ANALYSIS ON FINANCIAL STATEMENT OF FMCG COMPANIES

JATIN JASWANILOKESH ARYA

ARINDAM DASMAYOOKH CHAUDHURI

VAIBHAV KUMAR

MAYUK CHAUDHARI

GROUP 10

INDIAN ECONOMY

After the shadows of the great recession in 2008, global economy has started expanding: however, with two speeds. In developed world the economic growth is much slower than expected; recovery seems to have stalled in major developed nations, amid declining business confidence hurting global trade as well as employment.

In spite of the slow down caused by global financial crisis of 2007-09, downside risks of global events particularly movement in the prices of commodities like crude oil, the Indian economy has emerged with remarkable rapidity and is poised to further improve and consolidate in terms of key macroeconomic indicators. Reflecting strong fundamentals and resilience, the Indian Economy posted robust growth rate of 8.4 percent during 2010-11, thereby emerging as one of the fastest growing economies among the developing countries. Strong performance of the agriculture sector, along with continued robust growth of the industrial and services sectors have underlined the overall performance of the Indian Economy. India is still growing at a rapid pace in comparison to other countries; however that should not deter from the opportunity to push through further reforms, create infrastructure and generate economic opportunities.

At constant prices, the primary sector i.e. agriculture, forestry & fishing has shown a high growth of 7.0 per cent during 2010-11 as against 1.0 per cent during the year 2009-10. The growth of secondary sector is 7.2 per cent and that of service sector is 9.3 per cent during 2010-11.

While the rest of the world has been grappling with the after effects of the European debt crisis, the Indian economy in 2011-12 has also seen moderation in growth. Quarterly growth rates have consistently fallen in 2011-12 and for the first time since the global crisis of 2008, GDP growth rates in India has declined below 7 percent to reach 6.1 percent in the third quarter of 2011-12. Earlier expectations in the range of 8 percent to 8.5 percent have been reduced gradually and now the Economy is expected to grow at less than 7 percent. GDP grew at a modest 7.3 percent during the first half of the financial year but turbulent global conditions coupled with a weak industrial sector has resulted in a slowdown in GDP growth in the second half of the year. With the exception of Services, GDP growth and its two main components - Agriculture and Industry have recorded lower growth in 2011-12 as compared to the last year.

GDP GROWTH

Further, unforeseen weakening of the Indian rupee against the US dollar made imports even costlier. The rupee depreciated by about 15 percent from the levels of Rs. 44.7 to the levels of Rs. 51.3 against a dollar in March'12. This has led to massive increase in fiscal deficit of 5.9 percent of GDP as against a target of 4.6 percent for this year and a further push to the inflationary pressures. Rising cost of living casted a negative spell on the disposable income of households impacting the consumption story.

Despite recent tough global and domestic economic situation, outlook for the Indian economy still looks promising in the medium to long term. Finance budget 2012-13 aims to control fiscal deficit and bring it down to 5.1 percent of the GDP. Favourable demographic factors like a young working population and a labour force which is expected to increase by 32 percent in the next 20 years, compared to a fall of 4 percent in industrialized countries and 5 percent in China, strongly indicate latent growth potential of second fastest economy amongst the major economies on the globe.

FMCG INDUSTRY

With the presence of 12.2% of the world population in the villages of India, the Indian rural FMCG market is something no one can overlook. Increased focus on farm sector will boost rural incomes, hence providing better growth prospects to the FMCG companies. Better infrastructure facilities will improve their supply chain. FMCG sector is also likely to benefit from growing demand in the market. Because of the low per capita consumption for almost all the products in the country, FMCG companies have immense possibilities for growth. And if the companies are able to change the mindset of the consumers, i.e. if they are able to take the consumers to branded products and offer new generation products, they would be able to generate higher growth in the near future. It is expected that the rural income will rise in 2007, boosting purchasing power in the countryside. However, the demand in urban areas would be the key growth driver over the long term. Also, increase in the urban population, along with increase in income levels and the availability of new categories, would help the urban areas maintain their position in terms of consumption. At present, urban India accounts for 66% of total FMCG consumption, with rural India accounting for the remaining 34%. However, rural India accounts for more than 40% consumption in major FMCG categories such as personal care, fabric care, and hot beverages. In urban areas, home and personal care category, including skin care, household care and feminine hygiene, will keep growing at relatively attractive rates. Within the foods segment, it is estimated that processed foods, bakery, and dairy are long-term growth categories in both rural and urban areas.

Indian FMCG industry is expected to grow at a base rate of at least 12% annually to become a Rs 4,000 billion industry in 2020, according to a new report by Booz & Company. The Report titled “FMCG Roadmap to 2020 - The Game Changers” was released at the CII FMCG Forum 2010 in New Delhi Thursday. The Report noted that the positive growth drivers mainly pertain to the robust GDP growth, opening up and increased income in the rural areas of the country, increased urbanization and evolving consumer lifestyle and buying behaviour. The report further revealed that if some of the positive factors – driven mainly by improved and supportive government policy to remove supply constraints – play out favourably, the industry could even see a 17% growth over the next decade, leading to an overall industry size of Rs 6,200 Billion by 2020. The last decade has already seen the sector grow at 12% annually as result of which the sector has tripled in size.

Releasing the report, Booz & Company Partner Abhishek Malhotra said, “While on an aggregate basis the industry will continue to show strong growth, we will see huge variations at multiple levels – product category (e.g. processed foods growing faster than basic staples), companies and geographies.”

“Many Indian customer segments are reaching the tipping point at which consumption becomes broad based and takes off following the traditional “S shaped” curve seen across many markets.” The sector is poised for rapid growth over the next 10 years and by the year

2020, FMCG industry is expected to be larger, more responsible and more tuned to its customers,” he further added.

The Report identifies 9 key mega trends across consumers, markets and environment that will have a significant impact in shaping how the industry will look like in year 2020.

(a) Increasing Premiumization

Continued income growth coupled with increased willingness to spend will see consumers’ up-trading, creating demand for higher priced and increased functionality (real or perceived) products. The size of this segment will be large.

(b) Evolving Categories

Many consumers will move up the ladder and will shift from basic “need” to “want” based products. In addition evolving behaviour and emphasis on beauty, health & wellness will see increased requirements for customized and more relevant product offerings.

(c) Value at BoP

Significant majority of the population in the country, especially in the rural markets, will become a consumption source by moving beyond the “survival” mode. This segment will require tailored product at highly affordable prices which will come with the potential of very large volumes.

(d) Increasing Globalisation

While many leading MNCs have operated in the country for years given the liberal policy environment, the next 10 years will see increased competition from Tier 2 and 3 global players. In addition, larger Indian companies will continue to seek opportunities internationally and also have an access to more global brands, products and operating practices.

(e) Decentralization

Despite the complexity of the Indian market (languages, cultures, distances) the market has mainly operated in a homogenous set-up. Increased scale and spending power will result in more fragmented and tailored business models (products, branding, operating structures).

(f) Growing Modern Trade

Modern trade share will continue to increase and is estimated to account for nearly 30% by year 2020. This channel will complete existing traditional trade (~8 million stores which will continue to grow) and offer both a distribution channel through its cash & carry model as well as more avenues to interact with the consumer.

(g) Focus on Sustainability

Global climatic changes, increasing scarcity of many natural resources (e.g. water, oil) and consumer awareness (e.g. waste) are leading to increased concerns for the environment. The pressure on companies to be environmentally responsible is gradually increasing due to involvement of various stakeholders – from government (through policy) to consumers (through brand choice) and NGOs (through awareness).

(h) Technology as a Game Changer

Increased and relevant functionality coupled with lower costs will enable technology deployment to drive significant benefits and allow companies to address the complex business environment. This will be seen both in terms of efficiencies in the back-end processes (e.g. supply chain, sales) as well as the front-end (e.g. consumer marketing).

(i) Favourable Government Policy

Many government actions – in discussions as well as planned – will help in creating a more suitable operating environment. This will be done both on the demand side by increased income and education as well as on the supply side by removing bottlenecks and encouraging investments in infrastructure.

The confluence of many of these change drivers – consumers, technology, government policy, and channel partners – will have a multiplication impact and magnify both the amount as well as the pace of change. Winning in this new world will require enhancing current capabilities and building new ones to bridge gaps. In this new world FMCG companies will have 6 imperatives from a business strategy perspective: disaggregating the operating model, winning the talent wars, bringing sustainability into the strategic agenda, re-inventing marketing for ‘i-consumers’, re-engineering supply chains, partnering with modern trade.

The report urges the need for other stakeholders – government, retailers, NGOs and investors–to play a key role and evolve in a similar fashion to support the growth of the industry while continuing to deliver on their core business and social mandates.

The present market scenario can be described by the following table:

Name Last Price Market Cap.(Rs. cr.)

SalesTurnover

Net Profit Total Assets

HUL 532.40 115,098.84 22,116.37 2,691.40 3,512.93

Godrej Consumer

649.10 22,090.56 2,980.08 604.39 2,761.43

Dabur India 124.75 21,742.94 3,759.33 463.24 1,576.54

Colgate 1,199.45 16,311.66 2,693.23 446.47 435.40

Marico 190.60 12,285.00 2,970.30 336.58 1,677.27

Godrej Ind 277.30 9,288.96 1,438.04 201.56 1,739.27

P and G 2,405.35 7,807.94 1,297.41 181.29 600.62

Emami 499.05 7,551.21 1,389.82 256.81 804.23

Gillette India 2,135.30 6,957.92 1,232.90 75.73 600.33

Jyothy Labs 158.30 2,552.81 662.97 83.52 1,226.42

Bajaj Corp 169.60 2,501.60 473.31 120.09 427.86

Amar Remedies

35.90 93.93 671.33 44.62 413.96

JHS Svendgaard

31.60 76.14 92.80 -3.64 123.52

GKB Ophthalmics

38.00 15.78 31.13 1.71 30.44

DABUR INDIA LIMITED

Under one brand name Dabur it has marketed a variety of products, ranging from hair care to honey, oil, chyawanprash, Amla, Vatika, Hajmola and Real. The company is taking care of young and old generation demands into mid for development of products. It is having its manufacturing plants mainly in hilly areas where it can get the raw materials of herbs for production of ayurvedic medicines and other products. In 1936 Dr. Burman established Dabur India Limited. From its beginning it has launched many products and these are doing successful business in Indian as well as foreign markets on the basis of trust and loyalty. The products are consumer friendly with almost no side effects on human body. This company has development its own research laboratory for development and testing of the products. The future of the company is very bright at least in Indian markets.

Products of Dabur

Dabur India Limited is a leading Indian consumer goods manufacturer of Hair Care, Oral Care, Health Care, Skin Care, Home Care and Foods. The company is committed to provide natural solution healthy and holistic lifestyle. The products are herbal based and very friendly to the health without any adverse effects. The company is manufacturing a variety of products and marketing with trust and on the basis of loyalty of customers in India and abroad. Through research and development facilities the products are developed as per the emerging demands of the customers. Dabur is manufacturing products and medicines related to ayurvedic area. It is having a long list of its products for customers to use. The list of the products is appended below;

• Hair care products: Dabur amla hair oil, Dabur hair oil sikakai, Dabur vatika hair oil,

Dabur amla hair oil lite, Dabur special hair oil, Dabur jasmine hair oil, Dabur jasmine hair oil, Parachute coconut oil, Cocoraj coconut oil , Dabur anmol coconut oil

• Soaps: Dabur neem soap, Dabur sandalwood soap, Dabur sandalwood soap, Dabur aloe vera soap

• Ayurvedic medicines: Dabur hajmola tablets, Dabur shilajit health tonic, Dabur hingwastak churan, Dabur nature care triphla. Dabur hajmola candy, Dabur herbal toothpaste, Basil, Sat isabgol, Dabur nature care triphla, Dabur hingwastak churan, Dabur lavan bhaskar churan, Dabur honey, Dabur sitopaladi churan, Dabur pudin hara pearls

• Dabur healthcare products: Dabur chyawanprakash - sugar free, Dabur chyawanshakti - energy food, Dabur chyawanprash, Dabur chyawan junior, Chocolate flavoured health drink for kids.

SWOT Analysis of Dabur India

SWOT is the process and it stands for Strengths, Weaknesses, Opportunities and Threats, and is an important tool often used to highlight where a business or organisation is, and on the basis of this the company can take the strategic decisions for the business in the future. It looks at internal factors, the strengths and weaknesses of a business, and external factors, the opportunities and threats facing the business. This process highlights strength, weakness,

opportunities in the markets and threats to the business of the company. The SWOT analysis of Dabur would make the position of the company clear and it can assess the capacity of the company and the market positions for the business. The SWOT process for Dabur is carried out as follows:

(i) Strengths:

It highlights the plus points of the company internally. It shows the position of the company relating to its resources, management approach etc. On the basis of this management can dare to take further steps. The strengths of the company are:

• Support from leading businesses houses from abroad.

• Financial position of the company is sound.

• Research and development facilities are adequate for further development of the products.

• Market position is well maintained

• Niche marketing strategy is doing well.

(ii) Weaknesses:

• The impact of Dabur products is slow and of low quality and that is to be improved;

• Production and operating costs are higher and these reduce the profits of the company.

• Dabur India’s R&D facilities are comparatively inadequate and needs improvements.

• In experienced staff sometimes creating problems and giving weak performance.

• Old and outdated technologies not helping in production of more production of higher quality.

• Lack of innovative approach in the company exists.

(iii) Opportunities:

• Indian market is very wide and having great potential for further development.

• The knowledge of the company regarding customers and there profile is good.

• The availability of raw materials and low labour cost is another opportunity.

• Less level of competition is herbal based products

(iv)Threats:

• Export expansion chances are very less.

• Competition is slowly increasing and for further it would be threat.

• Higher inflation increasing the total costs.

FINANCIAL POSITION STATEMENT

(Rs in Crs)

   Year Mar 12  Mar 11  Mar 10  Mar 09  Mar 08 

  SOURCES OF FUNDS :

          

            

            

            

            

 

 Share Capital           

174.21

          

174.07

          

86.9           

86.51

          

86.4

TOTAL RESERVES EXCLUDING REVALUATION RESERVE

1,128.28

     927.09

     662.48

     651.69

     441.92

Capital Reserves 26.92

     26.78

     25.44

     23.37

     23.37

    

General Reserves 109.23

     58.54

     95.58

     157.86

     55.75

    

Share Premium 22.93

     10.74

     0      13.92

     8.67     

Profit & Loss Account Balance

864.11

     714.22

     526.91

     428.94

     323.23

    

Other Reserves 105.09

     116.81

     14.55

     27.6      30.9     

TOTAL REVALUATION RESERVE

0.78      0      0      0      0

  Total Shareholders Funds (A)

          

1,303.27

          

1,101.16

          

749.38

          

738.2

          

528.32

  Secured Loans           

0           

3.39           

24.27

          

10.65

          

16.45

Term Loans Institutions

0      0      0      0      1.1     

Term Loans Banks 0      2.69      22.37

     8.25      10.99

    

Term Loans Others

0      0      0      0      4.36     

Deferred Credit / Hire Purchase

0      0.7      1.9      2.4      0     

 Unsecured Loans           

1.14           

2.12           

85.7           

130.72

          

0.89

Loans from Banks 0      0      78.9      110.01

     0.24     

Deferred Tax 1.14      2.12      2.9      0      0     

Commercial Paper 0      0      0      20      0     

Security Deposits 0      0      3.9      0.71      0.65     

   Total Debt (B)           

1.14           

5.51           

109.97

          

141.37

          

17.34

  Other Liabilities          431.         360         0          0          0

(D)    77                 Total Liabilities (A+B+D)

          

1,736.18

          

1,466.67

          

859.35

          

879.57

          

545.66

  APPLICATION OF FUNDS :

          

            

            

            

            

 

 Gross Block           

883.23

          

766.88

          

687.23

          

518.77

          

467.94

Patent 12.79

     11.76

     11.76

     11.13

     11.13

    

Leasehold Land 9.7      9.7      9.7      9.34      9.24     

Freehold Land 36.97

     36.97

     34.39

     11.42

     7.62     

Buildings 323.45

     278.21

     252.87

     160.6

     135.6

    

Plant and Machinery

403.05

     339.05

     290.2

     244.16

     223.63

    

Furniture and Fixtures

34.46

     33.14

     32.03

     28.7      29.64

    

Computers 36.09

     34.83

     33.23

     30.37

     31.77

    

Vehicles 13.82

     13.28

     13.07

     13.11

     10.85

    

Other Fixed Assets

12.9      9.94      9.98      9.94      8.46     

  Less : Accumulated Depreciation

          

-297.9

          

-269.32

          

-236.3

          

-210.5

          

