This document provides an analysis of the financial statements of Deepak Nitrite Limited for the years ended March 31, 2020 and March 31, 2019. Some key highlights include: - Cash flow from operating activities increased significantly from Rs. 60.27 crores in 2018-19 to Rs. 764.68 crores in 2019-20, indicating strong core business performance. - Cash flow from investing activities was an outflow of Rs. 427.94 crores in 2019-20 due to purchases of investments, property, plant and equipment to support business growth. - Cash flow from financing activities was an outflow of Rs. 337.56 crores as the company paid down debts and dividends

1. ACCOUNTANCYPROJECT
ANALYSISOF
FINANCIAL
STATEMENTS
BYKUSHSHAHCLASS12

2. Specific Project - 1:
Name of the Company: Deepak Nitrite Ltd.
Introduction to the company:
Deepak Nitrite is a leading manufacturer of organic, inorganic, fine and
specialty chemicals.The company’s product range includes a spectrum of
chemicals which caters to a wide range of industries including
Colourants, Agrochemicals, Pharmaceuticals, Rubber, Speciality
& Fine chemicals.They also manufacture a wide
range of intermediates for use in industrial
explosives, paints, cosmetics, lubricants,
polymers, optical brighteners, photographic
chemicals, petroleum additives, specialty fibre
and water treatment chemicals. Inorganic &
Performance Chemicals, Fine & Speciality
Chemicals, Organic Chemicals, etc..The company also in the
business activities of Fluorescent Whitening Agent, Bulk Chemicals &
Commodities, Fine and Speciality Chemicals.

3. List Of Board Of Directors:
Names Designation
Ajay C Mehta Director
Arvind Bajpai Co. Secretary & Compl. Officer
Arvind Bajpai Secretary
K Mehta Chairman Emeritus
Deepak C Mehta Chairman & Managing Director
Dileep Choksi Independent Director
Indira Parikh Independent Director
Maulik D Mehta Whole Time Director
Purvi Sheth Independent Director
Richard H Rupp Independent Director
S K Anand Independent Director
Sanjay Asher Independent Director
Sanjay Upadhyay Director - Finance & CFO
Sudhir Mankad Independent Director
Swaminathan Sivaram Independent Director
Umesh Asaikar CEO
Umesh Asaikar Executive Director & CEO

4. 196 | 49th
Annual Report 2019-20
Consolidated Balance sheet as at March 31, 2020
` in Crores
Notes
As at
March 31, 2020
As at
March 31, 2019
i. AsseTs
Non-Current Assets
3
ssets 4
7
9
Total Non-Current Assets 2,052.31 1,766.06
Current Assets
11
13
14
Total Current Assets 1,156.30 1,161.72
ToTAL AsseTs 3,208.61 2,927.78
ii. equiTy AND LiABiLiTies
equity
Total equity 1,571.91 1,071.59
Non-Current Liabilities
17
19
Total Non-Current Liabilities 887.75 972.56
Current Liabilities
Total Current Liabilities 748.95 883.63
Total Liabilities 1,636.70 1,856.19
ToTAL equiTy AND LiABiLiTies 3,208.61 2,927.78
1
for DeLoiTTe hAsKiNs & seLLs LLp DeepAK C. MehTA uMesh AsAiKAR suDhiR MANKAD
KARTiKeyA RAvAL sANJAy upADhyAy ARviND BAJpAi sANDesh ANAND

5. Deepak Nitrite Limited | 197
for the year ended March 31, 2020
` in Crores
Notes 2019-20 2018-19
Total income (i+ii) 4,264.91 2,715.04
expenses
31
33
34
Total expenses (iv) 3,458.51 2,447.06
806.40 267.98
Tax expense
611.03 173.66
other Comprehensive income
Total other Comprehensive income for the year (viii) (3.80) (2.84)
Total Comprehensive income for the year (vii+viii) 607.23 170.82
611.03 173.66
- -
(3.80) (2.84)
- -
607.23 170.82
- -
earnings per equity share
`
`
for DeLoiTTe hAsKiNs & seLLs LLp DeepAK C. MehTA uMesh AsAiKAR suDhiR MANKAD
KARTiKeyA RAvAL sANJAy upADhyAy ARviND BAJpAi sANDesh ANAND

