Ph.D .

Research Proposal

A Financial Statement analysis

of
Maharatna Companies.

Khamar Nisarg Ajaykumar

Nisarg.khamar3@gmail.com
Nisarg814@yahoo.com
Mo no:- 09974870511

Department of Commerce & Business Administration

Faculty of Commerce
Hemchandrachary North Gujarat University, Patan

 LITERATURE REVIEW :Rk Yadav, N Dabhade(2013) Extensive changes in the global economy have made it imperative
for the governments all over the world to improve the quality of their governance structures. The
Government of India has also introduced the New Public Management concepts in public
administration with emphasis on results or performance to improve the efficiency and
effectiveness of public services. This research aims to figure out the key variables that are having
strong influence on Performance management system with special reference to BHEL, Bhopal
(M.P.). Chi square test is applied in this paper to check the authenticity of data given by the
respondents. We are also going to study the PM process, awareness level and satisfaction level of
employees of BHEL and how the PM system affects the performance and career development of
employees.
Suprava Sahu (2014) in his article on CSR Activities of Maharatna Companies in India:
Analytical case based approach explained the Maharatna Companies CSR policies and the
activities taken up by them. He has concluded that the Companies should go beyond 2% mandatory
limit for the betterment of the Society.

 Public sector undertakings in India :A state-owned enterprise in India is called a public sector undertaking (PSU) or a public sector
enterprise. These companies are owned by the union government of India, or one of the many state or
territorial governments, or both. The company stock needs to be majority-owned by the government to
be a PSU. PSUs may be classified as Central Public Sector Enterprises (CPSEs), public sector banks
(PSBs) or State Level Public Enterprises (SLPEs).
CPSEs are companies in which the direct holding of the Central Government or other CPSEs is 51% or
more. They are administered by the Ministry of Heavy Industries and Public Enterprises.

History :When India achieved independence in 1947, India was primarily an agricultural country with a weak
industrial base. The national consensus was in favour of rapid industrialisation of the economy which
was seen as the key to economic development, improving living standards and economic sovereignty.
Building upon the Bombay Plan, which noted the requirement of government intervention and
regulation, the first Industrial Policy Resolution announced in 1948 laid down broad contours of the
strategy of industrial development. Subsequently, the Planning Commission was constituted in March
1950 and the Industrial (Development and Regulation) Act was enacted in 1951 with the objective of
empowering the government to take necessary steps to regulate industrial development.
Prime Minister Jawaharlal Nehru promoted an economic policy based on import substitution
industrialisation and advocated a mixed economy.
He believed that the establishment of basic and heavy industry was fundamental to the development
and modernisation of the Indian economy. India's second five year plan (195660) and the Industrial
Policy Resolution of 1956 emphasized the development of public sector enterprises to meet Nehru's
national industrialisation policy. Indian statistician Prasanta Chandra Mahalanobis was instrumental to
its formulation, which was subsequently termed the FeldmanMahalanobis model.
The major consideration for the setting up of PSUs was to accelerate the growth of core sectors of the
economy; to serve the equipment needs of strategically important sectors, and to generate employment

and income. A large number of "sick units" were taken over from the private sector. Additionally, Indira
Gandhi's government nationalised fourteen of India's largest private banks in 1969, and an additional
six in 1980. This government-led industrial policy, with corresponding restrictions on private
enterprise, was the dominant pattern of Indian economic development until the 1991 Indian economic
crisis. After the crisis, the government began disinvesting its ownership of several PSUs to raise capital
and privatise companies facing poor financial performance and low efficiency

Governance :Various PSUs have been awarded additional financial autonomy. These companies are "public sector
companies that have comparative advantages", giving them greater autonomy to compete in the global
market so as to "support [them] in their drive to become global giants".
Financial autonomy was initially awarded to nine PSUs as Navratna status in 1997.
Originally, the term Navaratna meant a talisman composed of nine precious gems. Later, this term was
adopted in the courts of Gupta emperor Vikramaditya and Mughal emperor Akbar, as the collective
name for nine extraordinary courtiers at their respective courts.
In 2010, the government established the higher Maharatna category, which raises a company's
investment ceiling from Rs. 1,000 crore to Rs. 5,000 crore.
The Maharatna firms can now decide on investments of up to 15 per cent of their net worth in a project
while the Navaratna companies could invest up to Rs 1,000 crore without explicit government
approval. Two categories of "Miniratnas" afford less extensive financial autonomy.