-189.8

Leasehold Land 1.05      0.95      0.85      0.74      0.65     

Buildings 64.9      57.13

     50.02

     43.42

     39.14

    

Plant and Machinery

157.54

     139.48

     121.47

     110.41

     97.43

    

Furniture and Fixtures

22.87

     21.53

     19.99

     18.14

     17.91

    

Computers 26.38

     26.77

     24.07

     22.06

     21.97

    

Vehicles 6.61      6.79      5.98      5.16      4.72     

Other Fixed Assets

9.21      8.19      6.2      4.17      2.39     

  Net Block (E )           

585.33

          

497.56

          

450.95

          

308.32

          

278.17

  Capital Work in Progress

          

11.58

          

4.37           

23.31

          

51.71

          

16.26

Capital Advances 0      0      13.9      5.92      4.64     

Other Capital Work in Progress

11.58

     4.37      9.41      45.79

     11.62

    

 Investments           

552.72

          

519.49

          

348.51

          

436.9

          

270.37

Quoted Government

84.11

     0      0      0      0     

SecuritiesUnquoted Government Securities

0.02      0.02      0.02      0.01      0.01     

Quoted Equity 0      0      0.06      0      0.01     

Unquoted Equity 71.54

     101.6

     96.84

     92.04

     67.98

    

Quoted Debentures/Bonds

3.81      0      0      0      0     

Unquoted Debentures/Bonds

35      10      0      21.5      0     

Quoted Units 122.3

     83.72

     249.86

     117.78

     202.64

    

Joint Venture / Partnerships

0      0.49      0.5      0      0     

Application Money 0      0      1.5      1      0     

Other Investments

235.94

     323.66

     0      204.84

     0     

Less : Prov.for dimunition in value of investment

0      0      -0.27

     -0.27      -0.27     

   Current Assets, Loans & Advances

          

            

            

            

            

 

  Inventories           

528.57

          

460.59

          

298.44

          

261.72

          

201.15

Raw Materials 222.74

     214.07

     87.78

     71.27

     57.5     

Work-in Progress 96.26

     64.35

     51.57

     53.11

     33.5     

Finished Goods 200.51

     178.45

     116.18

     98.2      78.92

    

Stores and Spares 0.44      0.46      0      0      0     

Packing Materials 0      0      42.91

     39.14

     31.23

    

Goods-in transit 8.62      3.26      0      0      0     

 Sundry Debtors           

224.17

          

202.46

          

130.48

          

112.36

          

100.46

Debtors more than Six months

15.75

     13.25

     18.68

     12.61

     8.86     

Debtors Others 220.88

     201.36

     123.74

     112.1

     96.77

    

Less : Provisions for Doubtful Debts

-12.46

     -12.15

     -11.94

     -12.35

     -5.17     

  Cash and Bank           

291.29

          

192.41

          

163.91

          

143.69

          

68.26

Balance with Bank 290.98

     192.08

     48.2      41.33

     67.05

    

Term Deposit with 0      0      115.      101.      0.9     

Banks 11 53Cash in hand / others

0.31      0.33      0.6      0.83      0.31     

 Loans and Advances

          

193.35

          

124.48

          

325.12

          

227.28

          

182.94

Loans to Subsidiary

0      0      3.9      0      0.04     

Loans to Others 2.85      2.21      2.23      2.27      4.27     

Deposits with Government

47.99

     48.64

     27.17

     23.27

     19.27

    

Deposits Others 0      0      17.2      14.55

     9.96     

Advance Tax 9.7      0      242.5

     163.73

     126.21

    

Advances to suppliers

64.41

     41.81

     20.06

     14.11

     13.24

    

Advances recoverable in cash or kind

0      0      12.06

     9.35      9.95     

Less : Provision for Doubtful Advances

-1.06      -1.06

     0      0      0     

Interest Accrued on Investments

13.56

     5.14      0      0      0     

Other Current Assets

55.9      27.74

     0      0      0     

   Total Current Assets

          

1,237.38

          

979.94

          

917.95

          

745.05

          

552.81

  Less : Current Liabilities and Provisions

          

            

            

            

            

 

 Current Liabilities

          

916.79

          

779.13

          

432.06

          

331.21

          

317.22

Sundry Creditors 585.11

     494.86

     349.02

     281.43

     259.73

    

Creditors for Goods

0      0      98.87

     107.76

     88.49

    

Creditors for Finance

0      0      250.15

     179.37

     171.24

    

Creditors for Others

585.11

     494.86

     0      -5.7      0     

Acceptances 0      0      60.87

     45.27

     51.58

    

Bank Overdraft / Short term credit

276.67

     246.5

     0      0      0     

Advances from Customers / Credit balances

10.88

     3.73      19.12

     1.94      1.95     

Due to Subsidiary / Group Companies

0      0      0      0      1.65     

Trade and Other 0      0      0      0      0.06     

depositsUnclaimed Dividend

4.01      3.64      3.04      2.56      2.15     

Interest Accrued But Not Due

0      0.01      0.01      0.01      0.1     

Other Liabilities 40.12

     30.39

     0      0      0     

  Provisions           

160.63

          

144.71

          

440.1

          

332.89

          

265.41

Provision for Tax 0      0      232.88

     158.84

     122.5

    

Provision for Corporate Dividend Tax

21.2      18.36

     18.46

     14.7      11.01

    

Provision for Gratuity

4.71      9.06      13.25

     14.44

     13.11

    

Provision for Dividend

130.66

     113.15

     108.62

     86.51

     64.8     

Proposed Equity Dividend

130.66

     113.15

     108.62

     86.51

     64.8     

Other Provisions 4.06      4.14      66.89

     58.4      53.99

    

  Total Current Liabilities

          

1,077.42

          

923.84

          

872.16

          

664.1

          

582.63

   Net Current Assets (E-F)

          

159.96

          

56.1           

45.79

          

80.95

          

-29.82

 Miscellaneous Expenses not written off

          

0           

0           

2.74           

8.64           

13.95

Deferred revenue expenses

0      0      2.74      8.64      13.86

    

Royalty/Liscense fees/ Technical Knowhow

0      0      0      0      0.09     

   Deferred Tax Assets

          

23.93

          

21.28

          

23.82

          

23.54

          

24.01

  Deferred Tax Liability

51.04

           38.68

          

35.77

          

30.49

          

27.28

 

   Net Deferred Tax

-27.11

           -17.4

          

-11.95

          

-6.95           

-3.27  

  Other Assets           

453.7

          

406.55

          

0           

0           

0

   Total Assets           

1,736.18

          

1,466.67

          

859.35

          

879.57

          

545.66

 Contingent Liabilities

          

1,325.07

          

1,013.30

          

137.9

          

162.41

          

109.46

Claims not acknowledged as debt

8.14      8.02      7.72      6.68      2.71     

Guarantees 1,22      931.      59.8      84.4      61.6     

undertaken 3.03 72 4 5 5Letter of Credit 3.9      1.79      0.53      0.42      4.58     

Bills Discounted 0      0      34.16

     45.27

     10.49

    

Disputed Sales Tax

10.7      12.02

     11.67

     7.6      8.22     

Disputed Income Tax

3.19      9.4      0.77      0.68      0.46     

Disputed Excise Duty

76.11

     50.35

     23.21

     17.31

     21.35

    

Estimated Capital Contracts Remaining

  16.65

     27.25

     24.62

     30.65

     66.84

PERFORMANCE STATEMENT

(Rs in Crs)

   Year Mar 12(12)  Mar 11(12)  Mar 10(12)  Mar 09(12)  Mar 08(12) 

  INCOME :                                                                 

 Sales Turnover

           3,781.90

           3,295.97

           2,879.54

           2,423.68

           2,117.79

Sales turnover / Operating Income

3,781.49

     3,295.36

     2,879.54

     2,423.68

     2,117.79

    

Job Work & Service Income

0.41      0.61      0      0      0     

   Excise Duty

           -38.72            -30.99            -23.58            -27.52            -34.39

  Net Sales            3,743.18

           3,264.98

           2,855.96

           2,396.16

           2,083.40

  Other Income

           69.5            41.98            41.64            44.19            30.29

Export Incentives

7.66      4.37      5.33      6.81      4.66     

Dividend Income

0.38      0.19      0      0      0     

Interest Income

45.13      14.93      7.89      1.13      2.38     

Profit on sale of Fixed Assets

0.65      1.72      2.44      0.42      0.48     

Profit on sale of investments

7.19      9.51      12.68      20.89      9.82     

Rent received

0      0      1.42      0.09      0.14     

Gain on Cancell. of Forward Contr/forex trans

0      0      0      7.93      0.41     

Sale of Scrap 6.54      5.75      5.22      5.03      5.58     

Miscellaneous Income

1.95      5.51      6.66      1.89      6.82     

 Stock Adjustments

           59.33            78.31            9.68            38.89            3.04

Closing Stock Of WIP

96.26      64.35      51.57      53.11      33.5     

Closing Stock of Finished Goods

209.13      181.71      116.18      98.2      78.92     

Opening Stock of WIP

-64.35      -51.57      -53.11      -33.5      -31.73     

Opening Stock of Finished Goods

-181.71      -116.18

     -98.2      -78.92      -77.65     

Adjustment on amalgamation / trial runs

0      0      -6.76      0      0     

   Total Income

           3,872.01

           3,385.27

           2,907.28

           2,479.24

           2,116.73

  EXPENDITURE :

                                                                

 Raw Materials

           2,079.42

           1,728.96

           992.21

           937.13

           747.32

Opening Stock of Raw Materials

214.07      87.78      71.27      57.5      46.92     

Purchases of Raw Material

1,492.37

     1,400.34

     609.36      581.72      463.73     

Purchase of Trading Goods

595.72      454.91      395.51      369.19      294.17     

Closing Stock of Raw Materials

-222.74      -214.07

     -87.78      -71.27      -57.5     

Adjustment on amalgamation / trial runs

0      0      3.85      -0.01      0     

  Power & Fuel Cost

           46.41            42.39            35.43            36.63            38.42

  Other Manufacturing Expenses

           49.72            46.52            432.15

           358.33

           315.49

Packing Materials

0      0      391.4      324.19      284.05     

Job Work / Contract / Processing Charges

20.74      20.98      19      13.85      11.72     

Stores Consumed

13.45      11.72      10.36      10.42      10.02     

Repairs - Plant &

4.48      4.23      3.74      3.74      3.88     

machineryRepairs - Building

3.68      2.81      2.21      2.24      2.2     

Repairs - Others

7.37      6.78      5.44      3.89      3.62     

  Gross Profit            1,696.46

           1,567.40

           1,447.49

           1,147.15

           1,015.50

 Employee Cost

           233.19

           208.93

           197.62

           154.7            138.16

Salaries,Wages & Bonus

207.08      180      170.01      132.54      120.71     

Contribution to funds

16.27      16.42      18.96      16.91      12.62     

Staff Welfare Expenses

9.83      12.5      8.65      5.25      4.83     

Other Employee Cost

0.01      0.01      0      0      0     

 Selling and Administration Expenses

           606.4            581.93

           566.4            429.25

           390.67

Rent,Rates and Taxes paid

0      0      20      16.77      12.52     

Sales Tax 3.08      2.89      1.67      1.01      1.36     

Insurance 3.61      2.86      2.68      2.28      2.73     

Discount paid

25.28      18.85      0      0      0     

Advertisement

397.66      390.19      390.03      284.93      248.1     

Commssion expenses on sales

32.87      31.66      30.21      22.75      21.4     

Distribution Expenses

71.96      62.87      52.88      50.07      52.42     

Legal Expenses

15.37      21.59      18.07      9.78      14.29     

Communication Expenses

3.82      3.55      3.66      2.92      3.07     

Travel Expenses

33.18      30.07      27.24      20.82      19.2     

Audit Expenses

0.87      0.78      0.83      0.54      0.51     

Director's Remuneration

10.3      8.48      14.86      12.72      11.64     

R & D Expenses

2.8      3.68      0.5      1.66      0.75     

Other Administrative Expenses

5.6      4.46      3.77      3      2.68     

  Miscellaneous Expenses

           189.86

           100.38

           111.04

           96.32            84.83

Donations 8.3      7.15      6.13      3.63      4.58     

Loss on Sale of Assets

0.37      0.22      0.43      0.14      1.66     

Bad Debts written off

0      0      0      0      0.4     

Expenses Ammortised

0      0      5.66      3.94      5.67     

Provision for doubtful loan/ Deposit/ Advances

0.31      1.01      0.96      7.38      2.58     

Provision for Contingency

0      0      0      0.13      0.74     

Other provisions and write offs

46.48      0.02      0      0      0     

Other Miscellaneous Expenses

134.4      91.98      96.27      78.52      68.96     

  Depreciation

           65.88            67.9            31.91            27.42            25.75

  Operating Profit

           601.13

  608.26

  540.52

  439.46

  376.09

  Interest            14.1            12            13.49            14.47            10.92

Fixed Interest

0      0      10.13      6.67      3.37     

Other Interest

12.54      9.74      0.15      4.31      4.49     

Financial Charges

1.56      2.26      3.21      3.49      3.06     

  Profit Before Tax

           587.03

           596.26

           527.03

           424.99

           365.17

  Tax            114.45

           119.4            89.66            47.48            40.57

 Fringe Benefit tax

           0            0            0            6.51            7.08

  Deferred Tax

           9.34            5.45            4.04            -2.55            0.75

  Reported Net Profit

           463.24

           471.41

           433.33

           373.55

           316.77

  Extraordinary Items

           -29.52            8.71            12.08            18.8            7.66

Profit/(Loss) on Sale of Assets

0.28      1.5      2.01      0.28      -1.18     

Profit/(Loss) on Sale of Investment.

7.19      9.51      12.68      20.89      9.82     

Miscellaneous Income/Expense

-44.89      0      0      0      0     

Less : Tax on Extra Ordinary

7.3      2.2      2.5      2.37      0.96     

Income/ExpenseLess : Deferred Tax on Extra Ordinary Income/Exp.

0.6      0.1      0.11      0      0.02     

                     

  Adjusted Net Profit

           492.76

           462.7            421.25

           354.75

           309.11

  Adjst. below Net Profit

           0            0            -0.19            -0.71            -0.68

Short/(Excess) provision for tax

0      0      -0.19      -0.71      -0.86     

Other adjustments

0      0      0      0      0.18     

  P & L Balance brought forward

           714.22

           526.91

           428.94

           323.23

           229.16

 Appropriations

           313.35

           284.1            335.17

           267.13

           222.02

Appropriation to General Reserve

50      50      130      90      70     

Appropriation to Other Reserves

0.14      0.94      2.07      0.01      0.4     

Prior Year Dividend Paid

0      0.15      0      0      0     

Provision for Equity Dividend

226.47      200.19      173.6      151.39      129.6     

Dividend Tax 36.74      32.82      29.5      25.73      22.02     

INTERIM DIVIDEND PAID

95.81      87.04      64.98      64.88      64.8     

   P & L Balance carried down

           864.11

           714.22

           526.91

           428.94

           323.23

  Dividend            226.47

           200.19

           173.6            151.39

           129.6

  Equity Dividend %

           130            115            200            175            150

   Earnings Per Share-Unit Curr

           2.45            2.52            4.65            4.02            3.41

   Book Value-Unit Curr

           7.48            6.33            8.64            8.53            6.11

CASH FLOW STATEMENT

(Rs in Crs)

Year Mar 12(12)  Mar 11(12)  Mar 10(12)  Mar 09(12)  Mar 08(12) Cash and Cash Equivalents at Beginning of the year (Y*)

    192.41

    163.91

    151.84

    68.26

    54.04

Cash Flow From Operating ActivitiesLess: Total Adjustments (PBT & Extraordinary Items) (A)

-31.64

  -58.25

  -25.84

  -29.56

  -32.95

Depreciation 38.73   37.73   31.91   27.42   25.75

 

Interest (Net) -31.03

  -1.00   -2.29   13.34   8.55  

P/L on Sales of Assets

-0.28   -1.50   -2.01   -0.28   -0.48  

P/L on Sales of Invest

-7.19   -9.51   -12.68

  -20.88   -9.82  

Prov. & W/O (Net)

31.17   31.81   9.47   9.96   8.95  

P/L in Forex 0.89   0.72   -0.15   0.00   0.00  Others -0.65   0.00   1.59   0.00   0.00  Op. Profit before Working Capital Changes (B)

  663.56

  654.51

  552.87

  454.56

  398.13

Net Profit before Tax & Extraordinary Items (A+B)

  631.92

  596.26

  527.03

  425.00

  365.18

Total (OP before Working Capital Changes) (C )

-24.26

  -188.36

  45.36

  -58.06

  -17.14

Trade receivables

-14.55

  -87.38

  5.25   -11.91   -19.90

 

