S EPORTING ATE UGUST Malwa …Ludhiana - 141 003, Punjab Malwa Cotton Spinning Mills, the Delhi based company was promoted in 1976 in the Joint Sector by the PSIDC and Oswal Woollen

Stakeholders’ Education | Corporate Governance Research | Corporate Governance Score | Proxy Advisory

STAKEHOLDERS EMPOWERMENT SERVICES

1 | P A G E

SECTOR: TEXTILES REPORTING DATE: 14TH AUGUST, 2017

MALWA COTTON SPINNING MILLS LTD www.malwagroup.com

Malwa Cotton Spinning Mills Ltd NSE Code - MALWACOTT TABLE 1 - MARKET DATA (STANDALONE) (AS ON 10TH AUGUST, 2017)

Sector - Textiles NSE Market Price (`) 7.25 NSE Market Cap. (₹ Cr.) 5.63

Face Value (`) 10.00 Equity (` Cr.) 7.91

Business Group - Oswal Vidyasagar 52 week High/Low (₹) 10.95/5.70 Net worth (₹ Cr.)* -262.98

Year of Incorporation - 1976 TTM P/E (TTM) N.A. Traded Volume (Shares) 201

TTM P/BV N.A. Traded Volume (lacs) 0.01

Registered Office - Source - Capitaline, TTM - Trailing Twelve Months, N.A. – Not applicable, *As on 30th September, 2016

Industrial Area-A, COMPANY BACKGROUND

Ludhiana - 141 003, Punjab Malwa Cotton Spinning Mills, the Delhi based company was promoted in 1976 in the Joint

Sector by the PSIDC and Oswal Woollen Mills to manufacture acrylic yarn and cotton yarn.

The company has put up a plant with 24,200 spindles capacity to process cotton and

acrylic yarn in Barnala, Punjab. The commercial production was commenced in March

1981.

The company has envisaged a new project of 11,040 spindles at its existing premises

during 1983-84. In 1988-89, it set up a 7,680-spindle unit at Paonta Sahib. In 1989-90, the

company installed 9,600 spindles to manufacture yarn from man-made fibre.

Simultaneously, modernisation of the unit was taken up to enable the production of

quality cotton and polyester yarns, mainly for exports. In 1990-91, it undertook a project

to set up a 10,080-spindle EOU.

+91 161 222 4201

Company Website:

www.malwagroup.com

Revenue and Profit Performance

The revenue of the Company increased from ₹ 7.65 crores to ₹

7.95 crores from quarter ending Sep’15 to quarter ending Sep’16.

The Company made a loss of ₹ 3.59 crores in quarter ending

Sep’16 vis-a-vis making a loss of ₹ 10.18 crores in quarter ending

Sep’15.

Source - Money Control

Performance vis-à-vis Market

TABLE 2- Returns

1-m 3-m 6-m 12-m

Malwa Cotton Spinning Mills

3.57% 1.38% -16.67% -4.61%

Nifty -0.72% 3.82% 11.69% 14.55%

Source – Capitaline / NSE

-

0.50

1.00

1.50

Aug16

Sep16

Oct16

Nov16

Dec16

Jan17

Feb17

Mar17

Apr17

May17

Jun17

Jul17

Malwa Cotton Spinning Mills Ltd NIFTY

7.9511.13

7.65

-3.59 -3.89

-10.18-15

-10

-5

0

5

10

15

Sep'16 Mar'16 Sep'15

Quarterly revenue and Profit (₹ CRORE)

Revenue Profit

http://www.malwagroup.com/




2 | P A G E



TABLE 3 – FINANCIALS

(₹ Cr.) Sep’16 Mar’16 Sep’15 % Change

Sep ’16 vs Mar’16 Mar’16 vs Sep’15

Net Worth -262.98 -245.82 -237.61 N.A. N.A.

Current Assets 57.89 72.24 75.80 -19.86% -4.70%

Non-Current Assets 57.93 58.85 59.82 -1.56% -1.62%

Total Assets 115.82 131.09 135.62 -11.65% -3.34%

Investments 9.84 9.84 9.84 0.00% 0.00%

Finance Cost 0.00 0.06 0.02 N.A. 200.00%

Long Term Liabilities 54.59 68.50 81.27 -20.31% -15.71%

Current Liabilities 324.21 308.41 291.96 5.12% 5.63%

Turnover 7.95 11.13 7.65 -28.57% 45.49%

Profit After Tax (PAT) -3.59 -3.89 -10.18 N.A. N.A.