Maharatna

Navratna

A score of 60 (out of 100),

based on six parameters which
include net profit, net worth,
total manpower cost, total cost
of
production,
cost
of
OR
services, PBDIT (Profit Before
Depreciation, Interest and
Average annual Net Taxes), capital employed, etc.,
worth of Rs. 10,000 AND
crore for 3 years,
A company must first be a
and
have
4
OR Average annual Miniratna
independent
directors
on
its
Turnover
of
Rs.
20,000 crore for 3 board before it can be made a
Navratna.
years
Three years with an
average annual net
profit of over Rs.
2500 crore,

Eligibility

Rs. 1,000 crore - Rs.

5,000 crore, or free to
Benefits for
decide on investments
investment
up to 15% of their net
worth in a project

up to Rs. 1,000 crore or 15%

of their net worth on a single
project or 30% of their net
worth in the whole year (not
exceeding Rs. 1,000 crores).

Guidelines for awarding Maharatna :Status are as follow:

Miniratna
Category-I

Miniratna
Category-II

Have
made
profits
continuously for
the last three
years or earned
a net profit of
Rs. 30 crore or
more in one of
the three years

Have made profits

continuously
for
the last three years
and should have a
positive net worth.

up to Rs. 500
crore or equal to
their net worth,
whichever
is
lower

. up to Rs. 300
crore or up to 50%
of their net worth,
whichever is lower

Eligible Company of Maharatna companies:

The eligibility criteria laid down by the Government for grant of Maharatna, status to
Central Public Sector Enterprises (CPSEs) are following:

Criteria for grant of Maharatna status :The CPSEs fulfilling the following criteria are eligible to be considered for grant of Maharatna
status.
(i)

Having Navratna status.

(ii) Listed on Indian stock exchange with minimum prescribed public shareholding under
SEBI regulations.
(iii) Average annual turnover of more than Rs. 25,000 crore, during the last 3 years.
(iv) Average annual net worth of more than Rs. 15,000 crore, during the last 3 years.
(v) Average annual net profit after tax of more than Rs. 5,000 crore, during the last 3
(vi) Should have significant global presence/international operations.

years.

 List of Maharatna Companies in India

1. Bharat Heavy Electricals Ltd. (BHEL)
Bharat Heavy Electricals Limited (BHEL), declare by Government of India, is a power plant equipment
manufacture and operates as engineering and assembling organization situated in New Delhi, India. It
was established in 1964; BHEL is India's biggest engineering and assembling organization of its kind.
The company has been acquiring benefits consistently since 1971-72 and paying profits uninterruptedly
since 1976-77. BHEL makes more than 180 items under 30 major product groups and panders to center
divisions of the Indian Economy.
The Company is occupied with the outline, engineering, assembling, construction, testing,
commissioning and servicing of a scope of products and services for the center areas of the economy,
including force, transmission, industry, transportation, renewable energy, oil and gas, and defence.
BHEL is a producer of industrial systems and products for industries, for example, metallurgical,
mining, cement, paper, fertilizers, refineries and petro-chemicals, among others. Products and Systems
supplied by BHEL incorporate captive power plants, centrifugal compressors, oil rigs, drive turbines,
industrial boilers and auxiliaries, waste heat recovery boilers, gas turbines, pumps, heat exchangers,
electrical machines, valves, heavy castings and forgings, electrostatic precipitators, consistent and steel
tubes.