Inventories -67.99

  -162.14

  -26.85

  -60.57   -14.05

 

Trade Payables 95.46   84.37   66.96   14.42   16.81

 

Loans & Advances

-37.18

  -23.21

  0.00   0.00   0.00  

Cash Generated from/(used in) Operations

  639.30

  466.15

  598.23

  396.50

  380.99

(B+C)Total-others (D)   -

119.18

  -114.61

  -98.64

  -72.93

  -67.70

Interest Paid(Net)

0.00   0.00   -5.60   -13.38   -8.70  

Direct Taxes Paid

-119.18

  -114.61

  -93.04

  -37.51   -47.98

 

Others 0.00   0.00   0.00   -22.04   -11.02

 

Net Cash from Operating Activities (C1=B+C+D)

    520.12

    351.54

    499.59

    323.57

    313.29

Cash Flow from Investing ActivitiesInvestment in Assets :

 

Purchased of Fixed Assets

-142.39

  -74.56

  -128.36

  -96.87   -47.07

 

Sale of Fixed Assets

2.45   3.10   17.74   4.13   2.50  

Financial/Capital Investment :

                   

Purchase of Investments

-3345.00

  -4762.99

  -5328.37

  -4016.31

  -2975.40

 

Sale of Investments

3275.66

  4601.79

  5171.45

  3870.67

  2840.20

 

Interest Received

36.70   10.44   7.89   0.00   0.00  

Invest.In Subsidiaires

-16.00

  -6.60   0.00   0.00   0.00  

Net Cash Used in Investing Activities (C2)

    -188.58

    -228.82

    -259.65

    -238.38

    -179.77

Cash Flow From Financing ActivitiesProceeds:  Proceeds from Issue of shares (incl share premium)

0.07   0.14   0.25   0.10   0.11  

Proceed from 0ther Long Term Borrowings

19.81   0.00   0.00   0.00   0.00  

Proceed from Short Tem Borrowings

9.91   154.17

  5.91   129.83   0.00  

Payments:                    Of the Long Tem Borrowings

-5.85   -5.10   -8.22   -3.28   -13.09

 

Of the short term Borrowings

0.00   -2.76   -48.11

  -4.91   -48.02

 

Dividend Paid -208.59

  -195.22

  -151.96

  -129.68

  -66.47

 

Interest Paid -14.11

  -12.93

  0.00   0.00   0.00  

Others -33.90

  -32.52

  -25.74

  -1.83   8.17  

Net Cash Used in Financing Activities (C3)

    -232.66

    -94.22

    -227.87

    -9.77

    -119.30

                     Net Inc/(Dec) in Cash and Cash Equivalent (Y=C1+C2+C3))

    98.88

    28.50

    12.07

    75.42

    14.22

Cash and Cash Equivalents at End of the year (Y*+Y)

    291.29

    192.41

    163.91

    143.68

    68.26

A. ACCOUNTING POLICIES

Significant accounting policies are summarized below:

1. Accounting Convention:

The accounts have been prepared in accordance with the historical cost convention (except for specifically excluded treatment of accounts referred to in B 16(a) under accrual basis of accounting as per Indian GAAP. Accounts and disclosures thereon comply with the Accounting Standards specified in Companies (Accounting Standard) Rules, other pronouncements of ICAI, provisions of the Companies Act, 1956 and guidelines issued by SEBI applicable.

Indian GAAP enjoins management to make estimates and assumptions that affect reported amount of assets, liabilities, revenue, expenses and contingent liabilities pertaining to year, the financial statements relate to. Actual result could differ from such estimates. Any revision in accounting estimate is recognized prospectively from current year and material revision, including its impact on financial statement, is reported in notes to accounts in the year of incorporation of revision.

2. Fixed Assets and Depreciation:

a. Fixed assets are stated at carrying amount i.e. subject to deduction of

accumulated depreciation.

b. Cost includes inward freight, duties, taxes and other expenses incidental to acquisition and installation.

c. Depreciation on Fixed Assets has been provided on straight line method rates specified in Schedule XIV of the Companies Act and as per the useful lives of the assets estimated by the management when useful life of the assets is deemed less except for part of 5/1 Unit Sahibabad, Alwar unit and Narenderpur unit and for Motor Vehicles where depreciation has been provided for on written down value methods at the rates specified in the aforesaid Schedule.

d. Fixed Assets purchased for less than Rs. 5000/- have been depreciated at the rate of 100%.

e. Patents and trademarks are being amortized over the period of ten years on straight line basis.

f. Softwares are being amortized over the period of five years on straight line basis.

g. For New Projects, all direct expenses and direct overheads (excluding services provided by employees in Company's regular payroll) are capitalized.

h. Capital Subsidy received against fixed capital outlay is deducted from gross value of individual fixed assets, forming part of subsidy scheme granted, by way of proportionate allocation of subsidy amount thereon. Depreciation is charged on net fixed assets after deduction of subsidy amount.

i. During sale of fixed assets, any profit earned towards excess of sale value over gross block of assets, is transferred from profit & loss account to capital reserve.

3. Impairment/discarding of assets:

The Company identifies impairable fixed assets based on cash generating unit concept for tangible fixed assets and asset specific concept for intangible fixed assets at the year-end in term of clause 5 to 13 of AS -28 and clause 83 of AS- 26 respectively for the purpose of arriving at impairment loss thereon, if any, being the difference between the book value and recoverable value of relevant assets. Impairment loss, when crystallizes, is charged against revenue of the year.

Apart from test of impairment within the meaning of AS 28, individual tangible fixed assets of various CGU's are identified for writing down on the ground of obsolescence, damage, redundancy & un-usability at the year end.

4. Financial Assets & Liabilities:

a. Financial assets held for trading:

These assets relate to equity instruments, mutual funds held for short term which are carried at fair value. The difference of cost and fair value is accounted for as loss or income, forming part of transitional provisions, adjustable against opening balance of General Reserves.

b. Financial assets available for sale:

These relate to non-current investments eg. Equity Instruments/ Government Securities held for long term carried at fair value. The difference between cost and fair value is accounted for in investment revaluation reserve forming part of equity.

c. Other financial Assets/Liabilities - Loans, Receivables, Payables:

These include all remaining items of assets and liabilities, (excluding equity, fixed (tangible & intangible) assets inventories and specific exemptions referred to in note 4(g) to follow), being carried at amortized cost. The difference between unamortized value and amortized value is accounted for as a loss or income, forming part of transitional provisions, adjustable against opening balance of revenue reserves.

No amortization is made for financial assets/ liabilities bearing floating rate of interest or where amortization has immaterial impact on profitability in AS - 30.

d. Financial Instruments:

These relate to off - balance sheet exposure towards foreign exchange of the nature of currency fluctuation or forward contract, being mark to market, entered into with the object of hedging against adverse currency fluctuations (not being for trading and speculation) in respect of import/export commitments.

Financial Instruments are held at fair value and the profit or loss arising on year closing date on account of difference between contract rate and exchange rate (the latter being the fair value) on open contracts is recognized as profit or loss of the year appearing under broad head of 'Finance Cost'.

e. Fair value of financial assets - held for trading is determined on the basis of market quotation/NAV issued by investees. In the absence of scope of determination of fair value, same are held at cost.

f. Amortized cost is carried at by way of discounting future cash inflow/outflow in respect of relevant asset/liability as on reporting date against application of effective rate of interest.

g. Interest in subsidiaries/associates/joint venture, employees related dues, obligation under financial lease (in the capacity of lessee/ lessor) have been left out of the purview of treatments referred to for financial assets/liabilities because of different accounting standards dealing with them.

h. No amortized value of fiscal provision or advance tax has been considered because of period of uncertainty of their adjustment.

5. Investments in Subsidiaries, Joint Ventures and Associates:

These are held for long term and valued at cost reduced by diminution of permanent nature therein, if any. No profit or losses of subsidiaries are accounted for.

6. Deferred Entitlement on LTC :

In terms of the opinion of the Expert Advisory Committee of the ICAI, the Company has provided liability accruing on account of deferred entitlement towards LTC in the year in which the employees concerned render their services.

7. Inventories:

Stocks are valued at lower of cost or net realizable value. Basis of determination of cost remain as follows:

a. Raw materials, Packing : Moving weighted Average Basis materials, Stores & Spares

b. Work-in-process: Cost of input plus overhead up to the stage of completion.

c. Finished goods: Cost of input plus appropriate overheads.

8. Research and Development Expenses:

Contributions towards scientific research expenses are charged to the Profit & Loss Account in the year in which the contribution is made.

9. Retirement Benefits:

Liabilities in respect of retirement benefits to employees are provided for as follows:-

a. Defined Benefit Plans:

i) Leave Salary of employees on the basis of actuarial valuation as per AS 15 (revised).

ii) Post separation benefits of directors, which is of the nature of long term benefit, on the basis of actuarial valuation as per AS 15 (revised).

iii) Gratuity Liability on the basis of actuarial valuation as per AS 15 (revised)

b. Defined Contribution Plans:

i) Liability for superannuation fund on the basis of the premium paid to insurance company in respect of employees covered under Superannuation Fund Policy.

ii) Provident fund & ESI on the basis of actual liability accrued and paid to trust / authority.

c. VRS, if paid, is charged to revenue in the year of payment.

10. Recognition of Income and expenses:

a. Sales and purchases are accounted for on the basis of passing of title to the goods.

b. Sales comprise of sale price of goods including excise duty but exclude trade discount and sales tax / VAT.

c. All items of incomes and expenses have been accounted for on accrual basis except for those income stipulated for recognition on realization basis on the ground of uncertainty under AS-9 or income or expenses referred to in appropriate paragraphs of A (4) above.

11. Income Tax & Deferred Taxation:

The liability of Company on account of income tax is estimated considering the provisions of the Income Tax Act, 1961. Deferred tax is recognized, subject to the consideration of prudence, on timing differences being the difference between taxable income and accounting income that originate in one year and capable of reversal in one or more subsequent years.

12. Contingent Liabilities:

Disputed liabilities and claims against the Company including claims raised by fiscal authorities (e.g. Sales Tax , Income Tax, Excise etc.), pending in appeal/court for which no reliable estimate can be made of the amount of the obligation or which are remotely poised for crystallization are not provided for in accounts but disclosed in notes to accounts.

However, present obligation as a result of past event with possibility of outflow of resources, when reliably estimable, is recognized in accounts.

13. Foreign Currency Translation:

a. Transactions in foreign currencies are recognized at rate of overseas currency ruling on the date of transactions. Gain / Loss arising on account of rise or fall in overseas currencies vis-a-vis reporting currency between the date of transaction and that of payment is charged to Profit & Loss Account.

b. Receivables/payables (excluding for fixed assets) in foreign currencies are translated at the exchange rate ruling at the year-end date and the resultant gain or loss, is accounted for in the Profit & Loss Account.

c. Increase / decrease in foreign currency loan on account of exchange fluctuation are debited / credited to profit and loss account.

d. Impact of exchange fluctuation is separately disclosed in notes to accounts.

14. Employee Stock Option Purchase (ESOP):

Aggregate of quantum of option granted under the scheme in monetary term (net of consideration of issue to be paid in cash) in terms of intrinsic value has been shown as Employees Stock Option Scheme outstanding in Reserve and Surplus head of the Balance Sheet with corresponding debit in deferred Employee Compensation under ESOP appearing as Miscellaneous Expenditure under broad head of non-current assets as per guidelines to the effect issued by SEBI.

a. With the exercise of option and consequent issue of equity share, corresponding ESOP outstanding is transferred to share premium account.

b. Employees' contribution for the nominal value of share in respect to option granted to employees of subsidiary Company is being reimbursed by subsidiary

companies to holding Company.

15. Merger / Amalgamation:

Merger / Amalgamation (of the nature of merger) of other Company / body corporate with the Company are accounted for on the basis of purchase method, the assets / liabilities being incorporated in terms of values of assets and liabilities appearing in the books of transferor entity on the date of such merger / amalgamation for the purpose of arriving at the figure of goodwill or amalgamation reserve.

16. Miscellaneous Expenditure:

* Deferred Employees Compensation under ESOP is amortized on straight line basis over vesting period.

* Share issue expenses and research fee paid to technical collaborators are charged to revenue in the year of is occurrence.

B. NOTES TO ACCOUNTS

1. Building constructed on leasehold land included in the value of building shown in Fixed Assets Schedule:

as at March 31, 2012 As at March 31, 2011 Cost/Revalued 18745 17832

Written Down 14718 14220

2. Loans and Advances include Rs.49 (Previous year Rs.49 ) paid by the Company to Excise authorities on behalf of Sharda Boiron Laboratories Limited, now known as SBL Limited, in respect of excise duty demand of Rs. 68 raised by the District Excise Officer, Ghaziabad, against the Company and Sharda Boiron Laboratories Limited. The Hon'ble Supreme Court of India had concurred with the order of the District Excise Officer, Ghaziabad.

The Company had filed the review petition before Division Bench of the Hon'ble Supreme Court of India, which was also decided against the Company. Pursuant to the indemnity bond executed by M/s Sharda Boiron Laboratories Limited in favour of the Company and as per the terms and conditions of the contract executed with them, the recovery proceedings have been initiated by the Company against Sharda Boiron Laboratories Limited for Rs. 49 by invoking the arbitration clause. The matter is pending before Hon'ble High Court of Delhi for the appointment of an arbitrator. The balance amount of Rs. 21 along with interest demanded by the Excise Authorities has been paid directly by Sharda Boiron Laboratories Limited to Excise Authorities. During the year 1991-92 the Company had received a refund of Rs. 6, pursuant to the decision of Hon'ble Supreme Court in this regard. Necessary

adjustments in respect of recovery/refund will be made as per the arbitration proceedings.

3. a. Further to para A (3) above, Company has assessed recoverable value of each cash generating units (CGUs) and each intangible assets based on value-in-use method. Such assessment indicated the value in use of corresponding assets higher than corresponding carrying cost of assets thereby ruling out the cause of further arriving at their net-selling- price and exigency of provision against impairment loss.

b. CGUs include Narenderpur plant, Sahibabad plant, each of plants situated at Nashik /Baddi/Jammu, Rudrapur Plant, Silvasa Plants, Pitampur Plant, Kanpur Plant, Alwar Plant, Newai Plant and Jalpaiguri Plant.

c. Annual discount rate considered for arriving at value-in-use of assets of each CGUs is 7.50% i.e the average interest rate of external borrowing plus risk factor @ 2.00 % per annum.

d. Plant & Machineries worth Rs. 50 lacs (previous year Rs. 2 lacs) in terms of written down value have been discarded on the ground of losing utility.

4. Contingent Liabilities :

a. Claims against the Company not acknowledged as debts:

i. In respect of civil suits filed against the Company Rs. 770 (previous year Rs. 772)

ii. In respect of claims by employees Rs. 44 (previous year Rs. 30)

iii. In respect of excise duty disputes pending with various judicial authorities Rs. 7611 (previous year Rs. 5035).

iv. In respect of Sales Tax under appeal Rs. 1070 (previous year Rs. 1202)

v. In respect of Income tax under appeal Rs. 319 (previous year Rs. 940)

vi. In respect of letters of credit Rs. 390 (previous year Rs. 179)

b. Guarantees given:

In respect of Guarantees furnished by the Company Rs. 122303 (previous year Rs. 93172)

c. Information pursuant to AS 29:

Brief particulars of provisions on disputed liabilities:

5. The Company's freehold land situated at Sahibabad measuring about 7.58 acres was acquired by U.P. Government under Land Acquisition Act and the State Government had allotted and given possession of about 4.72 acres of land on lease to the Company in lieu of acquired land. The Company has filed a claim for

compensation of Rs. 572 before the Office of Special Land Acquisition Officer, Ghaziabad against the land so acquired. However, keeping in view the generally accepted accounting practice, the said claim has not been considered in the books of accounts.

6. Extra ordinary items relates to investment in H&B Stores limited, a wholly owned subsidiary, written off on account of Honorable High Court Delhi approving investee's application for reduction for share capital against cancellation of 448938127 number of equity shares of Re 1 each not being represented by tangible/ intangible assets.

G. The basis used for determination of expected rate of return is average return on long term investment in Government bonds

H. The estimate of future salary increase take in-to account regular increment, promotional increases and Inflationary consequence over price index.

I. Demographics assumptions take in to account mortality factor as per LIC (1994-96) ultimate criteria, employees and normal retirement age at 58.

J. Particulars on planned assets have been ascertained on the basis of last confirmation from Insurance Company.

K. CY - Current year, PY - Previous year

A. Item referred to in 1 above includes Purchases from Dabur Nepal Pvt. Ltd. And Dabur International Ltd. Rs.29451 and Rs.186 (Rs. 21719 & 241) repectively.