EPS (₹) -1.17 -2.35 -6.23 N.A. N.A.

Source - Money Control/ Stock Exchange filling

Discussion by the Company in quarterly results (September, 2016) –The negative net worth and business loss is temporary

phenomena arising due to sub-optimum capacity utilisation and unsustainable debt burden. The recoverable amount of assets is

more than the carrying the value, therefore there is no need to recognise any loss on account of impairment of assets.

The company has not provided Interest on borrowings as the lenders have categorised the account as NPA.

Other expenses Includes provisions for doubtful debt and advances for quarter ₹ 2.49 Cr and for the six months ₹ 13.06 Cr.

AUDIT QUALIFICATIONS (AS STATED IN ANNUAL REPORTS)

Audit Qualifications: Auditors have raised qualified opinion on financial statements for last three years. Auditors qualification

with Management response on qualification for last three financial years are as follow.

“Basis for Qualified Opinion on financial statements for FY 2015-16

We draw attention to note no.2 in the financial statements. The Company has incurred a net loss of ₹ 23.34 Crr during the year

31st March, 2016 which together with brought forward losses of ₹ 257.63 Cr exceeds the net worth of the company, and as of

that date, the company’s current liabilities exceeded its current assets by ₹ 236.17 Cr and its total liabilities exceeded its total

assets by ₹ 245.82 Cr. The Consortium banks have recalled their debts to the company. These events cast significant doubt on

the ability of the company to continue as a going concern. The appropriateness of the going concern assumption is dependent on

the company’s ability to establish consistent profitable operations and generate positive cash flows as well as raising adequate

finance to meet its short term and long term obligations. Based on the mitigating factors stated in the said note, the

management of the company believes that the going concern assumption is appropriate. However, we do not agree with the

management in this respect.

Basis for Qualified Opinion on financial statements for FY 2014-15

i) We draw attention to note no. 37 in the financial statements. The Company has incurred a net loss of ₹ 36.88 Cr during the

year ended 31st March, 2015, which together with brought forward losses of ₹ 218.85 Cr exceeds the net worth of the company,

and as of that date, the company’s current liabilities exceeded its current assets by ₹ 195.25 Cr and its total liabilities exceeded its

total assets by ₹ 222.48 Cr. The Consortium banks have recalled their debts to the company. These

events cast significant doubt on the ability of the company to continue as a going concern. The appropriateness of the going

concern assumption is dependent on the company’s ability to establish consistent profitable operations and generate positive

cash flows as well as raising adequate finance to meet its short term and long term obligations. Based on the mitigating factors

stated in the said note, the management of the company believes that the going concern assumption is appropriate.

However, we do not agree with the management in this respect.

ii) The company has not arranged to make available the confirmations and/or reconciliations to verify the balances stated in the

financial statements in respect of:




3 | P A G E



a) Trade Receivables: ₹ 55.35 Cr

b) Loans & Advances: ₹ 14.73 Cr

c) Trade payables: ₹ 53.26 Cr,

We have also not been able to perform any alternative procedures with regard to verification of the aforesaid balances and

thereby have been unable to obtain sufficient appropriate audit evidence regarding the aforesaid accounts. We are unable to

comment upon the difference, if any, which may arise upon the receipt of confirmations and/or the carrying out of such

reconciliation.

iii) The management of the company has represented to us that the recoverable amount of assets within the meaning of

Accounting Standard 28 “Impairment of Assets” is more than their carrying value and as such no amount needs to be recognized

in the financial statements for impairment loss. In the absence of the workings of impairment having been prepared and made

available to us for our review, we are unable to comment on whether; the company needs to make a provision in respect of

impairment loss on such assets and the amount of such provision.

iv) Refer note no.36 of the financial statements, the company has not made provision in respect of balances recoverable from

Trade Receivables, Loans and Advances and Other Recoverable including for employees, which are doubtful in nature amounting

to ₹ 41.44 Cr as on the date of the financial Statements.

v) Refer note no.38 of the financial statements, the Company has not provided for the Interest on borrowings amounting to ₹

29.78 Cr. The Company has also not provided interest of ₹ 29.35 Cr on it’s borrowings pertaining to the preceding year.

vi) We further report that, except for the effect, if any, of the matters stated in paragraph (i) and (ii) above which are not

ascertainable, had the impact of our observation made in paragraph (iv) and (v) above been considered, then loss for the year

ended 31st March, 2015 would have been ₹ 137.46 Cr (against the reported figure of ₹ 36.88 Cr) and reserves and surplus would

have been ₹ 358.21 Cr (against the reported figure of ₹ 257.63 Cr) and current assets would have been ((₹ 12.19 Cr) (against the

reported figure of ₹ 88.39 Cr).

vii) The earning (loss) per share for the year ended 31st March, 2015 would have been ₹ (177.61) against reported earnings (loss)

per share of ₹ (50.37).”