2. Coal India Limited (CIL)

Coal India Limited (CIL) is an Indian state-controlled coal mining organization headquartered in
Kolkata, West Bengal, India. Coal India Limited (CIL) as a composed state possessed coal mining
corporate started to exist in November 1975 with the government taking over private coal mines. With
a moderate production of 79 Million Tons (MTs) at the year of its beginning CIL today is the single
biggest coal maker in the India. Operating through 81 mining territories CIL is a pinnacle body with 7
wholly owned coal producing subsidiaries and 1 mine arranging and Consultancy Company spread
more than 8 provincial states of India.
CIL likewise fully owns a mining company in Mozambique christened as 'Coal India Africana
Limitada'. CIL likewise deals with 200 different infrastructure like workshops, hospital facilities and so
on. Further, it likewise possesses 26 technical & management training organizations and 102 Vocational
Training Institutes Centers. Indian Institute of Coal Management (IICM) as a state-of-the-art
Management Training 'Centre of Excellence' - the biggest Corporate Training Institute in India operates under CIL and conduct multi disciplinary management advancement programs.

3. Gas Authority of India Limited (GAIL)

GAIL (India) Ltd., consolidated in the year 1984, is a Large Cap company (having a business sector top
of Rs 47460.08 Cr.) operating in Petroleum sector. GAIL has been deliberate with the Maharatna status
on 1 Feb 2013, by the Government of India. Just six other Public Sector Enterprises (PSEs) appreciate

this coveted status amongst every central CPSEs. GAIL has been registered in the 131st position among
India's Most Trusted brands as indicated by the Brand Trust Report 2014, a study directed by Trust
Research Advisory.
GAIL (India) Ltd is India's leader Natural Gas Company, integrate all parts of the Natural Gas quality
chain (counting Exploration & Production, Processing, Transmission, Distribution and Marketing) and
its related services. The company is a coordinated vitality company along the Natural Gas value chain
with global footprints. They have interest in the matter of natural gas, LPG, Liquid Hydrocarbons and
Petrochemicals. They have likewise differentiated into Exploration & Production, City Gas Distribution
and are regularly expanding their overseas presence.

4. Indian Oil Corporation Limited (IOC)

Indian Oil Corporation (IOC), India's leader national oil company and downstream petroleum major,
was developed on June 30, 1959 as Indian Oil Company. The company was renamed as Indian Oil
Corporation on September 1, 1964 after the merger of Indian Refineries (built up 1958) with it. The
company is the main Indian corporate in the Fortune 'Global 500' posting, positioned at the 98th
position in the year 2011.
Indian Oil Corporation (Indian Oil) is India's biggest commercial enterprise, with a sales turnover of
Rs. 4, 50,756 crores (US$ 73.7 billion) and profits of Rs. 5,273 crores for the year 2014-15. It is the
main Indian corporate in Fortune's prestigious 'Global 500' listing of the worlds largest corporate;
locate at the 96th position for the year 2014.
The company's operations incorporate refineries, pipelines and marketing. Their provision of brands
incorporates Indane LP Gas, SERVO oils, XTRAPREMIUM petrol and XTRAMILE diesel and Propel
Petrochemicals. In exploration and production, Indian Oil's domestic portfolio include 11 oil and gas
blocks and two coal bed methane blocks while the overseas portfolio comprises of 10 pieces spread
across Libya, Iran, Gabon, Nigeria, Timor-Leste, Yemen and Venezuela.

5. National Thermal Power Corporation Limited (NTPC)

NTPC Limited (otherwise called National Thermal Power Corporation Limited) is an Indian Central
Public Sector Undertaking (CPSU) under the Ministry of Power, Government of India, engaged with
the matter of era of power and allied actions. It is an company incorporated under the Companies Act
1956 and an "Government Company" within the meaning of the act. It was established by Government
of India in 1975, which now holds 70% of its value shares on 13 May 2015 (after divestment of its
stake in 2004, 2010, 2013, and 2015).
In May 2010, NTPC was presented Maharatna status by the Union Government of India. It is locate
424th in the Forbes Global 2000 for 2014. NTPC Ltd is the largest power generating company in India
both regarding installed capacity and generated output. The company is engaged in the business of
generation and sale of bulk power. The company has two allocation: generation and various business.