B. Item referred to in 2 above includes Sales to, Dabur International Ltd., Weikfieid International (UAE) Ltd., Naturelle LLC, African Consumer Care Ltd., Asian Consumer Care Pakistan (Pvt) Ltd. Rs. 774, Rs. 354, Rs.1448, Rs. 540, and Rs.805 respectively (Rs. 651, Rs. 421, Rs. 869, Rs. 661, & Rs. 384 respectively).

C. Items reffered to in 5 above includes Interest received on loan given to Dermoviva Skin Essentials Inc. and Dabur International Limited, Rs. 9 and Rs. Nil respectively (Rs. 1 & Rs. 246).

D. Item referred to in 10 above relates to loan given to Dabur International Rs.Nil (26854) and H & B Stores Ltd. Rs.2650 (Rs. 1050).

E. Item referred to in 11 above relates to loan repaid by Dabur International Rs.Nil (26854) and Dermoviva Skin Essentials Inc. Rs.Nil (Rs.390).

F. Items referred to in 15 above includes Gaurantees & Collaterals to Dabur Egypt, Naturelle LLC, Asian Consumer Care Pakistan Ltd., Asian Consumer Care Pvt. Ltd. , Dermoviva Skin Essentials INC., Dabur International Ltd., Dabur Lanka (Pvt) Ltd. and Forum 1 Aviation Ltd. Rs. 3372, Nil, Nil, Nil, Rs. 54940, Rs. 59103, Rs. 3561 & Rs. 714 respectively (Rs.1492, Nil, Nil, Nil, Rs. 45259, Rs. 45036, Nil & Rs. 714), which also includes adjustment due to exchange rate fluctuation.

G. Figures in bracket relate to Previous year.

7. Partner, Holding 1% share of the firm Balsara International, a partnership firm wherein investment of the Company amounted to Rs. 49 (99% share ), resigned during the year, with his share of dues been paid off. Being reduced to the status of sole proprietary firm, it became imperative to consolidate the assets and liabilities therein in Company's account merged herein, in this connection, are net fixed assets Rs. 22, Cash and Bank balances Rs. 2, Advance Tax Rs. 33 and Trade Creditors Rs. 7. Excess of investment over net assets inherited, working out of Rs. 16, has been charged off to General Charges.

8. Exchange gain works out to Rs. 2275 (Previous Year Rs. 93) and exchange loss Rs. 2345 (Previous year Rs. 2027) and their net impact has been debited to Profit & Loss Account under the head "Finance Cost"

ii) Lease rent debited to Profit & Loss account of the year. Rs. 67 (Previous year Rs. 58)

iii) Irrevocable lease agreement relates of flat & vehicle, lease period not exceeding five years in respect of any arrangement.

iv) Figures in bracket relate to previous year.

9. AS 30 , 31 & 32:

a. Pursuant to implementation of AS 30, 31 and 32 all assets and liabilities excluding equity, fixed assets (tangible and intangible), inventories and specific exceptions referred to in accounting policy no. A (4 ) of schedule 23 have come to be recognized within the purview of financial assets and financial liabilities. This also includes off balance sheet exposures in derivative instruments referred to in accounting policy no. A( 4)(d), schedule 23. This read with deferred tax and impairment provision on tangible and intangible assets, marks departure from historic concept of accounts otherwise followed by the Company.

b. Financial assets/liabilities available for sale are of the nature of loans, receivables and payables, (not being receivable/ payable in short term context), call for measurements at amortized value as defined in accounting policy no. 4 (b). Schedule 23 unless amortized value does not materially differ from unamortized value or assets /liabilities are held at floating rate of interest.

Effective rate of interest applicable for arriving at discounted value of relevant liabilities & assets as on date, hereby described as amortized value, has been considered on the basis of appropriate Government Bond rate ruling as on 31-03-2012 i.e. 8.4 %. Such benchmarking of effective rate is attributed to expected cognizance taken by government of the market risk , commodity price index, foreign exchange reserve, inflationary & deflationary impact on internal rates & cyclic / non cyclic fluctuations in fiscal & monetary system for the purpose of arriving at the rate of bond.

c. Implementation of AS 30, 31 & 32 led to change in the treatment of financial assets / liabilities / instruments which during the year added to the opening General reserve , deferred tax liability and investment revaluation reserve by Rs. 76, Rs. 37 & Rs. 78 respectively with consequent rise in current investment, non-current investment by Rs. 65 and Rs. 78 respectively and decline in long term

borrowing by Rs. 48.

e. This being the first financial year of implementation of above accounting standard figures of previous years are not applicable for table in 'b' above.

f. Unrealized hedging loss forming part of financial assets of Rs. 53 against off balance sheet exposure appear in the current liabilities in the balance sheet.

g. Value of equity instruments, financial assets not carried at fair value except for those having negligible impact or bearing floating rate of interest Rs. 107 towards non-current investment Rs. 3000 of term deposit with bank maturing little after one year.

h. All financial assets and financial liabilities, not being referred to in above table, being short term in nature and not tradable in primary or secondary market, have been carried at unamortized cost.

i. This being the first year of implementation of AS 30, 31 & 32 question of change in market value, fair value and market risk vis a vis previous year does not occur.

j. The Company has no exposure involving credit risk included inloan or receivable.

k. Rs. 8 of fixed deposit is pledged with government authorities towards excise bond.

l. Outstanding overseas exposure hedged by forward option/ contract against adverse currency fluctuation:

10. Investment in Joint Venture Information (pursuant to AS-27) :

(a) The Company is a party to joint venture agreement controlling the management of Forum 1 Aviation Limited, a domestic jointly controlled corporate entity (JCE) with part of its operation akin to jointly controlled operation, the main object of the JCE being maintenance of aircraft for use of venturers or otherwise. The contributions of venturers are towards capital build up of the JCE and periodic contribution towards cost of maintenance of air craft. Variable component of cost of maintenance is borne by user of the aircraft in proportion to their actual usage and fixed component is shared by all the venturers in proportion to their capital contribution. The participation of the venturers in the affairs of the management of the JCE is through representation in the composition of Board of Directors as agreed in share holder's agreement.

(b) Share of the Company in assets, outside liability, net worth, income and expenses not being accounted for herein works out to Rs. 1011 (Previous year 1219), Rs. 441 (Previous year 553), Rs. 114 (Previous year 173), Rs. 396 (Previous year 422) and Rs. 362 (Previous year 357) respectively in respect of year under audit as per un-audited accounts of the JCE.

(c) Stake of the Company in terms of percentage of total subscribed and paid up capital of JCE is 14.28%. Said amount (Rs. 456) appears under investment head in balance sheet of the Company.

(d) Company's commitment towards revenue expenditure of the JCE amounting to Rs. 439 (Previous year Rs. 452) has been charged to profit and loss account under the head general charges.

(e) The Company has furnished guarantee bond for Rs. 714 (previous year Rs. 714) in respect of borrowing availed by the JCE for acquisition of aircraft which forms part of para B 4 (b)(i) of this schedule.

(f) No income from said investment, unless realized in cash, is recognized in this stand alone account.

11. Trade Payables include Creditors for goods and services.

12. Information pursuant to AS-17 issued by ICAI (Refer Page no. 104).

13. Amount due to Micro & Small enterprises under MSMED Act, 2006 is Rs. 566 (previous year Rs. 172). Identification of such enterprises have been made on the basis of their disclosure in correspondences, bills to the effect as mandated for them. No interest liability has been accrued on account of default in payment to relevant enterprises like previous year.

14. Sale of Services Rs. 41 CY relate to hiring charges paid by customers for using Company's machines.

15. (a) Figures for the previous year have been rearranged/ regrouped as and when necessary in terms of current year's grouping.

(b) Figures are rounded off to nearest rupees lacs.

KEY RATIOS

Value of Liquidity Ratio for Dabur India Ltd

Liquidity Ratio

Description Formula 2012 2011 2010 2009 2008

Current Ratio

Measures the ability of a firm to meet debt requirements as they come due

1.148 1.061 1.053 1.122 0.949

Quick or Acid-Test Ratio

Measures ability to meet short-term cash needs more rigorously by eliminating inventory

0.658 0.562 0.710 0.728 0.604

Cash Flow Liquidity Ratio

Focuses on ability of the firm to generate operating cash flows as a source of liquidity

  0.831 0.589 0.761 0.704 0.655

Average Collection Period

Helps gauge liquidity of accounts receivable and provides information about a company’s credit policies

  21.859

22.633

16.676

17.115

17.600

Days Inventory Held

Measures the efficiency of the firm in managing its inventory

  88.680

92.479

74.621

71.713

66.671

Days Payable Outstanding

Offers insight into a firm’s pattern of payments to suppliers

  98.166

99.360

87.268

77.113

86.087

Value of Activity Ratio for Dabur India Ltd

Activity Ratio Description Formula 2012 2011 2010 2009 2008Accounts Receivable Turnover

Measures efficiency of firm’s collection and credit policies

16.698

16.127

21.888

21.326

20.739

Inventory Turnover

Measures firm’s efficiency in managing its inventory

  4.116 3.947 4.891 5.090 5.475

Accounts Payables Turnover

Helps to gain insight into a firm’s pattern of payment to suppliers

  3.718 3.674 4.183 4.733 4.240

Fixed Asset Turnover

Assesses effectiveness in generating sales from investments in fixed assets

  6.395 6.562 6.333 7.772 7.490

Total Asset Turnover

Assesses effectiveness in generating sales from investments in all assets

1.411 1.454 2.212 1.979 2.414

Value of Leverage Ratio for Dabur India Ltd

Leverage Ratio

Description Formula 2012 2011 2010 2009 2008

Debt Ratio Considers the proportion of all assets that are financed with debt

0.509 0.510 0.420 0.390 0.388

Long-term Reveals the 0.001 0.005 0.128 0.161 0.032

Debt to Total Capitalization

extent to which long-term debt is used for the firm’s permanent financing (both long-term debt and equity)

Debt to Equity

Measures the riskiness of the firm’s capital structure in terms of the relationship between the funds supplied by creditors (debt) and investors (equity)

  1.036 1.039 0.723 0.640 0.633

Times Interest Earned

Indicates how well operating earnings cover fixed interest expenses

42.633

50.688

40.068

30.370

34.440

Cash Interest Coverage

Measures how many times interest payments can be covered by cash flow from operations before interest and taxes

  46.005

40.245

44.681

26.643

33.405

Fixed Charge Coverage

Broader measure of how well operating earnings cover fixed charges

42.633

50.688

16.737

14.604

16.579

Value of Profitability Ratio for Dabur India Ltd

Profitability Ratio

Description Formula 2012

2011

2010

2009

2008

Gross Profit Margin

Measures ability of a company to control costs of inventories or manufacturing of products and to pass along price increases through sales to customers

0.453

0.480

0.507

0.479

0.487

Operating Profit Margin

Measures overall operating efficiency and incorporates all of the expenses associated with ordinary business activities

0.161

0.186

0.189

0.183

0.181

Net Profit Margin

Measures profitability after consideration of all revenue and expense, including interest, taxes, and non-operating items

0.132

0.142

0.147

0.148

0.148

Cash Flow Margin

Measures ability to translate sales into cash

0.139

0.108

0.175

0.135

0.150

Return on Total Assets (ROA) or Return on Investment (ROI)

Measures overall efficiency of firm in managing investment in assets and generating profits

  0.186

0.206

0.326

0.293

0.358

Return on Equity (ROE)

Measures rate of return on stockholders’ investment

0.378

0.420

0.562

0.481

0.585

Cash Return on Assets

Measures firm’s ability to generate cash from the utilization of its assets

  0.196

0.157

0.387

0.267

0.363

Value of Market Ratio for Dabur India LtdMarket Ratio Description Formula 2012 2011 2010 2009 2008Price-to-Earnings

Relates earnings per common share to the market price at which the stock trades, expressing the “multiple” that the stock market places on a firm’s earnings

43.429

38.115

17.054

12.276

16.114

Dividend Payout

Determined by the formula cash dividends per share divided by earnings per share

56.456

43.834

34.068

21.483

24.172

Dividend Yield

Shows the relationship between cash dividends and market price

  1.300 1.150 1.998 1.750 1.500

Analysis

• Debt ratio is 0.509 which indicates that 50% of the business is financed through outsider’s fund which indicates that the borrowing cost of the company is low

• Operating profit is 16% as compared to 45% of g.p. ratio which indicates that the company is losing a huge portion of the profit in administrating and selling cost

• Average collection period is of 21 days as compared to 98 days on account of payment period which means that company is availing a huge portion of short term finance through the mode of creditors

• Debt ratio of the company is continuously increasing which means that the company is in the mode of reducing its cost of borrowings

ITC LIMITED

ITC Limited (BSE: 500875) or ITC is an Indian public conglomerate company headquartered in Kolkata, West Bengal, India.[2] Its diversified business includes four segments: Fast Moving Consumer Goods (FMCG), Hotels, Paperboards, Paper & Packaging and Agri Business. ITC's annual turnover stood at $7 billion and market capitalization of over $34 billion. The company has its registered

office in Kolkata. It started off as the Imperial Tobacco Company, and shares ancestry with Imperial Tobacco of the United Kingdom, but it is now fully independent, and was rechristened to India Tobacco Company in 1970 and then to I.T.C. Limited in 1974.

The company is currently headed by Yogesh Chander Deveshwar. It employs over 29,000 people at more than 60 locations across India and is listed on Forbes 2000. ITC Limited completed 100 years on 24 August 2010.

ITC has a diversified presence in FMCG (Fast Moving Consumer Goods), Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business and Information Technology. While ITC is an outstanding market leader in its traditional businesses of Hotels, Paperboards, Packaging, Agri-Exports and Cigarettes, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery. Meera Shankar, will join the board of ITC Ltd as the first women director in its history. She will be an additional non-executive director of the cigarettes-FMCG-hotel major.

BALANCE SHEET

Year Mar- Mar- Mar- Mar- Mar-

12 11 10 09 08

SOURCES OF FUNDS :

Share Capital + 781.84 773.81 381.82 377.44 376.86

Reserves Total + 18,676.74

15,716.09

14,076.49

13,650.72

11,910.94

Equity Share Warrants 0 0 0 0 0

Equity Application Money 0 0 0 0 0

Total Shareholders Funds 19,458.58

16,489.90

14,458.31

14,028.16

12,287.80

Minority Interest 157.09 140.82 126.38 129.96 113.21

Secured Loans + 0 1.06 0.95 18.86 15

Unsecured Loans + 105.38 88.69 109.81 167.81 209.92

Total Debt 105.38 89.75 110.76 186.67 224.92

Policy Holders Fund 0 0 0 0 0

Other Liabilities 172.69 161.8 0 0 0

Total Liabilities 19,893.74

16,882.27

14,695.45

14,344.79

12,625.93

APPLICATION OF FUNDS :

Gross Block + 15,519.38

14,018.90

12,992.74

11,550.60

9,819.51

Less: Accumulated Depreciation +

5,506.29

4,841.51

4,212.79

3,661.85

3,148.36

Less: Impairment of Assets 0 0 0 0 0

Net Block + 10,013.09

9,177.39

8,779.95

7,888.75

6,671.15

Lease Adjustment -5.67 -5.67 -5.93 -6.12 -8.37

Capital Work in Progress+ 2,396.46

1,367.95

1,023.58

1,243.12

1,156.51

Producing Properties 0 0 0 0 0

Investments + 5,206.83

4,867.80

5,000.48

2,507.07

2,607.89

Current Assets, Loans & Advances

Inventories + 6,428.11

5,734.80

5,092.02

4,794.33

4,268.27

Sundry Debtors + 1,203.84

1,086.68

1,025.51

817.32 892.96

Cash and Bank+ 3,130.12

2,426.87

1,348.58

1,316.93

776.82

Loans and Advances + 597.57 528.79 1,552.57

1,595.93

1,409.45

Total Current Assets 11,359.64

9,777.14

9,018.68

8,524.51

7,347.50

Less : Current Liabilities and Provisions

Current Liabilities + 4,944.90

4,654.00

3,754.20

3,248.42

2,984.34

Provisions + 4,359.10

4,057.10

4,586.75

1,703.84

1,621.26

Total Current Liabilities 9,304.00

8,711.10

8,340.95

4,952.26

4,605.60

Net Current Assets 2,055.64

1,066.04

677.73 3,572.25

2,741.90

Miscellaneous Expenses not written off +

0 0 0.21 0.32 0.42

Deferred Tax Assets 442.34 422.68 351.61 305.9 297.87

Deferred Tax Liability 1,308.11

1,220.75

1,132.18

1,166.50

841.44

Net Deferred Tax -865.77 -798.07 -780.57 -860.6 -543.57

Other Assets 1,093.16

1,206.83

0 0 0

Total Assets 19,893.74

16,882.27

14,695.45

14,344.79

12,625.93

Contingent Liabilities+ 428.93 341.29 424.07 392.82 479.98

PROFIT AND LOSS ACCOUNT

Year Mar 12(12)

Mar 11(12)

Mar 10(12)

Mar 09(12)

Mar 08(12)

INCOME :

Sales Turnover + 36,989.72

32,288.65

27,624.68

24,363.71

22,308.54

Excise Duty 10,437.93

9,713.95

8,488.81

7,807.57

7,670.51

Net Sales 26,551.79

22,574.70

19,135.87

16,556.14

14,638.03

Other Income + 784.35 536.1 643.8 526.22 599.84

Stock Adjustments + 86.42 272.72 -194.77

160.9 2.93

Total Income 27,422.56

23,383.52

19,584.90

17,243.26

15,240.80

EXPENDITURE :

Raw Materials + 9,731.70

8,433.70

6,792.19

6,066.58

5,924.82

Power & Fuel Cost+ 476.91 446.64 410.37 415.67 331.61

Employee Cost + 1,944.28

1,708.50

1,468.80

1,326.76

1,067.70

Other Manufacturing Expenses +

1,110.86

1,004.83

877.97 838.73 347.19

Selling and Administration Expenses +

3,189.96

2,884.71

2,437.98

2,341.73

1,767.66

Miscellaneous Expenses + 953.23 679.51 691.5 711.15 725.28

Less: Pre-operative Expenses Capitalised+

0 0 75.31 72.55 112.75

Total Expenditure 17,406.94

15,157.89

12,603.50

11,628.07

10,051.51

Operating Profit 10,015 8,225. 6,981. 5,615. 5,189.

