedness to Dr. Minu Mehta, my mentor, from the
bottom of my heart, for her unprecedented support and faith in me.

I sincerely express my appreciation to my project guide Prof. Svetlana Tatuskar for her
valuable guidance and intellectual suggestions during this project.

I have tried my best to keep report simple yet technically correct.

-Ratul Ghosh






Page | 6
Srei Infrastructure Finance Limited
Table of Contents

Executive Summary07


Objectives11


Analysis & Findings23


Conclusions & Recommendations..54


Annexures... 58


References & Bibliography.83













Page | 7
Srei Infrastructure Finance Limited
Chapter- 1
Executive Summary

INTRODUCTION TO THE INDUSTRY
India is one of the top 10 economies globally, with vast potential for the banking sector to grow.
The last decade witnessed a tremendous upsurge in transactions through ATMs, and Internet and
mobile banking. In 2014, the countrys Rs 81 trillion (US$ 1.34 trillion) banking industry is set
for a greater change. Two new banks have already received licences from the government.
Furthermore, the Reserve Bank of Indias (RBI) new norms will provide incentives to banks to
spot potential bad loans and take corrective steps that will curb the practices of rogue borrowers.
The Indian governments role in expanding the banking industry has been significant. Through
the Financial Inclusion Plan (FY 1013), banking connectivity in the country increased more
than three-fold to 211,234 villages in 2013 from 67,694 at the beginning of the plan.
Banks are also looking at new ways to attract customers. In September, 2013, ICICI bank
leveraged the popularity of the social platform, and launched its Facebook banking service,
Pockets. The service enables customers to transfer funds and pay bills from within the website.

Market Size
The revenue of Indian banks increased four-fold from US$ 11.8 billion to US$ 46.9 billion during the
period 20012010. In the same period, the profit after tax increased from US$ 1.4 billion to US$ 12
billion.
In 201213, Indian banks had 170 overseas branches (163 in 201112) while foreign banks had
316 branches in India (309 in 201112).
Credit to housing sector grew at a compound annual growth rate (CAGR) of 11.1 per cent
during the period FY 200813. Total banking sector credit is expected to grow at a CAGR of
18.1 per cent (in terms of INR) to touch US$ 2.4 trillion by 2017.




Page | 8
Srei Infrastructure Finance Limited
Recent Developments
Infrastructure Development Finance Company (IDFC) and Bandhan Financial Services Pvt Ltd have
been chosen among a field of 25 banks by the RBI to set up banks. In-principle approval has been
given to the banks, which are both non-banking finance companies. While Mumbai-based IDFC is
categorized as an infrastructure finance company, Kolkata-based Bandhan is a microfinance
establishment.

Government Initiatives
The RBI has issued extra guidelines for banks giving gold metal loans (GMLs). To safeguard against
fraud, the central bank has asked lenders to check the credit worthiness of borrowers; collateral
securities against the loan; and trade cycle of the manufacturing activity, before sanctioning the loans.
"Lack of proper monitoring mechanism and not ensuring end use of GML has resulted in certain
instances of frauds/misuse related to GML by certain unscrupulous jewellers," stated the RBI in a
notification.
The Cabinet Committee on Economic Affairs (CCEA) has given the green signal to a proposal to
increase foreign holding in Axis Bank from 49 per cent to 62 per cent. The move could bring in
overseas investment of nearly Rs 7,250 crore (US$ 1.20 billion) into the country. The CCEA nod is
dependent on FIIs holding capped at 49 per cent.

Road Ahead
Indias banking sector has the potential to become the fifth largest banking sector globally by 2020 and
the third largest by 2025. The industry has witnessed discernable development, with deposits growing
at a CAGR of 21.2 per cent (in terms of INR) in the period FY 0613; in FY 13 total deposits stood at
US$ 1,274.3 billion.
Today, banks are turning their focus to servicing clients. Banks in the country, including those in the
public sector, are emphasising on enhancing their technology infrastructure, in order to improve
customer experience and gain a competitive edge. The popularity of internet and mobile banking is
higher than ever before, with Customer Relationship Management (CRM) and data warehousing
expected to drive the next wave of technology in banks. Indian banks are also progressively adopting
an integrated approach to risk management. Most banks already have in place the framework for asset
liability match, credit and derivatives risk management.
Page | 9
Srei Infrastructure Finance Limited
INTRODUCTION TO THE COMPANY

The Industrial Development Bank of India (IDBI) is one of Indias leading public sector banks and
4
th
largest Bank in overall rating. RBI categorized IDBI as an Other public sector bank. It was
established on July 1, 1964 by an Act of Parliament. The main aim behind setting up of IDBI was to
provide credit and other facilities for the Indian Industry, which was still in the initial phase of growth
and development. The IDBI was established under the Act of Parliament as a wholly owned subsidiary
of the Reserve Bank of India.
Headquartered in Mumbai, IDBI Bank today rides on the back of a robust business strategy, a highly
competent and dedicated workforce and a state-of-the-art information technology platform, to structure
and deliver personalized and innovative Banking services and customized financial solutions to its
clients across various delivery channels.
IDBI has also set up an overseas branch at Dubai and has plans to open representative offices in
various other parts of the Globe, for en-cashing emerging global opportunities.
It is currently the tenth largest development bank in the world in terms of reach with- 1140 ATMs, 689
Branches, and 458 centers.
Some of the Institutions built by IDBI are the National Stock Exchange of India (NSE), The National
Securities depository Services Ltd (NSDL), The Stock Holding Corporation of India Ltd (SHCIL),
and IDBI bank, which today is owned by the government of India, though for a brief period it was a
private scheduled bank.
On 16 February 1976, the ownership of IDBI was transferred to the government of India and was
made the principal financial institution for coordinating the activities of the institutions engaged in
financing, promoting and developing industry in the country. Although Government shareholding in
the bank came down below 100% following IDBIs public issue in July 1995, the former continues to
be the major shareholder.






Page | 10
Srei Infrastructure Finance Limited
INTRODUCTION TO THE PROJECT

Project Title: Assessment of working capital financing-MPBF Method

The project aims to do the following

Paint sector Analysis
Financial Analysis of Asian Paints
Assessment of working capital- MPBF Method
Credit Monitoring Arrangement Analysis
Observations on CMA analysis
Recommendations to Bank and the Company
Report Writing






















Page | 11
Srei Infrastructure Finance Limited
Chapter- 2
Objectives

To accumulate and analyze the data of paint sector. Also to understand the demand and
supply, customers and competitors, emerging trends, critical factors and the future
prospects in the paint sector industry
To accumulate the information regarding the company (Asian Paints), its products and
services. Also to know their group subsidiaries and their international operations and to
check their growth priorities.
To understand the financial position of the company with the help of their income
statement and balance sheets. Also analyzing the cash flow statements and carry out the
Ratio analysis of the company.
To make the Assessment of the Working capital financing (MPBF method) with the help
of Credit Monitoring Arrangement sheets.
To comment on the CMA sheets and making recommendations to both the company and
the Bank.

Methodology:
A secondary research was done to gather the data regarding the paint sector industry. This data is
used in structuring the industry profile.
A company (Asian Paints Ltd) is selected from the paint industry & identified as a target for
providing working capital facility.
Financial analysis is done using Comparative statement analysis, Common size analysis and
Trend analysis of Income Statement and Balance Sheet on Microsoft Excel Based on the data
gathering from various resources
Then the Assessment of working capital is done with the help of Credit Monitoring Arrangement
Sheets and the comments are made on CMA sheets
Finally Recommendation is given to the Bank and the Company on the basis of the analysis

Page | 12
Srei Infrastructure Finance Limited
Understanding Working Capital Financing

Introduction
For running an industry or a concern, two types of capital are required namely fixed capital and
working capital. Working capital is the funds invested in current assets and is needed for meeting
day to day expenses.
Working Capital refers to that part of the firms capital, which is required for financing short
term or current assets such as debtors, inventory and cash & marketable securities.
Funds thus invested in current assets keep revolving fast and are constantly converted into cash
and this cash flow out again in exchange for other current assets
Working Capital is also known as revolving or circulating capital or Short-term capital
Current Assets represent gross working capital. The excess of Current Assets over Current
Liabilities is Net Working Capital
Working capital is the cash needed to pay for the day to day operations of the business.
In other words, working capital is needed by the business to
Pay suppliers and other creditors (for raw material purchases)
Pay employees (salary and wages)
Financing the gap between the supply of goods and the receipt of payment thereafter
(trade credit).
Thus, Working Capital Finance is the fund required to meet the cost involved during the working
capital cycle or operating cycle.

Operating Cycle/Working Capital Cycle
Operating cycle is the period involved from the time raw materials are purchased to the time they
are converted into finished goods and the same are finally sold and realized. The need for current
assets arises because of operating cycle. The operating cycle is a continuous process and
therefore the need for current assets is felt constantly. Each and every current asset is nothing but
blockage of funds. Therefore, these current assets need to be financed which is done through
Working Capital Financing.
Page | 13
Srei Infrastructure Finance Limited
Fixed Portion of working/Trade Cycle



















Factors determining Working Capital
Nature of the industry
Demand of industry
Cash requirements
Nature of the business
Manufacturing time
Volume of sales
Terms of purchase and sales
Inventory Turnover
Business Turnover

Cash
Wages & Overheads
Work-in-Progress
Trade Creditors
Raw Material Stock
Finished Goods
Trade Debtors
Selling Expenses Sale
Taxation
Fixed Assets
Lease Payments
Loan Creditors
Shareholders
Page | 14
Srei Infrastructure Finance Limited
Working Capital Cycle






Time & Money Concepts in Working Capital
Each component of working capital has 2 dimensions namely time and money, when it comes to
managing working capital.
You can get money to move faster around the cycle or reduce the amount of money tied up. Then
business will generate more cash or it will need to borrow less money to fund working capital.
As a consequence, you could reduce the cost of bank interest or you will have additional free
money available to support additional sales growth or investment.
Similarly, if you can negotiate improved terms with suppliers you can effectively create free
finance to help fund future sales.



Cash
RM
WIP
FG
Sales
Debtors
Page | 15
Srei Infrastructure Finance Limited
Types of Working Capital




Methods of Assessment of Working Capital
1. Turnover Method
Mainly used for small trading companies
Not appropriate for manufacturing and big trading companies
2. MPBF Method (Maximum Permissible Banking Finance)
This method is mainly used by the bank for assessment of working capital finance
3. Cash Budget Method
Mainly used for service sector companies
Cash inflow Cash outflow= Bank finance in form of working capital


Types of Working Capital
Concept Basis
Gross
Working
Capital
Net
Working
Capital
Time Basis
Fixed Working
Capital
Reserve
Working
Capital
Regular
Working
Capital
Variable Working
Capital
Seasonal
Working
Capital
Special
Working
Capital
Page | 16
Srei Infrastructure Finance Limited
Sources of Working Capital

Main Source
Owned
Funds
Bank
Borrowigs
Additional
Source
Existing
Cash
Reserves
Profits
Payables
New Equity
Loan From
Shareholders
Bank
Overdraft
Page | 17
Srei Infrastructure Finance Limited
Credit Monitoring Arrangement Tool (CMA)
CMA data is a tool used by the bankers to assess the requirement of working capital
It is divided into six parts as follows
Form1. Particulars of existing and proposed limits
Form2. Operating System
Form3. Analysis of Balance Sheet
Form4. Working Capital Assessment
Form5. Summary of financial position
Form6. Funds Flow Statement
Form7. Cash Flow Statement

Nature of Credit Facilities
Credit Facilities can be Funds based or Non-fund based. The fund limits are those where outlay
of the Banks funds is involved. Non-fund limits are those where the bank endorses the
committee/promise made by the borrower and the bank need to meet only if the borrower fails to
honor it. Main types of the facilities under the fund based limits and the related guidelines for
granting advances against them are discussed below in brief.
Working Capital Finance is expressed in different forms based on the requirement as follows:
1. Inventory Limits (Pre-sales)
Cash Credit (CC)
Export Packing Credit (EPC)
Overdraft
Vendor Financing
2. Finance Against Receivables (Post-sales)
Book debts
Bills Purchased/Discounted/Negotiated
3. Non Fund-based Limits
Letter of credit (LC)
Trade Credit Bank Guarantee (TCBG)
Bank Guarantee (BG)
Loan Equivalent Risk (LER)
Page | 18
Srei Infrastructure Finance Limited
Important Financial Parameters
The Ratio analysis provides a useful mechanism by which inter-relationship of various items can
be established. It provides valuable interpretation of financial strengths and weaknesses of the
concern. Studied over a period of time, the analysis reveals trends in the financial position and
operational efficiency of the business.


