AN ANALYTICAL STUDY OF THREE YEARS PUBLISHED DATA OF COLGATEPALMOLIVE (INDIA) LIMITED

Prepared by:CHARVI.A.TRIVEDI SYBBA C ROLL NO.-211

Submitted to:Prof. Swenee Shah

Acknowledgement
I am highly thankful to the management and staff of Colgate-Palmolive (India) Limited. I am especially thankful to Prof. Swenee Shah for helping me in my Practical Studies. In addition to allowing me to visit the company and study the organization, they provided me with many details which were very useful in preparing this report. I take this opportunity to thank our Director, Prof. Vadibhai Patel, Professor in-charge Prof Swenee Shah for their encouragement and the office staff for providing us all the facilities for making the visit more learning oriented.

Charvi A Trivedi

Date: 20/12 /2011

PREFACE
BBA is a professional course where equal importance is given to practical and theoretical knowledge .This feature makes it different from B.COM wherein importance is given only to the theoretical knowledge to gain this practical knowledge, visit to various companies are

organized. The sole objective of this project is to add practical knowledge to the theoretical one. With this objective we made this project on Colgate-Palmolive (India) Limited. To study about such a company was a great pleasure.

INDEX SR. NO. 1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 2 2.1 2.2 2.3 2.4 3 3.1 TOPIC Company profile Name of organization Registration Address of the company Brief introduction of the activities Status of the company in market Special Achievements Financial Highlights Meaning and analysis and objective Results of Operation Profit of 3 years Meaning and importance of Cash Flow Cash Flow Statement of the company Conclusion Ratio Analysis Meaning, Importance, Limitation, and Classification of Ratio Analysis. 3.2 Profitability ratio PAGE NO.

3.2.1 3.2.2 3.2.3 3.2.4 3.2.5 3.2.6 3.2.7 3.2.8 3.2.9 3.2.10 3.2.11 3.3 3.3.1 3.3.2 3.3.3 3.3.4 3.3.5 3.3.6 3.4. 3.4.1

Gross Profit ratio Net Profit Ratio Operating ratio Return on Capital Employed Return on Share holders fund Return on Eq. Share Capital Return on Eq. shareholders Fund Earnings per share Dividend per share Price earning ratio Dividend Payout ratio Activity/Turnover Ratio Fixed Asset turnover Ratio Debtors Ratio Creditors Ratio Stock turnover Ratio Working Capital turnover Book value per share Liquidity Ratio Current Ratio

3.4.2 3.5. 3.5.1 3.5.2 3.5.3 3.5.4 3.6 3.6.1 3.6.2 4 5 6 7 8

Liquid Ratio Leverage Ratio Proprietary Ratio Debt Equity ratio Capital gearing Ratio Long term fund to F.A Coverage Ratio Interest Coverage Ratio Debt Service Coverage Ratio Accounting Policies and Notes Directors Report Auditors Report Common Size Statement Conclusion & Findings

1.

COMPANY PROFILE

1.1 Name of the company

Colgate-Palmolive (India) Limited

1.2 Registered Address of the Company

Colgate Research Centre, Main Street, Hiranandani Gardens, Powai, Mumbai 400076.

1.3 Brief introduction of the activities of the business: Oral care-Under this segment the company offers product like toothpastes, toothbrush, tooth powder & tooth whitening products. Personal care -In this segment it offer products skin care, hair care ,body wash ,& shaving creams Household care-Under this segment it has launched brand AXIOM-a dish washing paste. From the Dentist - New products line introduced by the company under which it provides products like Gingivitis Treatment, Colgate Sensitive treatment, Tooth Whitening, Fluoride Therapy, Mouth Ulcer Treatment, Specialty Cleaning. It has also introduced new products namely colgate dental floss, ORAGARD-B a mouth ulcer cream etc. In 2011 Colgate-Palmolive (India), the market leader in oral care, has introduced Colgate 360 Surround - a ground-breaking and innovative toothbrush with a unique head.

1.4 Status in the market

Colgate-Palmolive is Rs1,300 crore company started in year 1937.In Rs2,400 crore domestic market it enjoys 50% of market share. It spread across 4.5 million retails outlets out of which 1.5 million are direct outlets.

The Company is having four wholly owned subsidiaries namely Colgate-Palmolive (Nepal), Multimint Leasing & Finance and Jigs Investments and Passion Trading & Investment Company.

In November 2007, it acquired a 75% equity interest in Advanced Oral Care Products, Professional Oral Care Products and SS Oral Hygiene Products, the company is the fastest growing and one of the oldest companies catering to the personal care products. The company is regularly coming up with new products and has been a consistent financial performer.

 In July 2009, the Bombay High Court sanctioned the amalgamation of both subsidiaries of the company Advanced Oral Care Products, Goa and Professional Oral Care Products, Goa. In March 2010, Colgate Palmolive (India) has acquired the remaining 25% of stake in CC Health Care Products from the local shareholders at an aggregate price of Rs 69.07 lakh. Colgate already has 75% stake in CC Health, which is engaged in the manufacture of toothpowder at Hyderabad.

1.5 Special Achievements

In 2003 Colgate was ranked as Indias Most Trusted Brand across all categories by Brand Equitys Most Trusted Brand Survey for four consecutive years from 2003 to 2007.

Colgate was also rated as the number one brand by the A&M MODE Annual Survey for Indias Top Brands for eight out of nine years during the period 1992 to 2001.

In 2011 Colgate-Palmolive (India), the market leader in oral care, in association with the Indian Dental Association (IDA) achieved the Guinness World Records for maximum number of dental check-ups in a single day (multiple venues).

1.6Financial Highlights
PROFIT OF THREE YEARS
PARTICULAR NET PROFIT (%) 2009 17.12 2010 18.13 (In Lacs) 2011 21.57

SALES OF THREE YEARS

(In Lacs) PARTICULAR SALES 2009 1,758,16 2010 2,024,65 2011 2,317,40

EPS OF THREE YEARS

EPS = PROFIT AFTER TAX - PERFERENCE DIV.

NO. OF EQUITY SHARES CALCULATION (In Lacs)

PARTICULAR S NETPROFIT AFTER TAX NO. OF EQUITY SHARES RATIO

2008-09 29021.94 13599281 7 21.34

2009-10 42325.82 13599281 7 31.12

2010-11 40258.33 13599281 7 29.60

1.7 Meaning of analysis and objective of study

The analysis of the company has helped me a lot in understanding the working of companies. The analysis of the company gives practical knowledge and where we have to use theories into practise. Objectives of the study:1) It provides an attempt to learn practical rather than bookish knowledge. 2) The main objective of the study is to develop analytical skills. 3) Various finance concepts are used in practical world. 4) The main purpose of the study is analysis of ratios, cash flow statement, and common-size statement of particular company.