.62 63 40 19 29

Interest + 101.99 91.67 91.79 49.57 41.24

Gross Profit 9,913.63

8,133.96

6,889.61

5,565.62

5,148.05

Depreciation+ 745.48 699.09 643.9 580.86 472.87

Minority Interest (before tax) 0 0 0 0 0

Profit Before Tax 9,168.15

7,434.87

6,245.71

4,984.76

4,675.18

Tax+ 2,777.57

2,348.20

2,117.50

1,276.68

1,423.75

Fringe Benefit Tax+ 0 -0.25 -0.38 27.41 0

Deferred Tax+ 68.19 17.5 -82.19 321.29 73.26

Net Profit 6,322.39

5,069.42

4,210.78

3,359.38

3,178.17

Minority Interest (after tax) 75.53 61.1 48.84 40.93 28.27

Profit/Loss of Associate Company

11.28 9.61 6.24 6.14 7.86

Net Profit after Minority Interest & P/L Asso.Co.

6,258.14

5,017.93

4,168.18

3,324.59

3,157.76

Extraordinary Items + 138.25 62.43 -8.62 3.63 10.5

Adjusted Net Profit 6,119.89

4,955.50

4,176.80

3,320.96

3,147.26

Adjst. below Net Profit + -3.6 43.06 20.83 8.3 57.71

P & L Balance brought forward

624.34 77.1 785.71 652.56 543.02

Statutory Appropriations 0 0 0 0 0

Appropriations + 4,755.77

4,513.75

4,897.62

3,199.74

3,132.82

P & L Balance carried down 2,123.11

624.34 77.1 785.71 625.67

Dividend 3,518.29

3,443.47

3,818.18

1,396.53

1,319.01

Preference Dividend 0 0 0 0 0

Equity Dividend (%) 450 445 1,000.00

370 350

EPS before Minority Interest (Unit Curr.)

7.36 5.83 9.36 8.24 7.8

EPS before Minority Interest (Adj) (Unit Curr.)

1.78

EPS after Minority Interest (Unit Curr.)

7.27 5.76 9.25 8.15 7.75

EPS after Minority Interest (Adj) (Unit Curr.)

1.78

Book Value (Unit Curr.) 24.76 21.18 37.71 37.01 32.44

CASH FLOW

Mar-12

Mar-11

Mar-10

Mar-09

Mar-08

Cash Flow Summary

Cash and Cash Equivalents at Beginning of the year

2362.27

1304.61

1278.44

741.55

1086.5

Net Cash from Operating Activities

5977.13

5508.74

4457.26

3498.45

3006.689941

Net Cash Used in Investing Activities

-1977.2

-871.34

-3360.32

-1376.5

-1967.150024

Net Cash Used in Financing Activities

-3316.71

-3579.74

-1070.38

-1585.06

-1349.219971

Net Inc/(Dec) in Cash and Cash Equivalent

683.22

1057.66

26.56 536.89

-309.6799

927

Cash and Cash Equivalents at End of the year

3045.49

2362.27

1305 1278.44

776.8200073

ACCOUNTING POLICY

1.Basis of Accounting To prepare financial statements in accordance with the historical cost convention modified by revaluation of certain Fixed Assets as and when undertaken. All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956 based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. 2. Fixed Assets To state Fixed Assets at cost of acquisition inclusive of inward freight, duties and taxes and incidental expenses related to acquisition. In respect of major projects involving construction, related pre-operational expenses form part of the value of assets capitalised. Expenses capitalised also include applicable borrowing costs, if any. To capitalise software where it is expected to provide future enduring economic benefits. Capitalisation costs include licence fees and costs of implementation / system integration services. The costs are capitalised in the year in which the relevant software is implemented for use. To charge off as a revenue expenditure all upgradation/ enhancements unless they bring similar significant additional benefits. 3. Depreciation To calculate depreciation on Fixed Assets, Tangible and Intangible, in a manner that amortises the cost of the assets after commissioning, over their estimated useful lives or, where specified, lives based on the rates specified in Schedule XIV to the Companies Act, 1956, whichever is lower, by equal annual instalments. Leasehold properties are amortised over the period of the lease. To amortise capitalised software costs over a period of five years. 4. Revaluation of Assets As and when Fixed Assets are revalued, to adjust the provision for depreciation on such revalued Fixed Assets, where applicable, in order to make allowance for consequent additional diminution in value on considerations of age, condition

and unexpired useful life of such Fixed Assets; to transfer to Revaluation Reserve the difference between the written up value of the Fixed Assets revalued and depreciation adjustment and to charge Revaluation Reserve Account with annual depreciation on that portion of the value which is written up. 5. Impairment of Assets To provide for impairment loss, if any, to the extent, the carrying amount of assets exceed their recoverable amount. Recoverable amount is higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Impairment losses recognised in prior years are reversed when there is an indication that the impairment losses recognised no longer exist or have decreased. Such reversals are recognised as an increase in carrying amounts of assets to the extent that it does not exceed the carrying amounts that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised in previous years. 6. Investments To state Current Investments at lower of cost and fair value; and Long Term Investments, including in Joint Ventures and Associates, at cost. Where applicable, provision is made to recognise a decline, other than temporary, in valuation of Long Term Investments. 7. Inventories To state inventories including work-in-progress at lower of cost and net realisable value. The cost is calculated on weighted average method. Cost comprises expenditure incurred in the normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity. Obsolete, slow moving and defective inventories are identified at the time of physical verification of inventories and, where necessary, provision is made for such inventories. 8. Revenue from sale of products and services To recognise Revenue at the time of delivery of goods and rendering of services net of trade discounts to customers and Sales tax/ Value added tax recovered from customers but including excise duty on goods payable by the Company. Net revenue is stated after deducting such excise duty. 9. Investment Income To account for Income from Investments on an accrual basis, inclusive of related tax deducted at source. To account for Income from Dividends when the right to receive such dividends is established. 10. Proposed Dividend To provide for Dividends (including income tax thereon) in the books of account as proposed by the Directors, pending approval at the Annual General Meeting.

KEY RATIO

RATIOS Current Ratio 1.2209

421.122377

1.081253

1.721337

1.59534

Quick Ratio 0.530044

0.464045

0.470769

0.753228

0.668584

Cash Flow Liquidity ratio 0.978853

0.910977

0.696065

0.97236

0.821502

Average Collection Period 16.54885

17.57003

19.56071

18.0188

22.266

Days Inventory Held 134.7888

138.0932

147.466

150.4919

154.9935

Days Payable Outstanding 31.77987

36.08537

105.1033

98.31022

104.4785

Account Receivable turnover

22.05591

20.77401

18.65986

20.25662

16.39271

Accounts Payable Turnover 8.751542

7.736489

2.631228

2.761145

2.666273

Inventory Turnover 2.063398

2.021635

1.875352

1.803743

1.79729

Fixed assets turnover 2.65 2.46 2.18 2.10 2.19Total Assets Turnover 1.3346

811.337184

1.302163

1.154157

1.159363

Debt Ratio 0.005297

0.005253

0.007472

0.011698

0.016626

Capital Employed 0.005297

0.005316

0.007537

0.013013

0.017814

gross profit ratio 37.33696

36.03131

36.00364

33.61665

35.16901

Operating Profit Ratio 37.72107

36.43738

36.48332

33.91606

35.45074

Net Profit Ratio 23.81154

22.4562

22.00464

20.29084

21.71173

Return on Investments 31.7808

30.02807

28.65363

23.41882

25.17177

Return on Equity 32.49153

30.74258

29.1236

23.9474

25.86443

Cash Return on Assets 0.300453

0.326303

0.303309

0.243883

0.238136

Price to Earning 14.13043

15.78045

13.99573

22.08738

28.20513

ANALYSIS OF FINANCIAL STATEMENT

1 .QUICK RATIO IS JUST .53 AS COMPARED TO 1.22 FOR CURENT RATIO, WHICH MEANS THAT A SUBSTANTIAL AMOUNT OF CURENT ASSET AMOUNT IS INVESTED IN RAW MATERIAL

2. COMPANY HAS INVENTORY HELD FOR ABOUT 134 DAYS WHICH MEANS THAT A HUGE PORTION OF AMOUNT GETS BLOCKED IN CURRENT ASSET

3. COMPANY HAS DEBT RATIO OF JUST 0.052 WHICH IMPLIES THAT THE COST OF BORROOWING FOR COMPANY IS HIGH AS A GREAT PORTION OF BUSINESS IS FINANCED THROUGH OWNER’S EQUITY

4. COMPANY HAS MAINTAINED ITS G.P. RATIOTO ABOUT 35% WHICH IMPLIES EFIICIENCY IN THE OPERATION OF MANUFACTURING ACTIVITY OF THE ORGANISATION.

HINDUSTAN UNILEVER LIMITED

Hindustan Unilever Limited (HUL) is India's largest consumer goods company based in Mumbai, Maharashtra. It is owned by the British-Dutch company Unilever which controls 52% majority stake in HUL. Its products include foods, beverages, cleaning agents and personal care products.

HUL was formed in 1933 as Lever Brothers India Limited and came into being in 1956 as Hindustan Lever Limited through a merger of Lever Brothers, Hindustan Vanaspati Mfg. Co. Ltd. and United Traders Ltd. It is headquartered in Mumbai, India and has an employee strength of over 16,500 employees  and contributes to indirect employment of over 65,000 people. The company was renamed in June 2007 as “Hindustan Unilever Limited”.

Lever Brothers started its actual operations in India in the summer of 1888, when crates full of Sunlight soap bars, embossed with the words "Made in England by Lever Brothers" were shipped to the Kolkata harbour and it began an era of marketing branded Fast Moving Consumer Goods (FMCG).

Hindustan Unilever's distribution covers over 2 million retail outlets across India directly and its products are available in over 6.4 million outlets in the country. As per Nielsen market research data, two out of three Indians use HUL products

PROFIT AND LOSS A/C

Year Mar 12(12)

Mar 11(12)

Mar 10(12)

Mar 09(15)

Dec 07(12)

INCOME :

Sales Turnover + 24,506.40

20,939.38

18,434.38

21,868.87

14,887.80

Excise Duty 1,070.07

916.83 696.81 1,410.92

1,058.55

Net Sales 23,436.33

20,022.55

17,737.57

20,457.95

13,829.25

Other Income + 402.19 489.89 629.18 814.28 674.34

Stock Adjustments + -95.15 307.6 -75.65 320.72 91.39

Total Income 23,743.37

20,820.04

18,291.10

21,592.95

14,594.98

EXPENDITURE :

Raw Materials + 10,308.66

8,794.99

7,554.93

9,571.38

6,280.91

Power & Fuel Cost+ 299.63 278.54 247.06 304.47 201.46

Employee Cost + 1,207.44

1,016.67

1,148.12

1,259.88

799.6

Other Manufacturing Expenses +

2,603.89

2,165.89

1,769.73

2,177.07

1,500.01

Selling and Administration Expenses +

4,745.46

4,666.41

3,912.10

3,884.14

2,578.14

Miscellaneous Expenses + 721.42 710.33 665.79 1,141.20

738.12

Less: Pre-operative Expenses Capitalised+

0 0 0 0 0

Total Expenditure 19,886.50

17,632.83

15,297.73

18,338.14

12,098.24

Operating Profit 3,856.8

3,187.2

2,993.3

3,254.8

2,496.7

Interest + 1.65 1.01 7.47 26.45 26.49

Gross Profit 3,855.2

3,186.2

2,985.9

3,228.3

2,470.2

Depreciation+ 233.54 229.29 191.94 199.97 141.91

Minority Interest (before tax) 0 0 0 0 0

Profit Before Tax 3,621.6

2,956.9

2,793.9

3,028.3

2,328.3

Tax+ 824.14 609.1 625.31 518.97 313.07

Fringe Benefit Tax+ 0 0 0 38.17 40.23

Deferred Tax+ -2.6 41.18 4.04 -38.69 56.17

Net Profit 2,800.1

2,306.6

2,164.6

2,509.9

1,918.8

Minority Interest (after tax) 9.48 10.58 7.98 5.43 3.98

Profit/Loss of Associate Company

0 0 0 0 0

Net Profit after Minority Interest & P/L Asso.Co.

2,790.6

2,296.0

2,156.6

2,504.5

1,914.8

Extraordinary Items + 164.29 214.87 65.52 31.44 202.23

Adjusted Net Profit 2,626.3

2,081.1

2,091.1

2,473.0

1,712.6

Adjst. below Net Profit + -6.54 0 0 0 153.99

P & L Balance brought forward

1,221.5

798.09 518.12 176.92 640.27

Statutory Appropriations 0 0 0 0 0

Appropriations + 2,153.0

1,872.5

1,876.6

2,163.3

2,532.2

P & L Balance carried down 1,852.6

1,221.5

798.09 518.12 176.92

Dividend 1,620.9

1,410.6

1,417.9

1,634.5

1,976.1

Preference Dividend 0 0 0 0 0

Equity Dividend (%) 750 650 650 750 900

EPS before Minority Interest (Unit Curr.)

11.74 9.61 8.83 8.19 7.18

EPS before Minority Interest (Adj) (Unit Curr.)

7.71

EPS after Minority Interest (Unit Curr.)

11.69 9.56 8.79 8.17 7.16

EPS after Minority Interest (Adj) (Unit Curr.)