Basis for Qualified Opinion on financial statements for FY 2013-14

We report that:

i. The company has not arranged to make available the confirmations and/or reconciliations to verify the balances stated in the

financial statements in respect of:

i .Trade Receivables Rs. 3796 lacs ii. Loans and Advances: ₹ 4005 lacs and iii. Trade payables: ₹.6515 lacs,

We have also not been able to perform any alternative procedures with regard to verification of the aforesaid balances and

thereby have been unable to obtain sufficient appropriate audit evidence regarding the aforesaid accounts .We are unable

to comment upon the difference, if any, which may arise upon the receipt of confirmations and/or the carrying out of such

reconciliation.

ii. The management of the company has represented to us that the recoverable amount of assets within the meaning of

Accounting Standard 28 “Impairment of Assets” is more than their carrying value and as such no amount needs to be recognized

in the financial statements for impairment loss. In the absence of the workings of impairment having been prepared and made

available to us for our review, we are unable to comment on whether the company needs to make a provision in respect of

impairment loss on such assets and the amount of such provision.

iii. Refer note no.36 of the financial statements, the company has not made provision in respect of balances recoverable from

Trade Receivables, Loans and Advances and Other Recoverable, which are doubtful in nature amounting to ₹ 5807lacs as on the

date of the financial Statements.

iv. Refer note no.38 of the financial statements, the Company has not provided for the Interest on borrowings amounting to ₹

2,935 lacs pertaining to year ended on 31st March, 2014.

v. We further report that, except for the effect, if any, of the matters stated in paragraph (i) and (ii) above which are not

ascertainable, had the impact of our observation made in paragraph (iii) and (iv) above been considered, then loss for the year




4 | P A G E



ended 31st March, 2014 would have been ₹ 13,608 lacs (against the reported figure of ₹ 4,866 lacs) and reserves and surplus

would have been ₹ (30,627) lacs (against the reported figure of ₹ (21,885) lacs) and current assets would have been ₹ 4,492 lacs

(against the reported figure of ₹ 13,234 lacs).

vi. The earning (loss) per share for the year ended 31st March, 2014 would have been ₹ (175.75) against reported earning (loss)

per share of ₹ (65.16).

“Management Response on Auditors qualification:

- For FY 2015-16:

The Auditors’ Report on the Accounts is self-explanatory and required no comments except i) The Company has not been able to

redeem 9% cumulative redeemable preference share capital--Due to cash losses in the company and negative net worth, the

company could not redeem cumulative redeemable Preference Share capital as per schedule. (ii) (a) Employee Benefits in respect

of non-provision for liability of gratuity, leave encashment and other compensated absences in accordance with provision of said

accounting standard. (AS-15)— The company has not made provision for gratuity and leaves with wages/salaries for year 2015-

16 on actuarial basis due to number of employees leaving the company which may result in reversal of provision already made.

(iii)(b) non-disclosure of segment results separately in respect of sewing thread segment in accordance with Accounting Standard

(AS)-17. Results of the operations of the sewing thread segment is compiled to the extent it could be computed from the books of

account however results of the textile segment (yarn & sewing thread ) is disclosed as per Accounting Standard (AS-17), (iv) Due

to recession there is delay in realization of debtors and the Company is settling with parties for its recovery and confident of

recovery of debtors in respect of which balances were not confirmed and however the company has made a provision for

doubtful debts and advances for ₹ 9.30 Cr in respect of these debtors and advances during the year. (v) The company has not

provided interest on borrowing as the accounts with lenders has been classified as NPA.

- FY 2014-15:

The Auditors’ Report on the Accounts is self-explanatory and required no comments except (i) nondisclosure of segment results

separately in respect of sewing thread segment in accordance with Accounting Standard (AS)-17. Results of the operations of the

sewing thread segment is compiled to the extent it could be computed from the books of account however results of the textile

segment (yarn & sewing thread ) is disclosed as per Accounting Standard (AS-17) (ii) Due to recession there is delay in realization

of debtors and the Company is settling with parties for its recovery and confident of recovery of debtors in respect of which

balances were not confirmed and however the company has made a provision for doubtful debts for ₹ 16.91 Cr in respect of

these debtors during the year.