Chpt:- 2

RESULTS OF OPERATIONS

2.1

PROFIT OF 3 YEARS
(In Lacs)

GROSS PROFIT:PARTICULARS GROSS PROFIT 2008-09 95350.59 2009-10 118561.63 2010-11 134859.19

NET PROFIT:(In Lacs) PARTICULARS NET PROFIT 2008-09 29021.94 2009-10 42325.82 2010-11 40258.33

EBIT:- EARNING BEFORE INTEREST AND TAX

(In Lacs) PARTICULARS EBIT 2008-09 34530.65 2009-10 48479.85 2010-11 51994.85

EBT:- EARNING BEFORE TAX

PARTICULARS 2008-09 2009-10

(In Lacs) 2010-11

EBT

34530.65

48479.85

51994.85

EAT:- EARNING AFTER TAX

PARTICULARS EAT 2008-09 29021.94 2009-10 42325.82

(In Lacs) 2010-11 40258.33

2.2 MEANING AND IMPORTANCE OF CASH FLOW STATEMENT:-

Cash is the most important liquid asset of the business. All business transactions ultimately results into cash inflow or outflow. Hence a statement that shows cash flow is considered to be an important one.

Meaning of Cash Flow :-

A statement showing Inflow of Cash and Outflow of Cash during the last year and as a result the balance of cash at the end of the year is known as CASH FLOW STATEMENT.

IMPORTANCE OF CASH FLOW STATEMENT:1. Effective cash management can be done by finance manager through an idea in cash receipts and cash payments, cash resources can be effectively managed. 2. If the cash payments are planned at a time when enough cash inflows is likely, it is possible to manage business with minimum working capital.

3. The management can plan out payment of dividend, repayment of long term loans, purchase of machinery or equipments etc. 4. Cash flow statement gives clear information about cash receipts and cash payments which is very useful to the management in meeting any future contingencies and also in seizing any profitability opportunity. 5. The historical cash flow statement prepared for last year is important for comparing the figures of cash budgets and points of differences may be located. 6. By cash flow statement it becomes easy in obtaining funds from financial institutes.

CASH FLOW STATEMENT

Particulars 2008-09 2009-10 2010-11

1.

2 3 4 5 6 7 8 9

Cash Flows from operating Adjustment far unrealized forgone exchange (loss/chain) (net) Depreciation Amortization. Cash flow from operating act net profit before tax Generalized foreign exchange loss (net) Depreciation/Amortization Interest expense loss/(profit) on sale as fixed assets (net) Interest income Dividend form subsidiary Loss on maturity of L.T inv.

34530.65

48479.85

51994.85

34530.65 (875.44) 2294.89 110.01 (980.54) 3136.57 (397.56) 39.13

48479.85 (135.39) 3756.79 150.43 (293.3) 2270.07 (240) 31.51

51994.85 51.06 3424.95 328.57 6.44 (3014.26) --------------------

12

13 14 15

16

(A) B.

Operating profit before w.c changes adjustment far(Inc)/dec.inwc Inventories Sundry debtors loans and advance current liabilities and provisions Cash generated from operations direct taxes paid(net) Net cash from/ (used in) operating. Act(A) Cash flow from Investing

33257.19 420.74 194.90 933.82 3186.50 36761.87 (4823.45) 31938.42

49479.82 (2008.35) 136.57 (1868.84) 1648.90 47388.10 (7652.75) 39735.35

52179.97 (4222.15) (3322.12) (702.40) 5030.45 48963.75 (10420.74) 38543.07

1 2 3 4 5 6 7 8

Activity: Purchase of fixed Assets Sale of fixed Assets sale of Investment sale of other investment Inter corporate deposits Loans to subsidiaries Interest received Dividend received

243.50 1107.27 165.28 3071.48 290.00 3335.00 2682.08 775.61

(3551.28) 449.56 1500.00 2750.00 2372.86 240.00

(4110.53) 21.19 1916.73 1734.00 2821.91 -

1 2 3 4

Net cash from/used Inv.Act(B) Cash flow from financing Act. Long term loans/(paid)(/net) Interest paid Dividend paid Dividend tax paid Net cash from /(used in)financing Act.(C) Net increase in cash and cash. Equivalent (A+B+C) Cash and cash Equivalent take over Cash and cash equivalent at the beginning of the yearopening balance Cash and Cash Equivalent taken over as per the scheme of amalgamation Cash and cash Equivalent of

4182.66

3451.89

(1450.16)

110.01 21746.08 3657.04 25513.13

(10.00) (150.43) (28714.08) (4871.24) (33745.75)

(453.75) (161.13) (27161.28) (4523.20) (32299.36)

10607.95

9441.49

4793.49

14426.28 80.10

25114.33 202.62

34758.44 8.93

at the end of the year closing balance

25114.33

34758.44

39560.86

2.4 CONCLUSION
1. NET PROFIT BEFORE TAX shows an increasing trend from 2008-09 to 2010-2011 2. Depreciation is also increased shows constant increase which decrease net profit. 3.Net interest paid has also increased from 150.43 to 328.57 which decreases Net rofit. 4. Sundry debtor is high in 2008-09 but it decreased in 2009-2010 and it again increased in 2010-2011 which decreased the profit. 5. Profit on fix assets is decreasing year by year. 6. Interest income received in 2010-2011 is more than that of 2009-2010 but theres not much increase seen in it. 7. Inventories are more in 2010-2011 as compared to both the years.

8. Current liabilities are 5030.45 in 2010-2011 which is very high as compared to last two years.

Chpt:-3

RATIO ANALYSIS

 MEANING OF RATIO ANALYSIS:Ratio analysis is a very important tool of financial analysis. It is the process of establishing a significant relationship between the items of financial statement (profit and loss a/c and balance sheet) to provide a meaningful understanding of the performance and financial position of the firm. ADVANTAGES OF RATIO ANLYSIS There are various groups of people who are interested in analysis of financial position of the company. They use the ratio analysis to work out particular financial circumstances of the company in which they are interested. Ratio analysis helps the various groups in the following manner:To know about the profitability:Accounting ratio helps to measure the profitability it helps the management to know about the capacity of the firm. In this way profitability ratio shows the actual performance of the business. To know about solvency:-

With the help of solvency ratio, solvency of the company can be measure. This ratio shows the relationship between the assets and liabilities. In case external liabilities are more than the assets; It shows the unsound position of the business. In this the firm has to make it possible to repay its loan. Helpful in analysis:Ratio analysis helps the outsiders just like creditors, shareholders, debenture holders, bankers to know about the profitability and ability of the firm to pay their interest, dividend etc. Helpful in comparative analysis of performance:With the help of ratio analysis, a company may have comparative study of its performance to the previous year. In this way co. come to know about its weak point and able to improve them. To know about the efficiency:Ratio analysis helps to know the operating efficiency of the co. with the help of various turnover ratios. All turnover ratios are calculated to evaluate the performance of the business in utilizing the resources.

To know about liquidity position:Ratio analysis helps to know the short term financial position (liquidity position) of the company with the help of liquidity ratios. In case of short term financial position is not good efforts are made to improve it. Helpful for forecasting purpose:Accounting ratios indicate the trend of the business. The trend is useful for estimating future. With the help of previous years Ratio, estimates for future can be made in this way. Ratio provides the basis for preparing budget and helps for future course of action.