7.71

Book Value (Unit Curr.) 17.03 12.66 12.23 9.8 6.92

BALANCE SHEET

Year Mar-12

Mar-11

Mar-10

Mar-09

Dec-07

SOURCES OF FUNDS :

Share Capital + 216.15 215.95 218.17 217.99 217.75

Reserves Total + 3,464.93

2,519.00

2,450.76

1,919.48

1,290.41

Equity Share Warrants 0 0 0 0 0

Equity Application Money 0 0 0 0 0

Total Shareholders Funds 3,681.08

2,734.95

2,668.93

2,137.47

1,508.16

Minority Interest 18.3 14.58 10.46 7.78 5.5

Secured Loans + 0 0 10.49 156.29 38.86

Unsecured Loans + 0 0 0.35 277.84 63.29

Total Debt 0 0 10.84 434.13 102.15

Policy Holders Fund 0 0 0 0 0

Other Liabilities 1,005.97

892.89 0 0 0

Total Liabilities 4,705.35

3,642.42

2,690.23

2,579.38

1,615.81

APPLICATION OF FUNDS :

Gross Block + 4,061.16

3,854.15

3,667.24

2,959.14

2,727.26

Less: Accumulated Depreciation +

1,798.30

1,630.70

1,452.88

1,301.15

1,168.36

Less: Impairment of Assets 0 0 0 0 0

Net Block + 2,262.86

2,223.45

2,214.36

1,657.99

1,558.90

Lease Adjustment 0 0 0 0 0

Capital Work in Progress+ 227.64 289.19 279.98 477.85 188.82

Producing Properties 0 0 0 0 0

Investments + 2,322.16

1,188.50

1,224.43

287.64 1,429.19

Current Assets, Loans & Advances

Inventories + 2,667.37

2,875.69

2,226.41

2,580.53

2,003.77

Sundry Debtors + 856.74 963.29 684.81 560.57 464.93

Cash and Bank+ 1,996.43

1,775.68

2,012.38

1,864.11

262.42

Loans and Advances + 483.32 420.38 615.67 764.99 688.46

Total Current Assets 6,003.86

6,035.04

5,539.27

5,770.20

3,419.58

Less : Current Liabilities and Provisions

Current Liabilities + 5,408.23

5,645.58

5,352.18

4,332.45

3,897.68

Provisions + 1,293.67

1,059.82

1,463.83

1,534.90

1,297.36

Total Current Liabilities 6,701.90

6,705.40

6,816.01

5,867.35

5,195.04

Net Current Assets -698.04

-670.36

-1,276.74

-97.15 -1,775.46

Miscellaneous Expenses not written off +

0 0 0 0 0

Deferred Tax Assets 406.81 400.92 455.5 443.7 409.61

Deferred Tax Liability 196.9 193.55 207.3 190.65 195.25

Net Deferred Tax 209.91 207.37 248.2 253.05 214.36

Other Assets 380.82 404.27 0 0 0

Total Assets 4,705.35

3,642.42

2,690.23

2,579.38

1,615.81

Contingent Liabilities+ 797.03 792.15 473.7 483.99 516.98

CASH FLOW STATEMENT

Mar-12

Mar-11

Mar-10

Mar-09

Dec-07

Cash Flow Summary

Cash and Cash Equivalents at Beginning of the year

250.45

937.16

1864.11

262.42

460.8999939

Net Cash from Operating Activities

2050.18

1923.61

3479.57

2054.05

1732.079956

Net Cash Used in Investing Activities

-513.44

-327.13

-1143.51

885.37

1000.960022

Net Cash Used in Financing Activities

-844.24

-2283.18

-2187.79

-1337.73

-2931.52002

Net Inc/(Dec) in Cash and Cash Equivalent

692.5 -686.7

148.27

1601.69

-198.4799957

Cash and Cash Equivalents at End of the year

942.95

250.46

2012.38

1864.11

262.4200134

ACCOUNTING POLICY

1. Basis for preparation of accounts The accounts have been prepared to comply in all material aspects with applicable accounting principles in India, the applicable Accounting Standards notified under Section 211(3c) of the Companies Act, 1956 and the relevant provisions thereof. All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current / non-current classification of assets and liabilities. 2. Revenue Recognition Sales are recognized when the substantial risks and rewards of ownership in the goods are transferred to the buyer, upon supply of goods, and are recorded net of trade discounts, rebates, sales taxes and excise duties (on goods manufactured and outsourced). It does not include inter-divisional transfers. Income from export incentives such as duty drawback and premium on sale of import licenses is recognized on an accrual basis. Income from services rendered is recognized as the service is performed and is booked based on agreements / arrangements with the concerned parties. Interest on investments is booked on a time proportion basis taking into account the amounts invested and the rate of interest. Dividend income on investments is accounted for when the right to receive the payment is established.

3. Expenditure Expenses are accounted for on accrual basis and provision is made for all known losses and liabilities. Revenue expenditure on research and development is charged against the profit of the year in which it is incurred. Capital expenditure on research and development is shown as an addition to fixed assets. 4. Tangible Fixed Assets Fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Subsequent expenditures related to an item of fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance. Items of fixed assets that have been retired from active use and are held for disposal are stated at the lower of their book value and net realisable value and are shown separately in the financial statements under Other Current Assets. Any expected loss is recognized immediately in the profit and loss account. Losses arising from the retirement of, and gains or losses arising from disposal of fixed assets which are carried at cost are recognized in the profit and loss account. Depreciation is provided on the straight line method over the estimated useful lives of the assets or the rates prescribed under Schedule XIV of the Companies Act, 1956, whichever is higher. 5. Impairment of Assets Impairment loss, if any, is provided to the extent, the carrying amount of assets exceeds their recoverable amount. Recoverable amount is higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Assessment is done at each balance sheet date as to whether there is any indication that an impairment loss recognized for an asset in prior accounting periods may no longer exist or may have decreased. 6. Investments Investments are classified into current and long-term investments. Current investments are stated at the lower of cost and fair value. Long-term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of long-term investments. Investments that are readily realizable and are intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as noncurrent investments.

Investment in land and buildings that are not intended to be occupied substantially for use by, or in the operations of the Company, have been classified as investment property. Investment properties are carried at cost less accumulated depreciation. 7. Inventories Inventories are valued at the lower of cost, computed on a weighted average basis, and estimated net realizable value, after providing for cost of obsolescence and other anticipated losses, wherever considered necessary. Finished goods and work-in-progress include costs of conversion and other costs incurred in bringing the inventories to their present location and condition. 8. Trade Receivables and Loans and Advances Trade Receivables and Loans and Advances are stated after making adequate provisions for doubtful balances. 9.. Provisions and Contingent Liabilities A provision is recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and in respect of which reliable estimate can be made. Provision is not discounted to its present value and is determined based on the best estimate required to settle the obligation at the yearend date. These are reviewed at each year end date and adjusted to reflect the best current estima

HUL RATIOS

RATIO 2012 2011 2010 2009 2008

Current Ratio 0.89584

0.90003

0.812685

0.98344

0.658239

Quick Ratio 0.49784

0.47117

0.486041

0.54363

0.272531

Cash Flow Liquidity ratio 0.6038 0.55169

0.805743

0.66779

0.383924

Average Collection Period 13.343 17.5602

14.09188

10.0014

12.27105

Days Inventory Held 48.9573

59.5269

53.12158

51.3625

60.45309

Days Payable Outstanding 73.4811

81.9793

104.8865

66.7245

87.85561

Account Receivable turnover 27.3552

20.7856

25.90145

36.4949

29.7448

Accounts Payable Turnover 3.60174

3.0947 2.438566

3.9712 3.015738

Inventory Turnover 5.40593

4.26196

4.814854

5.15894

4.382729

Fixed assets turnover 10.36 9.01 8.01 12.34 8.87

Total Assets Turnover 4.98078

5.49705

6.593328

7.93134

8.55871

Debt Ratio 0 0 0.004029

0.16831

0.063219

LONG TERM DEBT TO CAPITAL EMPLOYED

0 0 0.004029

0.16831

0.063219

gross profit ratio 16.4498

40.1077

41.48424

49.4238

51.688

Operating Profit Ratio 16.4568

15.9181

16.87587

15.9098

18.05405

Net Profit Ratio 11.9479

11.5202

12.20353

12.2688

13.87545

Return on Investments 59.5097

63.3269

80.46189

97.3079

118.7559

Return on Equity 76.0684

84.339 81.10404

117.426

127.2325

Cash Return on Assets 0.4357 0.5281 1.29341

0.7963 1.07195

ANALYSIS OF FINANCIAL STATEMENT

1. The company has tremendous amount of cash flow from operating activity ,despite being in the divestment mode,

2. Company’s debt ratio is reducing, which indicates that company is on the path of becoming a zero debt company

3. Despite sharp decline in G.P. ratio, the N.P. ratio has not decline much , because of the decrease in the selling and distribution expenses

4. Return on equity is 76.06% which is a great profit for the equity shareholder’s.

GODREJ CONSUMER PRODUCTS

.

INTRODUCTION

The Consumer Products business was part of the erstwhile Godrej Soaps Limited (GSL) and was demerged into Godrej Consumer Products Limited in April 2001, pursuant to a scheme of demerger approved by the Hon’ble High Court of Judicature, Mumbai, dated March 14, 2001.

Accounting Policy

1. Accounting ConventionThe financial statements are prepared under the historical cost convention, on accrual basis, in accordance with the generally accepted accounting principles in India, the applicable Accounting Standards notified under Section 211(3c) of the Companies Act, 1956 and specified in the Companies (Accounting Standard) Rules, pronouncements of the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956.

2. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires the Management to make estimates and assumptions that affect the reported balances of assets and liabilities as of the date of the financial statements and reported amounts of income and expenses during the period. Management believesthat the estimates used in the preparation of financial statements are prudent and reasonable. Actual results could differ from the estimates.

3. Fixed Assets

Fixed Assets are stated at cost of acquisition or construction, less accumulated depreciation. Cost includes all expenses related toacquisition and installation of the concerned assets.

Direct financing cost incurred during the construction period on major projects is also capitalised.

Fixed assets acquired under finance lease are capitalised at the lower of their fair value and the present value of the minimum lease payments.

4. Asset Impairment

Management periodically assesses using, external and internal sources, whether there is an indication that an asset may be impaired. An impairment occurs where the carrying value of the Asset exceeds its recoverable amount. Recoverable amount is higher of an asset''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. An impairment loss, if any, is recognised in the period in which the impairment takes place.

5. Operating Leases

Leases of assets under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognised as an expense on a straight- line basis over the lease term.

6. Investments

Investments are classified into current and long-term investments. Long term investments are carried at cost. Cost of acquisition includes all costs directly incurred on the acquisition of the investment. Provision for diminution, if any, in the value of long-term investments is made to recognise a decline, other than of a temporary nature. Current investments are stated at lower of cost and net realisable value.

7. Inventories

Inventories are valued at lower of cost and estimated net realisable value. Cost is computed on the weighted average basis and is net of CENVAT. Finished goods and work-in-progress include cost of

conversion and other costs incurred in bringing the inventories to their present location and condition. Finished goods valuation also includes excise duty. Provision is made for cost of obsolescence and other anticipated losses, whenever considered necessary.

8. Borrowing Costs

Borrowing costs that are directly attributable to the acquisition of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalised as part of the cost of that assettill the date it is put to use. Other borrowing costs are recognised as an expense in the period in which they are incurred.

9. Revenue Recognition

- Sales are recognised when goods are supplied and are recorded net of returns, trade discounts, rebates, sales taxes and excise duties.

- Income from processing operations is recognised on completion of production / dispatch of the goods, as per the terms of contract.

- Export incentives are accounted on accrual basis and include the estimated value of export incentives receivable under the Duty Entitlement Pass Book Scheme.

- Dividend income is recognised when the right to receive the same is established.

- Interest income is recognised on a time proportion basis.

- Insurance claims and transport and power subsidies from the Government are accounted on cash basis when received.

Balance Sheet

Year Mar-12 Mar-11 Mar-10 Mar-09 Mar-08

SOURCES OF FUNDS :

Share Capital +

34.03 32.36 30.82 25.7 22.58

Reserves Total +

2,781.15 1,692.80 923.87 545.83 148.98

Equity Share Warrants

0 0 0 0 0

Equity Application Money

0 0 0 0 0

Total Shareholders Funds

2,815.18 1,725.16 954.69 571.53 171.56

Minority Interest

88.23 0 0 0 0

Secured Loans +

703.87 1,067.18 36.87 229.57 92.1

Unsecured Loans +

824.25 274.86 0 48 95

Total Debt 1,528.12 1,342.04 36.87 277.57 187.1

Policy Holders Fund

0 0 0 0 0

Other Liabilities

29.41 26.71 0 0 0

Total Liabilities

4,460.94 3,093.91 991.56 849.1 358.66

APPLICATION OF FUNDS :

Gross Block + 4,185.74 3,455.14 726.73 550.2 389.28

Less: Accumulated Depreciation +

493.95 377.46 153.14 109.76 125.35

Less: Impairment of Assets

0 0 0 0 0

Net Block + 3,691.79 3,077.68 573.59 440.44 263.93

Lease Adjustment

0 0 0 0 0

Capital Work in Progress+

37.58 8.02 0.84 2.5 71.58

Producing Properties

0 0 0 0 0

Investments + 0 0 67 7.51 0.01

Current Assets, Loans

& Advances

Inventories + 783.91 439.41 264.43 167.47 191.56

Sundry Debtors +

472.53 383.99 115.26 60.19 50.95

Cash and Bank+

639.87 226.91 305.16 378.32 42.59

Loans and Advances +

130.55 186.76 224.68 126.77 66.77

Total Current Assets

2,026.86 1,237.07 909.53 732.75 351.87

Less : Current Liabilities and Provisions

Current Liabilities +

1,504.24 1,377.17 532.62 291.86 290.45

Provisions + 52.06 17.49 20.19 38.03 32.24

Total Current Liabilities

1,556.30 1,394.66 552.81 329.89 322.69

Net Current Assets

470.56 -157.59 356.72 402.86 29.18

Miscellaneous Expenses not written off +

0 0 0 0 2.87

Deferred Tax Assets

18.3 11.33 2.92 2.29 1.83

Deferred Tax Liability

17.79 12.73 9.51 6.5 10.74

Net Deferred Tax

0.51 -1.4 -6.59 -4.21 -8.91

Other Assets 260.5 167.2 0 0 0

Total Assets 4,460.94 3,093.91 991.56 849.1 358.66

Contingent Liabilities+

2,272.02 2,145.52 92.88 251.68 208.89

Profit & Loss Account

Year Mar 2012

Mar 2011

Mar 2010

Mar 2009

Mar 08(12)

INCOME :

Sales Turnover + 4,986.61 3,775.89 2,084.27 1,438.90 1,134.43

Excise Duty 120.45 82.29 40.58 42.26 30.86

Net Sales 4,866.16 3,693.60 2,043.69 1,396.64 1,103.57

Other Income + 252.17 93.38 44.3 39.93 4.59

Stock Adjustments +

212.26 45.22 40.45 -8.91 23.42

Total Income 5,330.59 3,832.20 2,128.44 1,427.66 1,131.58

EXPENDITURE :

Raw Materials + 2,530.78 1,752.40 986.75 760.63 541.4

Power & Fuel Cost+

79.96 53.39 33.46 35.61 25.03

Employee Cost + 391.91 284.5 151.8 86.53 72.5

Other Manufacturing Expenses +

111.98 86.07 32.92 25.89 23.28

Selling and Administration Expenses +

994.66 774.11 323.26 245.08 223.82

Miscellaneous Expenses +

106.98 130.31 145.63 26.61 25.06

Less: Pre-operative Expenses Capitalised+

0 0 0 0 0

Total Expenditure 4,216.27 3,080.78 1,673.82 1,180.35 911.09

Operating Profit 1,114.32 751.42 454.62 247.31 220.49

Interest + 72.59 48.58 11.1 18.86 14.84

Gross Profit 1,041.73 702.84 443.52 228.45 205.65

Depreciation+ 64.44 49.92 23.6 19.23 18.17

Minority Interest (before tax)

0 0 0 0 0

Profit Before Tax 977.29 652.92 419.92 209.22 187.48

Tax+ 227.94 137.82 79.55 31.78 26.6

Fringe Benefit Tax+

0 0 0 0.75 0.73

Deferred Tax+ -1.89 0.39 0.78 3.43 0.92

Net Profit 751.24 514.71 339.59 173.26 159.23

Minority Interest (after tax)

24.52 0 0 0 0

Profit/Loss of Associate Company

0 0 0 0 0

Net Profit after Minority Interest & P/L Asso.Co.

726.72 514.71 339.59 173.26 159.23

Extraordinary Items +

157.72 33.81 1.26 0.03 0.1

Adjusted Net Profit

569 480.9 338.33 173.23 159.13

Adjst. below Net Profit +

0 56.64 0 4.67 0

P & L Balance brought forward

606.58 296.96 137.62 96.33 60.47

Statutory Appropriations

0 0 0 0 0

Appropriations + 242.48 261.73 180.25 136.64 123.37

P & L Balance carried down

1,090.82 606.58 296.96 137.62 96.33

Dividend 156.63 163.14 125.86 102.98 92.76

Preference Dividend

0 0 0 0 0

Equity Dividend 475 450 425 400 400

(%)

EPS before Minority Interest (Unit Curr.)

21.33 14.87 10.27 6.06 6.35

EPS before Minority Interest (Adj) (Unit Curr.)

4.82

EPS after Minority Interest (Unit Curr.)

20.61 14.87 10.27 6.06 6.35

EPS after Minority Interest (Adj) (Unit Curr.)

4.82

Book Value (Unit Curr.)