A. LIQUIDITY RATIOS



B. WORKING CAPITAL MANAGEMENT


Page | 19
Srei Infrastructure Finance Limited
C. PROFITABILITY ANALYSIS


D. SOLVENCY RATIOS


Key Ratio Levels
Particulars Low Risk Medium risk High Risk
Current Ratio >1.40 1.20-1.40 <1.20
TOL/TNW >2.00 2.00-3.50 <3.50
Interest Coverage >3.50 2.00-3.50 <2.00
PAT/Sales (%) >10.00 4.00-10.00 <4.00
Inventory (No of days) <60 60-90 >90
Debtors (No of days) <45 45-90 >90
Debt Equity Ratio <1.25 1.25-1.75 >1.75
Page | 20
Srei Infrastructure Finance Limited
Credit Rating
The credit risk of the company is broken down into risk categories as under:
1. Business Risk
2. Management Risk
3. Financial Risk
4. Industry Risk

These risks are measured on scale of 1-10 points, 10 being the highest score and results in 10
grades as under
Grade Description
AAA Investment Grade-Very strong credit quality-Highest Safety
AA+ Investment Grade-Strong Credit Quality-Highest Safety
AA Investment Grade-Strong Credit Quality-High Safety
A Investment Grade-Above Average credit quality-Adequate safety
BBB Investment Grade
BB+ Sub-Investment Grade-Week credit quality
BB Sub-Investment Grade-Near Default credit
B Sub Investment Grade-Default Credit
C Sub Investment Grade-High Risk
D Default-Credit Loss






Page | 21
Srei Infrastructure Finance Limited
Lending Arrangement for Working Capital Facilities

Page | 22
Srei Infrastructure Finance Limited
Importance of Adequate Working Capital
Every business concern should have adequate working capital to run its business operations. It
should have neither redundant or excess working capital nor inadequate or shortage of working
capital
Both excess as well as shortage of working capital situations are bad for any business. However
out of the two, inadequacy or shortage og working capital is more dangerous from the point of
view of the firm


Disadvantages of Inadequate Working Capital
Idle funds, Non-profitable business, poor ROI
Unnecessary purchasing and accumulation of inventories over required level
Excessive debtors
Defective credit policy
Higher incidence of bad debts
Cant pay short term liabilities in time
Day-to-day liquidity worsens
Economies of scale are not possible
Improper utilization of Fixed Assets resulting in decrease of ROI/ROA
When there is Overall inefficiency in the organization


Sign of potential liquidity Problems
Buildup of inventories and declining inventory turnover
Increase in debt and debt ratios
Increase in costs that cannot be passed on
Increase in accounts receivables and collection period
Decline in net working capital and daily cash flows



Page | 23
Srei Infrastructure Finance Limited
Chapter- 3
Analysis & Findings

Paint Sector Analysis

INDUSTRY STRUCTURE
The Indian Paint industry can be divided as the organized sector comprising of large and medium
size units and the unorganized or the small scale sector
The organized sector has a market share of 60%, valued at 23.4 bn. This is in contrast to the
55% share that the sector commanded a few years back. There are around 25 units in this
segment. The unorganized sector comprises of around 2,000 units with a combined market share
of around 40%. Major companies in this segment include Asian Paints, Goodlass Nerolac,
Berger Paints, Shalimar Paints, and Rajdoot Paints
High excise duties, low technology and low capital costs for production led to the incidence of a
high number of units in the small scale sector. However, since 1992 the government has been
consistently lowering duties from 40.5% in 1992 to around 16% currently. This has led to
lowering of price differential between the organized and unorganized sector. Moreover the paints
sector was also allowed to claim MODVAT credit on petro-based products, thus lowering the
excise incidence further
The application of paints can be broadly divided into three categories viz. decoratives,
industrial and automotive. The decorative segment is broadly divided into interior paints
(emulsions, enamels, wood finishes) and exterior paints
The industrial and automotive paint manufacturing however, is technology intensive wherein
domestic majors have tied up with select global majors like Nippon Paints, DuPont, PPG and
Kansai for technology.
The paint industry is expected to grow at 12-13% annually over the next five years from Rs 280
bn in FY13 to around Rs 500 bn by FY18. FY13 was a challenging year for the industry as a
whole due to subdued demand across key sectors and rising inflation.
The unorganised sector controls around 35% of the paint market, with the organised sector
accounting for the balance. In the unorganised segment, there are about 2,000 units having small
Page | 24
Srei Infrastructure Finance Limited
and medium sized paint manufacturing plants. Top organised players include Asian Paints,
Kansai Nerolac, Berger Paints and ICI
The paints sector is raw material intensive, with over 300 raw materials (50% petro-based
derivatives) involved in the manufacturing process. Since most of the raw materials are
petroleum based, the industry benefits from softening crude prices.

Indian Paint Industry
Decorative Paint (70%)
Premium
Ranges
Metros &
Large cities
Medium
Ranges
Small
Cities
Distemper
Ranges
Sub-Urban
& Rural
Areas
Industrial Paint (30%)
Automobile
Sector
Consumer
Durables
Marines Paint
Page | 25
Srei Infrastructure Finance Limited
KEY POINTS
Supply- Supply exceeds demand in both the decorative as well as the industrial paints segments.
Industry is fragmented.
Demand-Demand for decorative paints depends on the housing sector and good monsoons.
Industrial paint demand is linked to user industries like auto, engineering and consumer durables.
Barriers to entry- Brand, distribution network, working capital efficiency and technology play a
crucial role.
Bargaining power of suppliers- Price increase constrained with the presence of the unorganised
sector for the decorative segment. Sophisticated buyers of industrial paints also limit the
bargaining power of suppliers. It is therefore that margins are better in the decorative segment.
Bargaining power of customers- High due to availability of wide choice.
Competition- In both categories, companies in the organised sector focus on brand building.
Higher pricing through product differentiation is also followed as a competitive strategy.

FINANCIAL YEAR 2013
FY13 was a mixed bag for the paint companies. While all the 3 players viz. Asian Paints, Kansai
Nerolac and Berger Paints reported a strong growth in sales, operating margins came under
severe pressure due to raw material price inflation. Top-line growth was boosted by strong
demand from the rural markets. Nonetheless, the demand environment in the industrial segment
continues to remain challenging due to hawkish interest rate environment
Performance on the margins was impacted by the rising prices of crude oil and titanium dioxide
which increased the overall expenditure, thereby impacting profitability growth. However,
companies are undertaking a gradual and calibrated price increase in order to shield margins.
Nonetheless, as a complete pass on of raw material price increase is not possible in the industrial
segment, the blended margins continue to suffer.
However, a good monsoon this year is expected to boost demand in the rural areas. A good
harvest and festival season demand can boost volumes in the second half of FY14



Page | 26
Srei Infrastructure Finance Limited
All the key players are in an expansion phase. Asian Paints plant in Khandala, Maharashtra has
recently got comissioned. Kansai Nerolacs capacity expansion plans at Jainpur and Bawal has
culminated. Berger Paints has also undertaken capacity expansion for its plants located in
Andhra Pradesh (AP). Further, expansion of water based plant at Rishra and Goa is also on track.
As per estimates, paint capacities are expected to go up by 50-70% in the coming 3 to 5 years

PROSPECTS
The market for paints in India is expected to grow at 1.5 times to 2 times GDP in the next five
years. With GDP growth expected to be between 5-6% levels, the top three players are likely to
clock above industry growth rates in the future, considering they have a strong brand and good
reach
Decorative paints segment is expected to witness higher growth going forward. The fiscal
incentives given by the government to the housing sector have immensely benefited the housing
sector. This will benefit key players in the long term
Although the demand for industrial paints is lukewarm it is expected to increase going forward.
This is on account of increasing investments in infrastructure. Domestic and global auto majors
have long term plans for the Indian market, which augur well for automotive paint manufacturers
like Kansai Nerolac and Asian-PPG. Increased industrial paint demand, especially powder
coatings and high performance coatings will also propel topline growth of paint majors in the
medium term
If the new capacities do not get utilized well, companies may face margin pressures in the near
term





Page | 27
Srei Infrastructure Finance Limited
ABOUT COMPANY
Asian Paints Ltd. is Indias largest and Asias 3
rd
largest paint company. It is the clear market
leader with about 55% market share in the paints industry. It sells decorative, industrial and
automotive paints and is the market leader in the decorative paints segment. The company
operates in 17 countries and has 24 paint manufacturing facilities in the world servicing
consumers in over 65 countries. Besides Asian Paints, the group operates around the world
through its subsidiaries Berger International Limited, Apco Coatings, SCIB Paints and
Taubmans, among others. It derives ~11% of its revenues from international operations.

MAJOR PRODUCTS & SERVICES
Asian Paints manufactures and markets industrial and decorative coatings. Along with that the
company also provides home painting services and solutions. The company's key products and
brands include the following:
Decorative paints: Interior wall paints, Exterior wall paints, Wood surface paints, Metals
surface paints.
Industrial coatings: Protective coatings, Floor coatings, Road markings.
Ancillaries: Wall primer, Acrylic Wall Putty, Exterior Wall Putty, Wood Primer.
Asian paints made a foray in automotive paints in the year 1997 with a joint venture with PPG
Industries. The joint venture is called PPG Asian paints.[7] The company manufactures body
coatings and plastic coatings.

FORBES LISTING
Forbes Global magazine USA ranked Asian Paints among the 200 Best Small Companies in the
World for 2002 and 2003 and presented the 'Best under a Billion' award, to the company. Asian
Paints is the only paint company in the world to receive this recognition. One of the country's
leading business magazine "Business Today" in Feb 2001 ranked Asian Paints as the Ninth Best
Employer.It has been recognised by "Economic Times" as well. Forbes has also ranked Asian
Paints among the Best under a companies in Asia in 2005, 06 and 07.

Page | 28
Srei Infrastructure Finance Limited


GENESIS OF ASIAN PAINTS










1942-1965

1.Company started its
business
2.The mischevous kid
was born
3.Name was Asian Paints
4.The company expanded
its products range,
developed its own
technology, set up a
distribution network
penetrating in smaller
towns and ploughed back
a large part of earnings
into creation of new
facilities.
















1967-1985

1.India's leading paint
2.Converted into a
public limited company
3.Entered into a
collaboration agreement
4.A major
modernisation
programme was
undertaken to streamline
the paint production
facilities by improving
the layout of machines,
addition to balancing
equipment and
replacement of old
machineryfacilities as
well.



