LIMITATION OF RATIO ANALYSIS

In spite of many advantages there are some limitations and they should be kept in mind while using them in interpreting financial statement. The following are the main limitation of ratio. Limited comparatively:Different firms apply different accounting policies. There the ratio of one firm cannot always be compared with the ratio of other firm. Some firm

may value the closing stock on last in first out (LIFO) based. While some other firms may value first in first out (FIFO) based. Similarly there may be different in providing depreciation of fixed assets or certain provisions etc. False result:Accounting ratios are based on data taken from accounting records, incase their data is correct then only the ratio will be correct. e.g.:- valuation of stock is based on very high price the profits of the firm with inflected and it will indicate a wrong financial position. The data therefore must be absolutely correct. Effect of price level changes:Price level change often made the comparison of different amounts difficult over a period of production, sales and also the value of assets. Therefore it is necessary to made proper adjustment for price changes before any comparison. Qualitative factors are ignored:Ratio analysis is a technique of qualitative analysis and this ignores qualitative factors which may be

important in decision making .e.g.:- average collection period may be equal to standard credit period put for some debtors may be in the list of doubtful list which is not disclose by ratio analysis. Effect of window dressing:In order to cover up their head financial position, some companies use window dressing. They may record the accounting data according to financial position of a company in a better way. Costly technique:Ratio analysis is a technique and can be use by big business houses. Small business units are not able to afford it. Miss leading results:In absence of absolute data, the result may be misleading. E.g.:-the gross profit of two firms is 25% where as the profit earned by one company is just 5000RS and sales are 20,000 RS and profit earned by the other one is 10,000RS and sales are 40,00,000RS even he profitability of the 2 firms is same but the magnitude of their business is quite different. 22

Absence of standard universally expected technology:There are no standard ratios which are universally accepted for comparison purpose. As such the significant of ratio analysis technique is reduced.

CLASSIFICATION OF RATIO:As per the requirement of various users (for e.g.:-short term creditors, long term creditors, management, investors) we can classify ratio into following group. Traditional Classification:1. Revenue Statement Ratios 2. Balance Sheet Ratios 3. Composite Ratios Functional Classification:1. Liquidity Ratios 2. Profitability Ratios 3. Leverage Ratios or Structural Ratios 4. Activity Ratios or Efficiency Ratios 23

3.2

Profitability Ratios:-

PROFITABILITY RATIO
NIN RELATIONTO SALES RELA TION TO SALES
IN RELATION TO INVESTMENTS

1. G.P Ratio Employed 2. N.P Ratio Shareholders Fund 3. Expenses Ratio shareholders fund 4. Operating Ratio capital

1. Return on Capital 2. Return on 3. Return on Eq. 4. Return on Eq. share 5. Earnings per share 6. Dividend per share 7. Price earning ratio

8. Dividend payout ratio

3.2.1 GROSS PROFIT

MEANING:It is the basic measure of profitability of business. It expresses relationship between gross profit earned to net sales. FORMULA: This ratio is calculated by dividing the gross profit by the net sales. It is expressed in percentage (%).It form of formula this ratio may be expressed as under GROSS PROFIT = GROSS PROFIT * 100 SALES CALCULATION: PARTICULARS 2008-09 GROSS PROFIT 95350.59 2009-10 (In Lacs) 2010-11

118561.63 134859.19

SALES RATIO (%)

169481.35 196245.92 222055.77 56.26 60.73 60.41

Gross Profit Ratio

61.00% 60.00% 59.00%

58.00%
57.00% 56.00% 55.00% 54.00% 2008-09 2009-10 2010-11

Ratio

INTERPRETATION:This ratio indicate an average gross margin earn on a sale of 100 rupees. The limit beyond which fall in sales prices will definitely result in losses. In 2008-2009 the profit 56.26%, in 2009-2010 it is 60.73% and in n2010-2011 its 60.41% . So we can

say that as compared to 2008-2009, 2009-2010 has more profit but it slowly decreases in 2010-2011

3.2.2NET PROFIT RATIO:MEANING:-

This ratio measures the relationship between net profit and net sales.

FORMULA:This ratio is calculated by dividing the net profit by net sales. It is expressed as (%). In the form of a formula this ratio may be expressed as under

NET PROFIT RATIO: - NET PROFIT * 100 SALES CALCULATION:

PARTICULARS NET PROFIT 2008-2009 29021.94 2009-2010 42325.82

(In Lacs)
2010-2011 40258.33

SALES RATIO (%)

169481.35 17.12

196245.92 21.57

222055.77 18.13

Net Profit Ratio

25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2008-09 2009-10 2010-11

Ratio

INTERPRETATION:This ratio indicates an average net margin earned on a sale of 100 rupees. In the above table we can see that in the year 2008-2009 the Net profit is 17.12%, in 2009-2010 is

21.57%, and in 2010-2011 it is 18.13%. So we can say that as compared to 2008-2009, in 2009-2010 it has more net profit which shows good economic condition of the company but it declines in 20102011.

3.2.3OPERATING RATIO:MEANING:This ratio measures a relation between operating cost and net sales. FORMULA:This ratio is calculated by dividing the operating cost by net sales. This ratio is expressed as % .In the form of a formula this ratio may be expressed as under.
OPERATING RATIO= COST OF GOODS SOLD + OPERATING EXP* 100 NET SALES

CALCULATION:

(In Lacs)

PARTICULARS 2008-2009 2009-2010 2010-2011 OPERATING EXP+COGS SALES RATIO (%) 137261.25 146427.04 167444.02 169481.35 196245.92 222055.77 81 74.61 75.41

Operating Ratio
82 80 78 76 74 72 70 2008-09 2009-10 2010-11 Operating Rstio

INTERPRETATION:This ratio indicates an average operating cost incurred sales on goods worth rupees 100.Lower the ratio greater is the operating profit to cover the operating expense to pay dividend and to create reserve and vice-versa.

In the above table we can see that the operating exp. In the year 2008, 2009 and 2010 are respectively 81%, 74.61%, 75.41%.From the above analysis we can say that the year 2008-2009 has the highest op. Exp. and 2009-2010 has the lowest OPERATING EXP but it increases by 1.20% in year 2010-2011.

3.2.5 RETURN ON INVESTMENT / CAPITAL EMPLOYED:MEANING:This ratio measures a relationship between net profit before interest and tax and capital employed. FORMULA:This ratio is calculated by dividing net profit before interest and tax by capital employed. It is expressed as % in the form of a formula this ratio may be expressed as under. RETURN ON CAPITAL EMPLOYED=NET PROFIT *100 Capital employed

CALCULATION: PARTICULARS 20082009 20092010 48479.8 5 32611.1 6 148.66

(In Lacs)

20102011 51994.8 5 38405.3 3 135.38

NETPROFIT(BEFOR 34530.6 E INT. & TAX) 5 CAPITAL EMPYOYED RATIO (%) 21629.5 7 159.65

Capital employed= Share capital + Reserves and surplus

INTERPRETATION:This ratio indicates the ability of the firm higher the ratio the more efficient the mgt and utilization of capital employed. In the above table we can see that the return on capital employed in 2008-2009, 20092010, and 2010-2011 is respectively 159.65%, 148.66%, 135.38%. As compared to 2009-2010 and

2010-2011 the return on Capital employed is less which shows that the returns and profit have decreased.