Their different business incorporates giving consultancy, project management and guidance, oil and gas
exploration, and coal mining. The company provides 28.6% of the corporate power generation of India.
They were positioned 317th in the '2009, Forbes Global 2000' locate of the World's greatest companies.

6. Oil & Natural Gas Corporation Limited (ONGC)

Oil and Natural Gas Corporation Limited (ONGC) is an Indian multinational oil and gas company
headquartered in Dehradun, India. It was established on 14 August 1956 by Government of India,
which right now holds a 68.94% value stake. It is included in exploring for and exploiting
hydrocarbons in 26 sedimentary bowls of India acquire and works more than 11,000 kilometers of
pipelines in the country.
Oil and Natural Gas Corporation Ltd. is an India-based oil exploration and production company. The
Company is the manufacture of crude oil and natural gas in India. The company has sorted out into the
geological and business fragments. The geological section incorporates operations in two allocations: In
India, which incorporate inshore and offshore, and outside India. The business fragment incorporates
exploration & Production and refining activities.
As of Dec 2013, the Company made 14 oil and gas discoveries in domestic fields (conducted by
ONGC). Out of 14, 7 discoveries are in offshore and 7 in onshore; 6 discoveries were made in the new
prospects; whereas 8 were new pool discoveries. Five discoveries were made in NELP blocks and 9 in
selection blocks. Out of the discoveries, 2 are oil bearing, 9 are gas bearing and 3 are both oil & gas
bearing. The Companys wholly owned addendum includes ONGC Videsh Limited and Mangalore
Refinery and Petrochemicals Ltd. (MRPL).

7. Steel Authority of India Limited (SAIL)

Steel Authority of India was established on January 19, 1954 and is headquartered in New Delhi, India.
Steel Authority of India Limited (SAIL) is one of the biggest state-owned steel making company
situated in New Delhi, India and one of the top steel manufacture in world. Steel Authority of India Ltd.
manufactures and markets steel and steel products.
The company produces basic and special steel and its allied products for the domestic construction,
engineering, power, railway, automotive and defense Industries.
It likewise producers and sells a wide scope of steel products, which incorporates hot and cold rolled
sheets and coils, galvanized sheets, electrical sheets, structurals, railroad items, plates, bars and poles,
stainless steel and other compound steels.

Name of the company

Bharat Heavy Electricals Limited
Coal India Limited
GAIL (India) Limited
Indian Oil Corporation Limited
NTPC Limite
Oil & Natural Gas Corporation Limited
Steel Authority of India Limited

Year of Establishment
JAN, 1964
01.11.1975
16.08.1984
01.09.1964
07.11.1975
14.08.1956
24.01.1973

Date of Maharatna status

22.07.1997
24.10.2008
11.11.1997
22.07.1997
22.07.1997
22.07.1997
22.07.1997

ist of Maharatna Comapies and its year of establishment & Maharatna Status:-

 OBJECTIVES OF THE STUDY :Financial statement is helpful in assessing the financial position and profitability of the concern.
Keeping in the view of accounting ratio the accountant should calculate the ratio in appropriate form as
early as possible for presentation for management for managerial decisions.
Following are the main objectives of analysis of financial statements: 1.

To evaluate the business in terms of profit in present and future.

2.

To evaluate the efficiency of various parts or department of the business.

3.

To evaluate the short term and long term solvency of business for Distributing profit to the trade
creditor and debenture holders.

4.

To evaluate the chances of growth of business in the future by preparing Budgets and forecasting.

5.

To evaluate the operational efficiency of one firm with another firm by Study the comparative
Statements.

6.

To evaluate the financial and economical stability of the business.

7.

To evaluate the actual meaning and consequence of financial data.

8.

To evaluate the long-term liquidity of the fund of the business.

