Case study Anand Nagar Electricity co.

Case Study of Anandnagar Electricity

Company

By:Partho Prateem Roy

Priyanka SinghSaurish sarkar

Abhishek KumarVidya Bhushan

ContentsHistoryDATA analysisPerformance analysisHas the company been able to fulfill their objectives?What additional information that you may need to answer this questionConclusion

HISTORY

AEB was operated & controlled under the state of Anandnagar since 1961, but state Govt. was not able to generate sufficient

funds out of it. Privatization was intended to pave the way for the company, as the

demand for electricity always exceeded the supply so it was privatized in the year (2000). At the time of privatization, a large financial institution valued the company at `4,000

million.

Financial & Operating data for the year ended 31 march

(Rs. In million) 2001 2002 2003 2004Revenues 13500 14250 17500 19500Op. Profit 810 1100 1790 2730Taxes 160 200 300 400PBDT 900 960 1030 1190PAT 650 900 1490 2330Dividends 200 320 600 900Salaries 3000 3000 2700 2600Tot Asset 3000 3600 4500 5750Capital Exp. 500 900 1750 2250Debtors 6000 3200 3000 3600Creditors 4500 2400 2300 2400Employees (num) 32000 31400 30500 30100P/E Ratio 0 10.5 12 11.5CPI 100 102.7 105.8 107.4

RevenuesOp. Profit

TaxesPAT

DividendsSalaries

Tot AssetEmployees

CPI

0

5000

10000

15000

20000

25000

30000

35000

2001

2002

2003

2004

2001200220032004

Performance analysis

Profit after the payment of tax (PAT) of the firm increased.Revenue of the company increased from `13500 million in the year 2001 to `19500 million in the year 2004.Profit of the firm increased so payment of dividend to shareholders increased.Profit of the firm increased so the company’s debt value decreased from `6000 mn (2001)to `3600 mn (2004)

Performance analysis

Payment of employees decreased from `3000mn (2001) `2600mn (2004),and number of employees also decreased.PE ratio also increased from 10.5(2001) 11.5(2004)Progress of CPI also increased from 100(2001) 107.4(2004)

Who are company’s stake holders?

Stake holders are the company investors.They may be employees of the organization, share

holders, govt. etc. Stake holders are also some what owners of the organization so they should

be informed about the performance and change in policy of the organization. In case of AEC we can

see that stake holders are fully satisfied as dividend of the company increased from time to

time, as the company is earning profit.

Who are company’s stake holders?

Has the company been able to fulfill their objectives?

According to the data provided we can say that, yes the company been able to fulfill their

objectives. The objective of the company was to maximize the supply of power and fulfill the day to day raising demand of electricity and also to gain high revenues. By analyzing the data of given four years we can say that it has fulfilled its objective because the revenue and profit has continuously increased and it has also increased in the asset side also whereas the creditors has decreased.

What additional information that you may need to answer this

questionAs per the data provided we can see the Debtors are decreasing year on year.Decreasing Debtors can improve the cash flow of the company, at the same time somewhere company looses its client base.

Conclusion

After privatization, AEC is generating sufficient funds and earning profits. And debt of the firm

has decreased from( 2001 to 2004).And the PE ratio and CPI also increased.

As a whole, we can say that after privatization the company's performance has increased leading to high revenue generation and creating optimum

profit which results in regular and high distribution of dividends to its stakeholders.

Thank you