6. Accounting Ratios:
1) Current Ratio: Current Assets/Current Liabilities
2018-19=> 1161.72/883.63
= 1.314
2019-20=> 1156.30/748.95
= 1.543
2) Quick Ratio: Quick Assets/Current Liabilities
2018-19=> (1161.72-410.73)/883.63
= 750.99/883.63
= 0.849
2019-20=> (1156.30-394.50)/748.95
= 761.80/748.95
= 1.0171
3) Debt to Equity Ratio: Non Current Liabilities/ Shareholders’ Funds
2018-19=> 972.56/1071.59
= 0.907
2019-20=> 887.75/1571.91
= 0.564
4) Total Assets to Debt Ratio: Total Assets/ Non Current Liabilities
2018-19=> 2927.78/972.56
= 3.056
2019-20=> 3208.61/887.75
= 3.614
5) Proprietary Ratio: (Shareholders’ Funds * 100)/ Total Assets
2018-19=> (1071.59*100)/2927.78
= 107159/2927.78
= 36.6%
2019-20=> (1571.91*100)/3208.61
= 157191/3208.61
= 48.99%
6) Inventory Turnover Ratio: Cost of Revenue from Operations/ Average Inventories
Average Inventories(2018-19)= (410.73+325.41)/2= 368.07
2018-19=> (1748.27-153.59+207.33)/368.07
= 1,802.01/368.07
= 4.895
Average Inventories(2019-20)= (394.50+410.73)/2= 402.615

7. 2019-20=> (2347.91+25.59+285.19)/402.615
= 2,658.69/402.615
= 6.603
7) Working Capital Turnover Ratio: Revenue from Operations/Working Capital
2018-19=> 2699.92/(1161.72-883.63)
= 2699.92/278.09
= 9.708
2019-20=> 4229.71/(1156.30-748.95)
= 4229.71/407.35
= 10.383
Graphical Presentation:
1)Current Ratio:
Previous Year= 1.314:1
Active Ratio= 1.543:1
Standard Ratio= 2:1
2) Quick Ratio:
Previous Year= 0.849:1
Active Ratio= 1.0171:1
Standard Ratio= 1:1
3) Debt to Equity Ratio:
Previous Year= 0.907
Active Ratio= 0.564
Standard Ratio= 2
0
0.5
1
1.5
2
Prev. Yr. Active Standard
0.7
0.8
0.9
1
1.1
Prev. Yr. Active Standard
0
0.5
1
1.5
2
Prev. Yr. Active Standard

8. 4) Total Assets to Debt Ratio:
Previous Year= 3.056
Active Ratio= 3.614
Standard Ratio= 1
5) Proprietary Ratio:
Previous Year= 36.6%
Active Ratio= 48.99%
Standard Ratio= 75%
6) Inventory Turnover Ratio:
Previous Year= 4.895
Active Ratio= 6.603
Standard Ratio= 5
0
20
40
60
80
Prev. Yr. Active Standard
0
1.75
3.5
5.25
7
Prev. Yr. Active Standard
0
1
2
3
4
Prev. Yr. Active Standard

9. 7) Working Capital Turnover Ratio:
Previous Year= 9.708
Active Ratio= 10.383
Standard Ratio= 8
Comments on Ratios:
Ratio Name Current Year
(2019-20)
Previous
Year(2018-
19)
Comments
Current Ratio 1.543 1.314 The company is able to meet its short term
obligations. The company is “Growing into”
its capacity
Quick Ratio 1.017 0.849 The company has increased its capability
of repaying the short term debts but still
needs to achieve the standard ratio
Debt to Equity (D/E) 0.564 0.907 The company has the tendency to borrow
very less money through long term debt.
It raises more funds through issue of
shares.
Total Assets to Debt Ratio 3.614 3.056 It indicates that a higher percentage of
assets are financed through raising
liabilities
Proprietary Ratio 48.9% 36.6% It shows that the company has paid a
substantial part of their debts and almost
all the finance is done through the
shareholders’ funds.
Inventory Turnover Ratio 6.603 4.895 it means that it is holding
its inventory longer than previously
measured time periods.
Working Capital Turnover
Ratio
10.383 9.708 The company is investing in too many
accounts receivable and inventory to
support its sales, which could lead to an
excessive amount of bad debts or obsolete
inventory.
0
2.75
5.5
8.25
11
Prev. Yr. Active Standard

10. 198 | 49th
Annual Report 2019-20
Consolidated Cash flow statement for the year ended March 31, 2020
` in Crores
2019-20 2018-19
(A) CAsh fLoW fRoM opeRATiNg ACTiviTies
806.40 267.98
` `
1,074.31 428.66
Cash generated from operations 963.16 116.37
764.68 60.27
(B) CAsh fLoW fRoM iNvesTiNg ACTiviTies
` `
(427.94) (162.55)