3.2.6 RETURN ON SHARE HOLDERS FUND:MEANING:This ratio measures a relationship between net profit after tax, interest, and equity share holders fund. FORMULA:This ratio is computed by dividing the net profit after interest and tax by equity share holders fund. It is expressed as a %. In the form of formula this ratio may be expressed as under:RETURN ON EQUITY SHARE HOLDERS FUND =
NET PROFIT AFTER INTEREST, TAX AND PREFERENCE DIVIDEND*100 SHARE HOLDERS FUND

CALCULATION:

(In Lacs)

PARTICULARS 2008-2009 2009-2010 2010-2011

NET PROFIT (AFTER INTEREST & TAX AND PREFERENCE DIVIDEND) SHARE HOLDERS FUND RATIO (%)

29021.94

42325.82

40258.33

21629.57

32611.16

38405.33

134.18

129.79

104.82

Preference dividend is zero (not given) Share holders fund=share capital + Reserves and surplus

Return on Share Holders Fund

160 140 120 100 80 60 40 20 0 2008-09 2009-10 2010-11 Return on Share Holders Fund

INTERPRETATION:This ratio indicates the firms ability of generating profit per rupee of equity share holders fund. Higher the ratio the more efficient the management and utilization of equity share holders fund. In the above graph we can see that the equity share holders fund in 2008-2009, 20092010and 2010-2011 is 134.18%, 129.79%, and 104.82%.This shows that the company have not worked as efficiently as in 2008-2009. 3.2.7 RETURN ON Eq. SHARE CAPITAL: MEANING:-

The ratio indicates profitability of a firm from the view point of real owners who are ordinary shareholder, who bear all the risks of business. FORMULA:This ratio is calculated by dividing Profit after tax and Pref. Dividend by Eq. share capital.

RETURN ON Eq. SHARE CAPITAL= PAT PREFDIVIDEND *100 EQUITY SHARE CAPITAL

CALCULATION: PARTICULARS 2007-08 2008-09

(In Lacs)

2009-10

NETPROFIT(AFTER 29021.94 42325.82 40258.33 TAX) Eq. share Capital Pref. Dividend RATIO (%) 1359.93 0 2134.08 1359.93 0 3112.35 1359.93 0 2960.32

INTERPRETATION:-

This ratio indicates the firms ability of generating profit per rupee of equity share capital fund. Higher the ratio the more efficient the management and utilization of equity share capital fund. In the above table we can see that the equity share holders fund in 2008-2009, 2009-2010and 20102011 is 2134.08%, 3112.35% and 42960.32%. The ratio increases in 2009-2010 but then again shows a fall in 2010-2011.

3.2.8 RETURN ON Eq. SHARE HOLDER FUND:MEANING:This ratio measures a relationship between net profit after tax, interest, and equity share holders fund. FORMULA: This ratio is computed by dividing the net profit after interest and tax by equity share holders fund. It is expressed as a %. In the form of formula this ratio may be expressed as under:RETURN ON EQUITY SHARE HOLDERS FUND =

NET PROFIT AFTER INTEREST, TAX - PREFERENCE DIVIDEND*100 SHARE HOLDERS FUND

CALCULATION: PARTICULARS 20082009 20092010 42325.82

(In Lacs)

20102011 40258.33

NET 29021.94 PROFIT(AFTER INTEREST& TAX ) SHARE 21629.57 HOLDREFUND PREF DIVIDEND RATIO (%) 0 134.18

32611.16 0 129.79

38405.33 0 104.82

Return on Eq. Share Holders Fund

160 140 120 100 80 60 40 20 0 2008-09 2009-10 2010-11 Return on Share Holders Fund

INTERPRETATION:This ratio indicates the firms ability of generating profit per rupee of equity share holders fund. Higher the ratio the more efficient the management and utilization of equity share holders fund. In the above table we can see that the equity share holders fund in 2008-2009, 2009-2010 and 2010-2011 is 134.18%, 129.79%, 104.82%.As we see that as compared to 2009-2010 and 2010-2011, 20082009 has made more returns on Eq share holder Fund. Therefore companys profit has decreased as compared to 2008-2009.

3.2.9 EXPENSES RATIO:

MEANING: This ratio measures a relationship between different types of ratio related with expenses and net sales FORMULA This ratio is calculated by dividing different types of expenses by net sales. This ratio is expressed as a percentage. Expense Ratio = No.s Expenses X 100 Net sale A. Administration Exp = Adm. Exp. X 100 Net sale CALCULATION: PARTICULA R Adm. Exp. Net sales 2008-09 2009-10
(In Lacs)

2010-11

25062.57 25591.95 13234.19 169481.3 196845.9 222055.7 5 2 7

Ratio

14.79%

13.04%

5.96%

Adminitrative Exapenses
16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2008-09 2009-10 2010-11

INTERPRETATION: This ratio shows that in year 2008-09 expense is more to compare the other two year. B. Selling Expenses Ratio = Selling Exp. * 100 Net sale CALCULATION:
(In Lacs)

PARTICULA 2008-09 R

2009-10

2010-11 53546.71

Selling Exp. 37674.47 43714.8 Net sale Ratio

169481.3 196845.9 222055.7 5 2 7 22.33% 22.28% 24.11%

Selling Expense Ratio

24.50%

24.00%
23.50% 23.00% 22.50% 22.00% 21.50% 21.00% 2008-09 2009-10 2010-11

Rat

INTERPRETATION: In the year 2010-11 the selling and distribution expenses are more to compare the other two financial ratios.

3.2.10 EARNINGS PER SHARE:MEANING:This ratio measures the profit earnings available to equity share holder on per share basis. FORMULA:This ratio is calculated by dividing the net profit after interest, tax and preference dividend by the no. of equity share .It is expressed as an absolute figure. In the form of a formula this ratio may be expressed as under. EARNING PER SHARE = NET PROFIT AFTER TAX PERFERENCE DIV. NO. OF EQUITY SHARES

CALCULATION:

(In Lacs)

PARTICULARS

20082009

20092010

20102011

NETPROFIT(AFT 29021.94 42325.82 40258.33 ER TAX) NO. OF EQUITY SHARES PREF DIVIDEND RATIO(Rs) 21.34 13599281 13599281 13599281 7 7 7 0 0 31.12 0 29.60

Earning Per Share Ratio

35 30 25 20 15 10 5 0 2008-09 2009-10 2010-11

Earning Per Share Ratio

INTERPRETATION:-

In general higher the ratio better it is the company and vice versa. In the above table we can see that E.P.S in the yr 2008-2009,2009-2010 and 2010-2011 is 21.34, 31.12, 29.60. So we can say that as compared to 2008-2009 and 2009-2010 EARNING PER SHARE of 2010-2011 is higher which shows that the earning available to equity share holder are sufficient.