- FY 2013-14:

The Auditors’ Report on the Accounts is self-explanatory and required no comments except i) non-disclosure of segment results

separately in respect of sewing thread segment in accordance with Accounting Standard (AS)-17. Results of the operations of the

sewing thread segment is compiled to the extent it could be computed from the books of account however results of the textile

segment (yarn & sewing thread ) is disclosed as per Accounting Standard (AS-17) ii) Due to recession there is delay in realization

of debtors and the Company is settling with parties for its recovery and confident of recovery of debtors in respect of which

balances were not confirmed and however the company has made a provision for doubtful debts for ₹1,017.51 lac in respect of

these debtors during the year.”

Response Comment

Frequency of Qualifications Auditor has raised qualified opinion for last three years.

Have the auditors made any adverse remark in last 3 years? No

Are the material accounts audited by the Principal Auditors? Yes -

Do the financial statements include material unaudited

financial statements? No

-




5 | P A G E



TABLE 4: BOARD PROFILE (AS PER ANNUAL REPORT 2015-16)

Regulatory Norms Company

% of Independent Directors on the Board 50% 50%

% of Promoter Directors on the Board - 33%

Number of Women Directors on the Board At least 1 1

Classification of Chairman of the Board - Executive Promoter Director

Is the post of Chairman and MD/CEO held by the same person? - Yes

Average attendance of Directors in the Board meetings (%) - 64.00%

Composition of Board: As per Regulation 17(1)(b) of the Listing Regulations, 2015, the Company should have at least 50%

Independent Directors as the Chairman of the Board is a Promoter Executive Director. The Company has 50% of Independent

Directors.

Board Diversity: The Company has 6 directors out of which 5 are male and 1 is female.

TABLE 5 - FINANCIAL RATIOS

Ratios Sep’16 Mar’16 Sep’15

% Change

Sep ’16 vs

Mar’16

Mar’16 vs

Sep’15

Turn

ove

r

Rat

ios

Inventory Turnover 0.48 0.57 0.37 -15.56% 54.81%

Debtors Turnover 0.30 0.30 0.19 0.65% 55.27%

Fixed asset Turnover 0.14 0.19 0.13 -27.44% 47.89%

Current Asset Turnover 0.14 0.15 0.10 -10.87% 52.66%

Ret

urn

Rat

ios Operating Profit Margin -39.87% -30.46% -126.54% N.A. N.A.

Net Profit Margin -45.16% -34.95% -133.07% N.A. N.A.

Return on Assets (ROA) N.A. N.A. N.A. N.A. N.A.

Return on Equity (ROE) N.A. N.A. N.A. N.A. N.A.

Return on Capital Employed (ROCE) N.A. N.A. N.A. N.A. N.A.

Liq

uid

ity

Rat

ios

Current Ratio 0.18 0.23 0.26 -23.77% -9.78%

Quick Ratio 0.13 0.17 0.19 -25.36% -9.30%

Cash Ratio 0.05 0.05 0.05 -7.87% -4.01%

Working Capital Turnover ratio N.A. N.A. N.A. N.A. N.A.

Solv

ency

Rat

ios Debt to equity ratio N.A. N.A. N.A. N.A. N.A.

Interest Coverage Ratio N.A. N.A. N.A. N.A. N.A.

Trad

ing

Rat

ios

Market Cap / Sales 0.58 0.55 0.87 5.52% -37.34%

Market Cap/ Net Worth N.A. N.A. N.A. N.A. N.A.

Market Cap/PAT N.A. N.A. N.A. N.A. N.A.

Market Cap/EBITDA N.A. N.A. N.A. N.A. N.A.

