Financial Management Project SMBA-09

Name of the Student Roll nos.Ashwini Rajeshirke 20

Archita Jadia 8Haseeb Tisekar 19

Durgesh D Lingarkar 30Shailesh Singh 21

Janardhan G Kamath 27Ankita M Chokshi 31Pratik J Harsora 32

Haresh Jain 37Soniya Jain 39

Vaibhav Patel 44

Company Overview• Pioneer in the consumer and industrial specialty

chemicals business in India• High market share and strong position in most

products and segments• Operations in 8 countries with manufacturing facilities• Brand "Fevicol" ranked as # 1 Household care brand by

Brand Equity in 2007-08• Pidilite ranked as # 1 company in chemical segment by

Business Today (2009)• Consistent growth in sales, profits and dividend payout

GROWTH

Consistent Dividend Payout

Dividend Payout = Dividend / PAT

39.7% 36.9%

27.5%

35.4%

30.2%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

2005-06 2006-07 2007-08 2008-09 2009-10

Dividend Payout Ratio

FINANCIAL ANALYSIS

• STOCK WATCH• DIRECTORS REPORT 31.03.2010• COMMON SIZE STATEMENT• CAPITAL STRUCTURE• CONTINGENT LIABILITIES• RATIO ANALYSIS

Stock WatchThe overall high has been in the month of Bonus Issue i.e March 2010

Performance vis BSE sensex

DIRECTOR’S REPORT (YEAR ENDED 31.03.2010)

• The Board reported about the expansion of the adhesives manufacturing capacities at Kalamb in

Himachal Pradesh and Daman. • A drive in improving performance through greater involvement and participation of employees was

initiated during the year at the manufacturing units.

• The Board updated about the Synthetic Elastomer Project which is a Monomer and Polymer Plant.

• The report highlighted on the Term Finances, Capital Expenditure and amount raised by the company through issue of Foreign Currency Convertible Bonds

• Subsidiaries performance has also been outlined in the Board’s Report. • The Board is positive about the Sales Growth in the Current Year. However margins will be under

pressure due to significant increase in inputs costs

• The Board’s Report is followed by Corporate Social Responsibility Report which highlights the new initiatives taken by the company in the areas of health care, education and rural development..

Pidilite Industries Limited--------COMMON SIZE BALANCE SHEET 31.03.2010 % 31.03.2009 % 31.03.2008 % (Rs in million) (Rs in million) (Rs in million) Balance Sheet SOURCES OF FUNDS Shareholders’ Funds Share Capital 506.13 3.61 253.07 1.89 281.82 2.37Reserves and Surplus 8879.66 63.36 7083.08 53.03 6142.99 51.74 9385.79 66.97 7336.15 54.92 6424.81 54.11Loan Funds Secured Loans 2184.50 15.59 2593.09 19.41 1904.27 16.04Unsecured Loans 2029.80 14.48 2987.05 22.36 3121.71 26.29 4214.30 30.07 5580.14 41.78 5025.98 42.33 Deferred Tax Liability (Net) 415.36 2.96 440.87 3.30 422.90 3.56 TOTAL 14015.45 100.00 13357.16 100.00 11873.69 100.00 APPLICATION OF FUNDS Fixed Assets Gross Block 8063.91 57.54 7778.35 58.23 6814.83 57.39

Less: Accumulated Depreciation/Amortisation 3889.19 27.75 3432.81 25.70 2973.48 25.04Net Block 4174.72 29.79 4345.54 32.53 3841.35 32.35Capital Work in Progress 2774.02 19.79 2387.47 17.87 1629.32 13.72 6948.74 49.58 6733.01 50.41 5470.67 46.07 Investments 5106.64 36.44 2407.10 18.02 1623.69 13.67

Current Assets, Loans and Advances Inventories 2506.31 17.88 2288.93 17.14 2655.44 22.36Sundry Debtors 2387.59 17.04 2413.03 18.07 2238.43 18.85Cash and Bank Balances 331.16 2.36 1270.76 9.51 1485.50 12.51Other Current Assets 51.51 0.37 211.15 1.58 32.41 0.27Loans and Advances 962.19 6.87 868.93 6.51 860.48 7.25 6238.76 44.51 7052.80 52.80 7272.26 61.25

Less: Current Liabilities and Provisions Current Liabilities 3301.93 23.56 2241.16 16.78 1895.12 15.96Provisions 976.76 6.97 594.59 4.45 597.81 5.03 4278.69 30.53 2835.75 21.23 2492.93 21.00 N et Current Assets 1960.07 13.99 4217.05 31.57 4779.33 40.25 TOTAL 14015.45 100.00 13357.16 100.00 11873.69 100.00

The Company relies more on internal sources than on borrwed funds.Also Reserves have increased and borrowings decreased

Gross Block of Fixed Assets has increased

Investments have increased tremendously

Current Assets have decreased as % as well as absolutely whereas Current liablitiea have increased % as well as absolutely