3.2.11 DIVIDED PER SHARE:MEANING:This ratio measures a relationship between dividend and no. of equity share. FORMULA:This ratio is calculated by dividing dividend paid to equity shareholder by no. of equity shares .It is expressed as absolute figure. In the form of a formula this ratio can be expressed as under

DIVIDEND PERSH. = DIVIDEND PAID TO EQ. SHARE HOLDER NO OF EQUITY SHARE

CALCULATION: PARTICULA RS 2008-2009 2009-2010 2010-2011

DIV PAID TO 203989200 271985700 EQUITY S.H 0 0 299184200 0 NO. OF EQUITY SHARE RATIO(Rs) 135992817 135992817 135992817 15 20 22

Dividend=First interim + second interim + third interim

Dividend per share

25

20

15 Ratio 10

0 2008-09 2009-10 2010-11

INTERPRETATION :The actual payment of the dividend to the share holders is rs15 in the year 2008-09 and in the year 2010-11 it increases to rs22.

3.2.12 PRICE EARNING RATIO:MEANING:It shows the relationship between the market price of the share and the earnings per share. FORMULA:-

PRICE EARNING RATIO= MARKET VALUE PER SHARE EARNINGS PER SHARE CALCULATION: PARTICULARS MARKET VALUE PER SHARE EARNING PER SHARE RATIO(RS)
(In Lacs)

2008-2009 2009-2010 20102011 450.95 702.53 852.2

21.34 21.13

31.12 22.57

29.60 28.79

Market value of share (NSE) = (High price + Low price)/2

Price Earning Ratio

35 30 25 20 15 10 5 0 2008-09 2009-10 2010-11 Price Earning Ratio

INTERPRETATION:As per NSE, the current market price of the share in the market in the year 2008-09 it was rs21.12 and it increased to rs28.79 in the year 2010-11.

3.2.13 DIVIDEND PAYOUT RATIO:MEANING:It is the proportion of actual dividend received to the earnings per share or the amount which belongs to the equity shareholders. FORMULA:-

This ratio is calculated by dividing earnings per share by dividend per share . It is expressed as a ratio or in percentage form. In the form of a formula this ratio can be expressed as under. DIVIDEND PER SHARE = DIVIDEND PER SHARE (DPS) EARNINGS PER SHARE (EPS)
32

CALCULATION:PARTICULARS DPS EPS RATIO 20082009 15 21.34 0.70 20092010 20 31.12 0.64 20102011 22 29.60 0.74

Dividend Payout Ratio

0.76 0.74 0.72 0.7 0.68 0.66 0.64 0.62 0.6 0.58 2008-09 2009-10 2010-11 Dividend Payout Ratio

INTERPRETATION:Dividend payout ratio shows that 70% dividend is distributed among the share holders and 30% profit is retained in the year 2009-10 whereas, 74% is distributed in the year 2010-11 and 26% profit is retained.

3.3 ACTIVITY / TURNOVER RATIO

3.3.1 FIXED ASSET TURNOVER:MEANING:-

To ascertain the efficiency and profitability of the business, the total fixed assets are computed to sales. FORMULA:FIXED ASSET TURNOVER =
34.

SALES FIXED ASSETS

CALCULATION: PARTICULARS 2006-07 SALES 2007-08

(In Lacs)

2008-09

169481.35 196245.92 222055.77 25313.66 7.75 26730.93 8.31

FIXED ASSETS 17859.64 RATIO(IN TIMES) 9.49

Fixed Assets Turnover Ratio

10 9 8 7 6 5 4 3 2 1 0 2008-09 2009-10 2010-11 Fixed Assets Turnover Ratio

INTERPRETATION:As shown in the above table the FIXED ASSETS TURNOVER for the years 2008-2009, 2009-2010 and 2010-2011 are 9.49, 7.75, 8.31. From the data we can clearly clarify that as compared to two year 2009-2010 has higher turnover.

3.3.2 DEBTORS RATIO:MEANING:This ratio establishes a relationship between debtors and bills receivable with average daily sales.

FORMULA:This ratio is calculated by dividing debtors and bills receivable by net credit sales. This ratio is usually expressed as x no. of days. As a form of a formula it can be expressed as under.
DEBTORS RATIO = DEBTORS+BILLS RECEIVABLE * 365 NET CREDIT SALE

CALCULATION: PARTICULARS DEBTORS+BILL S REC. NET CERDIT SALES RATIO(IN DAYS) 20082009 1113.45 169481.3 5 2 20092010 976.88 196245.9 2 2

(In Lacs)

20102011 4296.46 222055.7 7 7

Bills receivables not given. Credit sale not given. So, net sales assumed to be cr. Sales.

Debtors Ratio (IN DAYS)

7 6 5 4 3 2 1 0 2008-09 2009-10 2010-11 RATIO(IN DAYS)

INTERPRETATION:This ratio shows average collection period for credit sales.In the above table the time period allowed to the debtors is respectively 2 days, 2 days, 7 days.

3.3.3 CREDITORS RATIO:MEANING:This ratio establishes a relationship between creditors and bills payable and average daily credit purchase.

FORMULA:This ratio is calculated by dividing the creditors and bills payable by net credit purchase. This ratio is usually expressed in x no of days.
CREDITORS RATIO = CREDITORS+BILLS PAYABLE*365 NET CREDIT PURCHASE

CALCULATION: PARTICULARS 20082009

(In Lacs)

2009-201 20102011

CREDITORS+BILLS 34172.77 37080.06 42128.76 PAYABLE NET CREDIT PURCHASE RATIO(DAYS) 74809.24 80497.32 91511.14 167 168 168

Bills Payable not given. Purchases= Cost of goods sold - Opening stock + Closing stock; Stock= Inventory

Creditors Ratio (DAYS)

167.8 167.6 167.4 167.2 167 166.8 166.6 Creditors Ratio (DAYS)

166.4 2008-09 2009-10 2010-11

INTERPRETATION:This ratio shows an average time period for which the credit purchase remain outstanding. Creditors ratio for the year 2008-2009,2009-2010 and 20102011 is 167 days,168 days,168 days.

3.3.4 STOCK TURNOVER RATIO:MEANING:This ratio establishes a relationship between costs of goods sold and average inventory. FORMULAS:

This ratio is calculated by dividing the cost of goods sold by average stock .This ratio is usually expressed as no. of times. In the form of a formula this ratio may be expressed as under: STOCK TURN OVER RATIO = COST OF GOODS SOLD AVERAGE STOCK CALCULATIONS:
(In Lacs)

PARTICULARS CO.O.G.S AVERAGE STOCK RATIO(IN TIMES)

A.

2007 398.53 15.82 25.19

2008 486.37 15.52 31.34

2009 413.82 11.05 37.45

Average stock= opening stock + closing stock 2

Stock Turnover Ratio

40 35 30 25 20 15 10 5 0 2008-09 2009-10 2010-11 Stock Turnover Ratio

INTERPRETATION:It indicates the speed with which inventory is converted into sales. A high ratio indicates efficient performance of the company. In the above graph we can see that the stock turn over in the yr 2008, 2009 and 2010 is respectively 25.19, 31.34 and 37.45. So we can say that in the yr 2010 the stock turnover is effective which indicates the inefficient performance of the company.