1990-2014

1.Spreads its boundary
2.Completed 70 years
3.5th largest decorative
paint company in the
world
4.Admired companies in
India
5.Market leader of paint
industry













Page | 29
Srei Infrastructure Finance Limited
INTERNATIONAL OPERATIONS
Asian Paints operates in 17 countries across the world. It has manufacturing facilities in each of
these countries and is the largest paint company in eleven of these markets. Asian Paints operates
in five regions across the world viz. South Asia, Southeast Asia, South Pacific, Middle East and
Caribbean region through the five corporate brands viz. Asian Paints, Berger International, SCIB
Paints, Apco Coatings and Taubmans. The countries that Asian Paints has presence are as
follows:
1.Asian Paints in South Asia (India, Bangladesh, Nepal and Sri Lanka).
2.SCIB Paints in Egypt.
3.Berger in South East Asia (Singapore), Middle East (UAE, Bahrain and
Oman), Caribbean (Jamaica, Barbados, Trinidad & Tobago).
4.Apco Coatings in South Pacific (Fiji, Tonga, Solomon Islands and Vanuatu).
5.Taubmans in South Pacific (Fiji and Samoa).
The company has a dedicated Group R&D Centre in India and has been one of the pioneering
companies in India for effectively harnessing Information Technology solutions to maximize
efficiency in operations

GROUP SUBSIDIARIES
1) Apco Coatings is a subsidiary of Asian Paints in the South Pacific islands. Asian Paints
operates in Australia, Fiji, Tonga, Solomon Islands and Vanuatu under the brand name of Apco
Coatings.APCO COATINGS
2) Asian Paints Industrial Coatings Limited has been set up
3) In 1994, Berger units were brought under the single umbrella of the holding company 'Berger
International Limited (BIL)' with headquarters in Singapore, which was also listed on the
Singapore stock exchange. In November 2002, BIL became a part of the Asian Paints Group.
Incidentally, Berger Paints Jamaica Limited, which is listed on the Jamaican stock exchange, is
amongst the top ten companies in the country in terms of market capitalisation. In the Middle
East too Berger is a well-respected brand. It is the largest paint company in Bahrain. Using its
Page | 30
Srei Infrastructure Finance Limited
state-of-the-art manufacturing facilities there, and in United Arab Emirates, it exps of the
Company at its meeting held on 8 August 2013 have approved the infusion of Rs 997.8 million
for 51% stake in Sleek International Private Limited (SIPL). Post the infusion, the company
would hold 51% stake in SIPL, said statement from Asian Paints.




Growth Priorities
Leadership
Regions
Caribbean
Jamaica,
Trinidad &
Barbados
South
Pacific
South Pacific
Island
Growth Regions
Middle
East
UAE
South
Asia
Nepal,
Sri lanka &
Bangladesh
South East
Asia
Singapore,
Malaysia &
China
Page | 31
Srei Infrastructure Finance Limited
SWOT ANALYSIS









STRENGTHS
1.The largest paint company in India and
third largest company in Asia
2.They have over 50% of market share and
are clear leaders decorative paints and are
strong competitors to Kansai Nerolac to be
leaders in Industrial paints and coatings.
3.They operate in 17 countries and have 24
manufacturing facilities providing service to
65 countries all over the world.
4.Most renowned brand in Indian Paint
Industry & its strong customer focus and
innovative-spirit has made it marke
5.They have maintained their brand name
and increased awareness by unique ways of
advertising and roping in celebrities like Saif
Ali Khan.t leader since 1968.
6.The company has strong financials.





WEAKNESS
1. Limited market share in industrial paints
segment with Kansai Nerolac and
Akzonobel giving stiff competition.
2.In decorative paints Industry Customer
tastes and perceptions change very fast and
products may become obsolete with change
in trends, hence production planning and
inventory problem.
3.Seasonal demand and hence in off season
there can be cash flow problems
4.International presence restricted to small
pockets




OPPORTUNITIES

1. Big and international standard paint
company it should look for more
opportunities abroad
2. There is a good scope for growth
especially in industrial paints category
3. Needs to have more focus on Automobile
industry in industrial paints segment
4. Competitors are going for Hi-tech process
and Asian paints with good financial and
intellectual capital can go for hi-tech.













THREATS

1.Growth prone to slowdown effects
2.Stringent Government rules and
regulations regarding the quality of products
and manufacturing facilities as Environment
policies are given more emphasis
3.Raw material scarcity and volatlility in
prices.









SWOT
Page | 32
Srei Infrastructure Finance Limited
IMPORTANT FINDINGS
A. Balance Sheet




Networth
The networth of the
company is 3384 Cr
which increased by 23%
from the last year
It is 21% of the total
liabilities
The networth shows an
increasing trend in the last
5 years
Total Debt
Out of total debt 24% is
secured whereas 76% is
unsecured
Secured loan increased
from 42.34 Cr to 58.53 Cr
compared to last year
Total debt is 6.28% of the
total liabilities
Net Block/Fixed Assets
The net block of the
comopany increased from
1300 Cr to 24410 Cr ie
87% increase compared to
last year
The net block consist of
64% of the total assets
Investments
There has been decrease
in the investment by 20%
compared to last year
Investments amounts to
around 8% of the total
assets
Current Assets
The total Current Assets
increased from 3426 Cr to
4008 Cr ie by 21%
compared to last year
The Current Asstes
amount to 28% of the
total Current Assets
The total Current Assets
showed an increasing
trend in the last 5 year
Current Liabilities
The total Current
Liabilities increased by 9
% from 2262 Cr to 2466
Cr compared to last year
The Current Liabilties
amounts to 65% of the
total liabilities
Page | 33
Srei Infrastructure Finance Limited



B.PROFIT & LOSS A/C


Provisions
The provision increased
from 444 Cr to 539 Cr
compared to last year
The provision amounts to
14% of the total
laibilities
The provision shows an
increasing trend in the last
5 years

Contingent Liabilities
The Contingent liabilities
decreased from 472 Cr to
192 Cr
The Contingent liabilities
shows a decreasing trend
in the last 5 years
Reserves
The Reserves increased
from 2652 Cr to 3288 Cr
as comprared to last year
The Reserves shows an
increasing trend in the last
5 years
Total Income

The total income
increased from 10227 Cr
to 11736 Cr ie by 14.20%
compared to last year
The total income has
shown an increasing trend
in the last 5 years

Total Expenses
The total expenses
increased from 8663 Cr
to 9890 Cr ie by 14.15%
compared to last year
The total expenses have
shown an increasing
trend in the last 5 years
Operating Profit
The operating profit
increased from 1544 Cr to
1731 Cr ie by 12.13%
compared to last year
The operating profit is
15.16% of the total sales
The operating profit
shows an increasing trend
in the last 5 years

Page | 34
Srei Infrastructure Finance Limited


C.CASH FLOW





Profit Before Tax

The PBT increased from
1456 Cr to 1658 Cr ie by
13.88% compared to last
year
The PBT is 14.51% of
the net sales
The PBT has shown an
increasing trend in the last
5 years

Net Profit

The Net profit incresed
from 1020 Cr to 1159 Cr
ie by 13.61% compared to
last year
The net profit is 10.15%
of the total sales
The net profit shows an
increasing trend in the last
5 years
Earning per Share

The EPS increased from
Rs106.4 to Rs120.88
compared to last year
The EPS has shown an
increasing trend in the last
5 year

Net Cash from Operating
Activities

The NCFO increased
from 753 Cr to 1081 Cr as
compared to last year
The NCFO has shown an
increasing trend in the last
5 years

Opening Cash and cash
Equivalents

The opening cash and
cash equivalents
decreased from 509.23
Cr to 500.97 Cr
The Opening cash and
cash equivalents have
shown an increasing trend
in the last 5 years
Closing Cash and Cash
Equivalents

The closing cash and cash
equivalents increased
from 500.97 Cr to 566.87
Cr as compared to last
year
The closing cash and cash
equivalents have shown a
fluctuating trend in the
last 5 years

Page | 35
Srei Infrastructure Finance Limited
D.RATIO ANALYSIS






Net Profit Margin Ratio

The Net profit margin
decreased from 9.81% to
9.65 % compared to last
year
The net profit margin has
shown a fluctuating trend
in the last 5 years

Return on Capital
Employed
The ROCE has decreased
from 48.42% to 46.71%
compared to last year
The ROCE has shown a
decreasing trend in the
last 5 years
Return on Net worth

The Return on net worth
has decreased from
35.97% to 32.91%
compared to last year
The return on net worth
has shown a decreasing
trend in the last 5 years

Current Ratio

The current ratio has
increased from 1.16 to
1.24 as compared to last
year
The current ratio has
shown an increasing trend
in the last 5 years

Quick Ratio

The quick ratio has
increased from 0.66 to
0.72 as compared to last
year
The quick ratio has shown
a fluctuating trend in the
last 5 years
Debt Equity Ratio

The Debt Equity ratio has
decreased from 0.12 to
0.07 as compared to last
year
The debt equity ratio has
shown a decreasing trend
in the last 5 years

Page | 36
Srei Infrastructure Finance Limited



























Inventory Turnover Ratio

The inventory turnover
ratio decreased from 7.1
to 6.88 compared to last
year
The inventory turnover
ratio shows a decreasing
trend in the last 5 years

Debtors Turnover Ratio

The Debtors turnover
ratio decreased from
14.62 to 12.96 compared
to last year
The Debtors turnover
ratio shows a flucuating
trend in the last 5 years
Number of days in
working Capital
The number of days in
working capital increased
from 25 days to 31 days
compared to last year
The number of days in
working capital has
shown an increasing trend
in last 3 years

Page | 37
Srei Infrastructure Finance Limited
GRPHICAL ANALYSIS

A) BALANCE SHEET

Particulars

Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Networth

1,203.17 1,709.98 2,187.42 2,748.50 3,384.29




Particulars

Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Total Debt 299.3 226.84 233.88 335.85 237.66



0.00
500.00
1,000.00
1,500.00
2,000.00
2,500.00
3,000.00
3,500.00
Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Networth
Networth
0
50
100
150
200
250
300
350
Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Total Debt
Total Debt
Page | 38
Srei Infrastructure Finance Limited

Particulars

Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Total Current
Assets

1,547.71 1,591.29 1,994.24 2,937.79 3,563.15




Particulars

Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Total Current
Liabilities

1,105.72 1,469.08 1,759.27 2,262.21 2,466.85


0.00
500.00
1,000.00
1,500.00
2,000.00
2,500.00
3,000.00
3,500.00
4,000.00
Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Total Current Assets
Total Current Assets
0.00
500.00
1,000.00
1,500.00
2,000.00
2,500.00
Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Total Current Liabilities
Total Current Liabilities
Page | 39
Srei Infrastructure Finance Limited

Particulars

Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Fixed Assets

863.58 909.55 1,309.87 1,300.55 2,440.97




Particulars

Mar '09 Mar '10
Mar
'11
Mar '12 Mar '13
Investments

78.4 624.11 921.95 354.74 280.68



0
500
1000
1500
2000
2500
Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Fixed Assets
Fixed Assets
0
200
400
600
800
1000
Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Investments
Investments
Page | 40
Srei Infrastructure Finance Limited

Particulars

Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Reserves

1,107.25 1,614.06 2,091.50 2,652.58 3,288.37



Particulars

Mar '09 Mar '10
Mar
'11
Mar '12 Mar '13
Provisions

180.99 315.04 336.53 444.9 539.39




0.00
500.00
1,000.00
1,500.00
2,000.00
2,500.00
3,000.00
3,500.00
Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Reserves
Reserves
0
100
200
300
400
500
600
Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Provisions
Provisions
Page | 41
Srei Infrastructure Finance Limited
B) PROFIT & LOSS A/C
Particulars

Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Net Sales

5,739.65 6,944.30 7,998.01 10,002.10 11,427.35



Particulars Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Total Income 5,749.05 7,206.23 8,246.96 10,277.18 11,736.56
Total Expenses 5,026.63 5,830.95 6,849.20 8,663.82 9,890.10



0.00
2,000.00
4,000.00
6,000.00
8,000.00
10,000.00
12,000.00
Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Net Sales
Net Sales
0.00
2,000.00
4,000.00
6,000.00
8,000.00
10,000.00
12,000.00
Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Total Income
Total Expenses
Page | 42
Srei Infrastructure Finance Limited