COMMON SIZE INCOME STATEMENT

(Rs. in millions)

% (Rs. in millions)

% (Rs. in millions)

% 31.03.2010 31.03.2009 31.03.2008 INCOME Turnover : Gross 20,215.34 104.76 19,073.50 108.30 17023.71 110.88Less:Excise Duty 917.89 4.76 1,462.28 8.30 1670.63 10.88Sales:(Net) 19,297.45 100.00 17,611.22 100.00 15353.08 100.00Other Income 271.77 1.41 238.92 1.36 253.46 1.65 EXPENDITURE Materials 9958.16 51.60 10328.35 58.65 8430.82 54.91Other Expenses 5858.47 30.36 5417.62 30.76 4547.91 29.62Depreciation 463.86 2.40 472.16 2.68 385.05 2.51 Profit before tax 3,288.73 17.04 1,632.01 9.27 2,242.76 14.61Income Tax Expenses Current tax 565.29 2.93 182.45 1.04 248.94 1.62Less: MAT Credit Entitlement 142.29 0.74 59.9 0.34 60.15 0.39 423.00 2.19 122.55 0.70 188.79 1.23Deferred Tax -25.49 -0.13 17.96 0.10 140.38 0.91Fringe Benefi t Tax 27.71 0.16 34.05 0.22 Total Tax Expense 397.51 2.06 168.22 0.96 363.22 2.37Profit for the year 2,891.22 14.98 1,463.79 8.31 1,879.54 12.24Prior year Tax Provision written back (Net) 43.73 0.23 0 0.00 3.99 0.03

Balance brought forward from previous year 779.13 4.04 720.27 4.09 525.16 3.42

Profit available for appropriation 3,714.08 19.25 2184.06 12.40 2,408.69 15.69Appropriations: Dividend on Preference Share Capital 0 0.00 0.75 0.00 0 0.00Proposed dividend on Equity Share Capital 759.20 3.93 442.87 2.51 442.87 2.88Corporate Tax on dividend 126.10 0.65 75.38 0.43 75.27 0.49 885.30 4.59 519 2.95 518.14 3.37

Transfer to Capital Redemption Reserve 0.00 0.00 28.75 0.16 0 28.75

Transfer to Debenture Redemption Reserve 322.46 1.67 257.18 1.46 70.28 257.18Transfer to General Reserve 1,500.00 7.77 600 3.41 1100 600 Balance carried to Balance Sheet 1,006.32 5.21 779.13 4.42 720.27 4.69Earnings per share: Basic (Rs) 5.8 2.89 7.44 Diluted (Rs) 5.64 2.81 7.38 Face Value of Share (Re) 1 1 1

Increase in Turnover

Almost more than 50% of Sales is Materials Expenses

Profit which had fallen in 2009 has rised in 2010 also it is 14 % of Sales

Company is consitent in Dividend Payment

EPS is on enhanced capital base

SHARE CAPITALThe Authorised Capital of the Company as on 31st March 2010 is Rs. 70,00,00,000 divided into 70,00,00,000 equity shares of Re.1 each. The Issued Subscribed & Paid up Capital of the Company is Rs.50,61,34,612 divided into 50,61,34,612 equity shares of Re.1 each. As can be seen the Authorised as well as Paid up capital has increased pursuant to Bonus Issue of 1:1. Capital Structure from the period 1989 to 2009 is seen below.

Contingent liabilities not provided for:

As at31st March

2010(Rs. In millions)

As at31st March

2009(Rs. In millions)

As at31st March

2008(Rs. In millions)

iGuarantees given by Banks in favour of

Government and others48.98 56.02 69.77

ii Guarantees given by Company 647.00 565.30 396.50

IiiDisputed liabilities in respect of Income Tax,

Sales Tax,Central Excise and Customs (under appeal)*

323.80 112.25 115.62

ivClaims against the company not acknowledged

as debts.81.44 76.07 -

CONTINGENT LIABILITIES & DUES

*Tax dues as mentioned in Auditors Report for the year ended 31st March 2010

RATIO ANALYSIS

CONCLUSION• The financial analysis of the company can be summarized as follows:

 • The sales growth of the company is on the rise. The profitability of the Company

significantly improved in the current year due to lower material costs, strengthening of Indian rupee, lower duties and control on costs. Sales growth picked up in the second half of the year, due to improved economic conditions.

 • The share prices of the company have also almost doubled vis-à-vis last year.

•  The Operating Profit and Net Profit, for the year at Rs.4132 million and Rs.2891 million increased by 60% and 97% respectively.

• The Total Assets of the company are comparatively lower than its competitors.The company should consider competitors financials and map its future planning . 

• The stake holders have benefited with the Bonus issue and dividend payment. 

• Company should give attention to its increasing liabilities and inventories. The working capital of the company had decreased considerably. The short term liquidity position of the company is area of concern.

Thank You