Case Analysis for Britannia

CASE Britannia Industries Ltd Submitted by: Celin Naveen Date: 07-04-2011 1. Analysis of the issue of bonus debenture bonds application has fixed 09 March 2010 as the record date for determine the members of the family who will be entitled to receive atomic number 53 fully paid bonus debenture of Rs 170 separately for every one existing fully paid beauteousness share of Rs 10 each. It was announced in May 2009.The company is transferring RS 406 crore from militia to debt , by issuing bonus debentures to shareholders. The debentures will be free and it will fetch the shareholders 8.5 % interest for 3 geezerhood subsequently which the principal amount of Rs 170 will be redeemed. Calculation of bonus debenture amount Equity share corking =23.89 crore According to the offer, Bonus debenture =23.89/10*170=406.13 crore. 2. work of restructuring on the financial statement. A. The effect of bonus debenture good deal be clearly seen at two places: Reserves: The reserves amount for March 2009 was Rs 800.65 crore. After paying the bonus debenture of Rs 406.13 crore the reserves for the year March 2010 came down to Rs 394.52 crore(800.65-406.13).Since this amount is subjected to dividend distribution tax (17%) the company will have to account for this amount. gum olibanum the total reserve will be (800.65-406.13-406.13*17%)= 325.52 crore improver the net profit for the current year. Secured loans: The secured loans amount for defect 2009 was Rs 2.

20 crore which after the issue of bonus debenture went to 408.33(406.13+2.20) B. The effect can be seen in the following ratios Debt to equity ratio(Debt/ Net worth) - (March 2009) - 25.17/824.54 =0.03 - (March 2010) - 429.61/396.25=1.08 Interest reportage ratio (PBIT/Fixed interest charges) = The interest coverage ratio will only get affected from 22 march 2010 as the shareholders will receive the debuntures only on this date. ... If you sine qua non to get a full essay, order it on our website: Ordercustompaper.com

If you want to get a full essay, wisit our page: write my paper