Source - Money Control




6 | P A G E



TABLE 6 - TRADING VOLUME

Jun’17 Dec’16 Jun’16 % Change

June 17 vs Dec 16 Dec 16 Vs Jun 16

Trading Volume (shares) (avg. of 1 qtr) 1,796 614 2,672 192.40% -77.01%

Trading Volume (shares) (high in 1 qtr) 30,842 2,150 21,101 1334.51% -89.81%

Trading Volume (shares) (low in 1 qtr) 5 10 10 -50.00% 0.00%

Ratio - High/low trading volume 6,168.40 215.00 2,110.10 2769.02% -89.81%

Ratio - High/average trading volume 17.17 3.50 7.90 390.59% -55.68%

Source - Capitaline

TABLE 7 (A): OWNERSHIP & MANAGEMENT RISKS

Mar'17 Sep'16 Mar'16 Comments

Shar

eho

ldin

g (%

)

Promoter

shareholding 52.23 52.23 52.23

• No new equity shares were issued during the

period from March 16 to March 17.

• There was no change in the promoter

shareholding during the said period.

• The shareholding of public institution decreased

from 6.73% to 4.76% and that of public others

increased from 41.05% to 43.01% during the

same period.

• The promoters have pledged 79.32% of their

shareholding.

Public - Institutional


Public - Others


Non-Promoter Non-

Public Shareholding 0.00 0.00 0.00

Source - NSE

MAJOR SHAREHOLDERS (AS ON 31st March, 2017)

S. No. Promoters Shareholding

S. No. Public shareholders Shareholding

1 Jangi Growth Fund Pvt. Ltd 5.90%

1 Financial Institutions/ Banks 4.75

2 Oswal Knit India Ltd 4.65%

3 Neelam Growth Fund Pvt Ltd 4.52%

4 Rishi Growth Fund Pvt Ltd 4.52%

5 Prudential Commercial Enterp. Ltd 3.81%

Source - NSE

TABLE 7 (B): OWNERSHIP & MANAGEMENT RISKS

Market Activity of Promoters The promoters have not sold/bought any shares in last years

Preferential issue to promoters No preferential issue of shares was made to the promoters in last year

Preferential issue to others No preferential issue of shares was made to other shareholders during last year

GDRs issued by the Company The Company did not issue any GDRs during last one year

Issue of ESOPs/Issue of shares

other than Preferential allotment

The Company did not issue any shares to the employees under its ESOP Scheme in last one

year

Source - Annual Report FY 2015-16

TABLE 8: PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

Sr. No. Name and Description of main products / services % to Total turnover of the Company

1. Yarn 80.21%

2. Thread 19.79%

Source - Annual Report FY 2015-16




7 | P A G E



Glossary

Equity: The equity shares capital of the Company

Net Worth: The amount by which the Assets exceeds the liabilities excluding shareholders’ funds of the Company

Turnover: The revenue earned from the operations of the Company

EPS: Earning Per Share is net profit earned by the Company per share

𝐸𝑃𝑆 =Profit After Tax

Number of outstanding shares

P/E ratio: It is the ratio of the Company’s share price to earnings per share of the Company

𝑃/𝐸 𝑟𝑎𝑡𝑖𝑜 =Price of each share

Earnings per share

Current Assets: Cash and other assets that are expected to be converted to cash in one year

Fixed Assets: assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land,

buildings, and equipment

Total Assets: Current Assets + Fixed Assets

Investments: An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in

the future.

Finance Cost: The Financing Cost (FC), also known as the Cost of Finances (COF), is the cost and interest and other charges

incurred during the year in relation to borrowed money.

Long Term Liabilities: Long-term liabilities are liabilities with a maturity period of over one year.

Current Liabilities: A company's debts or obligations that are due within one year.

Inventory Turnover ratio: Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced

over a period.

𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Inventory

Debtors Turnover: Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business

can turn its accounts receivable into cash during a period

𝐷𝑒𝑏𝑡𝑜𝑟𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Accounts recievables

Fixed Asset Turnover: The fixed-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Fixed Assets

Current Asset Turnover: The current-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Current Assets

Operating Profit Margin: Operating margin is a measurement of what proportion of a Company’s revenue is left over after

paying for variable costs of production such as wages, raw materials etc. It can be calculated by dividing a Company’s operating

income (also known as “operating profit”) during a given period by its sales during the same period.

𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Operating profit

Sales Turnover

Net Profit Margin: Net profit margin is the percentage of revenue left after all expenses have been deducted from sales

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Net profit

Sales Turnover




8 | P A G E



Return on Assets: ROA tells you what earnings were generated from invested capital (assets)

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =Net profit

Total Assets

Return on equity/net worth: return on equity (ROE) is the amount of net income returned as a percentage of shareholders’

equity.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =Net profit

Net worth

Return on Capital Employed: Return on capital employed (ROCE) is a financial ratio that measures a company's profitability

and the efficiency with which its capital is employed.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =Net profit

Total Debt + Equity share capital

Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts

over the next 12 months. It compares a firm's current assets to its current liabilities.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑎𝑡𝑖𝑜 =Current Assets

Current Liabilities

Quick ratio: The quick ratio is a measure of how well a Company can meet its short term financial liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories

Current Liabilities

Cash ratio: The ratio of the liquid assets of a Company to its current liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories − Account Recievables

Current Liabilities

Working Capital Turnover ratio: The working capital turnover ratio is also referred to as net sales to working capital. It indicates

a Company's effectiveness in using its working capital.

𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Current Assets − Current Liabilities

Debt to Equity ratio: The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of

shareholders' equity and debt used to finance a company's assets.

𝐷𝑒𝑏𝑡 𝑡𝑜 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =𝑆ℎ𝑜𝑟𝑡 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡 + 𝐿𝑜𝑛𝑔 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡

𝑁𝑒𝑡 𝑊𝑜𝑟𝑡ℎ

Interest Coverage ratio: The Interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a

Company can pay interest on outstanding debt.

𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐶𝑜𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝑎𝑡𝑖𝑜 =𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥

𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡

Market Cap/Sales ratio: Market Cap/sales ratio, Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is

calculated by dividing the company's market cap by the revenue in the most recent year; or, equivalently, divide the per-

share stock price by the per-share revenue.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑆𝑎𝑙𝑒𝑠 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Market Cap/ Net Worth ratio: It is a valuation ratio calculated by dividing Company’s market cap to net worth.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ

Market Cap/ PAT ratio: It is a valuation ratio calculated by dividing Company’s market cap to net profit.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑃𝐴𝑇 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡

Market Cap/ EBITDA ratio: It is a valuation ratio calculated by dividing Company’s market cap to EBITDA.


http://www.investopedia.com/terms/i/invested-capital.asp

http://www.investopedia.com/articles/stocks/05/04405.asp

https://en.wikipedia.org/wiki/Stock

https://en.wikipedia.org/wiki/Market_cap

https://en.wikipedia.org/wiki/Stock



9 | P A G E



𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝐸𝐵𝐼𝑇𝐷𝐴 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝐸𝐵𝐼𝑇𝐷𝐴

Trading Volume (shares) (avg. of 1 year): Average number of shares/day traded in 1 year

Trading volume (shares) (high in 1 year): Highest number of shares/day traded in 1 year

Trading volume (shares) (minimum in 1 year): Lowest number of shares traded on any one day in 1 year




10 |

P A G E



DISCLAIMER

Sources Company Information

Only publicly available data has been used while making the factsheet. Our data sources include: BSE, NSE, SEBI, Capitaline, Moneycontrol, Businessweek, Reuters, Annual Reports, IPO Documents and Company Website.

Analyst Certification

The analysts involved in development of this factsheet certify that no part of any of the research analyst’s compensation was, is, or will be directly or indirectly related to the contents of this factsheet.

Disclaimer

While SES has made every effort and has exercised due skill, care and diligence in compiling this factsheet based on publicly available information, it neither guarantees its accuracy, completeness or usefulness, nor assumes any liability whatsoever for any consequence from its use. This factsheet does not have any approval, express or implied, from any authority, nor is it required to have such approval. The users are strongly advised to exercise due diligence while using this factsheet. This factsheet in no manner constitutes an offer, solicitation or advice to buy or sell securities, nor solicits votes or proxies on behalf of any party. SES, which is a not-for-profit Initiative or its staff, has no financial interest in the companies covered in this factsheet except what is disclosed on its website. The factsheet is released in India and SES has ensured that it is in accordance with Indian laws. Person resident outside India shall ensure that laws in their country are not violated while using this factsheet; SES shall not be responsible for any such violation. All disputes subject to jurisdiction of High Court of Bombay, Mumbai.

SEBI Reg. No. INH000000016

This factsheet or any portion hereof may not be reprinted, sold, reproduced or redistributed without the written consent of Stakeholders Empowerment Services

Contact Information

Stakeholders Empowerment Services

A 202, Muktangan, Upper Govind Nagar,

Malad East, Mumbai – 400 097

Tel +91 22 4022 0322

[email protected]

[email protected]

www.sesgovernance.com

Research Analyst: Kirti Dhokiya


mailto:[email protected]

mailto:[email protected]

http://www.sesgovernance.com/