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Financial Accounting and Corporate Finance.

Undergraduate, Post Graduate and Executive Education.

T.A. Pai Management Institute (TAPMI), a leading B School in South India had established its new campus in Badagabettu village, about 5 km away from Manipal, Udupi District, Karnataka. Though the campus housed about a thousand inmates, comprising students, staff and faculty members, a proper public transport system did not develop commensurate with other facilities. The TAPMI administration was flooded with requests from various stakeholders to find a solution to this vexed problem. The Dean Administration had three options before him namely convincing the existing private bus operator to run a new bus en route TAPMI, TAPMI purchases the bus by either paying cash or availing loan from a bank or TAPMI can take a bus on lease. The predicament before Dean was to find out the most economically viable solution.

At the end of this case discussion, the participants will be able to: understand the application of breakeven analysis; prepare income statement, balance sheet, cash flow statement and forecast of cash flows; evaluate financing and investing decisions by using various techniques; discuss and debate the different alternatives available to the organization.

Teaching notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes.

CSS 1: Accounting and Finance.

The case was developed from secondary sources and interviews with a security analyst. The secondary sources include company annual reports, news reports, analyst reports, industry reports, company websites, stock exchange websites and databases such as Bloomberg and CMIE Prowess.

Increasing competition in product and capital markets has put tremendous pressure on managers to become more cost competitive. To address their firms' uncompetitive cost structures, managers may have to consider dramatic restructuring of their businesses. During 2014–2017, Tata Steel Ltd (TSL) UK considered a series of divestitures and a merger plan to nurse the company back to health. The case considers the economics of the restructuring plan. The case is designed to help students analyze a corporate downsizing program undertaken by a large Indian company in the UK and to highlight the dynamic role of the CFO and governance issues in family firms. It introduces students to issues surrounding a typical restructuring and provides students a platform to practice the estimation of value creation in a restructuring exercise. While some cases on corporate restructuring in the context of developed economies are available, there are very few cases written in an emerging market context. This case bridges that gap. TSL presents a unique opportunity to study corporate restructuring necessitated by a failed cross-border acquisition. It illustrates the potential for value loss in large, cross-border acquisitions. It shows how managerial hubris can prompt family firm owners to overbid in acquisitions and create legacy hot spots. In addition, the case can be used to discuss the causes of governance failures such as weak institutional monitoring and poor legal enforcement in emerging markets that could potentially harm minority shareholders.

The case was developed from secondary sources and interviews with a security analyst. The secondary sources include company annual reports, news reports, analyst reports, industry reports, company websites, stock exchange websites and databases such as Bloomberg and CMIE Prowess.

The case highlights the ambitious growth strategy of Suzlon, an Indian company specializing in non-conventional (wind) energy. In 2007, Suzlon announced the acquisition of REpower of Germany, one of the top wind power companies in the world. It issued zero coupon and coupon bearing foreign currency (US dollar) convertible bonds (FCCB) amounting to $760 million to finance the acquisition. These bonds were listed in Singapore. Due to deteriorating business conditions the company experienced a sharp decline in profitability and stock price resulting in a debt overhang. At the same time, the Indian rupee depreciated from INR44 to INR55 leading to losses on largely unhedged, foreign currency coupon payments. The company had to restructure its capital structure to escape bankruptcy. Since FCCB holders did not agree to restructure the terms of the instrument, the company had to turn to senior lenders to restructure debt. Eventually Suzlon had to sell-off REpower to reduce leverage.

The case is based on interviews of market intermediaries and published information. The information relating to the restructuring has been taken from the information statement filed with the Securities Exchange Board of India and the Stock Exchanges. The timeline of events were constructed from the information available in company press releases. Financial statements and other details are from the documents filed with the regulators and supplemented with the information available in Prowess database. The stock price and stock market index data are from the websites of Bombay Stock Exchange and the National Stock Exchange of India. Exchange rates, inflation and interest rates have been taken from Bloomberg and the Reserve Bank of India website. Valuation inputs like multiples are from Prowess database and security analyst reports. Sources of information are documented appropriately in the case and instructor’s manual. Although we interviewed the investment bankers involved in the restructuring we have not included any private information in the case to preserve confidentiality.

