PROJECT REPORT ON INDUSTRIAL RELATION AT INDIAN RARE EARTHS LIMITED,OSCOM CHATRAPUR

A project reportOnCORPORATE DIVIDEND POLICY"

Schedule of the presentationIntroduction Objective, Research Methodology & Scope of StudyCompany Profile of Bhubaneswar stock exchangeData analysis & interpretation Findings ConclusionFuture Projection of StockSuggestions and Recommendations

IntroductionDividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business, or it can be paid to the shareholders as a dividend. Many corporations retain a portion of their earnings and pay the remainder as a dividend.For a joint stock company, a dividend is allocated as a fixed amount per share. Therefore, a shareholder receives a dividend in proportion to their shareholding

Objective, Research Methodology & Scope of Study

ObjectiveTo study the impact of dividend on the price and volume of business in the stock exchange in respect of particular stock before and after such dividend is announced.To check whether abnormality exists in the price and volume of the share as the dividend is announced.To analyze the bearing of such abnormality (if it does exist) on the market capitalization and volumes traded on the stock market a month before the Announcement Date and a month after the ex-dividend date for all the scripts under the study.

Research Methodology & Scope of StudyResearch Design: Exploratory Research Sampling:Sampling Technique : Judgmental samplingSampling Unit : One company of NSE-50Sampling Size : 5 companies from NSE-50 index Data Sources: Secondary DataInternet SourcesBusiness JournalsResearch papers

ScopeTo do a relative analysis between NSE-50 index and share prices of selected companies.Limited to NSE-50 companies only.Study of the annual reports of different sector companiesFor each company, annual reports are taken from the year 2012 to 2015 (2012-15).The scope of the study of report is limited to the establishment of Dividend Payout Pattern and the factors necessary for such establishmentFollowing ratios have been worked out:Scale of firm's operation by taking Natural Log of Net SalesDividend YieldDividend Payout Ratio

Company Profile of Bhubaneswar stock exchangeBhubaneswar Stock Exchange Association Ltd, (BhSE) is a stock exchange located in Bhubaneswar, Odisha, India. It was incorporated on 17 April 1989, and granted recognition to the Stock Exchange on 5 June 1989, by the Ministry of Finance, Govt. of India. It is one among the 21 odd regional stock exchanges in India.Organisation StructureThe affairs of the BhSE are managed by a Board of Directors consisting 9 Directors from the following categories:[2]4 Public Interest Directors4 Shareholder Directors1 Director in the capacity of Chief Executive Officer (BhSE)

COMPANY 1

Name: Tata Consultancy Services Limited (TCS Limited)Type Public companyTraded as BSE: 532540 NSE:TCS,Industry IT services, IT consultingFounded 1968Headquarters Mumbai, Maharashtra, IndiaKey people N. Chandrasekaran (CEO & MD)Services IT, business consulting and outsourcing servicesNet ProfitIncrease 19,256.96 cr.(2014-2015)Employees 319,000+ (April 2015)Website www.tcs.comCompany profile

Year ended as at 31st MarchTotal Paid up Capital(In Cr)Net Profit after Depreciation and Tax(In Cr)Dividend Paid/ Proposed(In Cr)Retain earning carried forward to Balance Sheet(In Cr)Total Reserves & Surplus(In Cr)2015195.8719,256.9615,473.873,783.0945,220.572014195.8718,474.926,267.3312,178.8343,856.012013295.7212,786.344,305.888,461.4632,266.532012295.7210,975.984,893.046060.9424,560.91

DPS(D/N)EPS(In RS)PAY OUT RATIO7998.3180.353294.1733.982265.2333.722555.9744.66

Graphical Analysis:

Abnormal Return (Volume):

NoAD-30 TO AD-1AD-10 TO AD-1ADAD+1 TO ED-1EDED+1 TO ED+10ED+1 TO ED+301CUM. AB8966576844701,608,7001,405,7341,126,3001,063,16010078272DAYS30.0010.001.0035.001.0010.0030.003AVE.DAILY AB (1/2)29888.56684471,608,70040163.851,126,30010631633594.234AVE.VOL.430487.15AB/AVE (3/4)0.070.153.730.092.610.240.08