3.3.5 WORKING CAPITAL TURNOVER:-

MEANING:This ratio establishes a relationship between the sales and working capital. FORMULA:This ratio is calculated by dividing the net sales by the working capital. This ratio usually expressed as NO of times. In the form of formula, this ratio may be expressed as under

WORKING CAPITAL TURN OVER RATIO = NET SALES WORKING CAPITAL

CALCULATIONS: PARTICULARS 20082009 NET SALES WORKING CAPITAL RATIO(IN

(In Lacs)

2009-2010 2010-2011

169481.35 196245.92 222055.77 1363.03 124.34 3866.15 50.76 6121.16 36.28

TIMES)

Working Capital Turnover Ratio

140

120
100 80 60 40 20 0 2008-09 2009-10 2010-11 Ratio

INTERPRETATION:This ratio indicates the firms ability to generate sales per rupee of working capital. In general higher the ratio, the more efficient the management and utilization of working capital and vice-versa. In the above graph W.C. turnover ratio in yr 20082009, 2009-2010 and 2010-2011 is 124.34, 50.76

and 36.28 respectively which shows the inefficient management of the company.

3.3.6 BOOK VALUE PER SHARE:MEANING:This ratio establishes a relationship between share capital, reserve and surplus with no. of equity shares. FORMULA:This ratio is calculated by dividing equity share capital reserve and surplus by no. of equity shares. It is expressed as an absolute figure. In the form of a formula this ratio is expressed as under.

BOOK VALUE PER SAHRE = EQUITY SHARE CAPITAL+R & S NO. OF EQUITY SHARES

CALCULATION: PARTICULAR S EQUITY 2008-2009 2009-2010 2010-2011 21629570 32611160 38405330

S.CAPITAL+R &S

00

00 13599281 7

00 13599281 7

NO. OF 13599281 EQUITY 7 EQUITYSHAR ES RATIO(Rs) 15.90

23.98

28.24

Book value per share

30 25 20 15 10 Ratio

5
0 2008-09 2009-10 2010-11

INTERPRETATION:In general higher the ratio the better it is. From the above table we can see that book value per share is increasing from 15.90 to 23.98 to 28.24 which

show the higher amount of profitability of the company.

3.4 LIQUIDITY RATIOS

3.4.1 CURRENT RATIO:MEANING:This ratio establishes a relationship between current assets and current liabilities. CURRENT ASSETS:The assets which can be converted into cash within a period of a year are known as current assets. E.g. cash balance, marketing security, bills receivable, prepaid expense, advance payment of cash ,bank balance, debtors, all type of stock i.e. raw material , work in progress , finished goods, income due but not received. CURRENT LIABLITIES: This means liabilities which are accepted to be mature within a year and included following: creditors, bills payable, short term loans, advances,

provision for tax, bank over draft, income received in advance, unclaimed dividend. FORMULA:This ratio is calculated by dividing current assets by current liabilities. This ratio is usually expressed as a pure ratio. In the form of the formula this ratio may be expressed as under:
CURRENT RATIO = CURRENT ASSETS CURRENT LIABLITIES

CALCULATIONS:

(In lacs)

PARTICULARS 2008-2009 2009-2010 2010-2011 CURRENT ASSETS CURRENT LIABLITIES RATIO(IN PROPOTION) 54210.29 55573.32 0.98:1 59013.45 55147.30 1.07:1 70444.31 64323.15 1.1:1

Current Ratio
1.1 1.05 1 0.95 0.9 2008-09 2009-10 2010-11 Ratio

INTERPRETATION:This ratio indicates availability of current assets to pay current liabilities. Traditionally a current ratio of 2:1 is considered to be a satisfactory ratio. In the above graph we can see that current ratio in 2008-2009,2009-2010 and 2010-2011 is respectively 0.98,1.07 and 1.1 which shows that the liquidity position of the company is satisfactory at present.

3.4.2 LIQUID RATIO:MEANING:This ratio establishes relationship between Liquid assets and liquid liabilities.

FORMULA:This ratio is calculation by dividing liquid assets by liquid liabilities. This ratio is usually expressed as a pure ratio. LIQUID RATIO= CURRENT ASSETS - STOCK CURRENT LIABLITIES-B.O.D

CALCULATION:

(In lacs)

PARTICULARS 2008-2009 2009-2010 2010-2011 LIQUID ASSETS STOCK LIQUID LIABLITIESBOD RATIO(IN PROPOTION) 45967.96 47958.09 55074.39

55573.32

55147.30

64323.15

0.83:1

0.87:1

0.86:1

Bills Overdraft (BOD) not given.

Liquid Ratio
0.88 0.87 0.86 0.85 0.84 0.83 0.82 0.81 2008-09 2009-10 2010-11 Liquid Ratio

INTERPRETATION:This ratio indicates rupees of liquid assets available for each rupee of liquid liabilities. Ideal liquid ratio is 1:1. In the above graph we can see that the liquid ratio in 2008-2009, 2009-2010 and 2010-2011 is respectively 0.83,0.87,0.86 so, we can say that the liquid ratio has been increased in the yr 2009-2010 which is efficient condition for the company.

3.5 LEVERAGE RATIO:3.5.1 PROPRIETORY RATIO:-

MEANING:This ratio measures the relationship between share holders fund and total assets of the company. FORMULA:This ratio is computed by dividing share holders funds by total assets it is expressed as %.

PROPRIETORY RATIO= PROPRITERS FUND*100 NET ASSETS CALCULATIONS: (In Lacs)

PARTICULARS 2008-2009 2009-2010 2010-2011 SHARE HOLDERS FUND NET ASSETS RATIO (%) 21629.57 32611.16 38405.33

22098.32 97.88

33069.91 98.61

38410.33 99.98

Proprietors fund= Shareholders fund.

Proprietory Ratio
100.00% 99.50% 99.00% 98.50% 98.00% 97.50% 97.00% 96.50% 2008-09 2009-10 2010-11 Ratio

INTERPRETATION:This ratio indicates the assets of the firm purchase out of owners funds. From the above table we can see that the proprietary ratio was very high in the yr 20102011as compared to in 2008-2009 & 2009-2010,
which shows that the owners fund is enough at present.

3.5.2 DEBT EQUITY RATIO

MEANING:This ratio establishes a relationship between long term debts and share holders funds.

FORMULA:This ratio is calculated by dividing the long term debt of the firm by the share holders fund. This ratio is usually expressed as the pure ratio e.g.:2:1. DEBT EQUITY RATIO= LONG TERM DEBTS*100 SHARE HOLDERS FUND

(No long term debt is given. So, this ratio cannot be calculated.)

3.5.3 CAPITAL GEARING RATIO:MEANING:This ratio expresses the proportion of preference capital + debentures and ordinary capital. FORMULA: CAPITAL GEARING RATIO = FIXED INTEREST BEARING CAPITAL*100 ORDINARY CAPITAL

(Fixed interest bearing capital is not given. So, this ratio cannot be calculated.)