9. To evaluate the financial strengths and weakness of the Maharatna companies.

 Research Methodology : SCOPE OF THE STUDY:

The study has great significance and provides benefits to various parties who directly or indirectly
interact with the company.
1. It is beneficial to the top management of the all Maharatna companies by providing crystal clear
picture regarding to the important financial aspects of the Maharatna compines.
2. The investors who are interested in investing in the Maharatna companies shares will also get
benefit by going Through the study and can easily take a decision whether to invest in it.

RESEARCH APPROACH AND KIND OF ANALYSIS:1. The research approach is descriptive observational research.
2. The observed secondary data will be used for financial analysis purpose.
3. In the course of analysis, various accounting and financial techniques will be used. Likewise
Trend Analysis, Comparative Analysis, Ratio Analysis etc.
4. The primary aim is to investigate the impact on Maharatna companys corporate profitability and
efficiency.

DATA COLLECTION
The study is mainly based on Secondary data. Secondary data Will be taken CMIE , Prowess
Database and published annual reports of the Maharatna companies. In addition to that, Financial
Literature and published articles on the related aspects will also be considered.
The secondary data is basically for financial analysis purpose. Other information related to the
industry will be collected from the Economic Times, Financial Express, Business Standard ,RBI
Bulletin, Other Periodicals, Journals and other various documents of the companies.

LIMITATIONS OF THE STUDY:1. The information used is primarily from historical reports available to the public and the same
Doesnt indicate the current situation of the firm.
2. Detailed analysis could not be carried for the project work because of limited time span.
3. Since financial matters are sensitive in nature the same could not be acquired easily.