Particulars

Mar
'09
Mar '10 Mar '11 Mar '12

Mar '13


Operating Profit
700.33 1,238.25 1,318.14 1,544.53 1,731.94
PBT 622.5 1,262.63 1,265.00 1,456.04

1,658.21

PAT 419.48 883.91 881.35 1,020.58
1,159.52







0
200
400
600
800
1000
1200
1400
1600
1800
2000
Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Operating Profit
PBT
PAT
Page | 43
Srei Infrastructure Finance Limited

Particulars
Mar '13
Expenses
Distribution

Raw Materials

6,627.32 67.0


Power & Fuel Cost

110.28 1.1


Employee Cost

623.56 6.3


Other Manufacturing Expenses

19.59 0.2


Selling and Admin Expenses

501.74 5.1


Miscellaneous Expenses

2,007.61 20.3

Total Expenses
9,890.10 100




67.0
1.1
6.3
0.2
5.1
20.3
Expenses Distribution
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing Expenses
Selling and Admin Expenses
Miscellaneous Expenses
Page | 44
Srei Infrastructure Finance Limited

Particulars
Mar '09
Mar
'10
Mar '11 Mar '12 Mar '13
Current Ratio 1.09 0.94 1.01 1.16 1.24
Current Ratio 0.74 0.49 0.47 0.66 0.72




Particulars
Mar '09
Mar
'10
Mar '11 Mar '12 Mar '13
Debt Equity
Ratio
0.25 0.13 0.11 0.12 0.07



0
0.2
0.4
0.6
0.8
1
1.2
1.4
Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Current Ratio
Current Ratio
0
0.05
0.1
0.15
0.2
0.25
Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Debt Equity Ratio
Page | 45
Srei Infrastructure Finance Limited

Particulars
Mar '09
Mar
'10
Mar '11 Mar '12 Mar '13
Inventory
Turnover Ratio
8.67 8.09 6.96 7.1 6.88



Particulars
Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Debtors Turnover
Ratio
11.12 12.46 14.18 14.62 12.96


0
1
2
3
4
5
6
7
8
9
Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Inventory Turnover Ratio
Inventory Turnover Ratio
0
2
4
6
8
10
12
14
16
Mar '09 Mar '10 Mar '11 Mar '12 Mar '13
Debtors Turnover Ratio
Debtors Turnover Ratio
Page | 46
Srei Infrastructure Finance Limited

C) PEER COMPARISON
Particulars
Asian
Paints
Berger
Paints
Kansai
Nerolac
Akzo
Nobel
Shalimar
Paints
Total Assets 3,069.02 1,287.45 1,346.46 1,105.30 163.12



Particulars
Asian
Paints
Berger
Paints
Kansai
Nerolac
Akzo
Nobel
Shalimar
Paints
Sales Turnover 10,418.78 3,024.21 3,154.40 2,231.98 530.18


0.00
500.00
1,000.00
1,500.00
2,000.00
2,500.00
3,000.00
3,500.00
Asian Paints Berger
Paints
Kansai
Nerolac
Akzo Nobel Shalimar
Paints
Total Assets
Total Assets
0.00
2,000.00
4,000.00
6,000.00
8,000.00
10,000.00
12,000.00
Asian Paints Berger
Paints
Kansai
Nerolac
Akzo Nobel Shalimar
Paints
SalesTurnover
Slaes Turnover
Page | 47
Srei Infrastructure Finance Limited
Particulars
Asian
Paints
Berger
Paints
Kansai
Nerolac
Akzo
Nobel
Shalimar
Paints

Net Profit
1,169.06 209.8 206.6 218.83 11.02



Particulars
Asian
Paints
Berger
Paints
Kansai
Nerolac
Akzo
Nobel
Shalimar
Paints
Last Price 536.5 237.3 1,243.00 821.85 80.7




0.00
200.00
400.00
600.00
800.00
1,000.00
1,200.00
1,400.00
Asian Paints Berger Paints Kansai Nerolac Akzo Nobel Shalimar
Paints
Net Profit
Net Profit
0
200
400
600
800
1000
1200
1400
Asian Paints Berger Paints Kansai Nerolac Akzo Nobel Shalimar Paints
Last Price
Last Price
Page | 48
Srei Infrastructure Finance Limited

Particulars
Market Capitalization
(Cr)
Asian Paints

51,460.96
Berger Paints

8,221.88
Kansai Nerolac

6,698.77
Akzo Nobel

3,834.78
Shalimar Paints

152.75
Total Mkt Cap

70,369.14



51,460.96
8,221.88
6,698.77
3,834.78
152.75
Market Capitalization (Cr)
Asian Paints
Berger Paints
Kansai Nerolac
Akzo Nobel
Shalimar Paints
Page | 49
Srei Infrastructure Finance Limited
INTERPRETATION OF FINANCIAL ANALYSIS



The profitability of the company is
quite high and is increasing year by
year which is a good sign for the
companys growth
The networth of the company is
increasing every year whereas the debt is
decreasing every year, this shows that
the company is having a more
proportion of own funds than the
borrowed funds in its share capital
The current ratio of the company is 1.24,
this shows that the short term solvency
position of the company is quite good
The working capital of the company is
quite good, this shows that the company
has good liquidity to carry out the day to
day operations in the company
The company makes provision of around
14% of the total liabilities, this shows
that the company has good liquidity in
case of any financial emergency
Page | 50
Srei Infrastructure Finance Limited
CORPORATE HIGHLIGHTS FOR FY 2013-2014




Ceased manufacturing activity at the Bhandup plant with effect
from 5
th
May 2014
Impact of about Rs.28 Cr in FY 2014-2015 for total Volunatary
Retirement/Seperation scheme/Relocation Compensation
Agreement signed in April 2014 with Kadisco Chemical industry
PLC, Ethiopia to acquire either directly or through subsidiaries
51% stake
Agreement signed in May 2014 with ESS Bathroom Products Pvt
Ltd to acquire its front end sales business including brands,
network and sales infrastructure
Increased stake in BIL to 96.79% during the year
Final dividend of Rs 4.20 per equity share (420% of face value)
Page | 51
Srei Infrastructure Finance Limited
IMPORTANT POINTS FROM ANNUAL REPORT


Joint Venture with PPG Industries INC, USA
-New 50:50 Joint venture between Asian Paints and PPG Industries on 10
th
April,2013
Capacity Expansion
- New manufacturing facility commissioned at Khandala, Maharashtra with an installed capacity
of 3,00,000 KL per annum
Energy Conservation measures taken by company
-Replacement of old equipment with the new equipment
-Reduction in specific fuel consumption for electricity generation
-Optimization of electrical equipment
Research and Development
-Development of new and upgradation of existing products
-Collaborative development with vendors and institutes
-Import substitution and identification of new raw material for development
Corporate Governance
-Fairness, Accountabitlity, disclosures and transparency are the 4 strong pillars supporting the
foundation of the companys philosophy of Corporate governance
-Responsible governance is imbibed in the companys work culture which has enabled it to
achieve sustainable growth on its journey to continued success











Page | 52
Srei Infrastructure Finance Limited
CREDIT RATING


Industry: Chemical


Ratings outstanding as on 21-May-2014


Instrument Category Rating Rating Outlook
Long Term CRISIL AAA Stable
Short Term CRISIL A1+


Credit rating agency, CRISIL has reaffirmed AAA rating to long-term bank facilities of Asian
Paints.
The rating agency has also reaffirmed A1+ rating to the companys short term bank facilities.
The company has received the said rating reaffirmation on the back of its leadership position in
the domestic paints sector, healthy operating margin, and robust financial risk profile,
marked by healthy capital structure and surplus liquidity.
However, the rating strengths are partially offset by Asian Paints susceptibility to volatility in
raw material prices.







Page | 53
Srei Infrastructure Finance Limited
OBSERVATIONS OF CMA ANALYSIS

TOL/TNW
The Tangible Net worth (TNW) of the company increased from 3577.73 cr in FY 2013 to 4102.46 cr in
FY 2014. The increase in TNW was mainly due to plough back of profit.
The gearing ratio of the company has increased from level of 0.88 as on March 31, 2013 to 0.90 as
on March 31, 2014 mainly on account of increased short term bank borrowings & increase in
level of sundry creditors.
Total Outside Liabilities (TOL) of the company have increased from 3135.94 cr as on March 31, 2013
to 3706.13 cr as on March 31, 2014. The increase in TOL is mainly because of increase in the level of
sundry creditors from 1441.57 cr as on March 31, 2013 to 1745.72 cr as on March 31, 2014.

FIXED ASSETS
The net block of the company marginally decreased from 2424.89 cr as on March 31, 2013 to 2402.34
cr as on March 31, 2014 due to depreciation. The same is expected to increase further to 2501.94 cr as
on March 31, 2015.

INCOME/SALES
During FY 2014, the company has registered net sales of 13392.88 cr as against sales of 11424.87 cr in
FY 2013 which is a growth of 14.57 %.

PROFITABILITY
The company has registered PBDIT of 2890.04 cr in FY 2014 against 2541.64 cr in FY 2013
registering a growth of 21.58 %. The PBDIT margin has decreased marginally from 22.25 % in FY
2013 to 21.58 % in FY 2014.
During FY 2014, the company has registered PAT of 2217.51 cr in FY 2013 against PAT of 2075.97 cr
in FY 2013 registering a growth of 16.56 %. The PAT margin has decreased from 18.17 % in FY 2012
to 16.56 % in FY 2013. Company has explained that the dip in profit is mainly because of increase in
cost of labor, increase in finance expenses and increase in cost of import of raw materials.


Page | 54
Srei Infrastructure Finance Limited
Chapter- 4
Conclusions & Recommendations


Recommendations to the banks are as follows
From the above financials we can come to a conclusion that the company is a cash rich
company and has a huge net worth and is enjoying very high profit margins
The company is not taking the help of outsiders liability and is making use of its own
funds in its day to day transactions in the organization
This will make it difficult for the bank to start the business with the company by
providing fund based limits to the company
The company would rarely make use of facilities like cash credit, overdraft facility,
Export Packing credit and vendor financing
Thus the bank should go ahead with the following facilities:

A. Non-Fund based Facility
1. Letter of credit
2. Trade Credit Bank Guarantee
3. Bank Guarantee
4. Loan Equivalent Risk

B. Cash Management Services
The CMS are mainly divided into collections, payment and debt. As per clients
perspective, Collection products are aimed at pooling the customers' receivables from
multiple locations into a single pooling account, disbursement products are aimed at
providing the customer various payment options through a single window. Further,
distribution of dividend / interest / refund / redemption payments, enables outsourcing of
routine tasks.


