Company Information• Established : 1920• Manufactures and sell paints and enamels, varnishes, oils, pigments, colours.• Is second largest paint company.• Market share of 18 percent.• It has 39 Joint Ventures, subsidiaries and licensees around the world and has recorded a turnover of over 2 billion USD.
Company Information• Key executives• Board Members• Auditing Committee
Auditor’s Report• The auditors report is a formal opinion, or disclaimer thereof, issued by either an internal auditor or an independent external auditor as a result of an internal or external audit or evaluation performed.• This report was conducted in accordance with auditing standards generally accepted in India.• The Balance Sheet as at 31 March 2011, of the company was audited.
Continued…The following key points were included in the report:• The Company has maintained proper records of fixed assets.• The inventory has been physically verified.• Dues have been generally regularly deposited during the year by the Company with the appropriate authorities.• The Company does not have any accumulated losses.• The Company has not defaulted in repayment of dues.• No money was raised by public issues during the year.• No material fraud on or by the Company has been noticed or reported during the course of our audit.
Financial Statements• Profit and Loss Account• Balance Sheet• Statement of Cash Flows• Ratios
Profit and Loss Account Mar 11 Mar 10Sales Turnover 2,493.19 1,971.71Excise Duty 234.48 156.99Net Sales 2,258.71 1,814.72Other Income 48.5 20.07Stock Adjustments 70.22 47.32Total Income 2,377.43 1,882.11Raw Materials 1,478.71 1,122.01Power & Fuel Cost 33.45 26.16Other Manufacturing Expenses 22.39 18.35Selling and Admin Expenses 395.31 341.62Miscellaneous Expenses 15.35 13.66Total Expenses 2,037.85 1,597.85Operating Profit 291.08 264.19
Profit Margin RatioProfit Margin= Profit after tax/Net sales*100 Particulars 2011 2010 Profit after tax 205.98 165.5 Net sales 2258.71 1814.72 205.98/2258.71*100 165.5/1814.72*100 PROFIT MARGIN= = 9.12 times = 9.14 times It measures overall profitability. In 2011 co. profit is reduced by 0.02 times.
Asset turnover ratioAsset Turnover= Sales/Average total assets Particulars 2011 2010 Net sales 2258.71 1814.72 Average total 998.64+882.8/2 882.8+998.64/2 asset =940.72 =940.72 ASSET 2258.71/940.72 1814.72/940.72 TURNOVER= =2.40 times =1.93 timesThere is increase in asset turnover by 0.47 timesthat is company has invested more in building itsassets.
Return on Asset Return On Asset = Profit after tax__ *100 Average total asset Particulars 2011 2010 Profit after tax 205.98 165.5 Average total 998.64+882.8/2 882.8+998.64/2 asset =940.72 =940.72 RETURN ON 205.98/940.72*100 165.5/940.72*100 ASSET= =21.89% 17.59%The return on assets ratio measures how efficientlyprofits are being generated from the assets employed.As compare to the previous year co. is able togenerate the more profit on assets.
Return on EquityReturn On Equity= Profit after tax *100 Average shareholder’s equity Particulars 2011 2010 Profit after tax 205.98 165.5 Average 53.89+26.95/2 26.95+53.89/2 shareholder’s =40.02 =40.02 equity RETURN ON 205.98/40.02 165.5/441.4 EQUITY= =5.12 times 4.13 timesThe higher this percentage, the higher the absolutereturn to shareholders. In 2011 co. is giving morereturn on investment to their shareholder’s ascompare to the previous year.
Earning per ShareEarning Per Share= Profit after tax__ No. of shares outstanding Particulars 2011 2010 Profit after tax 205.98 165.5 No. of shares 5.39 crores 2.69 crores EARNING PER 205.98/5.39 165.5/2.69 SHARE= =Rs38.21 =Rs61.52EPS indicates the quantum of net profit of the year thatwould be ranking for dividend for each share of thecompany being held by the equity share holders. That isdecreased by 23.31 in 2011
Current ratio Current Ratio= Current asset Current liabilities Particulars 2011 2010 Current asset 654.05 520.89 Current liabilities 363.54 305.45 CURRENT 654.05/363.54 520.89/305.45 RATIO= =1.79:1 1.70:1Current Ratio measures short term liquidity of theconcern and its ability to meet its short termobligations within a time span of a year. Co. is havingmore current asset to meet its current liability.
Quick ratio Quick Ratio= Quick Assets___ Current liabilitiesParticulars 2011 2010Quick asset =current asset-stock- =current asset-stock- cash/bank cash/bank =654.05-354.1-36.39 =520.89-247.44-41.08 =263.56 =232.28Current liabilities 363.54 305.45QUICK RATIO= 263.56/363.54 232.28/305.45 =0.72:1 0.76:1The higher the quick ratio, the better the positionof the company. In this case company’s quick ratiois decreased by 0.04.
Debtors turnover ratioDebtors Turnover Ratio= Sales/Avg debtors Particulars 2011 2010 Net sales 2258.71 1814.72 Average debtors 262.26+232.37/2 882.8+998.64/2 =246.31 =246.31 DEBTORS 2258.71/246.31 1814.72/246.31 TURNOVER= =9.17 times =7.37 timesThe higher debtor turnover in 2011 indicates bettermanagement of receivable as compare to theprevious year.
Stock turnover ratioStock Turnover Ratio= Cost of goods sold Average Stock Particulars 2011 2010 Cost of goods =Sales-Profit =Sales-Profit sold =2258.71-205.98 =1814.72-165.5 =2052.73 =1649.22 Average debtors 262.26+232.37/2 882.8+998.64/2 =246.31 =246.31 DEBTORS 2052.73/246.31 1649.22/246.31 TURNOVER= =6.82 times =5.48 timesThe higher stock turnover in 2011 points to betterstock management.
Debt to Equity ratioDebt To Equity Ratio=Secured+Unsecured loan Shareholders Equity Particulars 2011 2010 Secured loans 8.11 33.53 Unsecured loans 74.37 76.45 Shareholder’s equity 53.89 26.95 DEBT EQUITY 8.11+74.37/53.89 33.53+76.45/26.95 RATIO= =1.53 times = 4.08 times In 2010 co. had aggressively using the leverage but in 2011 company making little use of leverage as compared to previous year.
Liability to Equity ratio Particulars 2011 2010 Total Debt 82.48 109.98 Current liabilities 74.37 76.45 Shareholder’s equity 53.89 26.95 LIABILITY TO 8.11+363.54/53.89 109.98+305.45/26.95 EQUITY RATIO= =8.28 times = 15.41 timesIt showing that in 2011 company is having lessliability towards the outsiders as compared to theprevious year (2010).
Interest coverage ratioInterest Coverage Ratio=Profit before interest & tax/ Interest Expenses Particulars 2011 2010 Profit before tax 339.58 284.26 Interest Expenses 1.23 1.64 INTEREST 339.58/1.23 284.26/1.64 COVERAGE RATIO= =276.08 times =173.32 timesThe lower the ratio, the more the company isburdened by debt expense. Here the co. havinghigh interest coverage ratio.