2. 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.
4. Auditor’s Report
• The auditor's 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.
5. 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.
7. Profit and Loss Account
Mar '11 Mar '10
Sales Turnover 2,493.19 1,971.71
Excise Duty 234.48 156.99
Net Sales 2,258.71 1,814.72
Other Income 48.5 20.07
Stock Adjustments 70.22 47.32
Total Income 2,377.43 1,882.11
Raw Materials 1,478.71 1,122.01
Power & Fuel Cost 33.45 26.16
Other Manufacturing Expenses 22.39 18.35
Selling and Admin Expenses 395.31 341.62
Miscellaneous Expenses 15.35 13.66
Total Expenses 2,037.85 1,597.85
Operating Profit 291.08 264.19
9. Balance Sheet
Liabilities 2011 2010 Assets 2011 2010
-----Crores----- ------Crores------
Total Share Capital 53.89 26.95 Gross Block 675.28 637.67
Equity Share Capital 53.89 26.95 Less: Depreciation 397.07 348.35
Preference Share Cap. 0 0 Net Block 278.21 289.32
Reserves 862.28 745.87 Capital Work in Prog. 103.57 16.43
Revaluation Reserves 0 0 Investments 371.82 401.54
Net worth 916.17 772.82 Inventories 354.1 247.44
Secured Loans 8.11 33.53 Sundry Debtors 260.26 232.37
Unsecured Loans 74.37 76.45 Cash and Bank Bal. 39.69 41.08
Total Debt `82.48 109.98 Total Current Assets 654.05 520.89
Current Liabilities 363.54 305.45 Loans and Advances 63.64 53.74
Provisions 109.11 93.67
Net Current Assets 245.04 175.51
Total Liabilities 998.65 882.8 Total Assets 998.64 882.8
10. Statement of Cash Flows
Mar '11 Mar '10
----- in crores -----
Net Profit Before Tax 289.13 238.61
Net Cash From Operating Activities 130.57 150.46
Net Cash (used in)/from Investing
Activities -56.46 -162.89
Net Cash (used in)/from Financing
Activities -75.5 -22.65
Net (decrease)/increase In Cash and Cash
Equivalents -1.39 -35.08
Opening Cash & Cash Equivalents 41.08 76.16
Closing Cash & Cash Equivalents 39.69 41.08
13. Profit Margin Ratio
Profit 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.
14. Asset turnover ratio
Asset 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 times
There is increase in asset turnover by 0.47 times
that is company has invested more in building its
assets.
15. 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 efficiently
profits are being generated from the assets employed.
As compare to the previous year co. is able to
generate the more profit on assets.
16. Return on Equity
Return 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 times
The higher this percentage, the higher the absolute
return to shareholders. In 2011 co. is giving more
return on investment to their shareholder’s as
compare to the previous year.
17. Earning per Share
Earning 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 =Rs61.52
EPS indicates the quantum of net profit of the year that
would be ranking for dividend for each share of the
company being held by the equity share holders. That is
decreased by 23.31 in 2011
19. 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 1.70:1
Current Ratio measures short term liquidity of the
concern and its ability to meet its short term
obligations within a time span of a year. Co. is having
more current asset to meet its current liability.
20. Quick ratio
Quick Ratio= Quick Assets___
Current liabilities
Particulars 2011 2010
Quick 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 =232.28
Current liabilities 363.54 305.45
QUICK RATIO= 263.56/363.54 232.28/305.45
=0.72:1 0.76:1
The higher the quick ratio, the better the position
of the company. In this case company’s quick ratio
is decreased by 0.04.
22. Debtors turnover ratio
Debtors 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 times
The higher debtor turnover in 2011 indicates better
management of receivable as compare to the
previous year.
23. Stock turnover ratio
Stock 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 times
The higher stock turnover in 2011 points to better
stock management.
24. Debt to Equity ratio
Debt 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.
25. 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 times
It showing that in 2011 company is having less
liability towards the outsiders as compared to the
previous year (2010).
26. Interest coverage ratio
Interest 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 times
The lower the ratio, the more the company is
burdened by debt expense. Here the co. having
high interest coverage ratio.