Page | 55
Srei Infrastructure Finance Limited
C. Tax Payment Service
The bank may also help the company to pay various taxes like Value Added Tax (VAT),
Sales Tax, Excise and also many other types of taxes and can charge a minimal rate of
interest on it which may help to improve the profitability of the bank

D. Maintain Salary Accounts
The bank may also maintain salary accounts of the employees working in the company
and pay them a certain interest on this savings made by the people and then lend the
money at a higher rate of interest

E. Dividend Payment
The bank may help the company to make the payment of the dividend to the various
shareholders across the country

F. Asset Financing
Every year the company is investing huge amount In the purchase of fixed assets such as
plant and machinery, land and building etc. The bank can help the company by financing
these assets

G. International Transactions
Bank can facilitate foreign exchange transactions and provide trade financing. This will
help the company by mitigating the impact of currency and price fluctuations

H. Insurance Facilities
Bank can offer insurance to their large scale clients. The insurance can cover corporate
activites as well as staff and management activities

I. Asset Custody
Bank can protect their clients corporate assets. This includes setting up accounts to store
them, making regular audits to make sure that they remain intact and issuing report that
assess the assets status on annual basis
Page | 56
Srei Infrastructure Finance Limited
Recommendations to the company are as follows
The above financial showed that the company is financially sound company and is
making huge amount of sales turnover every year and thus earning huge amount of
profits
The company export sales is just 2% of the total gross sales. So the company should take
some measures in improving their export sales
The employee turnover in the company is huge and hence there is increase in the labour
cost every year. So steps should be taken by the company in reducing the labour turnover
The company is having huge amount of cash reserves in their account. The company
should make investment in various other schemes in order to enjoy more profits
The company must also look to do lateral expansion as they have huge amount of own
funds, but a very less amount of outsiders fund is being used by the company
The company is facing losses on FOREX and is increasing every year. Thus steps need to
be taken by the company like using facilities like hedging and factoring in order to
control these losses
The company is not investing much in the advertisement and promotional activities. So
the company must look forward to invest some amount in advertisement In order to
increase their sale
The company can also tie up with the builders and contractors and may take some large
scale projects











Page | 57
Srei Infrastructure Finance Limited
CONCLUSION

Every business concern should have adequate working capital to run its business operations. It
should have neither excess working capital nor inadequate of working capital.
Both excess as well as shortage of working capital situations are bad for any business. However
out of the two, inadequacy or shortage of working capital is more dangerous from the point of
view of the firm.
Any change in the working capital will have an effect on a business's cash flows. A positive
change in working capital indicates that the business has paid out cash, for example in
purchasing or converting inventory, paying creditors etc.
Hence, converting inventory, paying creditors etc will have a negative effect on the business's
cash holding.
However, a negative change in working capital indicates lower funds to pay off short term
liabilities (current liabilities), which may have bad repercussions to the future of the company.

















Page | 58
Srei Infrastructure Finance Limited

Chapter- 5
ANNEXURES

FINANCIAL STATEMENTS


Increase Percentage

Decrease Percentage
Consolidated Balance Sheet (Rs in Crores)- Trend Analysis
Increase/Decrease in % (Taking base year
as 2009 )

Particulars

Mar '13 Mar '12 Mar '11 Mar '10 Mar '09
Mar '13
(in %)
Mar '12
(in %)
Mar '11
(in %)
Mar '10
(in %)
Mar '09
(in %)
12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths
Sources Of Funds


Total Share Capital 95.92 95.92 95.92 95.92 95.92
100.00 100.00 100.00 100.00 100
Equity Share Capital 95.92 95.92 95.92 95.92 95.92
100.00 100.00 100.00 100.00 100
Share Application
Money
0 0 0 0 0
0.00 0.00 0.00 0.00 100
Preference Share
Capital
0 0 0 0 0
0.00 0.00 0.00 0.00 100
Preference Share
Application Money
0 0 0 0 0
0.00 0.00 0.00 0.00 100
Employee Stock
Opiton
0 0 0 0 0
0.00 0.00 0.00 0.00 100
Reserves 3,288.37 2,652.58 2,091.50 1,614.06 1,107.25
296.99 239.56 188.89 145.77 100
Revaluation
Reserves
0 0 0 0 0
0.00 0.00 0.00 0.00 100
Networth 3,384.29 2,748.50 2,187.42 1,709.98 1,203.17
281.28 228.44 181.80 142.12 100
Secured Loans 58.53 42.34 49.97 63.7 125.35
46.69 33.78 39.86 50.82 100
Unsecured Loans 179.13 293.51 183.91 163.14 173.95
102.98 168.73 105.73 93.79 100
Total Debt 237.66 335.85 233.88 226.84 299.3
79.41 112.21 78.14 75.79 100
Minority Interest 160.77 136.69 109.89 94.45 75.57
212.74 180.88 145.41 124.98 100
Policy Holders
Funds
0 0 0 0 0
0.00 0.00 0.00 0.00 100
Group Share in Joint
Venture
0 0 0 0 0
0.00 0.00 0.00 0.00 100
Total Liabilities 3,782.72 3,221.04 2,531.19 2,031.27 1,578.04
239.71 204.12 160.40 128.72 100


Page | 59
Srei Infrastructure Finance Limited

Particulars
Mar '13 Mar '12 Mar '11 Mar '10 Mar '09 Mar '13 Mar '12 Mar '11 Mar '10 Mar '09
12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths

APPLICATION
OF FUNDS

Gross Block 3,429.37 2,145.82 2,024.94 1,537.12 1,511.96
226.82 141.92 133.93 101.66 100
Less: Accum.
Depreciation
988.4 845.27 715.07 627.57 648.38
152.44 130.37 110.29 96.79 100
Net Block 2,440.97 1,300.55 1,309.87 909.55 863.58
282.66 150.60 151.68 105.32 100
Capital Work in
Progress
59.21 845.93 71.64 419.27 170.12
34.80 497.25 42.11 246.46 100
Investments 280.68 354.74 921.95 624.11 78.4
358.01 452.47 1175.96 796.06 100
Inventories 1,830.29 1,598.89 1,305.43 955.88 768.95
238.02 207.93 169.77 124.31 100
Sundry Debtors 980.88 782.76 585.53 542.52 571.92
171.51 136.87 102.38 94.86 100
Cash and Bank
Balance
751.98 556.14 103.28 92.89 206.84
363.56 268.87 49.93 44.91 100
Total Current Assets 3,563.15 2,937.79 1,994.24 1,591.29 1,547.71
230.22 189.82 128.85 102.82 100
Loans and Advances 444.95 420.97 299.53 258.23 201.41
220.92 209.01 148.72 128.21 100
Fixed Deposits 0 68.17 29.76 12.94 3.53
0.00 1931.16 843.06 366.57 100
Total CA, Loans &
Advances
4,008.10 3,426.93 2,323.53 1,862.46 1,752.65
228.69 195.53 132.57 106.27 100
Current Liabilities 2,466.85 2,262.21 1,759.27 1,469.08 1,105.72
223.10 204.59 159.11 132.86 100
Provisions 539.39 444.9 336.53 315.04 180.99
298.02 245.81 185.94 174.06 100
Total CL &
Provisions
3,006.24 2,707.11 2,095.80 1,784.12 1,286.71
233.64 210.39 162.88 138.66 100
Net Current Assets 1,001.86 719.82 227.73 78.34 465.94
215.02 154.49 48.88 16.81 100
Minority Interest 0 0 0 0 0
0.00 0.00 0.00 0.00 100
Group Share in Joint
Venture
0 0 0 0 0
0.00 0.00 0.00 0.00 100
Miscellaneous
Expenses
0 0 0 0 0
0.00 0.00 0.00 0.00 100
Total Assets
3,782.72 3,221.04 2,531.19 2,031.27 1,578.04
239.71 204.12 160.40 128.72 100
Contingent
Liabilities
192.96 472.61 401.83 148.94 278.37
69.32 169.78 144.35 53.50 100
Book Value (Rs) 352.83 286.54 228.05 178.27 125.44
281.27 228.43 181.80 142.12 100











Page | 60
Srei Infrastructure Finance Limited
Consolidated Balance Sheet (Rs in Crores)- Comparative Analysis
Increase Percentage
Decrease Percentage

Particulars
Mar '13 Mar '12
Inc/Dec Inc/Dec


(in amt) (in %)

12 mths 12 mths 12 mths 12 mths

Sources Of Funds


Total Share Capital 95.92 95.92 0 0.00

Equity Share Capital 95.92 95.92 0 0.00

Share Application Money 0 0 0 0.00

Preference Share Capital 0 0 0 0.00

Init. Contribution Settler 0 0 0 0.00

Preference Share Application Money 0 0 0 0.00

Employee Stock Opiton 0 0 0 0.00

Reserves 3,288.37 2,652.58 635.79 23.97

Revaluation Reserves 0 0 0.00 0.00

Networth 3,384.29 2,748.50 635.79 23.13

Secured Loans 58.53 42.34 16.19 38.24

Unsecured Loans 179.13 293.51 -114.38 -38.97

Total Debt 237.66 335.85 -98.19 -29.24

Minority Interest 160.77 136.69 24.08 17.62

Policy Holders Funds 0 0 0.00 0.00

Group Share in Joint Venture 0 0 0.00 0.00

Total Liabilities 3,782.72 3,221.04 561.68 17.44

















Page | 61
Srei Infrastructure Finance Limited
Particulars

Mar '13 Mar '12
Inc/Dec Inc/Dec
12 mths 12 mths 12 mths 12 mths
Application of Funds

Gross Block 3,429.37 2,145.82 1,283.55 59.82
Less: Accum. Depreciation 988.4 845.27 143.13 16.93
Net Block 2,440.97 1,300.55 1,140.42 87.69
Capital Work in Progress 59.21 845.93 -786.72 -93.00
Investments 280.68 354.74 -74.06 -20.88
Inventories 1,830.29 1,598.89 231.40 14.47
Sundry Debtors 980.88 782.76 198.12 25.31
Cash and Bank Balance 751.98 556.14 195.84 35.21
Total Current Assets 3,563.15 2,937.79 625.36 21.29
Loans and Advances 444.95 420.97 23.98 5.70
Fixed Deposits 0 68.17 -68.17 -100.00
Total CA, Loans & Advances 4,008.10 3,426.93 581.17 16.96
Deffered Credit 0 0 0.00 0.00
Current Liabilities 2,466.85 2,262.21 204.64 9.05
Provisions 539.39 444.9 94.49 21.24
Total CL & Provisions 3,006.24 2,707.11 299.13 11.05
Net Current Assets 1,001.86 719.82 282.04 39.18
Minority Interest 0 0 0.00 0.00
Group Share in Joint Venture 0 0 0.00 0.00
Miscellaneous Expenses 0 0 0.00 0.00
Total Assets

3,782.72 3,221.04 561.68 17.44
Contingent Liabilities 192.96 472.61 -279.65 -59.17
Book Value (Rs) 352.83 286.54 66.29 23.13















Page | 62
Srei Infrastructure Finance Limited
Consolidated Balance Sheet (Rs in Cr)- Common Size
Analysis
Important Indicators

Particulars
Mar '13
% of Total
Liabilities

12 mths 12 mths

Sources of Funds


Total Share Capital 95.92 2.54

Equity Share Capital 95.92 2.54

Share Application Money 0 0.00

Preference Share Capital 0 0.00

Init. Contribution Settler 0 0.00

Preference Share Application Money 0 0.00

Employee Stock Opiton 0 0.00

Reserves 3,288.37 86.93

Revaluation Reserves 0 0.00

Networth 3,384.29 89.47

Secured Loans 58.53 1.55

Unsecured Loans 179.13 4.74

Total Debt 237.66 6.28

Minority Interest 160.77 4.25

Policy Holders Funds 0 0.00

Group Share in Joint Venture 0 0.00

Total Liabilities 3,782.72 100.00


















Page | 63
Srei Infrastructure Finance Limited
Particulars
Mar '13
% of Total
Assets
12 mths 12 mths

Application of Funds
Gross Block 3,429.37 90.66
Less: Accum. Depreciation 988.4 26.13
Net Block 2,440.97 64.53
Capital Work in Progress 59.21 1.57
Investments 280.68 7.42
Inventories 1,830.29 48.39
Sundry Debtors 980.88 25.93
Cash and Bank Balance 751.98 19.88
Total Current Assets 3,563.15 94.20
Loans and Advances 444.95 11.76
Fixed Deposits 0 0.00
Total CA, Loans & Advances 4,008.10 105.96
Deffered Credit 0 0.00
Current Liabilities 2,466.85 65.21
Provisions 539.39 14.26
Total CL & Provisions 3,006.24 79.47
Net Current Assets 1,001.86 26.49
Minority Interest 0 0.00
Group Share in Joint Venture 0 0.00
Miscellaneous Expenses 0 0.00
Total Assets