This case can be used in a corporate finance course or in a module on debt restructuring in a corporate restructuring course or in the financing module in an advanced corporate finance course or in an International Finance course. It can also be used to teach an integrated approach to valuation and financing in a valuation course.

The case highlights the rationale for issuing FX convertible debt, parity conditions in international finance and the use of alternate valuation models.

The case provides an introduction to how currency mismatches create exposures, why and how companies hedge (or do not hedge) those exposures, alternate valuation models and the use of foreign currency convertibles in funding a global expansion program. The case highlights the ambitious growth strategy of Wockhardt, a global biopharmaceutical company. In a bid to dominate the biopharmaceutical market, Wockhardt grew aggressively by acquiring companies all over the world. This expansion was funded by a mix of secured loans (bank borrowings) and unsecured loans including foreign currency (US dollar denominated) convertible bonds (FCCBs). Due to deteriorating business and economic conditions, the company experienced a sharp decline in profitability and stock price resulting in a debt overhang. The company had to restructure its capital structure in March 2009 to escape bankruptcy. Since FCCB holders did not agree to restructure the terms of the instrument, the company had to turn to senior lenders to restructure debt. The company’s management is faced with several options to deal with financial distress. The case asks students to evaluate those options. The case can be used to teach hedging foreign currency exposures, design of capital structure in rapidly evolving industries and dangers of financing R&D intensive ventures with convertible debt denominated in foreign currencies.

The case is based on secondary data sources. Information statements filed with the Securities Exchange Board of India, the company’s website, press releases and security analyst reports formed the basis for this case. Supplementary information was gathered from the CAPITALINE database, and websites of the Bombay Stock Exchange and the National Stock Exchange of India. Sources of information are documented appropriately in the case and teaching note. No names in the case have been disguised. The authors have no personal relationship with the company.

The case is suitable for courses in corporate finance, mergers and acquisitions, international financial management, corporate restructuring and valuation at the graduate level. It can also be used in executive education programs.

The case provides an introduction to how currency mismatches create exposures, why and how companies hedge (or do not hedge) those exposures, alternate valuation models, the use of foreign currency convertibles in funding a global expansion program and the alternatives in corporate restructuring. Suitable references are provided in the teaching note.

Effective rural agribusiness development requires dedicated training programmes therefore, this paper is an attempt to investigate smallholder farmers’ TNs in the dairy agribusiness sector. The purpose of this paper is to study a bigger research project of the dairy value chain in agribusiness framework in the Rwenzori region.

A sample size of 100 dairy farmers were randomly selected from two Districts in the Rwenzori region. The descriptive statistics (mean and standard deviation) provided a basis for discussion. Furthermore, parametric Pearson coefficient test was conducted to examine the smallholder farmers’ TNs and assess its association with selected socio-demographic characteristics of the dairy farmers.

The analysis indicated that dairy farmers expressed the need for a training program. Most frequently requested topics include: fodder cultivation, quality and safe milk handling, milk marketing, calf feeding and rearing, animal nutrition and financial literacy out of 12 topics. The least desired TNs was record keeping.

The findings contribute to the understanding of dairy farmers’ TNs.

The identified 12 key training intervention areas for the dairy farmers inform policymakers Dairy Development Authority and other development bodies in the Rwenzori region to address the challenges and improve smallholder dairy farming practices.

The study applies a synthesis review to identify theoretically acceptable variables that measure smallholder farmers’ TNs in the dairy agribusiness. The paper also shares the empirical evidence of a pioneering attempt to identify smallholder dairy farmers’ TNs in Uganda.

As evident from the literature review, the research on cyber security performance is centered on security metrics, maturity models, etc. Essentially, all these are helpful for evaluating the efficiency of cyber security organization but what matters is how the factors of internal efficiency affect the business performance, i.e. the external effectiveness. The purpose of this research paper is to derive the factors of internal efficiency and external effectiveness of cyber security and develop impact model to identify the most and least preferred parameters of internal efficiency with respect to all the parameters of external effectiveness.