COMPANY 2

Name: Bajaj Auto LimitedType Public companyTraded as BSE: 532977NSE:BAJAJ-AUTOIndustry Automobile Founded 1930Headquarters Pune, IndiaKey people Rahul Bajaj (Chairman), Rajiv Bajaj (MD)Products Motorcycles, three-wheeler vehicles and carsNet ProfitDecrease 2,813.74 cr.(2014-2015)Employees 9,119 + (April 2015)Website www.bajajauto.comCompany profile

Year ended as at 31st MarchTotal Paid up Capital(In Cr)Net Profit after Depreciation and Tax(In Cr)Dividend Paid/ Proposed(In Cr)Retain earning carried forward to Balance Sheet(In Cr)Total Reserves & Surplus(In Cr)DPS(D/N)EPS(In RS)PAY OUT RATIO2015289.372,813.741,446.841,366.910,402.785097.2451.412014289.373,243.321,446.841,796.849,318.6550112.0844.612013289.373,043.571,302.151,741.427,612.5845105.1842.782012289.373,004.051,302.151,701.95,751.7045103.8143.35

Graphical AnalysisEPS VS Pay out Ratio

Abnormal Return (Volume):

NoAD-30 TO AD-1AD-10 TO AD-1ADAD+1 TO ED-1EDED+1 TO ED+10ED+1 TO4-8-20151CUM. AB396700.43127462610990400616.9239855430688.8373880.72DAYS30.0010.001.0034.001.0010.0018.003AVE.DAILY AB (1/2)13223.3431274.6261099011782.8523985543068.8820771.154AVE.VOL.424423.75AB/AVE (3/4)0.030.076.150.030.560.10.04

COMPANY 3

Name: Zee Entertainment Enterprises Ltd.Type Public companyIndustry Mass mediaFounded October 1992Headquarters Mumbai, Maharashtra, IndiaKey people Subhash Chandra (Chairman), Punit Goenka (MD & CEO)Products Broadcasting, publishing, cable, movie productionNet ProfitIncrease 831.80 cr.(2014-15) Employees 1,826+ (April 2015)Website www.zeetelevision.comCompany profile

Year ended as at31st MarchTotal Paid up Capital(In Cr)Net Profit after Depreciation and Tax(In Cr)Dividend Paid/ Proposed(In Cr)Retain earning carried forward to Balance Sheet(In Cr)Total Reserves & Surplus(In Cr)DPS(D/N)EPS(In RS)PAY OUT RATIO20152,115.20831.80216.10494.62,472.302.257.4030.420142,113.00772.30192.10571.61,855.102.07.9525.15201395.40640.70191.90448.83,257.402.06.7229.76201295.90489.70143.80345.92,899.201.55.1129.35

Graphical AnalysisEPS VS Pay out Ratio

Abnormal Return (Volume):

NoAD-30 TO AD-1AD-10 TO AD-1ADAD+1 TO ED-1EDED+1 TO ED+10ED+1 TO 4-8-20151CUM. AB3065420530022011,374,30023084971,249,000258569023103392DAYS30.0010.001.0053.001.0010.0018.003AVE.DAILY AB (1/2)102180.665,300,2211,374,300678971,249,0002585690128352.164AVE.VOL.25845705AB/AVE (3/4)0.040.204.40.030.510.05

Company -4

Company profile

Name: Sesa Sterlite a Vedanta companyType Public companyTraded as BSE:500295NSE:SESAGOA ,NYSE:SSLTsIndustry MiningFounded 1954Headquarters Goa, Karnataka, Odisha - IndiaKey people Anil Agarwal (Chairman Emiritus) Navin Agarwal(Chairman)Tom Albanese (Chief Executive Officer) D.D. Jalan(CFO)Products Zinc Lead Oil and Gas Iron ore Aluminum Copper Gold and SilverNet ProfitIncrease 1,927.20 cr. (2014-15)Employees Approx. 5,100 (April 2015)Website www.sesasterlite.com

Year ended as at 31st MarchTotal Paid up Capital(In Cr)Net Profit after Depreciation and Tax(In Cr)Dividend Paid/ Proposed(In Cr)Retain earning carried forward to Balance Sheet(In Cr)Total Reserves & Surplus(In Cr)DPS(D/N)EPS(In RS)PAY OUT RATIO2015296.501,927.201,215.60711.633,761.374.16.5063.072014296.501,076.09963.58112.5133,382.323.253.6389.53201386.91120.778.69112.0812,936.880.101.397.19201286.911,679.94347.641332.312,826.28419.3320.69