3,782.72 100.00


















Page | 64
Srei Infrastructure Finance Limited
Consolidated Profit & Loss account (in Crores) - Trend Analysis
Increase/Decrease in % ( Taking base year
as 2009)
Increase
Percentage

Decrease
Percentage

Particulars
Mar '13 Mar '12 Mar '11 Mar '10 Mar '09 Mar '13 Mar '12 Mar '11 Mar '10 Mar'9
12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12mts
Income


Sales Turnover 12,600.41 10,875.17 8,671.13 7,393.30 6,301.46
199.96 172.58 137.61 117.33 100
Excise Duty 1,173.06 873.07 673.12 449 561.81
208.80 155.40 119.81 79.92 100
Net Sales 11,427.35 10,002.10 7,998.01 6,944.30 5,739.65
199.09 174.26 139.35 120.99 100
Other Income 114.52 68.83 79.62 137.03 22.09
518.42 311.59 360.43 620.33 100
Stock
Adjustments
194.69 206.25 169.33 124.9 -12.69
-
1534.20
-
1625.30
-
1334.36 -984.24 100
Total Income 11,736.56 10,277.18 8,246.96 7,206.23 5,749.05
204.15 178.76 143.45 125.35 100
Expenditure


Raw Materials 6,627.32 5,977.01 4,653.93 3,882.47 3,403.19
194.74 175.63 136.75 114.08 100
Power & Fuel
Cost
110.28 84.74 74.56 56.48 54.01
204.18 156.90 138.05 104.57 100
Employee Cost 623.56 527.85 455.88 438.17 372.39
167.45 141.75 122.42 117.66 100
Other
Manufacturing
Expenses
19.59 97.16 76.88 54.92 44.03
44.49 220.67 174.61 124.73 100
Selling and
Admin Expenses
501.74 1,879.41 1,504.10 1,306.68 1,082.34
46.36 173.64 138.97 120.73 100
Miscellaneous
Expenses
2,007.61 97.65 83.85 92.23 70.67
2840.82 138.18 118.65 130.51 100
Preoperative Exp
Capitalised
0 0 0 0 0
0.00 0.00 0.00 0.00 100
Total Expenses 9,890.10 8,663.82 6,849.20 5,830.95 5,026.63
196.75 172.36 136.26 116.00 100











Page | 65
Srei Infrastructure Finance Limited

Operating Profit
1,731.94 1,544.53 1,318.14 1,238.25 700.33
247.30 220.54 188.22 176.81 100
PBDIT 1,846.46 1,613.36 1,397.76 1,375.28 722.42
255.59 223.33 193.48 190.37 100
Interest 36.65 38.15 25 36.75 32.46
112.91 117.53 77.02 113.22 100
PBDT 1,809.81 1,575.21 1,372.76 1,338.53 689.96
262.31 228.30 198.96 194.00 100
Depreciation 154.6 121.13 113.13 83.56 74.38
207.85 162.85 152.10 112.34 100
Other Written Off 0 0 0 0 0
0.00 0.00 0.00 0.00 100
Profit Before Tax 1,655.21 1,454.08 1,259.63 1,254.97 615.58
268.89 236.21 204.62 203.87 100
Extra-ordinary
items
3 1.96 5.37 7.66 6.92
43.35 28.32 77.60 110.69 100
PBT (Post Extra-
ord Items)
1,658.21 1,456.04 1,265.00 1,262.63 622.5
266.38 233.90 203.21 202.83 100
Tax 498.69 435.46 383.65 378.72 203.02
245.64 214.49 188.97 186.54 100
Reported Net
Profit
1,159.52 1,020.58 881.35 883.91 419.48
276.42 243.30 210.11 210.72 100
Minority Interest 45.64 31.85 38.11 48.27 21.64
210.91 147.18 176.11 223.06 100
Share Of P/L Of
Associates
0 0 0 0 0
0.00 0.00 0.00 0.00 100
Net P/L After
Minority Interest
& Share Of
Associates
1,110.88 986.77 837.87 826.83 392.16
283.27 251.62 213.66 210.84 100
Total Value
Addition
3,262.78 2,686.81 2,195.27 1,948.48 1,623.44
200.98 165.50 135.22 120.02 100
Preference
Dividend
0 0 0 0 0
0.00 0.00 0.00 0.00 100
Equity Dividend 441.23 383.69 306.94 258.98 167.86
262.86 228.58 182.85 154.28 100
Corporate
Dividend Tax
74.29 62.24 50.11 43.33 28.88
257.24 215.51 173.51 150.03 100
Per share data (annualised)

Shares in issue
(lakhs)
959.2 959.2 959.2 959.2 959.2
100.00 100.00 100.00 100.00 100
Earning Per
Share (Rs)
120.88 106.4 91.88 92.15 43.73
276.42 243.31 210.11 210.72 100
Equity Dividend
(%)
0 0 0 0 0
0.00 0.00 0.00 0.00 100
Book Value (Rs) 352.83 286.54 228.05 178.27 125.44
281.27 228.43 181.80 142.12 100










Page | 66
Srei Infrastructure Finance Limited
Consolidated Profit & Loss A/C (Rs in Crores)- Common Size
Analysis
Important Indicator

Particulars
Mar '13 % of Sales

12 mths 12 mths

Income


Sales Turnover 12,600.41 110.27

Excise Duty 1,173.06 10.27

Net Sales 11,427.35 100.00

Other Income 114.52 1.00

Stock Adjustments 194.69 1.70

Total Income 11,736.56 102.71

Expenditure


Raw Materials 6,627.32 58.00

Power & Fuel Cost 110.28 0.97

Employee Cost 623.56 5.46

Other Manufacturing Expenses 19.59 0.17

Selling and Admin Expenses 501.74 4.39

Miscellaneous Expenses 2,007.61 17.57

Preoperative Exp Capitalised 0 0.00
Total Expenses

9,890.10 86.55





















Page | 67
Srei Infrastructure Finance Limited

Operating Profit

1,731.94 15.16
PBDIT 1,846.46 16.16
Interest 36.65 0.32
PBDT 1,809.81 15.84
Depreciation 154.6 1.35
Other Written Off 0

Profit Before Tax 1,655.21 14.48
Extra-ordinary items 3 0.03
PBT (Post Extra-ord Items) 1,658.21 14.51
Tax 498.69 4.36
Reported Net Profit 1,159.52 10.15
Minority Interest 45.64 0.40
Share Of P/L Of Associates 0

Net P/L After Minority Interest & Share Of Associates 1,110.88 9.72
Total Value Addition 3,262.78 28.55
Preference Dividend 0

Equity Dividend 441.23 3.86
Corporate Dividend Tax 74.29 0.65
Per share data (annualised)

Shares in issue (lakhs) 959.2 8.39
Earning Per Share (Rs) 120.88 1.06
Equity Dividend (%) 0

Book Value (Rs) 352.83 3.09


















Page | 68
Srei Infrastructure Finance Limited
Ratio Analysis
Increase


Decrease




Particulars
Mar '13 Mar '12 Mar '11 Mar '10 Mar '09
Investment Valuation Ratios
Face Value 10 10 10 10 10
Dividend Per Share -- -- -- -- --
Operating Profit Per Share (Rs) 180.56 161.02 137.42 129.09 73.01
Net Operating Profit Per Share (Rs) 1,191.34 1,042.76 833.82 723.97 598.38

Profitability Ratios

Operating Profit Margin(%) 15.15 15.44 16.48 17.83 12.2
Profit Before Interest And Tax
Margin(%)
13.66 14.13 14.92 16.49 10.83
Gross Profit Margin(%)

13.8 14.23 15.06 16.62 10.9
Cash Profit Margin(%) 11.35 11.33 12.18 12.57 8.71
Adjusted Cash Margin(%) 11.35 11.33 12.18 12.57 8.71
Net Profit Margin(%) 9.65 9.81 10.44 11.93 6.88
Adjusted Net Profit Margin(%)

9.65 9.81 10.44 11.93 6.88
Return On Capital Employed(%) 46.71 48.42 52.84 62.58 44.25
Return On Net Worth(%) 32.91 35.97 38.54 48.86 33.06
Adjusted Return on Net Worth(%) 34.17 37.11 39.81 46.58 35.68
Return on Long Term Funds(%) 49.29 52.76 56.87 68.21 52.03














Page | 69
Srei Infrastructure Finance Limited

Liquidity And Solvency Ratios
Current Ratio 1.24 1.16 1.01 0.94 1.09
Quick Ratio 0.72 0.66 0.47 0.49 0.74
Debt Equity Ratio 0.07 0.12 0.11 0.13 0.25
Long Term Debt Equity Ratio 0.01 0.03 0.03 0.04
0.06

Management Efficiency Ratios
Inventory Turnover Ratio 6.88 7.1 6.96 8.09 8.67
Debtors Turnover Ratio 12.96 14.62 14.18 12.46 11.12
Investments Turnover Ratio 6.88 7.1 6.96 8.09 8.67
Fixed Assets Turnover Ratio 3.48 4.95 4.17 4.82 4.06
Total Assets Turnover Ratio 3.14 3.23 3.3 3.59 3.88
Asset Turnover Ratio 3.26 3.48 3.51 4.82 4.06
Average Finished Goods Held -- 43.53 41.62 37.23 31.26
Number of Days In Working Capital 31.56 25.91 10.25 4.06 29.22
Profit & Loss Account Ratios
Material Cost Composition 57.99 59.75 58.18 55.9 59.29
Selling Distribution Cost Composition 4.39 16.07 15.95 15.62 15.7
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit 46.28 45.1 42.34 36.17 49.45
Dividend Payout Ratio Cash Profit 40.64 40.17 37.33 32.88 41.66
Earning Retention Ratio 55.43 56.29 59.01 62.05 54.18
Cash Earning Retention Ratio 60.69 60.93 63.72 65.66 60.95

















Page | 70
Srei Infrastructure Finance Limited

Cash Flow
Increase



Particulars
Mar '13 Mar '12 Mar '11 Mar '10 Mar '09
Net Profit Before Tax 1515.88 1362.93 1122.83 1104.81 547.88
Net Cash From Operating Activities 1081.12 753.67 743.25 847.41 325.21
Net Cash (used in)/from
-424.87 -464.87 -410.23 -241.81 -16.69
Investing Activities
Net Cash (used in)/from Financing Activities -590.35 -297.06 -321.15 -237.99 -221.61
Net (decrease)/increase In Cash and Cash
Equivalents
65.9 -8.26 11.85 367.61 86.91
Opening Cash & Cash Equivalents 500.97 509.23 495.55 127.94 41.35
Closing Cash & Cash Equivalents 566.87 500.97 507.4 495.55 128.26


PEER COMPARISON
Highest


Company Name
Last Price Market Cap. Sales Net Profit Total
Assets
(Rs. cr.) Turnover
Asian Paints

536.5 51,460.96 10,418.78 1,169.06 3,069.02
Berger Paints

237.3 8,221.88 3,024.21 209.8 1,287.45
Kansai Nerolac

1,243.00 6,698.77 3,154.40 206.6 1,346.46
Akzo Nobel

821.85 3,834.78 2,231.98 218.83 1,105.30
Shalimar Paints

80.7 152.75 530.18 11.02 163.12
Jenson Nicholso

2.15 8.05 59.25 -5.84 -230.94



Page | 71
Srei Infrastructure Finance Limited
CREDIT MONITORING ARRANGEMENT SHEETS

