COMPANY PROFILE

GEOJIT PNB PARIBAS

The company started in 1987 by C.J George and Mr.

Ranajit kanjilal and became the Public Limited company by the name Geojit securities LTD.
GEOJIT PNB PARIBAS today is a leading retail

financial services company in India.

BOARD OF DIRECTORS

Mr. A. P. Kurian Non - Executive & Independent Chairman Mr. C. J. George Managing Director & Chief Promoter Mr.Alkeshkumar Sharma Non - Executive & Independent Director Mr. Mahesh Vyas Non - Executive & Independent Director Mr. Rakesh Jhunjhunwala Non - Executive Director Mr. Ramanathan Bupathy Non - Executive & Independent Director Mr. Punnoose George Non - Executive Director Mr. Olivier Le Grand Non - Executive Director Mr. Jean Christophe Gougeon Non - Executive Director

PRODUCTS
EQUITY
DERIVATIVES MUTUAL FUNDS

COMMODITIES
INSURANCE MCX MCX-SX

VISION AND MISSION STATEMENT

Vision Their vision is to be the most respected company in the financial services space. Mission Establishing a nation-wide trading facility for equities, debt instruments and hybrids, Ensuring equal access to investors all over the country through an appropriate communication network, Providing a fair, efficient and transparent securities market to investors using electronic trading systems, Enabling shorter settlement cycles and book entry settlements systems, and meeting the current international standards of securities market.

INTRODUCTION TO THE TOPIC

RELATIONSHIP OF ECONOMIC VALUE ADDED & RETURN ON CAPITAL EMPLOYED WITH RESPECT TO SHARE PRICE.

Economic value added is the performance metric that

calculates the value creation of the shareholders investment. Economic value added is the method to determine whether the firm is earning the higher rate of return on the entire funds at which the cost of funds are measured in terms of weighted average cost of capital. Measures of performance Performance measurement metric is categorized into: Traditional measures of performance indicator. Modern method of Performance indicators

TRADITIONAL MEASURES
Earning before interest and tax
Return on assets Return on equity

Return on investment
Net profit ratio Earning per share Return on capital employed

MODERN MEASURES
Economic value added
Market value added Cash value added

REVIEW OF LITRATURE
Baatz (1994), commented that it is but one of many tools

being developed to account for the capital invested in an organization by the true owners of that organization - the shareholders. Dodd and Chen (1996,) observed that EVA is the difference between companies adjusted net operating profit (after taxes) in a particular year and it total cost of capital. According to George Athanassakos (2007), the Value-based management (VBM) is a management philosophy that uses analytical tools and processes to focus an organization on the single objective of creating shareholder value.

OBJECTIVES OF THE STUDY

To measure EVA & ROCE for the sample companies

from various sectors.. To calculate the relationship between EVA with respect to the share prices movement of the selected companies. To calculate the relationship between ROCE with respect to the share prices movement of the selected companies. To analyze weather the company is creating wealth to shareholders

STATISTICAL TOOLS USED

STANDARD DEVIATION
CO-RELATION SIMPLE REGRESSION

ANOVA
F-TEST T-TEST

OUTCOMES
EVA usually is influenced by the weighted average cost of capital. And

weighted average cost of capital is influenced by Beat of portfolio, risk free rate of return & market return. Economic Value Added is a residual income variable. It is defined as Net operating profit after taxes subtracted with the cost of capital tied in operations. EVA is basically based on the historical data of the company. This creates the wealth to share holders. EVA is also affected by the Risk Free rate of Return, government policies, taxes imposed by the government. Traditional measures of the performance like ROCE, ROI does not create any wealth to the share holders, and EVA better reflects the value and creates the wealth to the shareholders. Stated EVA is only the measure of wealth creation to shareholders.