3.5.4 LONG TERM FUND TO FIXED ASSETS

MEANING:This ratio measures a relationship between long term funds to fixed assets. FORMULA:This ratio is computed by dividing share holders fund & long term debts by fixed assets. This ratio is expressed as pure ratio. Ideal is 1:1.The formula is as under.
LONG TERM FUNDS TO F/ A = LONG TERM FUND*100 FIXED ASSETS

CALCULATION: PARTICULARS LONG TERM FUND FIXED ASSETS 20082009 20092010

(In Lacs) 20102011

21629.57 32611.16 38405.33 17859.54 25313.66 26730.93

RATIO(Proportion) 1.21:1

1.29:1

1.44:1

Long term funds= Share capital + Reserves & surplus

LONG TERM FUND TO FIXED ASSETS RATIO

1.45 1.4 1.35 1.3 1.25 1.2 1.15 1.1 1.05 2008-09 2009-10 2010-11 Ratio

INTERPRETATION:Fixed assets should be purchased from long term capital. In the above table we can see that the fixed assets as compare to long term fund is more than 2008-2009 and 2009-2010, in the yr 20102011 which shows that the long term funds have been properly utilized.

3.6 COVERAGE RATIO 3.6.1 INTEREST COVERAGE RATIO:

MEANING:This ratio is useful to know if the firm has sufficient profit its liability or interest. FORMULA:This ratio is calculated by dividing earnings before interest and tax by interest. It can be shown in the form of a formula as under. INTEREST COVERAGE RATIO = EBIT INTEREST CALCULATION: PARTICULARS 2008-2009
(In Lacs)

2009-2010 48479.85 150.43 322.28

2010-2011 51994.85 161.13 322.69

EARNINGBEFORE 34530.65 (INT.&TAX) INTEREST RATIO(TIMES) 110.01 313.87

Interest Coverage Ratio

324 322 320 318 316 314 Ratio

312
310 308 2008-09 2009-10 2010-11

INTERPRETATION:The calculation shows that profit available before int. and tax is 313.87 times more than the int. payable in the year 2008-09 and it increases to 322.69 in the year 2010-11. It means that the financial position of the company is sound.

3.6.2 DEBT SERVICE COVERAGE RATIO: MEANING:This ratio measures the ability of the firm to measure the amount of capital. FORMULA:-

DEBT SERVICE COVERAGE RATIO= PROFIT AFTER TAX+NON CASH EXP. INTEREST + PRINCIPAL AMT. OF C.YR

CALCULATION: PARTICULARS PROFIT AFTER TAX+NON CASH EXP 20082009 31316.83 20092010 43688.28

(In Lacs)

20102011 46082.61

PRINCIPEL+INT 110.01 RATIO 284.67

150.43 290.42

161.13 286

Non cash exp. = Depreciation Principle amount of current year is not given.

Debt Service Coverage Ratio

291 290 289 288 287 286 285 284 283 282 281 2008-09 2009-10 2010-11 Debt Service Coverage Ratio

INTERPRETATION:Higher the ratio, better it is for the money lenders. Highest ratio is in the yr 2009-10 and in the year 2010-11 it is 286.

CHPT-4 ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES: Basis of accounting

The financial statements are prepared to comply in all material aspects with all the applicable accounting principles in India, the accounting standards notified under Section 211(3C) of the Companies Act, 1956 of India (the Act) and the relevant provisions of the Act Fixed Assets Fixed assets are stated at cost less accumulated depreciation. The Company capitalises all direct costs relating to the acquisition and installation of fixed assets. Interest on borrowed funds, if any, used to finance the acquisition of fixed assets, is capitalised up to the date the assets are ready for

commercial use. Under utilised/Idle assets are recorded at estimated realisable value. Intangible Assets Goodwill and other Intangible Assets are amortised over the useful life of the assets, not exceeding 10 years. Tangible Assets Lease-hold land is being amortised over the period of lease Investments Long-term investments are valued at cost. Current investments are valued at lower of cost and fair value as on the date of the Balance Sheet Inventories Inventories of raw and packing materials, work-in process and finished goods are valued at lower of cost and net realisable value. Revenue Recognition

Sales are recognised upon delivery of goods and are recorded net of trade discounts, rebates, sales tax/value added tax and inclusive of excise duty on own manufactured and outsourced products. Service Income Service Income is recognised on cost plus basis for services rendered Provisions and Contingent Liabilities The Company recognises a provision when there is a present obligation as result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation Expenditure Advertising expenses are consistently accrued and recognised in the year in which the related activities are carried out. The Company has Defined Contribution Plan comprising of Provident Fund and Superannuation Fund and Benefit Plan

comprising of Gratuity Fund and Pension Scheme for employees which are recognised by the Income Tax Authorities and administered through its trustees/appropriate authorities. Actuarial Gains and Losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognised immediately in the Profit and Loss Account as income or expense. Expenditure on Voluntary Retirement Scheme is charged to the Profit and Loss Account in the year in which it is incurred. Foreign Currency Transactions Transactions in foreign currencies are recognised at the prevailing exchange rates on the transaction dates Taxation Current tax is determined as the amount of tax payable in respect of taxable income for the year.Deferred tax for timing differences between the income as per financial statement and income

as per the Income-tax Act, 1961 is accounted for using the tax rates and laws that have been enacted or substantially enacted as of the Balance Sheet date

Chpt:-5 Directors report

The year 2010-11 was another challenging

year for the global markets. The continued high level of food inflation along with the firming up of Commodity costs have led to an inflationary business environment.

Uncontrolled high inflation could dampen the

growth trend in Indian market. In this challenging environment, their Company achieved a healthy double-digit sales growth during the year 2010-11.

Sales for the year increased by 13 per cent at ` 2,221 crore as against ` 1,962 crore during the previous year. The toothpaste business registered an impressive volume growth of 13 per cent during the year.

The profit before tax for the financial year 2010-11 was` 520 crore as against ` 485 crore during the previous year. During the year, their Company significantly increased its investment in the brand and equity building activities by 16.7 per cent i.e. ` 50 crore.

Despite this additional investment coupled with the lower deduction under the Incometax regulations on the profits of the Baddi manufacturing facility resulting in higher year on year tax payments of ` 56 crore, the profit after tax for the financial year 2010-11 was ` 403 crore as against` 423 crore during the previous year.
Their Company continued to achieve

excellent business results year after year despite the fierce competitive market environment.
Their Company has developed strong

relationships with dental professionals. This strategy has contributed greatly to increasing professional recommendations for their Companys brands. In India, 81 per cent of professionals are now recommending Colgate ahead of any other brand.
During 2010-11, innovative products like

Colgate Plax Mouthwash and Colgate Sensitive Toothpaste grew strongly to deliver new and improved benefits to consumers.
Their Companys strong cash generation and

positive growth momentum led your Board to

declare three interim dividends of ` 10, ` 5 and ` 7 per share aggregating` 22 per share for the financial year 2010-11 as against ` 20 per share in the previous year. These dividends were paid on August 30 and December 24, 2010 and April 19, 2011.
Since 2002, their Company partnered with

Pratham, a non-profit organisation, to promote academic education of the less privileged children.
Their Company achieved a hat-trick of

Guinness World Records TM in the oral care category that started off in 2007 with the Colgate Brush-up Challenge where 1,77,003 students from 380 locations in 22 cities across the country, in one day and at one time, brushed their teeth for one minute.