1.OPERATING STATEMENT (Rs in Crores)
PROFIT & LOSS ACCOUNT 2012 2013 2014 2015 2016
Audited Audited Audited Estimated Projections
SALES:
1.Domestic Sales 10621.93 12318.63 14368.61 16523.9 18754.62
2.Export Sales 156.07 169.44 198.56 232.31 263.67
Gross Sales 10778.00 12488.07 14567.17 16756 19018
Less:Excise Duty/Sales Tax 839.77 1127.93 1307.46 1503.57 1729.01
Add:Other Operating Income 33.91 64.73 133.17 70.35 75
Net Sales 9972.14 11424.87 13392.88 15322.99 17364.28
Increase in Net Sales (%)

14.57% 17.23% 14.41% 13.32%
Cost Of Sales:
1.Raw Materials: 5720.53 6254.94 7205.28 8286.07 9528.98
A.Imported 5720.53 6254.94 7205.28 8286.07 9528.98
B.Indigenous 0 0 0 0 0
2.Other Spares 0 0 0 0 0
A.Imported 0 0 0 0 0
B.Indigenous 0 0 0 0 0
3.Power & Fuel 84.74 110.28 129.05 151.01 176.68
4.Direct Labour 525.97 623.56 759.71 911.65 1103.09
5.Other Manufacturing Expenses 0 0 0 0 0
6.Depreciation/Amortization 121.13 154.6 245.66 294.79 356.69
7.Repairs & Maintenance 42.7 62.27 80.1 102.52 133.27
8.Other Expenses 1670.3 2004.24 2407.34 2560.34 2816.37

Sub Total 8165.37 9209.89 10827.14 12306.38 14115.08
Add:Opening stock in process 62.36 62.12 68.51 84.9 100.9
Less:Closing Stock in process 62.12 68.51 84.9 100.9 115.2
COST OF PRODUCTION 8165.61 9203.5 10810.75 12290.38 14100.78
COP as % of Gross Sales 75.76% 73.70% 74.21% 73.35% 74.14%
Add:Opening stock of finished goods 613.06 808.16 973.83 1036.08 1098.33
Less:Closing stock of finished goods 808.16 973.83 1036.08 1098.33 1160
COST OF SALES 7970.51 9037.83 10748.5 12228.13 14039.11




Page | 72
Srei Infrastructure Finance Limited

COST OF SALES 7970.51 9037.83 10748.5 12228.13 14039.11
COS as % of Gross Sales 73.95% 72.37% 73.79% 72.98% 73.82%
Selling, General & Admin Expenses 0 0 0 0 0
Profit before Int & Taxes (PBIT) 2001.63 2387.04 2644.38 3094.86 3325.17
PBIT as % of Gross Sales 18.57% 19.11% 18.15% 18.47% 17.48%
Interest & Other Financial Charges 40.97 36.65 42.22 48.63 55.47
Int & Fin Charges as % of sales 0.38% 0.29% 0.29% 0.29% 0.29%
Operating Profit Before Taxes (OPBT) 1960.66 2350.39 2602.16 3046.23 3269.7
OPBT as % of Gross Sales 18.19% 18.82% 17.86% 18.18% 17.19%
Add:Other Non-Operative Income
1.Interset & Dividend 0 0 0 0 0
2.Exchane Profit/Export Incentives 0 0 0 0 0
3.Excess Provision written back 0 0 0 0 0
4.Profit on Sale of Assets 0 0 0 0 0
5.Sale of scrap/Other Misc Income 107.41 114.52 134.22 157.3 185.25
Sub Total (Income) 107.41 114.52 134.22 157.3 185.25
Less:Non-Operating Expenses
1.Loss on Investment 0 0 0 0 0
2.Loss on Forex 0.83 4.71 13.51 17.2 21.25
3.Loss on sale of Fixed Assets 0 0 0 0 0
4.Bad Debts Written off 4.74 7.18 1.35 2.3 3.5
5.Misc Exp Written off 0 0 0 0 0
Sub Total (Expenses) 5.57 11.89 14.86 19.5 24.75
PROFIT BEFORE TAX/LOSS 2062.5 2453.02 2721.52 3184.03 3430.2
Tax Paid 429.34 439.37 536.4 654.4 811.45
Deffered Tax Liability/(Deffered Tax Asset) 6.12 59.32 33.75 42.23 51.25
Provision for Taxes 1.96 3 1.36 1.4 2.6
Net Profit/Loss (PAT) 1625.08 1951.33 2150.01 2486 2564.9
PAT as % of Gross Sales 15.08% 15.63% 14.76% 14.84% 13.49%
Equity/Preference Dividend Paid:
1.Equity Dividend 0 0 0 0 0
2.Preference Dividend 0 0 0 0 0
RETAINED PROFIT 1625.08 1951.33 2150.01 2486.00 2564.90





Page | 73
Srei Infrastructure Finance Limited
2.LIABILITIES (Rs in Crores)
2.Balance Sheet -Liabilities 2012 2013 2014 2015 2016
Audited Audited Audited Estimated Projections
CURRENT LIABILITIES (CL)
Short Term Borrowings from Banks
1.From Application Bank 280 189.86 198.63 202.83 230.25
2.From Other Banks 0 0 0 0 0
Out of Total Bank Borrowings- BP & BD
SUB-TOTAL 280 189.86 198.63 202.83 230.25
1.Short Term Borrowings from other incl
CP 0 0 0 0 0
2.Sundry Creditors (Trade) 1262.45 1441.57 1745.72 2112.35 2400.35
3.Advance Payment from Customers 0 0 0 0 0
4.Provision fro Taxes 9.63 10.73 69.6 35.23 45.27
5.Dividen Payable 0 0 0 0 0
6.Other Stat.Liabilities (due within 1 year) 0 0 0 0 0
7.Instalment of TL/Deb/Pref Sh 0 0 0 0 0
8.Other CL & Provisions 356.92 430.09 559.32 727.11 759.62
9.Interest Accrued but not due 0 0 0 0 0
10.Dues to Directors 0 0 0 0 0
11.Security Deposit - Suppliers &
Contractors 0 0 0 0 0
12.Other Current Liabilities 678.03 859.16 901.45 1020.23 1073.26
13
14
SUB-TOTAL 2307.03 2741.55 3276.09 3894.92 4278.5
TOTAL CURRENT LIABILITIES 2587.03 2931.41 3474.72 4097.75 4508.75











Page | 74
Srei Infrastructure Finance Limited
TERM LIABILITIES
1.Debentures 0 0 0 0 0
2.Preference Shares 0 0 0 0 0
3.Term Loans 0 0 0 0 0
4.Term Deposits 55.32 47.8 41.4 35.2 30.32
5.Unsecured Loans 0 0 0 0 0
6.Mobilization Advance 0 0 0 0 0
7.Sundry Creditors for Capital Goods 0 0 0 0 0
8.Defferd Sales Tax 0 0 0 0 0
9.Deffered Tax Liability 94.56 156.73 190.01 230.02 275.62
TOTAL TERM LIABILITIES 149.88 204.53 231.41 265.22 305.94

1.Ordinary Share Capital 95.92 95.92 95.92 95.92 95.92
2.Preference Share Capital 0 0 0 0 0
3.General Reseve 1949.81 2248.15 2876.57 3679.13 4782.86
4.Capital Reserve 3.25 39.16 39.16 39.16 39.16
5.Surplus(+) or deficit (-) in P&L Account 0 0 0 0 0
6.Share Application Money 922.66 1264.42 1316.28 1055.46 1100.56
7.Share Premium 0 0 0 0 0
8.Capital Redemption Reserve 5.37 5.37 5.37 5.37 5.37
9.Quasi Equity 0 0 0 0 0
10.Less:Revaluation Reserve 0 0 0 0 0
NET WORTH 2977.01 3653.02 4333.3 4875.04 6023.87
TOTAL LIABILITIES 5713.92 6788.96 8039.43 9238.01 10838.56













Page | 75
Srei Infrastructure Finance Limited
3.ASSETS(Rs in Crores)
BALANCE SHEET - ASSETS 2012 2013 2014 2015 2016
Audited Audited Audited Estimated Projected
CURRENT ASSETS
Cash & Bank Balances 624.31 751.98 931.66 1154.23 1442.53
Short Term Investments 285.02 130.56 529.06 649.6 794.42
1.Govt & Other Securities 22.02 55.56 47.06 67.6 78.56
2.Fixed Deposits with Banks 263 75 482 582 715.86
RECEIVABLES 781.25 980.88 1110.28 1256.72 1457.79
3.Domestic Sales 781.25 980.88 1110.28 1256.72 1457.79
4.Export Receivables
INVENTORY 1598.89 1830.29 2069.66 2437.64 2922.28
7.Raw Material-Indigenous 728.61 787.95 948.68 1238.41 1647.08
8.Raw Material-Imported 0 0 0 0 0
9.Consumable Spares-Indigenous 0 0 0 0 0
10.Consumable Spare-Imported 0 0 0 0 0
11.Stock in process 62.12 68.51 84.9 100.9 115.2
12.Finished Goods 808.16 973.83 1036.08 1098.33 1160
13.Goods in transit 0 0 0 0 0
14.Closing Stock of traded goods 0 0 0 0 0
15
OTHER CURRENT ASSETS 217.2 312.79 415.8 518.71 668.52
16.Deposits 132.98 214.6 246.66 283.48 334.5
17.Duties & Taxes paid in advance 0 0 0 0 0
18.Other Receivables 84.22 98.19 169.14 235.23 334.02
19.Advance to suppliers of RM 0 0 0 0 0
20.Advance Receivable in cash or kind 0 0 0 0 0
TOTAL CURRENT ASSETS 3506.67 4006.5 5056.46 6016.9 7285.54










Page | 76
Srei Infrastructure Finance Limited
GROSS FIXED ASSETS (GFA) 2022.55 3285 3484.09 3842.6 4299.62
1.Land 123.61 128.04 129.66 141.2 165.3
2.Building 490.04 824.47 876.11 939.6 1019.6
3.Plant & Machiney 1070.07 1956.14 2053.89 2254.26 2494.26
4.Furniture & Fixtures 50.27 57.09 70.97 98.3 130.5
5.Other Fixed Assets 288.56 319.26 353.46 409.24 489.96
6.Capital work in progress 617.08 59.21 71.6 106.3 152.25
Less:Accumulated Depreciation on FA 788.57 919.32 1153.35 1446.96 1766.96
Less:Revaluation Reserves,if any 0 0 0 0 0
NET BLOCK 1851.06 2424.89 2402.34 2501.94 2684.91
NON-Current ASSETS
1.Investment in Subsidiary Cos 0 0 0 0 0
2.Other Investments 69.72 150.12 192.13 244 300.23
3.Loans & Advances to subsidiary Cos 196.46 106.49 130.25 175.2 225.32
4.Advance to supplier of capital goods 0 0 0 0 0
5.Deferred Receivables 0 0 0 0 0
6.Margin monety kept with bank 0 0 0 0 0
7.Debtors exceeding 6 months 0 0 0 0 0
8.Short term depostits with bodies Corp 0 0 0 0 0
9.Non consumable stores & spares 0 0 0 0 0
10.Other NCA including dues with
directors 23.44 25.67 27.41 36.2 49.33
TOTAL NON CURRENT ASSETS 289.62 282.28 349.79 455.4 574.88
Intangible Assets 66.57 75.29 230.84 263.77 293.23
TOTAL ASSETS 5713.92 6788.96 8039.43 9238.01 10838.56
TOTAL LIABILITIES less TOTAL ASSETS 0 0 0 0 0