11. Corporate Overview Statutory Reports Financial Statements
Deepak Nitrite Limited | 199
` in Crores
2019-20 2018-19
(C) CAsh fLoW fRoM fiNANCiNg ACTiviTies
(337.56) 95.81
(0.82) (6.46)
2.96 9.43
Cash and Cash equivalents at the end of the financial year 2.14 2.96
Reconciliation of Cash and Cash equivalents
Total Cash and Cash equivalents as per note 12 A. 2.14 2.96
for DeLoiTTe hAsKiNs & seLLs LLp DeepAK C. MehTA uMesh AsAiKAR suDhiR MANKAD
KARTiKeyA RAvAL sANJAy upADhyAy ARviND BAJpAi sANDesh ANAND

12. (2) Objective:
(a) To understand the process of cash planning.
(b) To know whether the company has sufficient liquidity or not.
(c) To find whether the dividends are paid out of profits and if so, then out of
current profits or past profits.
(d) To know whether the fixed assets are purchased from long term sources
or short term sources.
(e) To gain the knowledge about whether the cash received from sale of fixed
assets is invested into business or is put to the production cycle.
(3) Graphical Presentation:
-600
-400
-200
0
200
400
600
800
2019-20 2018-19
Operating
Investing
Financing (in Rs. Crores)
Cash Flow from
various activities
22.05%
27.95%
50.01%
Operating Activities Investing Activities
Financing Activities

13. —> Analysis of Cash Flow Statements of Deepak Nitrite Limited for the
year ended 2020 & 2019 are as follows:
Cash Flow from Operating Activities:
—> Cash Flow from Operating Activities has a positive inflow of 764.68 Rs.
Crores in the year ended 31st March 2020. The company has almost increased
the cash flow 12 times from Operating Activities as compared to the previous
year’s 60.27 crores.
—> Positive cash flow from operating activities indicates that the core business
activities of the company are thriving. It provides as additional measure/
indicator of profitability potential of a company, in addition to the traditional ones
like net income and EBITDA. It depicts the cash generating abilities of a
company’s core business activities. Cash availability allows a business the
option to expand, build and launch new products, buy back shares to affirm
their strong financial position, pay out dividends to reward and bolster
shareholder confidence, or reduce debt to save on interest payments. Investors
attempt to look for companies whose share prices are lower and cash flow from
operations is showing an upward trend over recent quarters.
—> Operating cash flow indicates whether a company can generate sufficient
positive cash flow to maintain and grow its operations and plan future of
operations, otherwise, it may require external financing for capital expansion.
Particulars 2020 2019
Cash Flow Used/Flow from
Operating Activities
764.68 60.27
Cash Used/Flow from Investing
Activities
(427.94) (162.55)
Cash Used/Flow from Financing
Activities
(337.56) 95.81
Net Increase/(Decrease) in Cash
& Cash Equivalents
-0.82 -6.47
Opening Cash & Cash
Equivalents
2.96 9.43
Closing Cash & Cash
Equivalents
2.14 2.96

14. Cash Flow from Investing Activities:
—> Cash flow from Investing Activities has an outflow of 427.94 Rs. Crores for
the year ended 31st March, 2020 and outflow of 162.55 Rs. Crores for the year
ended 31st March, 2019. It shows that investing activity has gone down by
nearly 335 Rs. Crores.
—> However, negative cash flow from Investing activities might be due to
significant amounts of cash being invested in long-term plans. It shows cash
generated or spent on investing activities which includes long-term and
sometimes short-term assets.
—> Negative cash flow does not mean company is making losses or misusing
its funds instead it invests in various assets with a vision of higher returns in the
future.
—> In this case, Deepak Nitrite Limited has purchased a substantial amount of
Investments- short term as well as long term- along with lending money in order
to gain returns. In addition, to support its rapid growing sales and demand for
their products in the market, also invested in buying new machinery, plants and
equipments being the main reason behind huge outflow of cash in Investing
Activities.
Cash Flow from Financing Activities:
—> It has an outflow of 337.56 Rs. Crores for the year ended 31st March 2020
and inflow of 95.81 Rs. Crores for the year ended 31st March, 2019.
The outflow has almost increased by 450 crores.
—> The company has not raised any huge amount of funds. On contrary it has
started to pay off debts and dividends to lessen the interest expenses as well as
to express its investors how much their kind support means to the company.
It means that the company has enough cash flow and doesn’t want any
unnecessary debts or outside liabilities.