Chpt 6 Auditors reports

They had audited the attached Balance Sheet of Colgate-Palmolive (India) Limited (the Company)as at March 31, 2011, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Companys Management. Their responsibility was to express an opinion on these financial statements based on their audit. They conducted their audit in accordance with the auditing standards generally accepted in India. Those Standards require that they plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies(Auditors Report) (Amendment) Order, 2004(together the Order), issued by the Central Government of India in terms of sub-section (4A)of Section 227 of The Companies Act, 1956 of India (the Act) and

on the basis of such checks of the books and records of the Company as they considered appropriate and according to the information and explanations given to them, they gave in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. Further to our comments in the Annexure referred to in paragraph 3 above, they reported that : (a) They obtained all the information and explanations which, to the best of their knowledge and belief, were necessary for the purposes of their audit; (b) In their opinion, proper books of account as required by law have been kept by Auditors Report To the Members of Colgate-Palmolive (India) Limited the Company so far as appears from their examination of those books;

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report were in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act; (e) In their opinion and to the best of their information and according to the explanations given to them, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act, and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011; In the case of the Profit and Loss Account, of the profit for the year ended on that date; and In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

(ii)

(iii)

COMMON SIZE STATEMENT OF PROFIT & LOSS BALANCE SHEET

Meaning of common-size statement:The method discussed so far do not provide any common base with which all items in each statement can be compared. For this purpose common size statement are prepared in which all items are compared with one common item. For example in income statement of profit and loss account sales may be taken as 100 and all other item in the statement are computed as presentence of sales. Similarly in case of balance sheet the relation of each item to total assets is computed. When financial statements are presented in this way, they are called commonsized statement or 100% statement.

 COMMONSIZE STATEMENT OF PROFIT AND LOSS:MEANING:In the common size income statement, the sales as 100 and all individual items of expenses and incomes are shown as % of sales. The common size statement gives useful proportions of each component to the total. But they alone are not of much use, as they do not give information about the trends of individual items from year to year.

Common Sized Statement of Profit & Loss A/c:

(In
Value in Rs. 2008-09 2009-10 175815.90 6334.55 169481.35 10775.72 74130.76 14340.65 % of value 2008-09 2009-10 2010-11 103.74 103.17 3.74 3.17 100.00 100.00 6.36 43.74 8.46 5.02 39.59 8.11 104.36 4.36 100.00 4.81 39.27 8.70

Particulars INCOME Sales (-)Excise Duty Net sales Other income EXPENDITURE Cost of good sold Employees remuneration and benefits Other expanses Depreciation

2010-11

202464.5 231739.89 6218.73 9684.12 196245.9 222055.77 2 9845.72 10680.10 77684.29 15907.35 87196.58 19322.33

Profit before tax (-)Current tax (-)differed tax (-)fringe benefit tax Profit after tax (+)balance brought forward from last year profit available for appropriation

54960.12 60263.36 70797.16 2294.89 3756.79 3424.95 145726.42 157611.7 180741.02 9 34530.65 48479.85 51994.85 4107.50 6430.80 11659.42 1031.21 276.77 77.10 370.00 29021.94 577.17 42325.82 2883.98 40258.33 9194.98

32.43 1.35 85.98 20.37 2.42 0.61 0.22 17.12 0.34

30.71 1.91 80.31 24.70 3.28 -0.14 21.57 1.47

31.88 1.54 81.39 23.41 5.25 0.034 18.13 4.14

29599.11

45209.80

49712.69

17.46

23.03

22.39

Interpretation:
The sales of the company has increased but

with that the expense has also increased so the profit decreases. Expenditure is the highest in the year 20102011 in absolute terms but low in terms of %. Profit after tax is low in absolute as well as % terms.

COMMON-SIZE STATEMENT OF BALANCE SHEET: MEANING:-

In the balance sheet is taken as 100 and all items are presented as % of total assets as shown below. The balance sheet shows the % of each asset to the total assets as well as the % of each liability to the total liabilities.

COMMON SIZE STATEMENT OF BALANCE SHEET

Particulars 2008-09 2009-10 2010-11 % % %

Sources of funds Sharehol ders fund

Share capital Reserves and surplus 1009.54 1009.55 975.68 3.38 3.12 2.70

21891.96

28088.43

32204.68

73.26

86.87

89.21

22901.50 Loan funds Secured loans Differed tax liabilities 5264.27

29097.98

33180.36

76.64

89.99

91.91

1135.64

1005.94

17.62

3.51

2.79

1714.76

2099.83

1913.97

5.74

6.49

5.30

29880.53

32333.83

36100.27

100

100

100

Applicati on of fund
Fixed assets Gross block Less: depreciatio n Less: impairment Net block Capital work- in progress 23838.00 8620.88 24006.91 8358.61 25525.28 8257.76 79.78 28.85 74.25 25.85 70.71 22.87

469.73

469.73

1.57

1.45

14747.39 2648.42

15178.57 26614.88

17267.52 3480.37

49.35 8.86

46.94 8.09

47.83 9.64

17395.81 Investment s 1624.58

17793.45 84.56

20747.89 4776.06

58.22 5.44

55.03 0.26

57.47 13.23

Currentas sets

,loans and advances

Inventories Sundry debtors Cash and bank balance Loans and advances 6087.72 6076.46 4717.81 3896.25 5510.20 5686.12 20.38 20.33 14.59 12.05 15.26 15.75

1480.98

8046.57

1790.88

4.96

24.87

4.96

10256.47

11392.60

12762.49

34.32

35.23

35.35

23901.63 Less: current liabilities and provisions Current liabilities Provisions 12163.81

28053.23

25749.69

79.99

86.76

71.33

12419.06

13286.50

40.71

38.41

36.80

877.68 13041.49

1178.73 13597.79 14455.44

1886.87 15173.37 10576.32

2.94 43.65 36.35

3.65 42.05 44.71

5.23 42.03 29.30

Net current assets

10860.14

Total

29880.53

32333.45

36100.27

100%

100%

100%

INTERPRETATION: The above balance sheet shows the percentage of each asset to the total assets as well as the percentage of each liability to total liability and capital. The current assets and the current liabilities of the company has increased in the year 2009, compare to year 2008. But it has decline in the year 2010.

Fixed assets were increased from 30.90% in the year 2008 to 42.09 % in the year 2009 but it was declined to 40.14% in the year 2010. The share capital of the company has remained same in the year 2008, 2009 &2010.

Reserve and surplus has declined in the year 2009 but it has increased in the year 2010, compare to 2009.

CHPT:- 8 CONCLUSION & FINDINGS

FINDINGS:
From the study of the company Colgate-Palmolive (India) Limiteds three years ratio, I have come to know that the financial position of the company is really good. By studying and comparing all the financial position of balance sheet and profit and loss I found that the company is in profit. G.P is high as compared to the three years and so as N.P. PBT is also in increasing so this shows that the company is in profit. Sales is in the increasing stage. The expenditure of the company goes down continuously. The return on capital employed is very high; which indicates the profitability is also very high. The companys solvency is satisfactory. So, it is good for the point of view of investors to invest in this company for the long term.

Conclusion:
Analysis the three financial results of ColgatePalmolive (India) Limited Company gave me a great exposure to the financial and general management function of the organization. I am sure my analytical; comprehension and writing presenting skill have improved. I will use the skills all across my management carrier and projects. I also found that ratios are very important point to analyze the company performance.

References
Annual Report of Colgate Palmolive (India) Limited.