Bharat
Heavy
Electricals
JAN,
1964
Limited
01.02.2013
22.07.1997
15
years
7
months
50156
6615
13.19
Coal
India
Limited
01.11.1975
11.04.2011
24.10.2008
2
years
6
months
88281
17356
19.66
GAIL
(India)
Limited
16.08.1984
11.11.1997
3
47333
4022
8.50
Indian
Oil
Corporation
01.09.1964
Limited
447096
5005.17
1.12
NTPC
Limited
07.11.1975
67930.81
12619
18.58
Oil
Corporation
&
Natural
Gas
14.08.1956
19.05.2010
22.07.1997
12
years
10
months
82552
20926
25.35
Steel
Authority
of
India
24.01.1973
49350
2170.35
Name
of
the
CPSEs
Year
of
Establishment
status
Date
of
status
Time
Maharatna
taken
status
to
get
from
Turnover
Navaratna
(201213)
in
crores
Profit
Tax(2012-13)
After
in
%
crores
Profit
Bharat
(2012-13)
Heavy
Electricals
JAN,
1964
Limited
7
50156
6615
13.19
Coal
India
Limited
01.11.1975
11.04.2011
24.10.2008
2
years
6
months
88281
17356
19.66
GAIL
(India)
Limited
16.08.1984
01.02.2013
11.11.1997
15
years
3
months
47333
4022
8.50
Indian
Oil
Corporation
01.09.1964
447096
5005.17
1.12
NTPC
Limited
07.11.1975
67930.81
12619
18.58
Oil
Corporation
&
Natural
Gas
14.08.1956
82552
20926
25.35
Steel
Limited
Authority
of
India
24.01.1973
19.05.2010
22.07.1997
12
10
months
49350
2170.35
Name
4.40
of
the
CPSEs
Year
of
Establishment
Maharatna
Date
status
of
Time
taken
status
to
get
Navaratna
status
from
Turnover
13)
(2012Profit
in
crores
After
in
Tax(2012-13)
crores
%
(2012-13)
Profit
Bharat
Electricals
Heavy
Limited
JAN,
1964
7
50156
6615
13.19
Coal
India
Limited
01.11.1975
11.04.2011
24.10.2008
2
years
6
months
88281
17356
19.66
GAIL
(India)
Limited
16.08.1984
01.02.2013
11.11.1997
15
3
months
47333
4022
8.50
Indian
Limited
Oil
Corporation
01.09.1964
19.05.2010
22.07.1997
12
years
10
months
447096
5005.17
1.12
NTPC
Limited
07.11.1975
67930.81
12619
18.58
Oil
&
Natural
Gas
Corporation
14.08.1956
82552
20926
25.35
Steel
Authority
of
India
24.01.1973
49350
2170.35
4.40
Name
of
the
CPSEs
Year
of
Establishment
status
Date
of
status
Time
Maharatna
taken
status
to
get
from
Turnover
Navaratna
(201213)
in
crores
Profit
Tax(2012-13)
After
in
%
crores
Profit
Bharat
(2012-13)
Heavy
Electricals
JAN,
1964
Limited
01.02.2013
22.07.1997
15
years
7
months
50156
6615
13.19
Coal
India
Limited
01.11.1975
11.04.2011
24.10.2008
2
years
6
months
88281
17356
19.66
GAIL
(India)
Limited
16.08.1984
11.11.1997
3
47333
4022
8.50
Indian
Oil
Corporation
01.09.1964
Limited
447096
5005.17
1.12
NTPC
Limited
07.11.1975
12
10
months
67930.81
12619
18.58
Oil
Corporation
&
Natural
Gas
14.08.1956
19.05.2010
82552
20926
25.35
Steel
Authority
of
India
24.01.1973
49350
2170.35
Name
4.40
of
the
CPSEs
Year
of
Establishment
Date
status
of
Time
taken
status
to
get
Maharatna
Navaratna
status
from
Turnover
13)
(2012Profit
in
crores
After
in
Tax(2012-13)
crores
%
(2012-13)
Profit
Bharat
Electricals
Heavy
Limited
JAN,
1964
01.02.2013
22.07.1997
15
years
7
months
50156
6615
13.19
Coal
India
Limited
01.11.1975
11.04.2011
24.10.2008
2
years
6
months
88281
17356
19.66
GAIL
(India)
Limited
16.08.1984
11.11.1997
3
47333
4022
8.50
Indian
Oil
Corporation
01.09.1964
447096
5005.17
1.12
NTPC
Limited
07.11.1975
67930.81
12619
18.58
Oil
&
Natural
Gas
Corporation
14.08.1956
82552
20926
25.35
Steel
Authority
of
India
24.01.1973
Limited
19.05.2010
22.07.1997
12
years
10
months
49350
2170.35
4.40
MAHARATNA
COMPANIES
Name
of
the
CPSEs
Year
of
Establishment
status
Date
of
status
Time
Maharatna
taken
status
to
get
from
Turnover
Navaratna
(201213)
in
crores
Profit
Tax(2012-13)
After
in
%
crores
Profit
Bharat
(2012-13)
Heavy
Electricals
JAN,
1964
Limited
7
50156
6615
13.19
Coal
India
Limited
01.11.1975
11.04.2011
24.10.2008
2
years
6
months
88281
17356
19.66
GAIL
(India)
Limited
16.08.1984
01.02.2013
11.11.1997
15
3
months
47333
4022
8.50
Indian
Oil
Corporation
01.09.1964
Limited
447096
5005.17
1.12
NTPC
Limited
07.11.1975
67930.81
12619
18.58
Oil
Corporation
&
Natural
Gas
14.08.1956
82552
20926
25.35
Steel
Authority
of
India
24.01.1973
19.05.2010
12
10
months
49350
2170.35
Bharat
4.40
Heavy
Electricals
JAN,
1964
Limited
01.02.2013
22.07.1997
15
years
7
months
50156
6615
13.19
Coal
India
Limited
01.11.1975
11.04.2011
24.10.2008
2
years
610
88281
17356
19.66
GAIL
Limited
16.08.1984
11.11.1997
3months
47333
4022
8.50
Indian
Oil
Corporation
01.09.1964
Limited
447096
5005.17
1.12
NTPC
Limited
07.11.1975
67930.81
12619
18.58
Oil
Corporation
& (India)
Natural
Gas
14.08.1956
19.05.2010
22.07.1997
12
years
months
82552
20926
25.35
Steel
Authority
of India
24.01.1973
49350
2170.3