82.73 53.31 30.98 22.24 7.6

Cash Flow

Cash Flow Summary Mar-12 Mar-11 Mar-10 Mar-09 Mar-08

Cash and Cash Equivalents at Beginning of the year

70.15 242.8 344.57 19.85 21.73

Net Cash from Operating Activities

687.64 257.92 267.98 136.38 156.97

Net Cash Used in Investing Activities

-1004.73

-997.28 -227.85 5.29 -68.19

Net Cash Used in Financing Activities

438.91 566.71 -199 183.05 -90.66

Net Inc/(Dec) in Cash and Cash Equivalent

121.82 -172.65 -158.87 324.72 -1.88

Cash and Cash Equivalents at End

191.97 70.15 185.7 344.57 19.85

of the year

RATIOS

RATIO 2012 2011 2010 2009 2008

Current Ratio 1.302358157

0.887004718

1.645284998

2.221195

1.090427345

Quick Ratio 0.798657071

0.57193868

1.166947052

1.713541

0.496792587

Cash Flow Liquidity ratio

0.411148236

0.162699152

0.552016063

1.146807

0.131984257

Average Collection Period

35.44344 37.94573045

20.58526489

15.73015

16.85144576

Days Inventory Held 67.86262502

52.05975435

57.66268177

51.7868

76.74258306

Days Payable Outstanding

66.67835551

39.46807302

29.88131938

35.42233

59.75232963

Account Receivable turnover

10.29809748

9.619000495

17.73112962

23.20385

21.65986261

Accounts Payable Turnover

4.043766148

6.53306517

8.793183974

7.932431

4.439892725

Inventory Turnover 3.973198454

4.952914135

4.556706879

5.425808

3.456932554

Fixed assets turnover

1.32 1.20 3.56 3.17 4.18

Total Assets Turnover

1.090837357

1.193829168

2.061085562

1.644847

3.076925222

Debt Ratio 0.342555605

0.088839042

0 0.05653

0.264874812

Long term debt to Capital Employed

0.342555605

0.433768274

0.037183832

0.326899

0.521663971

gross profit ratio 21.4076397

19.02858999

21.70192152

16.35711

18.63497558

Operating Profit Ratio

22.89937035

20.34383799

22.24505674

17.7075

19.97970224

Net Profit Ratio 15.4380456

13.93518519

16.61651229

12.40549

14.42862709

Return on Investments

16.84039687

16.63623053

34.24805357

20.40513

44.39580661

Return on Equity 26.6853274

29.83549352

35.57070882

30.31512

92.81301003

Cash Return on Assets

0 0.244978893

0.28551892

0.208724

0.229929893

Price to Earning 22.87857478

24.5729657

26.45082765

21.78218

19.54330709

ANALYSIS ON FINANCIAL STATEMENT

1. Company has debt ratio of .34 which implies that business is financed about equally from both the sources that is shareholders & Debt which implies low cost of borrowing.

2. Net Profit ratio of company is continuously increasing because of decrease in selling and Administration expenses and increase in G.P margin.

3. Average collection period of the company doubled in the last 5 years leads to increase in the current ratio.

4. Days inventory held has increased to 67 days from 52 days which is the reason for increase in current ratio.

BRITANNIA INDUSTRIES LTD

For the year ended 31st March 2008, the Company achieved a sales growth of 17.5% on an expanded base arising from 27.5% growth in the previous year. Net Profit of the Company increased 77.5 % to Rs 1,910 Mn compared with Rs 1,076 Mn in 2006-07. Operating Margin increased by 307 basis points to 7.5%.

The Company witnessed all round growth in key categories with Biscuits recording sales of Rs. 23,299 Mn. Bread, Cake and Rusk business crossed the Rs. 2,700 Mn mark during 2007-08. This business has doubled in two years.

In an intensely competitive biscuit environment, all ³Power Brands² of the Company recorded double digit growth, with Tiger and Good Day growing in excess of 20%. The Company¹s innovation forays have successfully addressed new benefit clusters and NutriChoice Digestive has claimed its position in the health and vitality space. The Company continues to maintain its leadership edge in 6 out of 7 key product segments, the only exception being Glucose.

The Company introduced several new and renovated offerings in Tiger, Good Day, Treat and MarieGold. The health and nutrition platform was buttressed by Tiger Banana with ³iron-zor², fortified Milk Bikis, renovated MarieGold and Nutrichoice Digestive. To tap the more indulgent consumers, your Company launched Good Day Classic Cookies, while continuing to roll out individual consumption packs at the highly affordable Rs. 5 price point.

The Bread, Cake and Rusk portfolio was strengthened with the successful relaunch of Breads, fortified with vitamins and minerals, positioning them firmly as the healthy start to your day. This innovation combined with relevant consumer activation in key markets has seen a 30%+ growth in the Bread, Cake and Rusk business.

As a Corporate, Britannia worked for the benefit of all stakeholders - shareholders, consumers, dealers , suppliers, bankers and employees. It has established an excellent track record in terms of its financial performance and dividends distributed to its shareholders. This has been adequately demonstrated with the Company's topline growing from Rs 10,301 Mn in 1999 to Rs 26,176 Mn in 2008, a growth of 154% over the last 10 years. The net profit grew even more significantly at 382% from Rs 396 Mn in 1998-99 to Rs 1,910 Mn in 2007-08, giving a CAGR of 19.1%. As at 31st March 2008, the issued and paid

up capital of Britannia amounts to 23, 890,163 equity shares having a nominal value of Rs 10 each. The shareholder base is about 25,300 in number.

Balanced Sheet

  Year Mar 12  Mar 11  Mar 10  Mar 09  Mar 08   SOURCES OF FUNDS :

                                                                

 Share Capital           

23.89

          

23.89           

23.89

          

23.89

          

23.89

  Reserves Total

          

496.15

          

427.41

          

372.36

          

800.65

          

731.92

Capital Reserves

0.43      0.43      0.43      0.43      0.3     

General Reserves

256.41

     237.73

     223.21

     686.66

     667.66

    

`Capital Redemption Reserve

3.96      3.96      3.96      3.96      3.96     

Profit & Loss Account Balance

235.35

     185.29

     144.76

     109.6      60     

  Total Shareholders Funds

           520.04

           451.3            396.25

           824.54

           755.81

  Secured Loans

           0.58            406.89            408.1            2.2            1.94

Non Convertible Debentures

0      406.13

     406.13

     0      0     

Term Loans Others

0      0      0      2.2      1.94     

Deferred Credit / Hire Purchase

0.58      0.76      0      0      0     

Secured Loans Others

0      0      1.97      0      0     

 Unsecured Loans

           27.57            23.68            21.51            22.97            104.16

Loans from Banks

27.57      23.68      21.51      22.97      79.16     

Commercial Paper

0      0      0      0      25     

   Total Debt            28.15

           430.57

           429.61

           25.17

           106.1

  Other Liabilities

          

136.73

          

138.67

          

0           

0           

0

   Total Liabilities

           684.92

           1,020.54

           825.86

           849.71

           861.91

  APPLICATION OF FUNDS :

                                                                

 Gross Block           

677.36

          

593.56

          

547.83

          

511.5

          

453.18

Goodwill 0      0      0      0      0     

Patent 0.03      0.03      0.05      0.05      0.05     Technical Know-how

0      0      0      0      0     

Leasehold Land

22.75      10.86      5.22      5.22      5.22     

Freehold Land 2.53      2.53      2.53      2.53      2.53     Railway Sidings

0      0      0      0      0     

Buildings 90.85      61.25      59.98      59.2      52.77     Plant and Machinery

506.04

     472.07

     436.65

     405.67

     357.48

    

Furniture and Fixtures

10.9      9.43      8.63      7.84      7.53     

Office Equipments

29.68      26.26      0      0      0     

Computers 0      0      25.65      23.14      23.32     Vehicles 1.85      3.33      3.66      3.3      2.66     Other Fixed Assets

12.73      7.8      5.46      4.55      1.62     

  Less : Accumulated Depreciation

          

298.27

          

289.86

          

266.33

          

233.66

          

212.19

Leasehold Land

0.52      0.31      0.25      0.23      0.17     

Buildings 19.33      17.3      15.64      14.01      12.53     Plant and Machinery

249.85

     248.18

     229.52

     203.07

     185.33

    

Furniture and Fixtures

4.79      4.62      4.18      3.85      3.64     

Office Equipments

18.74      14.68      0      0      0     

Computers 0      0      13.12      10.24      9.23     Vehicles 0.74      1.96      1.91      1.4      1     Other Fixed Assets

4.3      2.81      1.71      0.86      0.29     

  Less:Impairment of Assets

           0            0            0            0            0

  Net Block           

379.09

          

303.7           

281.5

          

277.84

          

240.99

Leasehold Land

22.23      10.55      4.97      4.99      5.05     

Freehold Land 2.53      2.53      2.53      2.53      2.53     Railway Sidings

0      0      0      0      0     

Buildings 71.52      43.95      44.34      45.19      40.24     Plant and Machinery

256.19

     223.89

     207.13

     202.6      172.15

    

Furniture and Fixtures

6.11      4.81      4.45      3.99      3.89     

Office Equipments

10.94      11.58      0      0      0     

Computers 0      0      12.53      12.9      14.09     Vehicles 1.11      1.37      1.75      1.9      1.66     Other Fixed Assets

8.43      4.99      3.75      3.69      1.33     

  Capital Work in Progress

          

79.73

          

11.7           

9.97           

6.02           

9.69

Capital Advances

0      0      0      1.8      0.76     

Other Capital Work in Progress

79.73      11.7      9.97      4.22      8.93     

 Investments           

428.94

          

545           

490.64

          

423.1

          

380.83

Quoted Equity 6.46      3.14      0.02      0.02      0.02     Unquoted Equity

202.88

     185.08

     135.28

     67.25      63.95     

Quoted Debentures/Bonds

131.12

     131.12

     81.12      0      0     

Unquoted Debentures/Bonds

7.52      7.07      7.57      16.09      13.02     

Unquoted Units

85.03      206.82

     272.28

     367.73

     327.9     

Preference Shares

6.05      24.33      70.52      4.51      8.44     

Other Investments

24.88      38.21      0      0      0     

Less : Prov.for dimunition in value of investment

35      50.77      76.15      32.5      32.5     

   Current Assets, Loans & Advances

                                                                

  Inventories           

382.28

          

311.2           

268.34

          

253.63

          

301.53

Raw Materials 201.83

     132.99

     123.73

     133.99

     199.66

    

Work-in Progress

1.42      0.29      0.27      0.3      0.16     

Finished Goods

127.65

     121.53

     103.34

     81.86      62.55     

Stores and Spares

14.12      11.88      11.48      10.63      9.66     

Packing Materials

37.26      44.51      29.52      26.85      29.5     

 Sundry Debtors

          

52.14

          

57.26           

39.49

          

49.61

          

46.32

Debtors more than Six months

6.16      6.5      7.21      6.63      6.77     

Debtors 50.69      55.28      36.35      46.47      41.82     

OthersLess : Provisions for Doubtful Debts

4.71      4.52      4.07      3.49      2.27     

  Cash and Bank

          

30.94

          

28.75           

23.36

          

40.8           

43.77

 Loans and Advances

          

182.08

          

70.63           

207.7

          

195.3

          

160.84

Bills Receivable

0      0      0      0      0     

Loans to Subsidiary

8.52      9.2      14.5      15.39      7.43     

Loans to Group / Associate Companies

0      0      0      4.63      29.39     

Loans to Others

0      0      0      1.26      0.79     

Deposits with Government

2.02      0.64      2.75      1.15      1.57     

Intercorporate Deposits

0      0      10      0      0     

Deposits Others

63.19      2.28      12.12      13.71      13.18     

Advance Tax 7.4      15.3      17.6      5.41      2.85     Advances recoverable in cash or kind

94.31      36.84      161.74

     205.32

     118.19

    

Less : Provision for Doubtful Advances

0      0      13.7      51.57      12.57     

Interest Accrued on Investments

4.27      4.33      1.83      0      0     

Other Current Assets

2.37      2.04      0.86      0      0.01     

   Total Current Assets

          

647.44

          

467.84

          

538.89

          

539.34

          

552.46

  Less : Current Liabilities and Provisions

                                                                

 Current Liabilities

          

854.46

          

359.06

          

310.89

          

265.8

          

247.02

Sundry Creditors

349.07

     243.4      119.1      87.34      94.67     

Creditors for Goods

4.5      2.84      3.86      2.55      1.4     

Creditors for Capital Goods

12.87      3.72      0      0      0     

Creditors for 0      0      0      0      0     

FinanceCreditors for Others

331.7      236.84

     115.24

     84.79      93.27     

Bank Overdraft / Short term credit

0      29.24      3.21      1.73      2.44     

Advances from Customers / Credit balances

11.77      9.36      14.01      0      0     

Unclaimed Dividend

2      1.82      1.73      1.46      1.36     

Interest Accrued But Not Due

1.58      1.38      1.14      0      0     

Other Liabilities

490.04

     73.86      171.7      175.27

     148.55

    

  Provisions           

124.8

          

96.65           

190.83

          

147.48

          

100.65

Provision for Tax

0      0      23.25      0      0     

Provision for Corporate Dividend Tax

16.47      12.6      9.92      16.24      7.31     

Provision for Gratuity

0      0      0      6.89      6.86     

Provision for Dividend

101.53

     77.64      59.73      95.56      43     

Proposed Equity Dividend

101.53

     77.64      59.73      95.56      43     

Other Provisions

6.8      6.41      97      27.87      43.48     

  Total Current Liabilities

          

979.26

          

455.71

          

501.72

          

413.28

          

347.67

   Net Current Assets

          

-331.82

          

12.13           

37.17

          

126.06

          

204.79

 Miscellaneous Expenses not written off

           0            0            0            26.64            23.23

Deferred revenue expenses

0      0      0      51.58      23.23     

Less: Misc.Expenditure written off during the year

0      0      0      24.94      0     

   Deferred            23.68            22.87            31.18            14.31            25.02

Tax Assets  Deferred Tax Liability

           31.84            29.11            24.6            24.26            22.64

   Net Deferred Tax

           -8.16            -6.24            6.58            -9.95            2.38

  Other Assets            137.14

           154.25            0            0            0

   Total Assets            684.92

           1,020.54

           825.86

           849.71

           861.91

Profit and Loss Account :

   Year Mar 12(12) 

Mar 11(12) 

Mar 10(12) 

Mar 09(12) 

Mar 08(12) 

  INCOME : Sales Turnover 5,032.8

14,255.79

3,426.64

3,142.89

2,616.98

   Excise Duty 58.62 32.27 23.18 30.68 29.8  Net Sales 4,974.1

94,223.52

3,403.46

3,112.21

2,587.18

  Other Income 58.53 48.92 50.83 84.59 54.07 Stock Adjustments 4.79 17.89 21.35 19.61 -17.05   Total Income 5,037.