15. Specific 3
(1)Segment wise Revenue analysis yearly
(a) Basic Chemicals:
2019-20=>(940.32/4293.56)*100
= 21.9%
Degree= (940.32/4293.56)*360
= 78.85
(b) Fine and Speciality Chemicals:
2019-20=> (585.26/4293.58)*100
= 13.63%
Degree= (585.26/4293.58)*360
= 49.1
(c) Performance Products:
2019-20=> (767.12/4293.56)*100
= 17.86%
Degree= (767.12/4293.56)*360
= 64.30
(d) Phenolics:
2019-20=> (2000.86/4293.56)*100
= 46.60%
Degree= (2000.86/4293.56)*360
= 167.7
(e) Un-allocable: 0

16.
Segment Basic Chemicals Fine/Speciality
Chemicals
Performance
Products
Phenolics Total
Revenue (Rs.) 940.32 585.26 767.12 2000.86 4293.56
% of Total
Revenue
21.90% 13.63% 17.87% 46.60% 100%
Degrees for Pie
Diagram
78.85 49.10 64.30 167.7 359.95
!"#"$%
&'#('%
&)#")%
*&#+$%
Basic Chemicals Fine & Speciality Chemicals Performance Products
Phenolics

17. (2) Common size Statement of Segment wise profit.
Formula= (Profit of the segment/ Total Profit) * 100
(a) Basic Chemicals:
2019-20=> (209.35/990.52)*100
= 21.1
Degree= (209.35/990.52)*360
= 76.1
(b) Fine & Speciality Chemicals:
2019-2020=> (175.24/990.52)*100
= 17.7%
Degree= (175.24/990.52)*360
= 63.7
(c) Performance Products:
2019-20=> (418.62/990.52)*100
= 42.2%
Degree= (418.62/990.52)*360
= 152.14
(d) Phenolics:
2019-20=> (187.31/990.52)*100
= 18.9%
Degree= (187.31/990.52)*360
= 68.07

18. Segment Basic Chemicals Fine/Speciality
Chemicals
Performance
Products
Phenolics Total
Profit (Rs.) 209.35 175.24 418.62 187.31 990.52
% of Total Profit 21.14% 17.69% 42.26% 18.91% 100%
Degrees for Pie
Diagram
76.1 63.7 152.14 68.07 360.01
18.91%
42.26%
17.69%
21.14%
Basic Chemicals Fine & Speciality Chemicals
Performance Products Phenolics

19. (3) Common Size statement of segment wise Capital Employed
Capital Employed = Segment Assets-Segment Liabilities
For Year ended 31st March 2020
(a) Basic Chemicals:
453.36-115.24= 338.12
(b) Fine & Speciality Chemicals:
381.74-70.65= 311.09
(c) Performance Products:
476.50-56.55= 419.95
(d) Phenolics:
1723.01-1082.68= 640.33
(e) Un-Allocable:
174.00-311.58=(137.58)
Bar Graph:
-175
0
175
350
525
700
Basic Chemicals Fine & Speciality Chemicals Peformance Products Phenolics Un-Allocable
Region 1

20. (4) Calculation of Return of Investment
Formula= (Profit Before Int, Tax (PBIT)/Capital Employed)*100
Graphical Representation of ROI
Segment Basic Chemicals Fine & Speciality
Chemicals
Performance
Products
Phenolics Total
Profit Before
Interest and Tax
(Segment Result)
209.35 175.24 418.62 187.31 990.52
Capital Employed 338.12 311.09 419.95 640.33 1709.49
ROI(%) 61.916 56.331 99.683 29.252 247.182
0
25
50
75
100
Basic Chemicals Fine & Speciality Chemicals Performance Products Phenolics
ROI

21. (5) Combined Comparative Statement
Conclusions:
1) Performance Products has the highest ROI of 99.7%.
2) With the revenue share of 17.87% of total revenue, performance products is able to generate a
PBIT of 99.67%
3) Therefore, Performance Products and Basic Chemicals is showing a good performance.
4) Phenolics has a very high revenue generation but comparatively low ROI. This is because it is a
new segment that Deepak Nitrite Ltd. has commenced in late 2018.
Segment Basic
Chemicals
Fine &
Speciality
Chemicals
Performanc
e Products
Phenolics Un-
Allocable
Total
Revenue
(%) of Total
21.90% 13.63% 17.87% 46.60% — 100%
PBIT (%) of
Total
21.14% 17.69% 42.26% 18.91% — 100%
Capital
Employed
(%) of Total
21.510 19.790 26.715 40.935 (8.752) 100%
ROI (%)
(same as
before)
61.916 56.331 99.683 29.252 — 247.182