Page | 77
Srei Infrastructure Finance Limited

4.WORKING CAPITAL ASSESSMENT (Rs in Crores)
BUILD UP OF CURRENT ASSETS 2012 2013 2014 2015 2016
Audited Audited Audited Estimated Projection
Raw Material- Indigenous 728.61 787.95 948.68 1238.41 1647.08
Months Consumption #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Raw Material- Imported 0 0 0 0 0
Months Consumption 0 0 0 0 0
Consumable Spares-Indigenous 0 0 0 0 0
Months Consumption #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Consumabe Spares- Imported 0 0 0 0 0
Months Consumption #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Stock in process 62.12 68.51 84.9 100.9 115.2
Months Cost of Production 0.09 0.09 0.09 0.10 0.10
Finished goods 808.16 973.83 1036.08 1098.33 1160
Months cost of sales 1.22 1.29 1.16 1.08 0.99
Receivables other than deffered & Exports 781.25 980.88 1110.28 1256.72 1350
Months Domestic Sales 0.88 0.96 0.93 0.91 0.86
Export Receivables 0 0 0 0 0
Months Export Sales 0 0 0 0 0

BUILD UP OF CURRENT LIABILITIES 2012 2013 2014 2015 2016
Audited Audited Audited Estimated Projection
Trade Creditors 1262.45 1441.57 1745.72 2112.35 2400.35
Months Trade Creditors 2.65 2.77 2.91 3.06 3.02

CALCULATION OF ASSESSED BANKING
FINANCE (ABF) 2012 2013 2014 2015 2016
Audited Audited Audited Estimated Projection
1.Total Current Assets 3506.67 4006.5 5056.46 6016.9 7285.54
2.Other Current Liabilities 2307.03 2741.55 3276.09 3894.92 4278.5
3.Working Capital Gap 1199.64 1264.95 1780.37 2121.98 3007.04
4.Minimum Stipulated NWC (25% of CA ) 876.6675 1001.625 1264.115 1504.225 1821.385
5.Actual Projected NWC 919.64 1075.09 1581.74 1919.15 2776.79
6.Item 3 - Item 4 322.9725 263.325 516.255 617.755 1185.655
7.Item 3 - Item 5 280 189.86 198.63 202.83 230.25
8.MPBF (Lower of 6 or 7) 280 189.86 198.63 202.83 230.25
9.Excess borrowings Representing
Shortfall in NWC NIL NIL NIL NIL NIL

Page | 78
Srei Infrastructure Finance Limited
5.SUMMARY OF FINANCIAL POSITION (Rs in Crores)
STATEMENT OF FINANCIAL ANALYSIS 2012 2013 2014 2015 2016
Audited Audited Audited Estimated Projection

Total Assets (Tangible) 5647.35 6713.67 7808.59 8974.24 10545.33
Total Outside Liabilities 2736.91 3135.94 3706.13 4362.97 4814.69
Tangible Networth 2910.44 3577.73 4102.46 4611.27 5730.64
Net Sales 9972.14 11424.87 13392.88 15322.99 17364.28
PBDIT 2122.76 2541.64 2890.04 3389.65 3681.86
Operating Profits 1960.66 2350.39 2602.16 3046.23 3269.7
Net Profit 1625.08 1951.33 2150.01 2486 2564.9
Gross Cash Accruals 1752.33 2165.25 2429.42 2823.02 2972.84
Term Liablities to Gross Cash Accruals 0.03 0.02 0.02 0.01 0.01
Net Working Capital 919.64 1075.09 1581.74 1919.15 2776.79
% of NWC to Current Assets 26.23% 26.83% 31.28% 31.90% 38.11%
Current Assets to Net Sales 35.16% 35.07% 37.75% 39.27% 41.96%

Current Ratio 1.36 1.37 1.46 1.47 1.62
Quick Ratio 0.74 0.74 0.86 0.87 0.97

PBDIT/Net Sales(%) 21.29% 22.25% 21.58% 22.12% 21.20%
OPBT/Net Sales(%) 19.66% 20.57% 19.43% 19.88% 18.83%
Net Profit / Net Sales (%) 16.30% 17.08% 16.05% 16.22% 14.77%
Return on Assets(%) 28.78% 29.07% 27.53% 27.70% 24.32%
Retained Profits/Net Profits (%) 100.00% 100.00% 100.00% 100.00% 100.00%
Return on Net Worth (%) 54.59% 53.42% 49.62% 50.99% 42.58%












Page | 79
Srei Infrastructure Finance Limited
Receivable Turnover (Domestic) 27 29 28 28 28
Receivable Turnover (Export) 0 0 0 0 0
Inventory Turnover 54 53 52 53 56
Accounts Payable Turnover 81 84 88 93 92
Fixed Assets Turnover Ratio 8.08 4.83 5.75 6.40 6.86

Net Sales Growth(%)

14.57% 17.23% 14.41% 13.32%
Net Profit Growth (%)

20.08% 10.18% 15.63% 13.17%
Net Worth Growth (%)

22.93% 14.67% 12.40% 24.27%

TOL/TNW 0.94 0.88 0.90 0.95 0.84
DER 0.05 0.06 0.06 0.06 0.05
DSCR

60.08 58.54 59.05 54.59
CFDSCR

52.71 43.36 48.88 35.79
FACR 12.35 11.86 10.38 9.43 8.78
Net Operating Cash Flow 1685.89 1931.93 1830.77 2376.94 1985.42
Interest Cover 51.81 69.35 68.45 69.70 66.38
CFICR 41.15 52.71 43.36 48.88 35.79

















Page | 80
Srei Infrastructure Finance Limited

6.FUNDS FLOW STATEMENT (Rs in Crores)
FUNDS FLOW STATEMENT 2012 2013 2014 2015 2016
Audited Audited Audited Estimated Projection
Profit After Tax

1951.33 2150.01 2486 2564.9
Depreciation

154.6 245.66 294.79 356.69
Dividends

0 0 0 0
Funds from Operations 0 2105.93 2395.67 2780.79 2921.59
Long Term Sources
Change in capital

0 0 0 0
Net change in Reserves

-1275.32 -1469.73 -1944.26 -1416.07
Change in term loans

54.65 26.88 33.81 40.72
Total[Source(+)/Deficit(-)] 0 885.26 952.82 870.34 1546.24
Long term Uses
Net Change in fixed Assets

728.43 223.11 394.39 539.66
Change in other non-current Assets

-7.34 67.51 105.61 119.48
Change in investment in group companies

0 0 0 0
Change in intangibles

8.72 155.55 32.93 29.46
Contribution to Working Capital 0 155.45 506.65 337.41 857.64
Short Term Uses
Change in Net Working Assets

431.03 368.77 514.42 685.71
Change in other Current Assets

95.59 103.01 102.91 149.81
Short Term Uses
Change in other Current Liabilities

434.52 534.54 618.83 383.58
Chane in Bank Borrowings/Loans

-90.14 8.77 4.2 27.42
Net Deficit/Surplus in ST Sources 0 -182.24 71.53 5.7 -424.52

Net Movement in Liquid Assets 0 -26.79 578.18 343.11 433.12
Change in cash

127.67 179.68 222.57 288.3
Change in Marketable Investments

-154.46 398.5 120.54 144.82
Net Movement in Liquid Assets 0 -26.79 578.18 343.11 433.12







Page | 81
Srei Infrastructure Finance Limited

7.CASH FLOW STATEMENT (Rs in Crores)
CASH FLOW STATEMENT 2012 2013 2014 2015 2016
Audited Audited Audited Estimated Projection
Operating Sector
Net Sales

11424.87 13392.88 15322.99 17364.28
Debtors(Trade) [Inc(+)/Dec(-)] 199.63 129.4 146.44 201.07
Cash From Sales

11225.24 13263.48 15176.55 17163.21
Costs-Interest & Finance Charges

36.65 42.22 48.63 55.47
Expenses on stock purchases

6254.94 7205.28 8286.07 9528.98
Trade Creditors [Inc(+)/Dec(-)] -179.12 -304.15 -366.63 -288
Manufacturing Expenses

2800.35 3376.2 3725.52 4229.41
Cash cost of Sales

8912.82 10319.55 11693.59 13525.86
Expenses for inc/dec in stocks

59.34 160.73 289.73 408.67
Cash from Asset Conversion Cycle

2253.08 2783.2 3193.23 3228.68
Selling,Gen & Admin Exp

0 0 0 0
Advance Payments [Inc(+)/Dec(-)] 0 0 0 0
Advance Received [Inc(+)/Dec(-)] 0 0 0 0
Taxation

501.69 571.51 698.03 865.3
Dividends

0 0 0 0
Cash from Operations

1751.39 2211.69 2495.2 2363.38
Other Current Assets [Inc(+)/Dec(-)] 95.59 103.01 102.91 149.81
Other Current Liabilities [Inc(+)/Dec(-)] -255.4 -230.39 -252.2 -95.58
Other Incone/Expenses

-102.63 -119.36 -137.8 -160.5
Net Cash from Operations

2013.83 2458.43 2782.29 2469.65












Page | 82
Srei Infrastructure Finance Limited
7.CASH FLOW STATEMENT (Rs in Crores)
CASH FLOW STATEMENT 2012 2013 2014 2015 2016
Audited Audited Audited Estimated Projection
Operating Sector
Net Sales 11424.87 13392.88 15322.99 17364.28
Debtors(Trade) [Inc(+)/Dec(-)] 199.63 129.4 146.44 201.07
Cash From Sales 11225.24 13263.48 15176.55 17163.21
Costs-Interest & Finance Charges 36.65 42.22 48.63 55.47
Expenses on stock purchases 6254.94 7205.28 8286.07 9528.98
Trade Creditors [Inc(+)/Dec(-)] -179.12 -304.15 -366.63 -288
Manufacturing Expenses 2800.35 3376.2 3725.52 4229.41
Cash cost of Sales 8912.82 10319.55 11693.59 13525.86
Expenses for inc/dec in stocks 59.34 160.73 289.73 408.67
Cash from Asset Conversion Cycle 2253.08 2783.2 3193.23 3228.68
Selling,Gen & Admin Exp 0 0 0 0
Advance Payments [Inc(+)/Dec(-)] 0 0 0 0
Advance Received [Inc(+)/Dec(-)] 0 0 0 0
Taxation 501.69 571.51 698.03 865.3
Dividends 0 0 0 0
Cash from Operations 1751.39 2211.69 2495.2 2363.38
Other Current Assets [Inc(+)/Dec(-)] 95.59 103.01 102.91 149.81
Other Current Liabilities [Inc(+)/Dec(-)] -255.4 -230.39 -252.2 -95.58
Other Incone/Expenses -102.63 -119.36 -137.8 -160.5
Net Cash from Operations 2013.83 2458.43 2782.29 2469.65
Investment Sector
Capital Expenditure [Inc(+)/Dec(-)] 728.43 223.11 394.39 539.66
Investment in Group Companies [Inc(+)/Dec(-)] 0 0 0 0
Intangibles/Other Term Assets [Inc(+)/Dec(-)] 1.38 223.06 138.54 148.94
Cash before Funding 1284.02 2012.26 2249.36 1781.05
Financing Sector
Dues to Banks [Inc(+)/Dec(-)] -90.14 8.77 4.2 27.42
Short Term Debt [Inc(+)/Dec(-)] 0 0 0 0
Term Debt [Inc(+)/Dec(-)] 54.65 26.88 33.81 40.72
Equity [Inc(+)/Dec(-)] 0 0 0 0
Other Loans & Reserves [Inc(+)/Dec(-)] -1275.32 -1469.73 -1944.26 -1416.07
Total -1310.81 -1434.08 -1906.25 -1347.93
Movement in Cash Assets -26.79 578.18 343.11 433.12
Cash & Bank Balance [Inc(+)/Dec(-)] 127.67 179.68 222.57 288.3
Investments (Other than long term) [Inc(+)/Dec(-)] -154.46 398.5 120.54 144.82
Movement in Cash Assets -26.79 578.18 343.11 433.12

Page | 83
Srei Infrastructure Finance Limited
Chapter- 6
REFERENCES & BIBLIOGRAPHY

www.moneycontrol.com

www.asianpaints.com

www.rediffmoney.com

www.investopedia.com

www.ibef.org


























Page | 84
Srei Infrastructure Finance Limited