Graphical AnalysisEPS VS Pay out Ratio

Abnormal Return (Volume):

NoAD-30 TO AD-1AD-10 TO AD-1ADAD+1 TO ED-1EDED+1 TO ED+10ED+1 TO 4-8-20151CUM. AB4511774691064681071649609295858932793707165674882DAYS30.0010.001.0046.001.0010.0021.003AVE.DAILY AB (1/2)15039.23469106.46810716107846.285858932793707.1312737.524AVE.VOL.20525845AB/AVE (3/4)0.0070.223.320.0532.350.40.15

Company -5

Company profileName: State Bank of IndiaType Public companyTraded as BSE:500112NSE:SBIN,Industry Banking, Financial ServicesFounded 27 January 1921, Imperial Bank of India 1 July 1955, State Bank of India 2 June 1956, nationalization Headquarters Mumbai, Maharashtra, IndiaKey people Arundhati Bhattacharya (Chairperson)Products consumer banking, corporate banking, finance and insurance, investment banking, mortgage loans, private banking, private equity, savings, Securities, asset management, wealth management, Credit cards,Net ProfitIncrease 13,101.57 cr (2014-15)Employees 222,033 + (April 2015)Website www.sbi.co.in

Year ended as at 31st MarchTotal Paid up Capital(In Cr)Net Profit after Depreciation and Tax(In Cr)Dividend Paid/ Proposed(In Cr)Retain earning carried forward to Balance Sheet(In Cr)Total Reserves & Surplus(In Cr)DPS(D/N)EPS(In RS)PAY OUT RATIO2015746.5713,101.572,557.2810544.29127,691.653.517.5519.942014746.5710,891.172,239.718651.46117,535.6830145.8820.562013684.0314,104.982,838.7411266.2498,199.6541.5206.2020.122012671.0411,707.292,348.669358.6383,280.1635174.4620.06

Graphical AnalysisEPS VS Pay out Ratio

Abnormal Return (Volume)NoAD-30 TO AD-1AD-10 TO AD-1ADAD+1 TO ED-1EDED+1 TO ED+10ED+1 TO ED+301CUM. AB138422018492709,541,20018899001,601,9001821950135731732DAYS30.0010.001.003.001.0010.0030.003AVE.DAILY AB (1/2)46140.661849279,541,200629966.661,601,9001821950452439.14AVE.VOL.20397895AB/AVE (3/4)0.020.14.70.310.80.90.22

Findings

There is no fixed pattern in the distribution of Dividend of the Industries. But pattern could be worked out for different Companies. For Shareholders: From the Shareholders point of view the company which is giving more Dividend is good for the shareholders. So companies should try to increase their DPS (dividend per share) to woo the shareholders to invest more and more in them.

For Organizations: The companies which have higher EPS (earning per share) is good because higher the EPS higher is the PAT. So companies should try to increase their PAT so that their EPS will increase.Regarding Payout Ratio: From the analysis of all the five companies we found that their Payout Ratios are in the range of 19 -35 or more which is considered a very good ratio. The companies are distributed their almost 1/3rd as their Dividend and rest are retained as surplus.

CONCLUSIONS

The information about the corporate dividend policies brings abnormality in the market and market does perform efficiently.The movements in stock prices and trading volume are influenced by the flow of new information into the market.The dividend effect are reflected into the market price of the company within the time period of few days before the announce date to few days after the ex-dividend date.Insider information plays vital role in the fluctuations of stock price and trading volume of and company which has declared dividend.We can conclude from this project that there is linear relationship between dividend decision and market price of the company for a limited duration. Thereafter the markets start behaving efficiently and absorb all the available information in the market.

Future Projection of Stock

YearsTotal Paid up Capital(In Cr) % change of Paid up CapitalTotalIncome(In Cr)% change ofincomeTotalExpenditure(In Cr)% changeOf expenditure Net profit( In Cr)%change of net profitReserve surplus( In Cr)% change of Reserve surplus2011295.7229,769.2720,511.017,569.9919,283.772012295.72041,543.4639.5527,472.5633.9410,975.9844.9924,560.9127.362013295.72050,656.5321.9334,119.8724.1912,786.3416.4932,266.5331.372014195.87-33.7667,787.7133.8143,139.2826.4318,474.9244.4843,856.0135.912015195.87078,573.0215.9152,549.7121.8119,256.964.2345,220.573.11