514,290.33

3,475.64

3,216.41

2,624.20

  EXPENDITURE : Raw Materials 3,184.5

42,782.23

2,184.97

1,930.00

1,540.64

  Power & Fuel Cost 38.25 29.55 22.38 21.47 22.78 Employee Cost 145.87 119.93 99.94 90.01 85.41  Other Manufacturing Expenses

450.01 359.94 313.76 289.32 235.36

 Selling and Administration Expenses

725 614.6 558.28 464.16 386.78

  Miscellaneous Expenses 156.08 103.68 129.9 139.58 82.28 Less: Pre-operative Expenses Capitalised

0 0 0 0 0

   Total Expenditure 4,699.75

4,009.93

3,309.23

2,934.54

2,353.25

  Operating Profit 337.76 280.4 166.41 281.87 270.95  Interest 38.07 37.75 8.21 16.01 9.73  Gross Profit 299.69 242.65 158.2 265.86 261.22  Depreciation 47.32 44.59 37.54 33.46 29.08  Profit Before Tax 252.37 198.06 120.66 232.4 232.14  Tax 63.71 39.95 20.67 34.38 35.6 Fringe Benefit tax 0 0 0 5.3 6.67  Deferred Tax 1.92 12.82 -16.52 12.32 -1.13  Reported Net Profit 186.74 145.29 116.51 180.4 191  Extraordinary Items 18.87 15.57 -28.15 -10.44 12.58  Adjusted Net Profit 167.87 129.72 144.66 190.84 178.42  Adjst. below Net Profit 0 0 0 0 0

  P & L Balance brought forward

185.29 144.76 109.6 60 60

  Statutory Appropriations 0 0 0 0 0 Appropriations 136.68 104.76 81.35 130.8 191   P & L Balance carried down 235.35 185.29 144.76 109.6 60  Dividend 101.53 77.64 59.73 95.56 43   Preference Dividend 0 0 0 0 0  Equity Dividend % 425 325 250 400 180   Earnings Per Share-Unit Curr

14.25 11.11 44.62 68.71 76.89

  Earnings Per Share(Adj)-Unit Curr   Book Value-Unit Curr 43.54 37.78 165.86 345.14 316.37

Financial Ratios :

   Year Mar 12 

Mar 11  Mar 10  Mar 09  Mar 08 

current ratio 1.89 0.97 0.94 1.18 1.45quick ratio 0.27 0.2 0.16 0.3 0.33cash flow liquidity ratio .69 1.32 1.20 0.92 2.31average collection period

3.7 4.9 4.19 5.6 6.46

days inventory held 29.67 28.34 30.39 33.0 46.9

operating cycle 33 33 34 39 52Debt to equity ratio .05 .95 1.02 .03 .14account recievable turnover

43.9 52.7 46.6 42.05 37.49

inventory turnover 10.9 11.5 10.5 10.0 7.10accounts payable turnover

13.4 16.4 27.0 33.2 24.69

fixed asset turnover 13.09 13.8 12.09 11.20 10.73total asset turnover 8.41 4.45 3.61 3.12 2.6debt ratio .23 .55 .52 .02 .12times interest earned 8.87 7.42 20.26 17.60 27.8cash interest coverage 8.1 8.4 32.1 18.5 11.13debt service coverage ratiofixed charge coverage 8.8 7.42 20.26 17.60 27.84cash flow adequacygross profit margin 0.06 0.05 0.046 0.08 0.10operating profit margin 0.067 0.066 0.048 0.090 0.10cash flow margin 0.042 0.057 0.069 0.07 0.024ROI 0.28 0.13 0.15 0.19 0.18ROE 0.32 0.28 0.36 0.23 0.23cash return on assets 0.35 0.25 0.24 0.24 0.064EPS 14.05 10.86 60.55 79.88 74.68

price to earnings 37.7 32.7 5.2 3.2 3.6book value 43.54 37.78 165.86 345.14 316.37dividend payout 8.5 6.5 25 40 18dividend yield 0.016 0.018 0.079 0.15 0.06

SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of accounting and preparation of financial statementsThe financial statements are prepared under the historical cost convention, on the accrual basis of accountingto comply in all material aspects with the applicable accounting principles in India, the mandatory AccountingStandards (‘AS’) prescribed by the Companies (Accounting Standard) Rules, 2006, the relevant provisions of theCompanies Act, 1956 (‘the Act’) and the guidelines issued by the Securities and Exchange Board of India (‘SEBI’).(b) Use of estimatesThe preparation of the financial statements, in conformity with generally accepted accounting principles in India,requires that the Management makes estimates and assumptions that affect the reported amounts of assets andliabilities, disclosure of contingent liabilities as at the date of the financial statements and the reported amounts ofrevenue and expenses during the reporting period. Actual results could differ from those estimates. Any revisionto accounting estimates is recognised prospectively in current and future periods.(c) Fixed assetsTangible assetsTangible assets are stated at their cost of acquisition or construction less accumulated depreciation. Cost includesinward freight, duties, taxes and expenses incidental to acquisition and installation or construction, net ofCENVAT and VAT credit, where applicable.The cost of the fixed assets not ready for their intended use before such date, are disclosed as capital work-inprogress.Intangible assetsIntangible assets are stated at cost of acquisition less accumulated amortisation.(d) Depreciation and amortisationDepreciation in respect of all the assets is provided on straight line method. The rates of depreciation prescribed inSchedule XIV to the Act are considered as minimum rates. If the Management’s estimate of the useful life of a fixedasset at the time of the acquisition of the asset or of the remaining useful life on a subsequent review is shorterthan envisaged in the aforesaid schedule, depreciation is provided at a higher rate based on the Management’sestimate of the useful life / remaining useful life.Vehicles acquired on finance lease are depreciated over a period of 5 years.With effect from 1 April 2010, the Management has revised the estimated useful life for computers (part of office

equipments) to four years (from six years used earlier), based on a review of useful life of such assets.Computer softwares are fully depreciated over a period of six years, based on the review of useful life of suchassets.Assets costing individually upto ` 5,000/- are fully depreciated in the year of addition.Leasehold land is amortised over the period of primary lease.(e) Impairment of assetsThe Company assesses at each balance sheet date whether there is any indication that an asset, includingintangible, may be impaired. If any such indication exists, the Company estimates the recoverable amount ofthe asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the statement of profit and loss. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost. An impairment loss is reversed only to the extent that the carrying amount of asset does not exceed the net book value that would have been determined, if no impairment loss had been recognised.(f) LeasesAssets acquired under lease where the Company has substantially all the risks and rewards of ownership are classified as finance lease. Such leases are capitalised at the inception of lease at lower of the fair value and present value of minimum lease payments. Assets taken on finance lease are depreciated over their estimated useful life or the lease term whichever is lower.Assets acquired under lease where the significant portion of risks and rewards of ownership are retained by the lessor are classified as operating lease. Lease rentals are charged to the statement of profit and loss on accrual basis.(g) InventoriesInventories are valued at the lower of cost (including prime cost, excise duty and other overheads incurred in bringing the inventories to their present location and condition) and estimated net realisable value, after providingfor obsolescence, where appropriate. The comparison of cost and net realisable value is made on an item-by-item basis. The net realisable value of materials in process is determined with reference to the selling prices of related finished goods. Raw materials, packing materials and other supplies held for use in production of inventories are not written down below cost except in cases where material prices have declined, and it is estimated that the cost of the finished products will exceed their net realisable value.The provision for inventory obsolescence is assessed regularly based on estimated usage and shelf life of products. Raw materials, packing materials and stores and spares are valued at cost computed on monthly moving weighted average basis. The cost includes purchase price, inward freight and other incidental expenses net of CENVAT and VAT credit, where applicable.Work-in-progress is valued at input material cost plus conversion cost as applicable.Finished goods are valued at lower of net realisable value and prime cost, excise duty and other overheads incurred in bringing the inventories to their present location and condition.(h) Trade receivables and loans and advances

Trade receivables and loans and advances are stated after making adequate provision for doubtful receivables and loans and advances.(i) InvestmentsLong-term investments are stated at cost. A provision for diminution is made to recognise a decline, other than temporary, in the value of long-term investments.Current investments are stated at lower of cost and fair value for each investment individually.(j) Revenue recognitionRevenue from sale of goods and sale of scrap is recognised on transfer of all significant risks and rewards of ownership to the buyer. The amount recognised as sale is exclusive of sales tax and net of trade discounts and sales returns. Sales are presented both gross and net of excise duty.Income from royalty is accounted based on contractual agreements.Dividend income is accounted for in the year in which the right to receive the same is established.Interest on investments is booked on a time-proportion basis taking into account the amounts invested and the rate of interest.(k) Foreign currency transactionsTransactions in foreign currency are recorded at exchange rates prevailing on the respective dates of the relevant transactions. Monetary assets and liabilities denominated in foreign currency are restated at the exchange rates prevailing at the balance sheet date. The gains or losses resulting from such transactions are adjusted to the statement of profit and loss. Non-monetary assets and non-monetary liabilities denominated in foreign currency and measured at fair value / net realisable value are translated at the exchange rate prevalent at the date when the fair value / net realisable value was determined. Non-monetary assets and non-monetary liabilities denominated in foreign currency and measured at historical cost are translated at the exchange rate prevalent on the date of transaction.The Company uses foreign exchange forward contracts to cover its exposure towards movements in foreign exchange rates. The use of foreign exchange forward contracts reduces the risk of fluctuations in exchange movements for the Company. The Company does not use the foreign exchange forward contract for trading or speculative purposes. Premium or discount arising at the inception of the forward contracts against the underlying assets is amortisedas expense or income over the life of the contract. Exchange differences on forward contracts are recognised in the statement of profit and loss in the reporting period in which the exchange rates change.(l) Derivative contractsBased on the principle of prudence as provided in Accounting Standard 1 - “Disclosure of Accounting Policies”, the Company assesses losses, if any, by marking to market all its outstanding derivative contracts [other than those accounted under Accounting Standard 11 - “Effects of Changes in Foreign Exchange Rates” (Refer point (k) above)] at the balance sheet date and provides for such losses. The net gain, if any, based on the said evaluation is not accounted for in line with the ICAI notification issued in March 2008 in relation to such transactions.(m) Taxes on incomeIncome-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the Income-tax laws) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year). Deferred tax in respect of timing differences which originate during the tax holiday period but reverse after the

tax holiday period is recognised in the year in which the timing differences originate. For this purpose the timing differences, which originate first are considered to reverse first.The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised only to the extent where there is reasonable certainty that the assets can be realised in future; however, where there is unabsorbed depreciation or carried forward business loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets.Deferred tax assets / liabilities are reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonably / virtually certain (as the case may be) to be realised.The Company offsets, the current tax assets and liabilities (on a year on year basis) and deferred tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.Minimum Alternative Tax (‘MAT’) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income-tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the guidance note issued by Institute of Chartered Accountants of India (‘ICAI’), the said asset is created by way of a credit to the statement of profit and loss. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income-tax during the specified period.(n) Employee benefits(i) Short-term employee benefitsAll employee benefits falling due wholly within twelve months of rendering the services are classified as short-term employee benefits, which include benefits like salaries, wages, short-term compensated absences and performance incentives and are recognised as expenses in the period in which the employee renders the related service.(ii) Post-employment benefitsContributions to defined contribution schemes such as Provident Fund, Pension Fund, etc., are recognised as expenses in the period in which the employee renders the related service. In respect of certain employees,Provident Fund contributions are made to a Trust administered by the Company. The interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made good by the Company. In respect of contributions made to government administeredProvident Fund, the Company has no further obligations beyond its monthly contributions. The Company also provides for post-employment defined benefit in the form of gratuity and medical benefits. The cost of providing benefit is determined using the projected unit credit method, with actuarial valuation being carried out at each balance sheet date.The Britannia Industries Limited Covenanted Staff Pension Fund Trust (‘BILCSPF’) and Britannia Industries Limited Officers’ Pension Fund Trust (‘BILOPF’) were established by the Company to administer pension schemes for its employees. These trusts are managed by the Trustees. The Pension Scheme is applicable to all the managers and officers of the Company who have been employed up to the date of 15 September 2005 and any manager or officer employed after that

date, if he has opted for the membership of the Scheme. The Company makes a contribution of 15% of salary in respect of the members, each month to the trusts. On retirement, subject to the vesting conditions as per the rules of the trust, the member becomes eligible for pension, which is paid from annuity purchased in the name of the member by the trusts.(iii) Other long-term employee benefitsAll employee benefits (other than post-employment benefits and termination benefits) which do not fall due wholly within twelve months after the end of the period in which the employees render the related services are determined based on actuarial valuation carried out at each balance sheet date. Provision for long-term compensated absences is based on actuarial valuation carried out as at 1st January every year.(iv) Voluntary retirement scheme benefitsVoluntary retirement scheme benefits are recognised as an expense in the year they are incurred.

Analysis on financial statement

1. Debt ratio is 0.23, which implies that substantial amount of business is financed through shareholder’s fund.

2. quick ratio is just 0.09 as compared to current ratio of 1.89 which means that company has invested a huge portion of amount in debtors and stock which means company does not have sufficient cash and balance to meet the short term requirements

3.average collection period of the company has reduced to just about to 3 days from 6 days which implies efficiency in the collection system, policy of the company

4. company holds inventory for about 29 days which is not in the interest of the company as it is increasing the holding, carrying cost of inventory, but it has reduced by a great portion if compared to last 5 years , which implies improvement in the policy of management

COMPARISON OF ACCOUNTING RATIOS

COMPANY

RATIOS

HUL ITC DABUR

GODREJ

CONSUMER

CARE

BRITANNIA INDUSTRIES

Current Ratio 0.89584

1.220942

1.148 1.302358157

1.89

Quick Ratio 0.49784

0.530044

.658 0.798657071

.27

Cash Flow Liquidity ratio

0.6038 0.978853

.831 0.411148236

.69

Average Collection Period

13.343 16.54885

21.859

35.44344 4.3

Days Inventory Held 48.9573

134.7888

88.68 67.86262502

29.67

Days Payable Outstanding

73.4811

31.77987

98.166

66.67835551

Account Receivable turnover

27.3552

22.05591

16.698

10.29809748

43.9

Accounts Payable Turnover

3.60174

8.751542

3.718 4.043766148

13.4

Inventory Turnover 5.40593

2.063398

4.116 3.973198454

10.9

Fixed assets turnover 10.36 2.65 6.395 1.32 13.09

Total Assets Turnover 4.98078

1.334681

1.411 1.090837357

8.41

Debt Ratio 0 0.005297

.509 0.342555605

.041

Long term to Capital Employed

0 0.005297

.001 0.342555605

.041

gross profit ratio % 16.4498

37.33696

45.30 21.4076397

6

Operating Profit Ratio % 16.4568

37.72107

16.1 22.89937035

6.7

Net Profit Ratio % 11.947 23.811 13.2 15.438045 3.357

9 54 6

Return on Investments %

59.5097

31.7808

18.6 16.84039687

28

Return on Equity % 76.0684

32.49153

37.8 26.6853274

32

Cash Return on Assets 0.43571

0.300453

.196 0.342555605

.35

Price to Earning 18.569 14.13043

43.43 22.87857478

37.7

Analysis and Conclusion

• Current Ratio of Britannia is 1.89 as compared to 0.90 for HUL which signifies that Britannia has sufficient current assets to pay off its current liabilities and Britannia is more liquid than HUL

• Average collection period for Britannia is 3.7 as that of 35.44 for Godrej which means that Godrej takes 12 times more time to recover from its debtors and for that period they had to finance which increases their borrowing cost.

• G.P. margin for Dabur is the highest @45% as that of 6% from Britannia but N.P. is highest for ITC because of efficient selling and distribution activities.

• ROI is highest for HUL @ 59% as that of 16% for Godrej which mean that HUL is more efficient as it is earning 59 rs by investing 100rs as that of Godrej which is earning just 16rs

PARAN

On Inventory Valuation

Industry Name: FMCG

Sl.No.

Company Total Assets

Closing Inventory

% of closing inventory to total assets

Sales Inventory Holding Period*

PBT for the year

1.

2.

3.

4.

5.

HINDUSTAN UNILEVER

ITC

DABUR

GODREJ CONSUMER PRODUCTS

BRITANNIA INDUSTRIES

10936.40

26818.59

2839.52

4,460.94

684.92

2,516.65

5637.83

528.57

783.91

382.28

23.01

21.02

18.62

17.5

.55

23,181.09

26,551.79

5,283.58

4,866.16

4974.19

39.62

77.50

36.51

58.7

29.67

3,476.68

9,168.15

790.49

977.29

252.37

*-Inventory Holding Period = Closing Inventory X 365/Sales.

Analysis and Conclusion

• Inventory holding period for Britannia is least i.e. 29 days and max. for ITC - 77 days which means that ITC has invested 2.5 times more than that of Britannia and is avg. for all other companies.

• Depreciation for Britannia is 15% of PBTD as compared to 5% for Dabur, which is lowest. This means that low percentage of profit would be available to share holders of Britania

• Investment income is 0%of PBT for Godrej as compared to 15% for Britannia, which implies that the entire income for Godrej comes from operations and investment return for HUL is lowest @ 4.83.

On valuation of Investments

Industry Name: FMCG

S NO

Company

Total Assets

Invest-ments

% of investments to total assets

Income from investments

Investment Income to Investment (%)

Provision for diminution

PBT for the year

Investment Income to PBT

1 HINDUSTAN UNILEVER

10936.40

2,438.21

22.29 117.70 4.83 0 3,476.68

3.38

2 ITC 26818.59 6316.5

9

23.55 321.85 5.09 0 9,168.15

3.51

3 DABUR 2839.52

552.72 19.47 48.72 8.81 0 790.49 6.16

4 GODREJ CONSUMER PRODUCTS

4460.94

0 0 0 0 0 977.29 0

5 BRITANNIA INDUSTRIES

684.92

428.94 62.62 38.07 8.87 0 252.37 15.08

On valuation of fixed assets

Industry Name: FMCG

Sl.No.

Company Total Assets TA

Tangible fixed assets TFA

Plant and Machi

TFA and to TA

Plant and Machi

Depreciation for

PBT D for the year

Depreciation to PBT

Intangible fixed asset

Intangibles to TFA

nery

nery to TFA

the year

D s

1 HINDUSTAN UNILEVER

10936.40

2523.64

1329.96

23.07

52.70

233.54

3,846.20

6.07 51.69 2.05

2 ITC 26818.59

9,106.68

6287.06

33.95

69.03

745.48

9,913.63

7.52 564.81 6.20

3DABUR

2839.52

919.08

387.75

20.61

66.24

36.81

653.41

5.63 798.73 86.90

4 GODREJ CONSUMER PRODUCTS

4460.94

1744.95

176.62

39.10

3.78 64.44

1049.56

6.13 2716.2 60.8

5 BRITANNIA INDUSTRIES

684.92

354 256.19

51.68

72.37

47.32

299.99

15.77 22.23 6.2

PBTD – Profit Before Tax and Depreciation