There are two objectives for this research: Deriving the factors of internal efficiency and external effectiveness of cyber security; Developing a model to identify the impact of internal efficiency factors on the external effectiveness of cyber security since there is not much evidence of research in defining the factors of internal efficiency and external effectiveness of cyber security, the authors have chosen grounded theory methodology (GTM) to derive the parameters. In this study emic approach of GTM is followed and an algorithm is developed for administering the grounded theory research process. For the second research objective survey methodology and rank order was used to formulate the impact model. Two different samples and questionnaires were designed for each of the objectives.

For the objective 1, 11 factors of efficiency and 10 factors of effectiveness were derived. These are used as independent and dependent variable respectively in the later part of the research for the second objective. For the objective 2 the impact models among independent and dependent variables were formulated to find out the following. Most and least preferred parameters lead to internal efficiency of cyber security organization to identify the most and least preferred parameters of internal efficiency with respect to all the parameters external effectiveness.

The factors of internal efficiency and external effectiveness constructed by using grounded theory cannot remain constant in the long run, because of dynamism of the domain itself. Over and above this, there are inherent limitations of the tools like grounded theory, used in the research. Few important limitations of GTM are as below in grounded theory, it is comparatively difficult to maintain and demonstrate the rigors of research discipline. The sheer volume of data makes the analysis and interpretation complex, and lengthy time consuming. The researchers’ presence during data gathering, which is often unavoidable and desirable too in qualitative research, may affect the subjects’ responses. The subjectivity of the data leads to difficulties in establishing reliability and validity of approaches and information. It is difficult to detect or to prevent researcher-induced bias.

The internal efficiency and external effectiveness factors of cyber security can be further correlated by the future researchers to understand the correlations among all the factors and predict cyber security performance. The grounded theory algorithm developed by us can be further used for qualitative research for deriving theory through abstractions in the areas where there is no sufficient availability of data. Practitioners of cyber security can use this research to focus on relevant areas depending on their respective business objective/requirements. The models developed by us can be used by the future researchers to for various sectoral validations and correlations.

Though the financial costs of a cyber-attack are steep, the social impact of cyber security failures is less readily apparent but can cause lasting damage to customers, employees and the company. Therefore, it is always important to be mindful of how the impact of cyber security affects society as well as the bottom line when they are calculating the potential impact of a breach. Underestimating either impact can destroy a brand. The factor of internal efficiency and external effectiveness derived by us will help stakeholder in focusing on relevant area depending on their business. The impact model developed in this research is very useful for focusing a particular business requirement and accordingly tune the efficiency factor.

During literature study the authors did not find any evidence of application of grounded theory approach in cyber security research. While the authors were exploring research literature to find out some insight into the factor of internal efficiency and external effectiveness of cyber security, the authors did not find concrete and objective research on this. This motivated us to use grounded theory to derive these factors. This, in the authors’ opinion is one of the pioneering and unique contribution to the research as to the authors’ knowledge no researchers have ever tried to use this methodology for the stated purpose and cyber security domain in general. In this process the authors have also developed an algorithm for administering GTM. Further developing impact models using factors of internal efficiency and external effectiveness has lots of managerial and practical implication.

The purpose of this paper is to develop the methodology which can facilitate the concept of reconfiguration in the manufacturing system.

Design methodology includes the calculation of similarity matrix, formation of part family, and selection of part family. ALC algorithm has been used for part family formation and three criteria have been considered for the selection of part family. These criteria are reconfiguration effort, under-utilization cost, and floor space cost. AHP has been used to calculate the weights of criteria and reference ideal method has been used for the selection of alternatives.

In the manufacturing system, machines should be grouped on the basis of reconfiguration cost. When the time period is less, light machines and Group 1 machines are added and removed. In the case study, the concept of reconfiguration is useful for families (A, B, C, D). Machines can be reused by adding/removing some modules of machines. The concept of reconfiguration becomes more useful when it is implemented with lean manufacturing. Lean manufacturing techniques Jidoka and Poka-yoke are used to increase the diagnosability of the system.