In FY-2015 Reduced the corporate tax so it is easy for it company to growth in the market and extended business.TCS want to extend their business all over the world so Announces Global Strategic Partnership with FICO a leading analytics software company, to enable clients to purchase and implement FICO solutions through TCS.Also Bank of Bhutan selects TCS for Core Banking to power next generation banking services

Expected TCS Growth

Bajaj Auto Limited

YearsTotal Paid up Capital(In Cr)% change of Paid up CapitalIncome(In Cr)% change ofincomeExpenditure(In Cr)% changeOf expenditureNet profit(In Cr)%change of net profitReserve surplus(In Cr)% change of Reserve surplus2011289.3717,782.0813,309.803,339.734,620.852012289.37020,097.170.1315,903.1419.483,004.05-10.055,751.7024.472013289.37020,768.740.0316,338.002.733,043.571.317,612.5832.352014289.37020,874.820.00516,062.67-1.663,243.326.59,318.6522.412015289.37021,911.700.0517,553.029.272,813.74-13.2410,402.7811.63

company has decided to introduce new bike like Bajaj Platina 100 ES, Bajaj CT 100 (Re introduced), Pulsar RS 200, Pulsar AS200 & AS150, Pulsar NS150 to expand their business. Bajaj CT 100 has own reputation is a economic bike.The automobile sector has been chosen as a top priority area under the Make in India programme. It targets to make India the worlds third largest market for automobiles by 2016 .so this effect will definitely affect to the Company to expand the business in domestic and international.Central Bank of India signed Memorandum of Understanding (MOU) with Bajaj Auto Limited to provide finance in less interest for customers who intend to buy the Bajaj's Auto Rickshaws .

Andhra Bank and Bajaj Auto have signed a memorandum of understanding (MoU) for a strategic tie-up for financing of Bajaj 2-wheelers being purchased by rural farmers under a scheme called `Bajaj Kisan Chakra'. Maharashtra Govt. nnouncements by auto majors, all aimed at expanding their existing plants in the state., Bajaj Auto also invest a Rs 4,000 crore to expand their business.it will definitely grow in near future.

Expected Bajaj Auto.Growth:

State Bank of India(SBI)

YearTotal Paid up Capital(In Cr)% change of Paid up CapitalTotal Income(In Cr)% change ofincomeTotal Expenditure(In Cr)% changeOf expenditureNet profit(In Cr)%change of net profitReserve surplus(In Cr)% change of Reserve surplus2011635.0096,324.788,954.457,370.3564,351.042012671.045.67120,872.9025.48109,165.6122.7211,707.2958.8483,280.1629.412013684.031.93135,691.9412.26121,586.9611.3714,104.9820.4898,199.6517.912014746.579.14154,903.7214.15144,012.5518.4410,891.17-22.78117,535.6819.692015746.570174,972.9612.95161,871.3912.413,101.5720.29127,691.658.64

Under the Pradhan Mantri Jan Dhan Yojana of financial inclusion launched by Government, SBI held 11,300 camps and opened over 30 lakhs accounts by September, which included 21.16 lakh accounts in rural areas and 8.8 lakh accounts in urban areas. SBI agreed with 26 countries in worldwide to provide finance for development of IT.SBI has signed a deal with Amazon, according to which, they are going to develop high end payment and commerce solutions for their common customers and small scale businesses.SBI is all set to sign such MoUs with leading B2B ecommerce platform Snapdeal. from this ecommerce company will get more profit from it because Ecommerce has grown up day to day.SBI has alsoconfirmed their partnership with Paypal.Indian Army has signed a Memorandum of Understanding (MoU) with the State Bank of India on the Defence Salary Package it is the another opportunity for company to grow up.

Expected SBI Growth

Suggestions and Recommendations

The dividend news in the market creates abnormality in the return and volume of the script, so that investor should not treat that markets are always efficient.Investors should behave rationally while taking their decision regarding investment in any script. They should wait for the abnormality in the script to be removed before investing in it.For long term investor, dividend decision of a company should not be a major influencing factor in their investment decision.Investors should consider the fundamentals of the company before investing in it and should consider the actual performance of the company over the period of time.A huge positive abnormal return before the announce date of dividend indicates the sins of leakage of any insider information. So the investor must check room for such insider information before investing in that company. This will help them to protect themselves from future losses

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