Industrial case study has been considered.

Market competition is increasing rapidly and it increases the demand and variety of products, due to which manufacturing enterprises are forced to adapt a manufacturing system which can adjust its capacity and functionality quickly at low cost. To reconfigure manufacturing system from one product/product family to another product/product family, changes can be done in hardware and/or software components in response to sudden changes in the market or in regulatory requirements.

An integrated approach for reconfiguration has been proposed considering the industrial application. It includes weighted Jaccard function, ALCA, AHP, RIM. The methodology for calculation of reconfiguration effort, under-utilization cost, and floor space cost has been presented for industrial case.

Political economy research recognizes that the inflows of external financial resources help the governments enact market-oriented reforms. Since remittances have outpaced other types of financial inflows in many countries, they can potentially increase the government’s incentive to implement regulatory reform that can contribute to business-friendly environment. This issue has long been overlooked by the literature on remittances. The purpose of this paper is to examine whether remittances promote business regulatory reform in the recipient countries.

This study uses balance of payments data on remittances for 114 countries during 2004-2012 period. Since remittances could be endogenous to business regulation, the identification strategy follows an instrumental variable approach. The author assesses the general stability of linear model estimates by fitting the beta regression model.

The results show that, while the increase in remittance inflows is associated with lower regulatory requirements for starting a business in the recipient economy, this association is stronger in developing countries than in high-income nations. Various sensitivity tests reinforce the robustness of these findings.

One of the most important yet overlooked aspects of remittances is that they can potentially shape the political will to enact regulatory reform for businesses. The incentives for the government to relax burdensome entry regulations tend to stem from potential gains associated with the formalization of remittances. This paper makes a first attempt at studying the link between remittances and the quality of entry regulation.

The purpose of this paper is to design novel tunnel field effect transistor (TFET) using graphene nanoribbons (GNRs).

To design the proposed TFET, the bilayer GNRs (BLGNRs) have been used as the channel material. The BLGNR-TFET is designed in QuantumATK, depending on 2-D Poisson’s equation and non-equilibrium Green’s function (NEGF) formalism.

The performance of the proposed BLGNR-TFET is investigated in terms of current and voltage (I-V) characteristics and transconductance. Moreover, the proposed device performance is compared with the monolayer GNR-TFET (MLGNR-TFET). From the simulation results, it is investigated that the BLGNR-TFET shows high current and gain over the MLGNR-TFET.

This paper presents a new technique to design GNR-based TFET for future low power very large-scale integration (VLSI) devices.

The purpose of this paper is to print a thermolabile drug-containing tablet using the fused deposition modeling (FDM) technique and analyze its mechanical, pharmaceutical and environmental feasibility using a variety of tests.

Ascorbic acid (Vitamin C) is the thermally-sensitive drug impregnated into polyvinyl alcohol excipient using ethanol-water mixture and printed by an FDM printer by varying three parameters without using any external stabilizing agent. Afterward, Taguchi analysis has been performed on these parameters to recognize the significant factors and interactions. Besides this, a regression model has been obtained based on the dissolution data. Various thermo-mechanical and pharmaceutical tests have been carried out to confirm the feasibility. Finally, a life cycle assessment (LCA) analysis has been carried out to compare it with the existing tableting method by considering the environmental impacts.

The dissolution profile was found to follow the Korsmeyer-Peppas model, where the drug release occurred both by dissolution and erosion. Further, the infill percent has been found as the most significant parameter. The characterization tests and imaging outputs proved the fidelity of this attempt. Finally, the three-dimensional printed method was found to be more environmentally sustainable than the existing conventional tableting process.

LCA on a printed tablet is a one-of-a-kind attempt. Thus, this research attempt delivered another approach to print personalized tablets at a temperature lower than prescribed temperatures with required release behavior and can contribute toward the quest of sustainable personalized medication.